Nationwide Destination B Annuity offered by Nationwide

Introduction
Type of Product Variable Annuity
Product NameNationwide Destination B Annuity
Offered byNationwide
Company Info

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Contract and Purchasing
Minimum Premium Payment10000
Maximum Premium Payment1000000
Minimum Additional Premium Payment1000
Maximum Age at Start of Contract85
Investments
Ability to Select Asset AllocationYes
Total Number of Investment Options85 [Find annuities with more investment options]
Fixed Account
Features and Benefits
Free WithdrawalsYes
Free Withdrawal Limit10
Waiver of Withdrawal ChargesAvailable
Guaranteed Death BenefitAvailable
Are Telephone Transactions AllowedYes
Fees and Expenses
Minimum Total Fees and Expenses1.75 [Find annuities with lower fees and expenses]
Maximum Total Fees and Expenses3.24 [Find annuities with lower fees and expenses]
Minimum Mortality and Expense Risk Charge "M&E Fee"1.1 [Find annuities with lower mortality and expense fees]
Maximum Mortality and Expense Risk Charge "M&E Fee"1.1 [Find annuities with lower mortality and expense fees]
Administrative Fee30.00 [Find annuities with lower administrative fees]
Contract Maintenance Fee0.2 [Find annuities with lower contract maintenance fees]
Early Withdrawal Charges / Surrender Fees
Minimum Investment Management Fee0.45 [Find annuities with lower investment management fees]
Maximum Investment Management Fee1.94 [Find annuities with lower investment management fees]
Sales Compensation
Maximum Commissions8 [Find annuities with lower commissions] [Find annuities with higher commissions]
Contact Information
Company OfferingNationwide
Company TypeInsurance Company
Phone Number800-882-2822
Websitewww.nationwide.com
Talk to a Financial Advisor
Contact Information Connect with a Financial Advisor
Reviews and Ratings
Average Review

4.5/5 from 4 Reviews


Key Phrases:
Annuity Product Types: 

Product Ratings and Reviews

Rating:
4
Average: 4 (1 vote)

Both of the reviewers who talk about simple interest have reasonable points.

However, one thing that Nationwide does mention with this rider is the potential to beat inflation.

To support the point of the reviewer who brought-up the whole simple interest issue, inflation works on a compound basis.

Crediting a simple level of interest in an attempt to offset the damaging impact of inflation will result in a mismatch.

Unless the inflation level is very high (many feel that this is a real possibility), the positive impact of the 7 percent simple interest will stay ahead of any damage caused by inflation.

Anyway, the overall point is that inflation compounds while simple interest does not, so using simple interest to guard against inflation may not make sense.

 

1,103 reads
Rating:
5
Average: 5 (1 vote)

Why the rant about simple interest?

These things are all based on simple interest.

Also, the benefit is there to serve as a floor in the event that overall stock and bond market performance is lousy and less than 7 percent.

The guaranteed minimum is not the only option that can increase the income benefit base.

Over the course of 10 years, it is likely that the minimum 7 percent guarantee will come into play less often than a market return adjustment to the contract value.

Who wouldn't want to invest with a floor of guaranteed return in this environment?

The upside is there if things are all rosy in the market, but the protection is also there if things don't turn-out as well as expected.

Simple interest is sure better than no interest.

1,113 reads
Rating:
4
Average: 4 (1 vote)

The 7 percent minimum guarantee that is referenced by the other reviewer is simple interest - not compound interest.

For someone who invests $100,000 in this variable annuity, the minimum guaranteed increase in the income benefit would be $7,000 per year.  

If this person holds onto the VA and does not take any withdrawals for 10 years, the income base would have a guaranteed minimum of $170,000.

If the benefit were based on compound interest rather than simple interest, that same income base would be $196,715.

A $26,715 difference is pretty meaningful.

Now assume that the actual income withdrawal benefit is 5 percent.  

5 percent of the $170,000 is $8,500 per year.

5 percent of $196,715 is $9,835.

1,330 reads
Rating:
5
Average: 5 (1 vote)

The living benefit rider that comes with Nationwide's Destination B variable annuity is pretty competitive when compared to similar options from competing companies.

The lifetime income rider is currently at 7 percent.  Pretty interesting return in our current low interest rate world.

For the person who owns the annuity, this means that their income benefit base is guaranteed to increase a minimum of 7 percent per year for the first 10 years that they own the contract.

This would be affected if the owner chooses to start taking withdrawals prior to the end of the first 10 years.

This also means that stock markets could go completey haywire (like they have been over the past couple of years), and the owner would still have the minimum 7 percent increase to their benefit base.

If, on the other hand, markets happen to be great, then the income benefit base will increase will reflect contract value and market increase.

 

 

3,041 reads

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