Giving meaning to the RILA revolution

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With sales exceeding $ 24 billion in 2020, sales of registered indexed annuities (RILA) have maintained a compound annual growth rate of 38% since their introduction almost ten years ago. * explains the popularity of this relatively new product? Find out the “why” behind the fastest growing annuity category in our industry today.

The evolution of an industry

The financial industry continues to evolve to meet the ever-changing demands of consumers. When Fixed Indexed Annuities (AIFs) were introduced in the mid-1990s, they filled a sizeable gap in the annuity risk spectrum, answering the call for growth potential beyond a simple fixed rate of return while providing guaranteed protection against losses due to market downturns. The RILAs were the next logical step. RILAs entered the market in 2010 and have grown steadily in response to the growing demand for stronger accumulation potential with managed market risk.

Innovate with a goal

Also known as buffered annuities, structured annuities, or indexed variable annuities, LIRAs are considered to be a cross between a Fixed Indexed Annuity (FIA) and a Variable Annuity (VA). While the majority of AIFs are designed with income in mind, RILAs are designed for growth. In fact, of all the annuities available today, LIRAs offer the highest earning potential of any risk-managed annuity product.

RILAs manage risk with buffers or floors, tools that provide investors with the ability to pursue growth potential based on their individual tolerance for risk. In return for taking market risk, clients can benefit from greater growth potential in the form of cap and participation rates typically higher than AIFs, making RILAs an attractive solution for focused investors. on accumulation and a viable alternative to VAs.

“The RILAs have bridged the gap between the AIFs and the VAs,” says Grant Kvalheim, CEO and President of Athene USA. “This is an excellent solution for clients who need a financial product that can support the growth of their assets while providing a level of protection against volatile markets. “

Weather the storm and come out on top

It turns out that RILAs are in the right place at the right time. With the global pandemic, increased market volatility, and persistently low interest rates, today’s economic conditions have created a “perfect storm”, contributing to the increase in market share that RILAs have experienced. in recent years compared to other types of annuities.

Faced with today’s challenges, consumers may be more likely to look for risk-managed products to help protect what they’ve earned, combined with strong accumulation potential to keep their assets growing. These lingering fears and feelings of uncertainty have created an opportunity for change, accelerating the need for RILA in the market and fostering a shift towards accumulation in the annuity industry.

According to Kvalheim, “RILAs are a timely and innovative solution that meets the changing needs of today’s investor in an increasingly complex planning environment. “

Tips to help refine the field

With the boom in RILA sales, carriers continue to position themselves by offering new products in the hope of winning their share of the pie. But with such fierce competition, it can be difficult to determine the best solution for your client. It is important that finance professionals analyze each product and carrier with a critical eye before offering an RILA, especially in light of new fiduciary rules and the best interests of DOL.

To determine which RILA may be the right solution for your client, answer these five questions to help narrow the field.


* LIMRA Secure Retirement Institute, “Individual Retirement in the United States: Exam of the Year 2020”.

Registered indexed annuities present a risk of substantial loss of capital and related income. They are designed to be a long term investment product used to help provide income for retirement and are not suitable as a short term investment.

This material is a general description intended for general public use. Athene Annuity and Life Company (61689), headquartered in West Des Moines, Iowa, and issuing annuities in 49 states (excluding New York) and Washington DC, does not undertake to provide advice investing in an individual or in an individual situation, and therefore nothing in this should be read as investment advice. This document should not be construed as a recommendation of Athene Annuity and Life Company or Athene Securities, LLC. Please contact your financial professional if you have any questions about Athene products or their functionality.

ATHENE ANNUITIES ARE PRODUCTS OF THE INSURANCE INDUSTRY AND NOT GUARANTEED BY ANY BANK OR INSURED BY FDIC OR NCUA / NCUSIF. MAY LOSE VALUE. NO BANK OR CREDIT GUARANTEES. NOT A DEPT. NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY. MAY BE OFFERED ONLY BY AN AUTHORIZED INSURANCE AGENT.

Registered indexed annuities can only be marketed and sold by licensed financial professionals. Any discussion of this product must be preceded or accompanied by a Prospectus.

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