RILAs: The New Annuities In Town
October 26, 2021 by David Blanchett
There’s a new annuity in town that is receiving significant attention and garnering an increasing amount of annuity assets: the Registered Index-Linked Annuity (RILA). Given the hype, it’s important for advisors to consider these new products for clients—or at least be aware of how they work and where they could potentially fit within a retirement income plan.
What’s in a Name?
While RILAs aren’t technically all that new (they’ve been available for about a decade) they are relatively new as annuities go.
One emerging issue with the “newness” of RILAs is the various names used to describe the strategies across the industry. RILAs are also referred to as structured annuities, investment variable annuities, buffered annuities, etc. While these sound like very different things, the underlying strategy is generally very similar in that an insurance company uses financial options to gain a unique exposure to some type of market/investment (typically using a “buffer” or a “floor” approach).
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