American Skandia Life Assurance Corp. is looking to reel in investors with a new variable annuity that offers a bonus if it does not reach its target over 10 years.
Performance Advantage pays investors a one-time bonus or an ongoing annual credit if the annuity does not reach a performance target of 7.2% per year, the Shelton, Conn.-based company said in a statement.
If the goal isn't met over 10 years, the customer can opt for a 10% bonus on the account value if converting the investment into an annual income stream. Or the investor can receive a 25-basis-point bonus on the value of the account.
American Skandia is also paying a 1% bonus on all purchase payments for the annuity made during the first year of ownership. These new features cost the customer nothing, the company said.
American Skandia has a 5.6% share of the U.S. variable annuity market, according to the Variable Annuity Research Data Association.