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Midwest Holding Subsidiary Introduces MYGA Contract: Annuity Moves

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What You Need to Know

  • Midwest Holding is issuing the new MYGA contract through its American Life subsidiary.
  • Equitable says it is expanding its annuity distribution pipes.
  • A PGIM analyst has given a Security Benefit product a boost.

Midwest Holding — a Lincoln, Nebraska-based company —says its American Life & Security Corp. subsidiary has started selling a multi-year guaranteed annuity (MYGA) contract aimed at RIAs.

The contract is the first American Life MYGA aimed at RIAs, Midwest Holding says.

The company is offering versions with three-year rate guarantees and five-year rate guarantees, both for retirement arrangements that qualify for special tax treatment and for non-qualified arrangements.

The contract is available in 21 states today. Midwest Holding is working to get the product approved in more states.

Equitable

Equitable says it’s now distributing fee-based versions of its variable and index-linked annuity products through the Envestnet Insurance Exchange.

Fiduciary Exchange (FIDx) operates the insurance exchange.

Security Benefit

Security Benefit Corp. — a Topeka, Kansas-based annuity issuer — is welcoming the recent publication of an analysis by David Blanchett, head of retirement research at PGIM DC Solutions.

More on this topic

Blanchett talked about the value of using a tax exclusion ratio approach to hold down income taxes on annuity distributions.

Security Benefit makes a tax exclusion ratio approach available through its ClearLine Annuity Rising Income Rider, the company says. Security Benefit worked with DPL Financial Partners to develop the rider.

The rider helps an annuity buyer take advantage of the fact that the IRS gives taxpayers two ways to handle annuity distributions that are subject to federal income taxes.

A taxpayer can either pay taxes on all gains first, or use the tax exclusion ratio approach to spread the taxes over the annuitant’s lifetime.

The ClearLine rider helps annuity buyers spread the taxes over their lifetimes, and the Blanchett analysis shows that this strategy tends to lead to better results than the other approach, Security Benefit says.

The strategy hinges on an annuity holder’s use of one of two available options for calculating taxes on distributions from annuity accounts: either paying taxes on all gains first, or spreading tax payments over the life expectancy of the annuitant. The ClearLine rider helps an annuitant spread tax payments over a lifetime.

(Photo: Emilia Mariana Ungur/Shutterstock)