Registered Index-Linked Annuity

Registered Index-Linked Annuity (RILA)

Client Risk Profile: Moderate

Protection Level: Moderate

Funding Source: Equity Allocations

A registered index-linked annuity (RILA), also known as structured or buffered annuity, is effectively a hybrid between variable and fixed index annuities, allowing for defined levels of equity market participation and downside protection. Investors may purchase RILAs as an equity allocation complement or fixed income replacement strategy to capture upside while reducing portfolio risk, as these products often provide cushion against major market losses.

Consider a RILA when your client needs:

Principal Protection: RILAs are typically used for clients nearing retirement. They offer a level of protection against sequence of returns risk, while also providing the potential for higher returns due to higher cap rates than other structured insurance vehicles.

Equity Replacement: RILAs can be utilized to de-risk portfolios from large equity allocations, while still providing market exposure.

Guaranteed Income: Through the use of a living benefit, registered index linked annuities can be used to generate guaranteed lifetime income with allocation flexibility and liquidity (beyond the surrender period).

Disclosures:

Variable annuities are contracts purchased from a life insurance company that are designed for long-term retirement goals and are subject to market risk, including loss of principal.

No investment strategy insures a profit or protects against losses in a down market.

All guarantees are based on the financial strength and claims-paying ability of the issuing insurance company.

The purchase of an annuity within a retirement plan that already provides tax deferral under sections of the Internal Revenue Code results in no additional tax benefits. An annuity should be used to fund a qualified plan based upon the annuity’s features other than tax deferral. All annuity features, risks, limitations, and costs should be considered prior to recommending the purchase of an annuity within a tax-qualified retirement plan. In addition to surrender charges, withdrawals are subject to income tax.