North American – New Fidelity index to become default in illustrationsBenkis Barrueta
From North American:
North American is pleased to announce starting March 27, 2021, the new Fidelity Multifactor Yield IndexSM
5% ER will be the default index when running indexed universal life insurance (IUL) illustration through
our web-based illustrations platform.
What does this mean for illustrations?
The Fidelity index seeks to deliver more consistent returns over time, and when combined with a high
participation rate and a lower cost lead to higher illustrated cash value accumulation potential.
Why did we make this change?
Defaulting to this index helps agents more quickly identify the accumulation potential in our IUL products.
States that do not have the Fidelity Index available yet will continue to see the S&P 500® annual point-to-point as the default index. The Fidelity index is available in all states except Alabama, California, Delaware,
Florida, North Dakota, and South Dakota.
The WinFlex software currently uses the Fidelity index as the default.
About the index
The Fidelity Multifactor Yield IndexSM 5% ER is a rules-based index that blends six equity factor indices with
U.S. Treasuries, and uses a dynamic allocation approach that seeks to reduce volatility to deliver more
consistent returns over time. Six-factor indices were chosen by Fidelity with the goal of enhancing returns,
managing risk, and targeting specific outcomes. A fixed income overlay is applied with a combination of
10-year treasuries and cash to account for potential changes in interest rates. The allocation between
equity allocations and fixed allocations is adjusted daily with a goal to meet a 5% volatility target.
For resources on this index, please visit go.fidelity.com/FIDMFY.