The Prudential FlexGuard RILA product has been picking up in sales. One of the reasons for this could be the different and unique options available regarding how you build the contract. These different options are explained below.
- Dual Directional
- This allows your client to win, even if they lose. This means that Prudential will credit the amount of losses to the clients account as long as the losses are within the stated buffer. For example, if you chose the 6-year contract with the 10% buffer option with no cap (15% and 20% options also available), and your account was down 10% at the end of the term, 10% would be credited back to the balance of your client’s account.
- Step-Rate Plus Index Strategy – Uncapped Strategy
- With this design you have a participation rate that is based on the level of protection that you choose. If you are doing this step-rate option, you only have a 5% or 10% level of protection to choose from. If you were to choose the 5% level of protection you would have a 70% participation rate and a guarantee that as long as your returns were over 0.00%, you would lock in a 8.75% return with the S&P Index or the MSCI Index. If you were to choose the 10% level of protection option, only the S&P Index would be available, and the participation rate would be 70%. If your returns for the year were over 0.00%, you would lock in 10%. If your index returns are ever higher than the above stated “step-rate” percentages, the higher amount is always credited. For example, let’s say that you are using the 5% protection option and the S&P Index option. If the index return is 20%, which is higher than the 8.75% step-rate, your account would be credited 70% of that 20% index return (which equals 14%).
- Tiered Participation Rate Index Strategy – Uncapped Strategy
- The tiered participation rate strategy bases your participation rate on the index returns. For example, right now if you were in the S&P 500 index strategy with a 6-year point to point and a 5% buffer, you would have a 100% participation rate up to a 15% return and a 125% participation rate on anything over 15%. This is also an uncapped strategy so there are no limitations on the upside.
As you can see, there are some interesting options that you have available in the Prudential FlexGuard contract, but this is just the tip of the iceberg. For more information on this contract and more design options, please click the links below.
Current Rates: Click Here
FlexGuard website: Click Here
