Jackson gives a new spin on its investment-focused VAs, with guaranteed account balance option

Jackson National is adding a living benefits rider to a VA it debuted over a decade ago as a bare-bones investment-focused product.

This week, the company announced that it is pairing a guaranteed minimum account balance rider with its Elite Access line of variable annuities. That optional feature, which costs 90 basis points for a 10-year guarantee and 100 bps for a seven-year guarantee, ensures that account balances won’t go down, even if the underlying investments in it lose value.

The company launched Elite Access in 2012, emphasizing the investment selection it offered, including funds focused on alternative asset classes, as well as the benefit of tax deferral.

“The addition of Principal Guard to Jackson’s Elite Access Suite positions us to better meet the evolving market demand for protection-oriented products,” said Brian Sward, head of product solutions for Jackson National Life Distributors, in the company’s announcement.

Industrywide, annuity sales have grown in 2024, at a record $216.6 billion for the first half of the year, led by fixed-rate deferred annuities, at $83.7 billion, and fixed indexed annuities, at $59.3 billion, data from Limra show. Traditional variable annuities, the category that includes Elite Access, saw $29.1 billion, versus $30.9 billion for registered index linked annuities, a subcategory of VA that provides downside protection and limits appreciation. Jackson was the biggest seller of traditional VAs during the first six months of year, bringing in over $5 billion in those products, according to Limra. 

The industry sales trends may suggest a decreasing tolerance for risk among investors and people nearing retirement who were burned by market volatility since Covid, although many of the protection-focused annuities started ramping up sales even before that.

Jackson’s new Principal Guard rider gives a 100-percent account balance guarantee for the seven-year option and a 110-percent guarantee for the 10-year version.

Data from Wink, Inc. show that the rider has spousal continuation for the different annuities on which it is available. Those who opt for the rider must allocate at least 30 percent of their contract’s assets to a fixed option, and it is not available in conjunction with Jackson’s Earnings Max Death Benefit, according to Wink.

"There are only five or six companies that have active GMAB riders available as of today," said Peter Lamond, VA ambassador at Wink, in an email. The idea is similar in concept to adding a put option on a stock, he said.

“Elite Access used to be a bare-bones contract, but they added richer death benefits and now this living benefit. Principal guarantee after 10 years used to be standard and, in this case, it's a bit richer, but we've seen fluctuations and interest rates are high, so they can support a higher guarantee,” said Tamiko Toland, owner of Toland Consulting, in an email. “The benefit requires a minimum allocation to a special fixed account, which is very much in line with many living benefits in general. Jackson has veered away from investment requirements for its GLWB [available alongside other VAs], however.”

The guaranteed minimum account balance option is a simple version “with no step-up or reset,” and “as a GMAB, it's functional without having additional features that would confuse advisors and allows them to invest most of the contract without worrying about losses for a predetermined period,” Toland said.