Key differentiators include floor structure to limit losses, three defined protection levels and enhanced growth opportunities for investors facing volatile market
COLUMBUS, Ohio — Nationwide, one of the strongest, diversified, Fortune 100 insurance and financial services companies, joins with product development partner Annexus, the premier independent designer of indexed retirement solutions, to announce the launch of the Nationwide Defined Protection℠ Annuity (DPA), a new registered index-linked annuity (RILA). DPA is the carrier’s first offering in a category that has experienced rapid growth, with RILA sales increasing from $1.2 billion in 2014 to over $17 billion in 2019,1 and the product’s combination of features make it uniquely positioned to succeed with financial professionals and their clients in today’s challenging economic environment.
“Defined Protection Annuity is perfectly aligned with Nationwide’s mission to protect people, businesses and futures with extraordinary care,” said Eric Henderson, president, Nationwide Annuity, at Nationwide Financial. “Buffered RILAs have seen strong growth, but record drops in the stock market earlier this year and concerns that the next drop could remain lower for longer, show the importance of a floor structure to provide a clearly defined level of protection. We were very intentional in our decision to enter this category with an innovative solution that can help conservative to moderate investors balance the right level of protection they need with the greater growth potential they want.”
Nationwide DPA provides three defined protection levels which limit negative performance. This allows clients to select how much of their investment—90%, 95% or 100%—will be protected from market losses and helps determine their performance opportunities. DPA also features a variety of index strategies that can offer upside potential and be tailored to fit a broad range of investment objectives. These include traditional equity indices like the S&P 500® Price Index and MSCI EAFE, as well as the NYSE® Zebra Edge® Index and J.P. Morgan Mozaic II℠ Index, two indices designed to provide consistent performance through market cycles. These indices optimally complement the DPA product structure and provide a greater growth opportunity of up to twice the return of the index each year.2
“Investors have traditionally shifted more assets to bonds and other fixed income investments to de-risk their portfolios as they near or enter retirement. In today’s low interest rate environment, these safe options no longer provide enough yield to be a viable investment” Don Dady – Annexus Co-founder
“Clients preparing for or living in retirement can’t afford to lose more than 10% of their retirement savings without needing to adjust their plans3 and according to a recent Nationwide Retirement Institute survey, in today’s complex market more than half of investors recognize the importance of annuities to protect their assets against market risk,” said Craig Hawley, head of Nationwide’s annuity distribution. “With Nationwide Defined Protection Annuity, financial professionals can help clients set limits on the amount of potential loss, control how much risk they’re comfortable with, control how much growth potential they want and have the flexibility to adjust as their risk tolerance changes over time. We’re also offering new tools to help advisors educate clients about the risks in retirement and where DPA fits as part of the modern-day retirement portfolio.”
“Investors have traditionally shifted more assets to bonds and other fixed income investments to de-risk their portfolios as they near or enter retirement,” said Annexus co-founder Don Dady. “In today’s low interest rate environment, these safe options no longer provide enough yield to be a viable investment — in fact, they are starting to become increasingly risky due to the high probability of rising interest rates over the long term. DPA is designed to excel in a low interest rate environment and offer clients a viable solution for greater growth potential.”
“DPA is the result of thousands of hours of close collaboration over the past two years to deliver a solution that meets investors’ unique needs for protection, growth and flexibility” Ron Shurts – Annexus Co-founder
“The partnership between Nationwide and Annexus continues both of our companies’ traditions of designing protection-focused products with the goal of delivering better client outcomes,” said Annexus co-founder Ron Shurts. “DPA is the result of thousands of hours of close collaboration over the past two years to deliver a solution that meets investors’ unique needs for protection, growth and flexibility.”
Nationwide Defined Protection Annuity will be available to consumers through Financial Professionals across the U.S., with more than 300 wirehouses, banks and independent broker-dealers expected to offer the product. DPA is pre-approved through certain broker-dealers where it will be available as of August 31, 2020.
Financial professionals interested in Nationwide Defined Protection Annuity should contact their Nationwide wholesaler or call the National Sales Desk at 800-321-6064. Individual investors interested in learning more about the benefits of defined protection should contact their financial professional or visit www.definedprotection.com.
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor’s. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow us on Facebook and Twitter.
Annexus designs solutions to help Americans grow and protect retirement savings. For over a decade, Annexus has developed market-leading fixed indexed annuities and indexed universal life insurance products. Our products have forged partnerships with the industry’s leading insurance carriers and the world’s largest investment banks. A handpicked network of financial professionals use Annexus solutions to help clients take control of their retirement. Find out more at www.annexus.com.
1 Source: Beacon Annuity Market Study through Q1 2020; Indexed Variable Sales by Distribution.
2 DPA strategy participation rates depend on the strategy crediting factors, including the protection level and term selected, and may include a spread. Please request a current rate sheet.
3 Source: ORC International, “2018 Market Volatility & Retirement Income Study.” April 2018.
Nationwide Defined Protection is an individual single purchase payment deferred annuity with index-linked strategies issued by Nationwide Life Insurance Company, Columbus, Ohio. The general distributor is Nationwide Investment Services Corporation, member FINRA. Please note, the contract does not directly participate in any stock or equity investments. Withdrawals are subject to income tax, and withdrawals before age 59½ may be subject to a 10% early withdrawal federal tax penalty. The contract prospectus contains information about the contract’s features, risks, charges, and expenses. Prospectuses are available from Nationwide. Clients should read the prospectus carefully before investing.
When evaluating the purchase of an annuity, your clients should be aware that annuities have limitations. They are long-term vehicles designed for retirement purposes. They are not intended to replace emergency funds, to be used as income for day-to-day expenses or to fund short-term savings goals. Please read the contract for complete details. Withdrawals are subject to income tax, and withdrawals before age 59½ may be subject to a 10% early withdrawal federal tax penalty.
Guarantees and protections referenced within are subject to the claims-paying ability of Nationwide Life Insurance Company.
Nationwide Defined Protection Annuity does not directly participate in any stock, equity investments or index. It is not possible to invest directly in an index. Please consult the prospectus for more information on the available index options.
The “S&P 500” is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by Nationwide Life Insurance Company (“Nationwide”). Standard & Poor’s®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); DJIA®, The Dow®, Dow Jones® and Dow Jones Industrial Average are trademarks of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Nationwide. The Product is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500.
The product referred to herein is not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such product or any index on which such product is based. The Contract contains a more detailed description of the limited relationship MSCI has with Nationwide and any related funds.
The J.P. Morgan Mozaic II℠ Index (“Index”) has been licensed to Nationwide Life Insurance Company (the “Licensee”) for the Licensee’s benefit. Neither the Licensee nor Nationwide Defined Protection Annuity, (the “Product”) is sponsored, operated, endorsed, recommended, sold or promoted by J.P. Morgan Securities LLC (“JPMS”) or any of its affiliates (together and individually, “JPMorgan”). JPMorgan makes no representation and gives no warranty, express or implied, to contract owners taking exposure to the Product. Such persons should seek appropriate professional advice before making any investment. The Index has been designed and is compiled, calculated, maintained and sponsored by JPMS without regard to the Licensee, the Product or any contract owner. JPMorgan is under no obligation to continue compiling, calculating, maintaining or sponsoring the Index. JPMorgan may independently issue or sponsor other indices or products that are similar to and may compete with the Index and the Product. JPMorgan may also transact in assets referenced in the Index (or in financial instruments such as derivatives that reference those assets). These activities could have a positive or negative effect on the value of the Index and the Product.
The NYSE® Zebra Edge® Index has been licensed by ICE Data Indices, LLC (together with its affiliates, “IDI”) to UBS AG and sub-licensed by UBS AG (together with its subsidiaries and affiliates, “UBS”) to Nationwide Life Insurance Company (“Nationwide”). Neither Nationwide nor the Product is sponsored, operated, endorsed, recommended, sold or promoted by Zebra Capital Management, LLC (together with its subsidiaries and affiliates, “Zebra”), IDI or UBS and in no event shall Zebra, IDI or UBS have any liability with respect to the Product or the Index. Zebra, IDI and UBS make no representations, give no express or implied warranties and have no obligations with regard to the Index, the Product or otherwise any investor in the Product, client or other third party.
The mark NYSE® is a registered trademark of NYSE Group, Inc., Intercontinental Exchange, Inc. or their affiliates and is being utilized by ICE Data Indices, LLC under license and agreement. The marks Zebra® and Zebra Edge® are registered trademarks of Zebra Capital Management, LLC, may not be used without prior authorization from Zebra Capital Management, LLC, and are being utilized by ICE Data Indices, LLC under license and agreement.
Neither Nationwide nor any of its associated subsidiaries are affiliated with Annexus.
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