Oxford Life
Many clients purchase annuities for the stability and safety they provide through guarantees. Two annuity options with popular, yet different guarantees are multi-year guarantee annuities (MYGAs) and guaranteed lifetime withdrawal benefit riders (GLWBs). MYGAs offer a favorable alternative for bank certificate of deposit (CD) buyers because the terms and conditions are similar, but the interest rates credited to MYGAs are often higher than CDs and the interest accumulates tax-deferred.
Oxford Life Insurance Company (Oxford Life) has introduced an annuity that combines the guaranteed interest of a MYGA with the guaranteed lifetime payout of a GLWB rider. This annuity is called the Oxford Life Income Protector and is the first five-year MYGA to offer a GLWB rider—at no additional charge.
The MYGA interest rate is guaranteed for five years and varies based on the deposit amount. Deposits from $25,000 to $250,000 are currently being credited an annual interest rate of 3 percent, and deposits from $10,000 to $24,999 are currently being credited 2.5 percent. This product is available to clients issue ages 18 to 80 and offers hardship waivers for nursing home confinement and terminal illness. In addition, 10 percent of the account value may be withdrawn annually without incurring a withdrawal charge, except during the first year when the free withdrawal amount is limited to interest.
The GLWB rider offers clients the option of guaranteed income for life and is automatically added to the MYGA at no additional charge. (Oxford Life attaches this rider automatically to the base policy only if the annuitant is an owner, unless the owner is not a natural person. If the owner is not a natural person, the annuitant will be treated as the owner for purposes of this rider. If the base policy has joint owners, Oxford Life will attach this rider only if the joint owners are spouses.)
This rider credits interest to an income account, used solely for the purpose of calculating the monthly income benefit, at a rate 5 percent greater than the base product. The current income account interest rate is 8 percent.
This product will uniquely cater to clients concerned with achieving guaranteed rates of return like those found in CDs and with outliving their retirement savings.
