Great American Life has launched variable-indexed annuity, known as Index Frontier 7, for customers looking for more protection than provided by equities.
The new offering, according to the company, will enable consumers to grow their fund in rising markets and offer a greater level of protection in down markets.
It provides tax-deferred growth and lifetime income options in addition to a seven-year early withdrawal charge period.
Contract owners can select from indexed strategies with returns linked to the performance of the S&P 500 Index, iShares US Real Estate ETF or the SPDR Gold Shares ETF, the insurer noted.
Great American Life vice president of national sales Joe Maringer said that the potential for stock market corrections could mean it is time for consumers to rebalance their financial portfolios.
“This month marks the 10th anniversary of the longest-running bull market in the last 50 years. While consumers have reaped the benefits of that growth, those nearing or in retirement should consider ways to garner some level of protection before the next market downturn,” Maringer added.
When variable-indexed annuities were first launched in the market in 2014, industry sales were less than $500m, which surpassed $9bn last year.
“The recent growth of these solutions can be attributed to the need for accumulation and stability. In exchange for a -10% floor each term, Index Frontier 7 currently offers the potential for positive returns up to 20%,” Maringer further explained.
The company said that it will not charge any annual administrative fees, mortality and expense charges, or 12b-1 fees on Index Frontier 7.