Prudential FlexGuard® indexed variable annuity-Everything You Need to Know
- Derek Notman
- Jul 1
- 3 min read
Updated: Aug 7
The Prudential FlexGuard® Indexed Variable Annuity is a customizable financial product designed to offer investors a balance between growth potential and protection against market volatility. Launched in May 2020, FlexGuard has gained significant traction, achieving over $1 billion in sales within its first six months, marking it as one of the fastest-selling products in its category.
Key Features of Prudential FlexGuard® Indexed Variable Annuity
Diverse Index Crediting Strategies
FlexGuard provides a range of index crediting strategies, allowing investors to tailor their investment approach based on individual financial goals and risk tolerance. These strategies include various term lengths and protection levels, enabling customization to meet specific needs.
Protection Levels
Investors can select from multiple protection levels, commonly referred to as buffers, which help mitigate potential losses during market downturns. This feature offers a safety net by absorbing a portion of the negative returns, thereby reducing the impact on the investor's principal.
Variable Investment Options
In addition to index-linked strategies, FlexGuard offers access to a variety of variable investment options. This flexibility allows investors to diversify their portfolios and adjust their investment mix in response to changing market conditions or personal preferences.
No Explicit Product Fees on Index Strategies
One notable aspect of FlexGuard is the absence of explicit product fees, such as mortality and expense risk charges, when allocating funds to index strategies. This structure can enhance the growth potential of investments by reducing the overall cost burden.
Return of Premium Death Benefit
FlexGuard includes a return of premium death benefit at no additional cost. This feature ensures that beneficiaries receive the greater of the account value or the total premiums paid (adjusted for withdrawals), providing a level of legacy protection for investors.
Considerations When Choosing Prudential FlexGuard®
Surrender Charges: The annuity imposes a surrender charge schedule for early withdrawals, starting at 8% and decreasing over a six-year period. Investors should be mindful of this schedule to avoid unexpected charges.
Market Risk: While the product offers protection features, investments are still subject to market risks. It's essential to understand the specific terms of the selected strategies to ensure they align with one's risk tolerance and financial objectives.
Conclusion
In summary, the Prudential FlexGuard® Indexed Variable Annuity presents a blend of growth opportunities and protective features, making it a compelling option for investors seeking customizable solutions in uncertain markets. As with any financial product, it's crucial to thoroughly assess individual needs and consult with a financial professional to determine suitability.
Contact Us for Expert Advice
We'll end with a note that we are an independent firm, which gives us the advantage of being entirely objective when it comes to recommending a product or service. If you feel like you would like a second opinion from us regarding this annuity or something else, feel free to contact us for a nice chat.
Best Regards,
Derek Notman & Drew Faloon
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