We are seeing more and more variable index annuity cases come through the door as time goes on and uncertainty in the market increases. If you are not familiar with these types of contracts, many of them provide clients with an opportunity for market participation, a buffer against losses, zero fees, and potential “free money.” What I am talking about here with potential free money is the step-rate option in the Shield account.
The variable index annuity product that has been seeing the most action from our financial professionals is the Brighthouse Shield product, and one option that you can select in the Shield contract is the step-rate option. The step-rate option can be put on the 6-year or 3-year Shield contract, and it is a 1-year term option that currently gives you 10% protection each year with a 7.0% cap. The cool thing about this option is that as long as the client’s return for the year is above 0.00%, the client will get a “step-up” in their actual account value to the 7.0% cap for that year. In my mind, anytime that you get something without earning it, it’s free. Hence, the Shield contract with the step-rate option gives you market participation, a buffer against losses, no fees, and potential “free money.”
As I mentioned above, the Shield product is becoming more and more popular for producers that have mutual fund clients that are concerned about the volatility in the market but still like the idea of market participation with the addition of downside protection and no fees. It has also shown to be a good fit for clients in fixed annuities, fixed index annuities, and bond funds that are looking for a little more in returns than they are currently getting while maintaining some downside protection.
If you would like to talk in more detail about this contract, the different options available, or potential opportunities, please give me a call. Also, I have attached a link below to the Shield website where you can learn more about the product and see current rates and design options.
Contact Micah Hesting for more information:
Relationships/Business Development Strategist