Nationwide announced today it has added a new fixed indexed annuity (FIA), Nationwide Peak® 5, to offer clients additional ways to maintain principal protection while offering the potential for higher returns and growth.
For conservative clients, Nationwide Peak 5 can provide an alternative to low-yielding fixed products such as money markets or CDs. It can also be utilized as a bond-alternative within a client's portfolio, delivering advisors an easy-to-explain option with the potential to deliver better results for their clients.
More than seven in ten (72%) investors think there is a chance of another stock market crash in the next six months.1 As a result, $16.1 trillion is parked in cash accounts.2
"Market volatility is a serious concern for clients," said Eric Henderson, senior vice president of life insurance and annuities at Nationwide. "They are worried their savings might not keep up with inflation or last through retirement, but they're hesitant to invest directly in equities because of the risk. Peak 5 provides an opportunity to get clients' assets out of no-earning or low-earning fixed accounts such as savings or CDs and into something with more earnings potential. And, for risk-averse clients, it still provides safety because their principal is guaranteed."
Nationwide Peak 5 is also easier to understand than many other FIAs and offers flexible investment choices, enabling advisors to provide personalized solutions based on their clients' needs.
Nationwide Peak 5 is a single-premium deferred fixed interest and indexed annuity. Clients can use the fixed account or any of the indexed accounts, or any combination.
Nationwide added the Morgan Stanley 3D Index option to Nationwide Peak 5 to provide an additional option for clients that could result in higher growth while maintaining principal protection.
The Morgan Stanley 3D Index utilizes diverse asset classes and dynamic indicators to help drive growth. It's a simple, rules-based index that re-balances allocations monthly to react to changes in market conditions while reducing performance swings typical with pure equity-only indexes.
"Morgan Stanley's unique index – which is only available on Nationwide FIAs – allows us to offer higher cap rates than those of other equity-based indexes," Henderson said. "As a result, fixed income annuities linked to the index may grow more in positive years. In years when the market delivers negative returns, we will safeguard the principal and the client will not experience a loss."
In addition to the Morgan Stanley 3D Index, Nationwide Peak® 5 offers access to crediting based on the S&P 500 price return index, MSCI EAFE index, J.P. Morgan Mozaic II® index and a fixed account.
Protection for spouse
Nationwide Peak 5 also offers the Joint Option feature upon death for no additional cost. The Joint Option allows the annuity's death benefit to be paid to either surviving spouse, no matter who passes away first or who owns the contract – even in an Individual Retirement Account (IRA). The surviving spouse also has the option to continue the annuity contract at the death benefit value.
Visit https://nationwidefinancial.com/products/annuities/fixed-indexed/peak-5 or call 1-800-321-6064 for more information about Nationwide Peak 5.
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor's. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow us on Facebook and Twitter.
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This material is not a recommendation to buy, sell, hold or roll over any asset, adopt a financial strategy or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. Investors should discuss their specific situation with their financial professional.
1 Yale School of Management Stock Market Confidence Indexes, April, 2019
2 U.S. Bureau of Economic Analysis, Federal Reserve, St. Louis Fed, and J.P. Morgan Asset Management "Guide to the Markets", January, 2019