The benefits of a fixed index annuity for a client

Fixed index annuities (FIA) can be a valuable planning vehicle for retirement savings1.

They offer protection from market downturns and guarantees that clients expect along with growth opportunity to help build their retirement savings. Midland National’s fixed index annuities help provide peace of mind by offering:

  • Tax deferral2
  • Liquidity options
  • Annuity payout options
  • Full accumulation value at death
  • Ability to avoid probate
  • Fixed account option

These important features can be found in each Midland National fixed index annuity.

Fixed index annuities also offer a unique opportunity to earn interest linked to the growth of various stock market indices without experiencing the downside risk. The interest credits for a fixed index annuity will not mirror the actual performance of the index itself, but rather the index closes (whether it be daily, monthly, annually, etc.) are used as a basis for determining what the interest credits will be.

It’s important for clients to understand how the components work within a fixed index annuity. Fixed index annuities are not an investment in the stock market or applicable indices. There are two main aspects that factor in to determining the interest credits, the index account (crediting method) option and the index itself.

Crediting methods

Midland National offers several crediting methods that can be used to calculate interest credits, including:

  • Annual Point-to-Point
  • Monthly Point-to-Point
  • Daily Average
  • Inverse Performance Trigger
  • Two-year Point-to-Point

Indexes

Along with the crediting methods, the other important aspect in determining interest credits is the index itself. Midland National offers multiple index options that allow clients to remain in the driver’s seat with their retirement strategy. As previously mentioned, the interest credits that are derived from a FIA will not mirror the actual performance of the index itself. The interest credits are determined based on the index account option chosen, the performance of the index, and will be subject to an index cap rate, index margin and/or a participation rate depending on the product. Reference the product-specific brochure for additional details.

Midland National prides itself on being a leader in choices and flexibility. We feel it’s important to offer choices in an effort to provide opportunity to maximize your clients’ retirement savings.

Related Links

Busting 5 common myths about fixed index annuities

Annuities are often misunderstood. Many people may find it difficult to understand and navigate these insurance products due to misinformation, rumors, and myths. As a result, many individuals may be put off by the idea of purchasing an annuity. In this consumer-friendly flyer, we’ve debunked 4 common myths we hear about fixed index annuities (FIAs).

Compare fixed index annuities with features of other financial product options

When consumers are creating a financial plan, there is no one “best” product. But there are products that can be a better fit in order to help meet their retirement goals.

How fixed index annuities compare in terms of risk

Fixed index annuities (FIAs) are insurance products that are quickly becoming a household term as a new generation of savers are drawn to growth potential and protection from market downturns. Take a look at where FIAs fit with other products in light of risk.

Rollover resources: Why an annuity may meet rollover needs

This client-friendly flyer can be paired with our client rollover guide, to help your clients understand how an annuity may meet their rollover needs.

Consumer guide to understanding rollovers

This guide to rollovers is intended to walk through the considerations your clients may want to make before deciding if a rollover to a Midland National annuity might be a good fit for them. It also provides an overview of a simple, three-step process they may want to use to start moving their money today.

 

1. Fixed index annuities are not a direct investment in the stock market. They are long term insurance products with guarantees backed by the issuing company. They provide the potential for interest to be credited based in part on the performance of specific indices, without the risk of loss of premium due to market downturns or fluctuation. Although fixed index annuities guarantee no loss of premium due to market downturns, deductions from your accumulation value for additional optional benefit riders could under certain scenarios exceed interest credited to the accumulation value, which would result in loss of premium. They may not be appropriate for all clients. Interest credits to a fixed index annuity will not mirror the actual performance of the relevant index.

2. Under current law, annuities grow tax deferred. An annuity is not required for tax deferral in qualified plans. Annuities may be subject to taxation during the income or withdrawal phase. Neither Midland National® Life Insurance Company, nor any financial professionals acting on its behalf, should be viewed as providing legal, tax or investment advice. Rely on your own qualified tax professional.

The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.

Insurance products issued by Midland National® Life Insurance Company, West Des Moines, Iowa. Product and features/options may not be available in all states or appropriate for all clients. See product materials for further details, specific features/options, and limitations by product and state.

Fixed index annuities are not a direct investment in the stock market. They are long term insurance products with guarantees backed by the issuing company. They provide the potential for interest to be credited based in part on the performance of specific indices, without the risk of loss of premium due to market downturns or fluctuation. Although fixed index annuities guarantee no loss of premium due to market downturns, deductions from your accumulation value for additional optional benefit riders or strategy fees associated with allocations to enhanced crediting methods could exceed interest credited to the accumulation value, which would result in loss of premium. They may not be appropriate for all clients. Interest credits to a fixed index annuity will not mirror the actual performance of the relevant index.

33668Y     |     PRT 7-6-21