US Pacesetter and the Benefits of Volatility-Targeted Indexes

The S&P 500® is widely regarded as the best single gauge of the U.S. equities market. But it’s not the only index crediting strategy available to your clients — they may want to consider diversifying the asset allocation on their policy to include a volatility-targeted index, such as the US Pacesetter Index or the Balanced Trend Index.

Volatility-targeted indexes are managed with the goal of leveling off the sharp ups and downs of the markets. They can still experience the same cycles as the general market, but they seek a smoother ride* than a traditional index like the S&P 500®. They aim to do so by:

• Tracking the performance of different asset classes, such as stocks, bonds, commodities, and cash.
• Adjusting the mix depending on what’s less volatile at the time, with the aim of managing the total volatility of the index.

That’s not the only reason for considering a volatility-targeted index.

Because volatility-targeted indexes are designed for lower volatility, National Life Group can offer these strategies with higher participation rates and – unlike S&P 500® index crediting strategies – without caps.

US Pacesetter inforce availability

The following policies will now be able to take advantage of the US Pacesetter no cap indexed crediting strategy, starting September 23 (for the October 14 sweep date):

• FlexLife and PeakLife IUL policies issued between 10/28/2019 and 09/24/2022 (except in NY)
• SurvivorLife IUL policies issued between 05/03/2021 and 09/24/2022 (except in NY)

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* There is no guarantee that a volatility-controlled index will achieve its objectives. When discussing this or other index strategies with your client, explain that this is not an investment in the market and that this is a method for crediting interest and disclose any cap, participation rate or threshold that will apply. For an index with volatility control and the additional costs deducted from the index value, the positive index value change may be less than that of similar indices that do not include volatility control and do not deduct costs. When included in a fixed indexed annuity with the protection of a 0% floor, the benefit of reduced downside will not be realized for index return below 0%. An investment cannot be made directly into an index.