For much of the past 6 years, we have enjoyed the guaranteed nature of income riders. The ability to know exactly the income that could be accessed, without question, was the core benefit of income riders. That we have been able to couple guaranteed income for life with 6 and 7% guaranteed “roll up rates” has made for a great sales in a marketplace starved for return and safety.
If you have been paying attention over the last year, you have noted that income riders have become more expensive, and are offering lower roll up rates and payout percentages; and if you have been paying really close attention, you have noted that companies are moving away from absolute guarantees, to a roll up that combines guaranteed growth and crediting account performance. The net result has been lower guaranteed payouts, and notably higher projected payout.
So, as always, times are changing, and for the better. For the client that intends to defer income for a period of more than 5 years. Athene’s revamped and enhanced Target Horizon with the Target Pay Plus rider is a great example of how performance will pay dividends to your client’s through participating income.
The Target Pay Plus will offer your clients a competitive guaranteed base income number but will also allow for enhanced growth through index stacking, every dollar that the product earns will be enhanced by 150% for income purposes.
Utilizing Athene’s 2yr point to point we have a historical crediting rate of 6% that means a client who chooses the Target Pay Plus rider will average 9% annual growth on their income value! Guarantees may have been easier to sell, but the bottom line is performance pays better. Call the IAMS Annuity Sales Desk and ask for your income payout comparison, you may be surprised how little you have to give up on the guaranteed side to offer a great upside!