North American Launches Income Pay Pro Fixed Index Annuity

With many people concerned about planning for income in retirement, North American Company for Life and Health Insurance^® has introduced a new fixed index annuity (FIA) designed to deliver a guaranteed lifetime income stream. The Income Pay Pro^SM is a modified single premium FIA with an embedded guaranteed lifetime withdrawal benefit (GLWB) rider¹ offering guaranteed lifetime income².

 

“The three-legged stool of savings, social security, and pension income is a bit wobbly today,” said Bryce Biklen, North American’s chief distribution officer. “With the disappearance of pension plans, and potential uncertainty in the future for Social Security – plus inflation and a volatile economy – our clients need to protect their retirement nest eggs.”

 

Income Pay Pro offers Lifetime Payment Amounts, or LPAs, for as long as the client or, if applicable, their joint annuitant lives. This flexible FIA is a financial solution offering a fixed account and a variety of index account options from strong financial brands. In a market downturn, premium is protected from potential losses and when the market is 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 are working hard to save money for retirement, the Income Pay Pro fixed index annuity is too,” said Biklen.

The Income Pay Pro offers a GLWB rider, which is common in many fixed index annuities. However, the Income Pay Pro’s GLWB value initially equals 100% of premium³ and increases by a set percent roll-up rate compounded for up to ten years or until the lifetime payment election date, if earlier. The roll-up rate is a guaranteed rate applied only to the GLWB value that compounds annually during the roll-up period⁴, providing growth potential even if a penalty-free withdrawal is taken. However, if the LPA is started during the initial ten-year period, the roll-up rate will no longer be applied in following years.

The Lifetime Payment Amount is then calculated by multiplying the current GLWB value by the lifetime payment percentage⁵ based on the client’s age. Once payments begin, the owner can receive them for life, even if the accumulation value or GLWB value is reduced to zero along the way.

“This FIA adapts to changing retirement plans. The GLWB rider offers the ability to select level or increasing lifetime payments when LPAs are started. In addition, the LPA reserve⁶ feature allows the flexibility to customize LPAs to fit personal goals,” said Biklen. “This is important so you can be guaranteed to have access to cash when you need it most.”

While nobody likes to think about it, the potential cost of nursing home care can take a substantial bite out of retirement savings. This, in turn, can have a negative effect on ongoing retirement income. Another key benefit is the Nursing Home Multiplier⁷ to be used in the event the client requires an extended stay in a qualified care center. If the client meets qualifications, this feature allows the client to double their LPA when they need it most.

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