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February 10, 2023 at 10:18 AM
A life insurer is using quick bursts of cash to get retirement savers’ attention.
Nassau Life and Annuity Company, a subsidiary of Nassau Financial Group, introduced the Nassau Bonus Annuity — a single-premium, non-variable indexed annuity — Thursday.
A client can tie part of the crediting rate to the performance of one or more options on a menu that includes 13 investment indexes.
Nassau Life is also offering another way for a client to build contract value: When the client buys the annuity, the company will add a bonus payment equal to up to 10% of the client’s premium payment to the contract value.
What It Means
In the late 1990s, relatively high interest rates made offering annuities with rich bonuses attractive, because life insurers could easily earn more on their own investment portfolios than they had promised to pay the annuity holders.
In recent years, low interest rates made offering bonuses and significant rate guarantees unappealing, because low rates hurt life insurers’ investment performance.
