Nationwide Updates Variable Annuity Income Riders

Nationwide has updated some of its variable annuity income guarantee riders.

The Columbus, Ohio-based company changed the riders available with its Nationwide Advisory Retirement Income Annuity contract — a product aimed at fee-based advisors — as well as contracts designed to pay commissions.

What it means: Traditional variable annuity sales have dropped in recent years.

The Nationwide rider refresh suggests that insurers will still have products on the shelves when the sales pendulum swings back in traditional variable contracts’ favor.

The backdrop: Rising interest rates and investment market volatility have increased the client appeal of fixed annuities in recent years.

For insurers still in the variable annuity market, the idea of tying product returns to the performance of investment indexes, rather than bundles of stocks, has been hot.

U.S. sales of individual variable indexed annuities, or registered index-linked annuity contracts, increased to $21.8 billion the first half of the year, from $20.4 billion in the first half of 2022, according to LIMRA.

Over the same period, sales of traditional variable annuities fell to $26.1 billion, from $35 billion.