Nationwide L-Inc provides income, guaranteed growth, upside potential and
spousal continuation in one variable annuity rider
COLUMBUS, Ohio, March 2 /PRNewswire/ -- Baby Boomers approaching or
entering longer, more active retirement horizons are imagining a scary
scenario: outliving their income.
With today's widespread elimination of private pension plans, Social
Security that is anything but secure and a volatile stock market, individuals
need to look beyond these traditional means to supplement their retirement
income.
Consumers now have a link to guaranteed lifetime income with the
Nationwide Lifetime Income Rider (L-Inc), from Nationwide Financial Services,
Inc. (NYSE: NFS).
"Nationwide L-Inc combines the benefits consumers approaching retirement
want - guaranteed lifetime income, guaranteed growth, market participation and
guaranteed income for a spouse - into one rider," said Mark Phelan, senior
vice president of Individual Investments for Nationwide Financial.
"We feel the features packaged in Nationwide L-Inc, short for lifetime
income, can help simplify the decision process for investment professionals
and their clients when choosing a lifetime withdrawal benefit in today's
crowded marketplace."
Nationwide L-Inc is available with certain variable annuities for an
additional cost (.60% of income benefit base) and offers:
- Guaranteed lifetime income through withdrawals of up to 7% of an income
base that will never decrease due to market performance even if the
contract value does
- Guaranteed growth with the potential to beat inflation
- 100% market participation that provides upside potential without
complicated choices or fixed investment restrictions
- Lifelong income continuation for a surviving spouse
Nationwide L-Inc uses a "greater of" value proposition to help give
consumers the potential to beat inflation and ensure that they receive the
highest withdrawals available according to rider provisions. Guarantees are
backed by the claims paying ability of Nationwide.
The income benefit base, the amount on which the lifetime income payments
are calculated, is guaranteed to increase at least 5% simple interest annually
for the first 10 years, or until the first withdrawal from the contract.
When consumers are ready to begin taking withdrawals, the benefit base
used to determine withdrawal amounts will be whichever is higher on the
contract rider anniversary date: the contract value or the guaranteed minimum
value that was determined by the 5% annual "roll-ups." The higher income
benefit base is then multiplied by an age-based lifetime income percentage to
determine the withdrawal amount.
"We designed Nationwide L-Inc with maximization of allowable income in
mind," said Phelan.
Nationwide L-Inc offers spousal continuation at an additional cost (.15%
of income benefit base), which allows the surviving spouse to continue to
receive lifetime income for the duration of his or her life.
"We realize peace of mind for many couples comes from knowing a spouse
will be taken care of financially," said Phelan. "Nationwide L-Inc guarantees
a surviving spouse will receive a lifetime income stream."
Phelan said Nationwide L-Inc's flexibility allows consumers to access
their lifetime income stream based on their individual needs and
circumstances.
"Nationwide L-Inc allows consumers to take withdrawals immediately, as
early as age 45, with no waiting periods and without having to annuitize,"
said Phelan. "However, those who wish to begin taking withdrawals until a
later date can do so knowing they'll be rewarded through a higher withdrawal
percentage."
Consumers are offered a diverse range of professionally managed investment
choices with Nationwide L-Inc, including asset allocation models ranging from
conservative to moderately aggressive that are designed to match various risk
profiles.
"Due to longer retirement horizons, many consumers in or approaching
retirement still want full market participation, which Nationwide L-Inc
provides," said Phelan.
Phelan said the combination of L-Inc and Nationwide's other living
benefit, Capital Preservation Plus Lifetime Income (CPPLI), provides consumers
with two income withdrawal options to choose from based on their needs.
"If lifetime income is the primary need and potential inflation protection
is secondary, there's Nationwide L-Inc," said Phelan. "If principal
protection is initially more important with the opportunity to draw lifetime
income later, there's CPPLI."
Capital Preservation Plus Lifetime Income, available at an additional cost
of .60% with certain variable annuities, provides an "all-in-one" rider that
guarantees a return of principal (less applicable charges and withdrawals) in
as few as five, seven or 10 years. After this Capital Preservation phase,
individuals have the flexibility to begin taking guaranteed lifetime
withdrawals, enter another Capital Preservation phase or drop the rider and
its fee.
Flexibility and simplicity are what Nationwide Financial strives for in
the development of its variable annuity riders, according to Phelan.
"With eighty-five percent of annuity contracts sold today offering one or
more living benefits(1), we realize it's difficult for investment
professionals to keep up with the marketplace," said Phelan.
"Through the range of features available with Nationwide L-Inc and CPPLI,
we're trying to simplify options for investment professionals by offering two
living benefits that can help clients meet their retirement income needs."
Annuities are long-term, tax-deferred investments designed for retirement
and will fluctuate in value. They also allow customers to create a fixed or
variable stream of income through a process called annuitization. It also
provides a variable rate of return based on the performance of the underlying
investments.
But, as with most things in life, annuities do have limitations. If a
contract holder decides to take money out early, he or she may face surrender
charges. Plus, if a person is not yet 59 1/2, he or she may also have to pay
an additional 10% income tax penalty on top of ordinary income taxes. A death
benefit is available with most variable annuities. If an early withdrawal is
taken, the death benefit and cash value will be reduced.
Annuities contain guarantees and protections that are subject to the
claims-paying ability of the issuer. But, while these don't apply to the
actual performance of the variable accounts, they do offer a level of
protection against investment loss.
Annuities are contracts bought from an insurance company and they are sold
by prospectus. While it may take some time, these documents should be read.
They describe risk factors, fees and charges that may apply to the contract
holder. Please remember, variable annuities may have fees and charges
including mortality and expense, administrative fees, contract fees and the
expenses of the underlying investment options.
Variable products are sold by prospectus. Potential clients may obtain
both the product prospectus and underlying fund prospectuses from their
investment professional or by writing to Nationwide Life Insurance Company,
P.O. Box 182150, Columbus, Ohio 43218-2150. Before investing, carefully
consider the fund's investment objectives, risks, charges and expenses. The
product prospectus and underlying fund prospectus contain this and other
important information. Read the prospectus carefully before investing or
sending money.
About Nationwide Financial(R)
Nationwide Financial Services, Inc. (NYSE: NFS), a publicly traded company
based in Columbus, Ohio, provides a variety of financial services that help
consumers invest and protect their long-term assets, and offers retirement
plans and services through both public- and private-sector employers.
It's part of the Nationwide group of companies, which offers diversified
insurance and financial services. The group is led by Nationwide Mutual
Insurance Company, which is ranked No. 99 on the Fortune 500 based on 2004
revenue(2). For more information, visit http://www.nationwide.com.
Nationwide, the Nationwide Framemark and Nationwide Financial are
federally registered service marks of Nationwide Mutual Insurance Company.
Capital Preservation Plus Lifetime Income and the Nationwide Lifetime Income
Rider are service marks of Nationwide Life Insurance Company. Capital
Reservation Plus is a federally registered service mark of Nationwide Life
Insurance Company. On Your Side and Nationwide Allocation Architect are
service marks of Nationwide Mutual Insurance Company.
(1) Morningstar, 2005
(2) Fortune, April 2005
Nationwide variable annuities are issued by Nationwide Life Insurance
Company, Columbus, Ohio. The general distributor is Nationwide Investment
Services Corporation, member NASD. In MI only: Nationwide Investment Svcs.
Corporation.
Contacts:
Jeff Whetzel (614) 249-6354
whetzej@nationwide.com
Jeff Botti (614) 249-6339
bottij@nationwide.com
SOURCE Nationwide Financial Services, Inc.
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Related links:
http://www.nationwide.com
CONTACT:
Jeff Whetzel, +1-614-249-6354, or
whetzej@nationwide.com, or Jeff Botti, +1-614-249-6339, or
bottij@nationwide.com, both of Nationwide Financial Services,
Inc.
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