The Prudential FlexGuard RILA product has increased their participation and cap rates and have been picking up in sales. In addition to the recent enhancements, another reason for their success in this market are their unique options available regarding how you can build the contract. These options are explained below.
Point-to-Point with Cap Rate Index Strategy
- This is your more traditional option. Just like many other RILA’s out there, this is a 6-year contract with 1-year, 3-year, and 6-year investment term options that you can select. Each of the different investment terms have different indexes that you can choose to invest in and a cap rate associated with each index based on the level of protection that you choose.
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 an 80% participation rate and a guarantee that as long as your returns were over 0.00%, you would lock in a 9.75% return with the S&P Index or a 12% return with the MSCI Index. If you were to choose the 10% level of protection option, only the S&P Index would be available, and an 80% participation rate and a 9.5% step-rate. If your returns for the year were over 0.00%, you would lock in 9.5%. 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 9.75% step-rate, your account would be credited 80% of that 20% index return (which equals 16%).
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 5% return and a 135% participation rate on anything over 5%. 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 or call the Prudential sales desk at 877.668.0810 option 1.
Current Rates: Click Here
FlexGuard website: Click Here
