Enhancements to Capital Preservation Plus Lifetime Income increases living
benefit's flexibility
COLUMBUS, Ohio, Oct. 13 /PRNewswire/ -- Nationwide Financial Services,
Inc. (NYSE: NFS) has added even more flexibility to its hybrid living benefit,
Capital Preservation Plus Lifetime Income (CPPLI).
Investment professionals and their clients now have the opportunity to use
Nationwide Allocation Architect(SM), a managed asset allocation service that
helps consumers match their risk tolerance with their investment goals. The
use of asset allocation does not guarantee returns or protection from
potential losses. Additional enhancements to CPPLI also include the option of
taking an immediate annual withdrawal of up to 6 percent during the Capital
Preservation phase, as well as 3 and 4 percent Extra Value options that will
be available at an additional cost.
"The intent of CPPLI has always been to help provide customers with the
principal protection, flexibility and lifetime withdrawal options that were
restricted in traditional living benefits," said Mark Phelan, senior vice
president of Individual Investments for Nationwide Financial.
"These new enhancements further increase CPPLI's flexibility and choice
for customers, whether it's through a more disciplined approach to investment
through Nationwide Allocation Architect or providing access to income through
the immediate withdrawal option."
Phelan said Nationwide Allocation Architect helps provide a disciplined
approach to investment through diversification and an easier way to manage
assets.
Nationwide Allocation Architect(SM) was first made available in August on
certain variable universal life (VUL) products issued by Nationwide Life
Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus,
OH. The service was launched by Nationwide Financial through its affiliated
company, Nationwide Investment Services Corporation (NISC), a registered
investment advisor and NASD member.
Nationwide Allocation Architect(SM) offers customers additional options of
how to invest assets within their variable annuity. Working with their
investment professional, consumers can determine their risk tolerance and then
decide which asset allocation investment model -- conservative, moderately
conservative, moderate or moderately aggressive -- makes sense for them. The
four asset allocation models are in addition to the previous investment
options that are available with CPPLI, which includes three Fidelity VIP
(Variable Insurance Products) Freedom Funds and five Gartmore GVIT (Gartmore
Variable Insurance Trust) Investor Destinations Funds.
NISC has partnered with Ibbotson Associates Advisors LLC to provide an
investor profiling tool, asset allocation models and investment option
selections that make up the Nationwide Asset Allocation Architect(SM) models.
Ibbotson is a recognized authority on asset classes and their historical
behavior, and has helped their clients balance investment risk and return
based on their goals and objectives for more than 25 years.
By incorporating the immediate withdrawal option, Nationwide's Capital
Preservation Plus Lifetime Income gives customers the flexibility to access
income based on their needs.
"CPPLI still offers customers the same principal protection and lifetime
withdrawal phases that have always been available," said Phelan. "The
immediate withdrawal option simply increases its flexibility so customers can
respond to their individual circumstances as needed."
Nationwide Financial took living benefits to a new level by introducing
Capital Preservation Plus Lifetime Income. Available with certain Nationwide
variable annuities for an additional cost, Capital Preservation Plus Lifetime
Income provides a unique triple-benefit, "all-in-one" investment that provides
a return of principal guarantee (which may be reduced by certain applicable
contract charges like contingent deferred sales and contract maintenance
charges) while also offering increased flexibility and withdrawals for life.
During the Capital Preservation phase of the rider, investors choose a
term of 5, 7 or 10 years. Investors are then guaranteed a return of their
principal.
At the end of the Capital Preservation phase, investors can assess their
needs and choose what they'd like to do. They can enter the Lifetime
Withdrawals phase and begin withdrawals, annuitize their contract, re-enter
the Capital Preservation phase and delay taking withdrawals until a later age
for a potentially higher withdrawal amount, or drop the rider and its fee.
During the Lifetime Withdrawals phase, the rider allows them to take
withdrawals from their account of between 4 and 7 percent of an amount
guaranteed for life (based on age at first withdrawal), even after their full
principal has been returned and if their contract value is zero.
Excess withdrawals may reduce future withdrawal amounts; withdrawals may
be subject to CDSC; and if taken before age 59-1/2, may be subject to income
tax penalties in addition to regular income taxes. Withdrawals will reduce
the contract value and death benefit. The rider has a daily charge at an
annualized rate of 0.60% and might not be available in all states. For the
variable portions of the account, the charge is deducted from the net asset
value of these accounts. It's calculated each day. For portions in the
guaranteed term option, the charge is simply deducted from the interest rate
credited to the account. The base variable contract charge for variable
annuities offering this rider ranges from 1.10% to 1.75%.
Annuities are long-term, tax-deferred investments designed for retirement
and may fluctuate in value. They also allow customers to create a fixed or
variable stream of income through a process called annuitization.
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. 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, these don't apply to any variable
accounts that are subject to investment risk, including possible loss of
principal.
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.
The return of principal guarantee with the standard version of CPPLI is
achieved by allocating the initial investment between a guaranteed term option
(GTO) and the variable investment options (including the fixed account, if
available) available in the variable annuity contract according to the term
selected (GTOs are not available in the states of Maryland, Pennsylvania and
Washington). Nationwide Life Insurance Company's GTOs are held in a separate
account that invests in fixed interest investments. Also:
- Payments into this account cannot be used to satisfy creditors of the
insurance company's general account should the company become
insolvent
- The guaranteed fixed rate is secured by assets that must meet
investment and credit quality guidelines and the reserving requirements
for the separate account as determined by state law
- If a person has GTOs in the contract, he or she has no claim, maintain
no interest and do not participate in the investment experience of the
separate account assets
- Transfers and withdrawals from the GTO before maturity are subject to a
market value adjustment
- The market value adjustment reflects the impact of interest rate
changes from the time the guarantee period was selected; upward
movements in interest rates will cause market value to go down, while
downward rate movements cause market values to increase
"The enhanced Capital Preservation Plus Lifetime Income rider provides
investment professionals with a product that offers clients even more
flexibility and control when preparing for or entering retirement," said
Phelan.
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 Ibbotson Associates
Ibbotson Associates Advisors, LLC, is a leading authority on asset
allocation, providing products and services to help investment professionals
obtain, manage and retain assets. The company's business lines include
investment consulting and research; planning and analysis software; investment
advice; educational and marketing services and a widely used line of NASD-
reviewed presentation materials. The company markets its integrated product
line to institutional money managers, insurance companies, plan sponsors and
consultants, financial planners, brokers, mutual fund firms, hedge funds,
banks and small money managers. For more information, visit http://www.ibbotson.com.
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(1). For more information, visit http://www.nationwide.com.
(1) Fortune Magazine, April 2005
Nationwide, the Nationwide Framemark and Nationwide Financial are
federally registered service marks of Nationwide Mutual Insurance Company. On
Your Side and Nationwide Allocation Architect are service marks of Nationwide
Mutual Insurance Company.
Form number, (AAN-0101AO)
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.
Capital Preservation Plus Lifetime Income is a service mark of Nationwide
Life Insurance Company
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
http://www.nationwide.com
Company News On-Call:
http://www.prnewswire.com/comp/607050.html
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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