Nationwide has launched its second registered index-linked annuity (RILA), and it offers a downside protection benefit that the company hopes will counter worries among investors about putting cash into the market.

Nationwide Defender, Columbus, Ohio-based Nationwide’s second RILA, is an annuity that is partly designed to allow customers to feel more comfortable getting back into the market, said Aaron Murphy the company's associate vice president of variable annuity product development.

“We really see Defender as a great product for consumers that are worried about market volatility and are uncomfortable getting off of the sidelines and into the market,” he said.

The annuity will offer investors five different index options: the S&P 500, the MSCI EAFE, the Russell 2000, the S&P MidCap 400, and the Nasdaq-100. In addition, investors can tailor the product to fit their needs by using either a one-year, three-year or six-year term, the firm said. It also includes two downside buffer options: 10% or 20%, said Mike Morrone, vice president of Nationwide Annuity business development.

“We’re hearing customers tell us that they want protection-type products," Morrone said. “This product was designed to provide some protection as people enter retirement.”

The buffers absorb the first 10% to 20% of a loss depending on the option the investor chooses, while the investor assumes the rest, the firm said. 

“We think it’s a very attractive solution and gives financial professionals a solution to clients who think they should have a portion of their portfolio in equities,” Murphy said. 

The RILA has two death benefits that come at no additional cost, according to the company. One benefit provides the contract value of the RILA on the day the benefit was processed. The other provides either the contract value or the initial premium adjusted for withdrawals, whichever is greatest, the firm said. 

There is also a spousal benefit, which means that, when one spouse passes away, it provides the surviving spouse with the payout even if that person did not own the RILA, Morrone explained.

The decision to launch the firm’s second RILA comes as the products are enjoying a boom in popularity. According to a recent LIMRA study, RILA sales have increased to more than $41 billion in 2022 compared to $1.9 billion in 2014. Nationwide Defender joins Defined Protection Annuity (DPA), the firm's first RILA that released in August 2020.