Delaware Life Launches First Bitcoin-Linked Fixed Index Annuity
Delaware Life Insurance Company has launched a groundbreaking fixed index annuity, making it the first U.S. insurer to integrate a BlackRock index that includes exposure to Bitcoin. This initiative addresses the evolving demands of retirement investors seeking a blend of traditional market exposure with digital asset investment while preserving principal protection inherent in annuities.
Innovative Index for Retirement Planning
The new offering ties to the BlackRock U.S. Equity Bitcoin Balanced Risk 12% Index. This index strategically allocates 74% to the iShares Core S&P 500 ETF, 25% to the iShares Bitcoin Trust ETF (IBIT), and 1% to cash. The aim is to maintain a 12% volatility target, utilizing dynamic cash adjustments to navigate Bitcoin's price fluctuations.
Robert Mitchnick, BlackRock’s Global Head of Digital Assets, underscores the significance: "The BlackRock U.S. Equity Bitcoin Balanced Risk 12% Index offers a measured approach, allowing policyholders to participate in digital assets while maintaining the downside protection they expect from annuity products."
Strategic Collaboration and Innovation
Colin Lake, Delaware Life’s CEO of Marketing, emphasizes the innovation behind their offerings: “We’re proud to partner with BlackRock as the first insurance carrier to offer cryptocurrency exposure through a fixed index annuity. As the retirement-planning landscape evolves, we’re continuously and thoughtfully innovating to meet the needs of financial professionals and their clients.”
The inclusion of IBIT in the index offers policyholders exposure to Bitcoin's potential returns under professional management, eliminating the need for direct digital asset ownership. This meets regulatory compliance requirements while expanding investment options.
Annuity Products and Performance
Delaware Life's annuity products featuring this index include Momentum Growth™, Momentum Growth Plus™, and DualTrack Income™. These products allow clients to strategically enhance their retirement portfolios with a mix of traditional and digital assets. As of December 31, 2024, the index posted a six-month return of 1.88%, despite a recent three-month decline of 3.16% due to Bitcoin's volatility.
Bitcoin's current price is noted at $87,774, with a slight 2% decrease in the last 24 hours and a trading volume of $64 billion. Such figures highlight the dynamic nature of integrating cryptocurrency into traditional financial products. This initiative sets a precedent in the life insurance industry, expanding investment options for policyholders and aligning with modern financial trends.