Trio of Fixed Index Annuities From RBC Insurance Spotlight New Interest Crediting Strategy, Link to Dow Jones Industrial Average

Dec 07, 2006 12:12:09

GREENVILLE, S.C., Nov. 10 /PRNewswire/ -- Three new fixed index annuities from RBC Insurance utilize an innovative, client-friendly design that combines safety, flexibility, and liquidity with innovative asset diversification and interest crediting strategies. The RBC Enhanced Choice 8, Choice 10 and Enhanced Choice 12 index annuities are among the first in the industry to utilize quarterly cap interest crediting, a hybrid crediting strategy that computes interest based on the sum of four capped quarterly results. "By blending the more potent upside of a monthly cap strategy with the simplicity of annual point-to-point, quarterly cap crediting combines the advantages of the two methods most commonly used in index annuities," said Ronald DiCicco, vice president, sales and marketing for RBC Insurance. The RBC Choice Series of fixed index annuities employ a client-focused design that includes two indexed accounts linked to the Dow Jones Industrial Average(sm). The Dow is viewed as the market standard by most consumers. "With indexed accounts tied to the Dow, clients benefit from the familiarity and consistency of the most widely recognized market index. And though the Dow historically has tracked closely with the S&P 500, it has shown stronger upside in recent years," said DeCicco. Quarterly cap crediting is used in one of the two indexed accounts. The other indexed account uses a monthly averaging strategy with either a cap or a spread fee. There is also a fixed account that performs like a traditional fixed annuity. Accounts automatically rebalance at each contract anniversary, and clients can reallocate assets annually without restriction. A key goal of the RBC Choice Series is to minimize the complexity and uncertainty producers and clients sometimes associate with fixed index annuities. The combination of indexed and fixed accounts promotes diversification within the contract, allowing the client to pursue upside potential while eliminating the chance of zero interest in any given crediting period. "Diversification is a valuable tool for managing volatility and creating predictable yields based on individual client goals and risk tolerance," said DeCicco. "We've also simplified the indexed accounts by giving them only one moving part, making them easy to explain." In addition to their signature asset allocation and interest crediting features, the RBC Choice Series of Fixed Index Annuities offer several competitive liquidity features. These include free annual withdrawals of up to 10 percent of accumulation value after the first contract year as well as confinement and terminal illness waivers. The greater of full account value or the minimum guarantee value is paid at death. The RBC Enhanced Choice 8 and RBC Enhanced Choice 12 also offer a premium enhancement/bonus that is credited at contract issue.