North American Launches Income Pay Pro Fixed Index Annuity
New guaranteed income annuity for life
WEST OF THE MONKS, Iowa, November 8, 2022 /PRNewswire/ — With many concerned about retirement income planning, North American Company for Life and Health Insurance® introduced a new Fixed Index Annuity (FIA) designed to provide a guaranteed income stream for life. Pay Pro incomeSM is a modified single premium AIF with an integrated Guaranteed Lifetime Withdrawal Benefit (GLWB) endorsement1 providing guaranteed lifetime income2.
“The three-legged stool of savings, social security and retirement income is a little wobbly today,” said Bryce Bike, director of distribution in North America. “With retirement plans disappearing and potential uncertainty in the future of Social Security — plus inflation and a volatile economy — our clients need to protect their retirement savings.”
Income Pay Pro offers lifetime payment amounts, or LPAs, for as long as the client or, if applicable, the life of their joint annuitant. This flexible AIF is a financial solution offering a fixed account and a variety of index account options from strong financial brands. When the market goes down, the premium is protected against potential losses and when the market goes up, the Income Pay Pro generates interest credits based on the performance of these indices.
“It’s a retirement ‘paycheck’ that lasts a lifetime. While you’re working hard to save money for retirement, so is the Income Pay Pro Fixed Index Annuity,” Biklen said. .
The Income Pay Pro offers a GLWB rider, which is common in many fixed index annuities. However, the GRV value of Income Pay Pro is initially equal to 100% of the premium3 and increases in a compounded fixed percentage rollover rate for up to ten years or the lifetime payment election date, whichever is earlier. The rollover rate is a guaranteed rate applied only to the value of the GLWB compounded annually during the rollover period4, offering growth potential even if a penalty-free withdrawal is made. However, if the APL is started during the initial ten-year period, the roll-up rate will no longer be applied in subsequent years.
The lifetime payment amount is then calculated by multiplying the present value of the LIB by the lifetime payment percentage5 depending on the age of the client. Once payments begin, the owner can receive them for life, even if the accumulated value or GRV value is reduced to zero along the way.
“This AIF adapts to the evolution of retirement plans. The GLWB addendum offers the possibility of selecting level or increasing payments for life when the LPAs are started. In addition, the LPA reserve6 This feature provides the ability to customize LPAs based on your personal goals,” Biklen said. “This is important so you can be sure you have access to money when you need it most.
Although no one likes to think about it, the potential cost of nursing home care can eat into a substantial chunk of retirement savings. This, in turn, can have a negative effect on ongoing retirement income. Another key benefit is the Nursing Home Multiplierseven to be used in the event that the client requires an extended stay in a qualified care center. If the customer meets the qualifications, this feature allows the customer to double their APL when they need it most.
About North American Life and Health Insurance Company
North American Life and Health Insurance Company® is a member of Sammons® Financial Group, Inc. Since 1886, North American has established a tradition of providing quality insurance products to consumers throughout the United States. We offer a comprehensive portfolio of term, universal and indexed universal life insurance products. North American also offers a wide variety of traditional fixed-index and fixed-index annuities and consistently ranks among the top fixed-index annuity providers in the United States* For more information, please visit here.
*Source: Secure Retirement Institute (LL Global Inc.) U.S. Individual Annuity Industry Sales Report
- The built-in Guaranteed Lifetime Withdrawal Benefit (GLWB) rider includes a rider fee of 1.15% of the GLWB value, deducted as a partial surrender of the accumulated value on the policy anniversary, as long as the addendum is in effect.
- Lifetime income refers to the guaranteed payment of Lifetime Payment Amounts (LPA) as defined in the IBC Addendum included in the contract. It does not refer to interest credited to the contract. Clients should consult their own tax advisor regarding the tax treatment of APLs, which will vary according to individual circumstances.
- The modified single premium period is from the date of issue until the date of the lifetime payment election or the end of the first year of the contract, whichever is earlier.
- Also referred to as the GRV increase in value period. An excess withdrawal would disqualify the GLWB value from accrual for that policy year. The LIB value is not the same as the accumulation value and is not available as a lump sum and is not available as a death benefit.
- Lifetime Payout Percentages (LPP) are based on the attained age of the covered person(s), the chosen LPA option – leveled or increasing, and whether they are joint or single covered persons. For joint insureds, BVGs are based on the youngest insured.
- The LPA reserve is subject to a maximum LPA reserve and is not available after the maturity date. See product description for details and limitations.
- The Nursing Home Multiplier (known as the LPA Multiplier benefit in the contract) requires a minimum waiting period of 2 years and can be paid for up to five annual payments as long as the client continues to meet the requirements of each payment. Confirmation that the client continues to meet the requirements will be required on an annual basis. See contract for full details.
Sammons Financial® is the trading name of Sammons® Member companies of Financial Group, Inc., including North American Company for Life and Health Insurance®. Annuities and life insurance are issued by the North American Company for Life and Health Insurance, and product warranties are its sole responsibility.
Pay Pro incomeSM 10 is issued on contract form NA1012A/ICC17-NA1012A.MVA, or appropriate state variations are issued by North American Company for Life and Health Insurance®, West Des Moines, Iowa. Product and features/options may not be available in all states or appropriate for all customers. See product materials for details, specific features/options, and limitations by product and state.
For the purposes of this product, “Revenue” refers to the contractual security provided by the Choice of Lifetime Payment Amounts (LPA). It is not the same as and does not refer to interest credited to the annuity contract. Consult your own tax advisor regarding the tax treatment of APLs, which will vary depending on your personal circumstances.
Fixed index annuities are not a direct investment in the stock market. These are long-term insurance products with guarantees backed by the issuing company. They offer the possibility of crediting interest partly on the performance of specific indices, without the risk of loss of premium due to market declines or fluctuations. Although fixed index annuities do not guarantee any premium loss due to market declines, deductions from your accumulation value for additional optional benefit riders or strategy fees associated with credit enhanced method allocations could exceed the interest credited to the accumulation value, which would result in a loss of premium. . They may not be suitable for all customers. The interest credits of a fixed index annuity will not reflect the actual performance of the relevant index.
The term finance professional is not intended to imply engagement in an advisory activity in which compensation is unrelated to sales. Finance professionals with an insurance license will receive a commission on the sale of an insurance product.
Neither North American, nor any financial professional acting on its behalf, should be construed as providing legal, tax or investment advice. Consult and trust a qualified advisor. Under current law, annuities grow on a tax-deferred basis. Annuities may be subject to tax during the income or withdrawal phase. The deferred tax feature is not required for a qualifying tax plan. In such cases, you should consider whether other features, such as death benefit, life annuity payments and any other features make the contract suitable for your needs.
Withdrawals made before age 59½ may be subject to IRS penalties.
SOURCE North American Life and Health Insurance Company