North American Income Pay Pro Fixed Indexed Annuity – Guaranteed Income with Long-Term Care Support

The distinction between compound and simple interest on an income base roll-up is one of the most meaningful structural differences in the income FIA market, yet it is often buried in fine print rather than featured prominently. An 8% simple interest roll-up applies 8% of the original GLWB value each year — the dollar amount of the annual increase is constant for the full deferral period. An 8% compound roll-up applies 8% to the full current GLWB value each year — the dollar amount of the increase grows each year because it is calculated on an ever-larger base. Over a 5-year deferral period, the difference between simple and compound at 8% is modest. Over a 10-year deferral period, the difference is substantial: after 10 years of 8% simple interest, a $100,000 GLWB base grows to $180,000; after 10 years of 8% compound interest, the same $100,000 base grows to approximately $215,892. That $35,892 difference in the income base translates directly into a higher guaranteed lifetime income payment when the Lifetime Payment Percentage is applied at income activation. The Income Pay Pro’s 8% compound roll-up for 10 years is one of the most aggressive income base growth structures available from an A+-rated carrier in the current market. The 1.15% annual rider charge is the cost of accessing that compound roll-up guarantee, and the break-even analysis between the rider fee drag on the accumulation value and the income base growth it purchases depends on the specific deferral period and income activation age. For buyers who plan to defer for the full 10 years, the compound roll-up advantage over competing simple-interest alternatives is compelling.

The LPA Reserve is a feature that allows income recipients to bank unused lifetime income for future use — and it is a meaningful structural advantage that most competing income FIAs do not offer. In any year after LPAs are elected, the covered person may choose to take less than the full annual LPA amount. At the end of that contract year, the unused LPA amount is deposited into the LPA Reserve, subject to a maximum reserve limit. The LPA Reserve balance may then be taken as a lump sum at any time or withdrawn systematically until depleted. The practical use cases for the LPA Reserve are numerous. In a year when household income needs are lower than usual — a spouse returns to part-time work, a large expense was paid from another account, Social Security income increased — the covered person can take a partial LPA and allow the unused portion to accumulate in the Reserve. In a subsequent year when expenses spike — a home repair, a medical procedure, a family need — the Reserve provides an accessible pool that can supplement the standard LPA without requiring an excess withdrawal that would reduce the income base. The Reserve effectively transforms a rigid annual income structure into a more dynamic and real-world-friendly income management tool. Importantly, placing unused LPA in the Reserve does not eliminate the income guarantee — guaranteed lifetime LPAs continue at the same level in future years. The Reserve is purely additive: it creates additional access above and beyond the ongoing guaranteed income stream.

The Nursing Home Multiplier — formally called the LPA Multiplier Benefit in the contract — is triggered when the covered person is confined to a qualified nursing care center for more than 90 consecutive days, provided the 2-year minimum waiting period from contract issue has been met. Once the confinement is confirmed and the election is made, the Nursing Home Multiplier doubles the annual Lifetime Payment Amount for up to five annual payments. To continue receiving the doubled amount, annual confirmation that the covered person continues to meet the requirements is required on each payment date — the qualification is not permanent, and the multiplier ends if the covered person is no longer meeting confinement requirements at the time of an annual payment date, or after five payments have been made. There are several important limitations to understand. First, the Nursing Home Multiplier cannot be used concurrently with the nursing home confinement waiver — only one of the two features may be exercised at any given time. The nursing home confinement waiver allows penalty-free access to the accumulation value; the Nursing Home Multiplier doubles the LPA income amount. These serve different financial functions, and the contract owner must choose which to activate in a qualifying scenario. Second, the covered person cannot be confined to a qualified care center at the time the contract is issued — if the client is already in care at contract issue, this benefit is not available. Third, the Nursing Home Multiplier is not available in all states. Fourth, and most critically: this feature is not long-term care insurance and is not intended to replace a dedicated LTC policy. It doubles the income amount during a qualifying nursing home confinement — it does not pay for care facility expenses directly, does not cover home health care, assisted living, or memory care settings, and does not provide a separate benefit pool. Buyers who have significant LTC risk should evaluate whether the Nursing Home Multiplier is sufficient as a standalone care protection feature, or whether a combination with a dedicated LTC policy better addresses their full care planning exposure.

North American Company and Midland National Life Insurance Company are both members of Sammons Financial Group, which means they share the same parent organization and the same A+ financial strength ratings. Both the North American Income Pay Pro 10 and the Midland National Income Planning Annuity 10 are frequently compared because they are sibling products from the same parent company competing for similar income-focused buyer profiles. The structural differences are meaningful. The North American Income Pay Pro uses an 8% compound roll-up rate on the GLWB value for up to 10 years, with the LPA calculated by multiplying the grown GLWB value by the Lifetime Payment Percentage at the activation age. The Midland National Income Planning Annuity uses an age-banded Lifetime Payment Percentage (LPP) structure with no separate roll-up on a benefit base — income is determined by the LPP multiplied directly by the net premium, with the LPP increasing by 10% per birthday of deferral for up to 10 years. The North American compound roll-up approach tends to produce more income for buyers who defer for the full 10 years, because compounding a benefit base at 8% over a decade produces more growth than a 10% annual percentage increase on a static premium base for longer deferral periods. The Midland National LPP approach is simpler to explain and evaluate, and may compete more favorably for shorter deferral windows. Additional distinguishing factors: the Income Pay Pro includes the LPA Reserve and spousal continuation; the Midland National Income Planning Annuity includes the LPA Multiplier (same doubling provision with a 2-year wait and 90-day ADL threshold). The minimum premium is $20,000 for Midland National versus a different minimum for North American — confirm at application. Side-by-side income illustrations at your specific age, premium, and income activation date from Diversified Insurance Brokers remain the most reliable comparison tool.

Taking an excess withdrawal — any amount above the 10% annual free withdrawal provision — during the 10-year GLWB value increase period has two separate consequences that compound each other. The first consequence applies to the accumulation value: the excess amount is subject to surrender charges and potentially the MVA, reducing the actual cash in the contract by more than the nominal withdrawal amount taken. The second consequence applies to the GLWB value and roll-up: if an excess withdrawal is taken in any contract year, the 8% compound roll-up is not applied to the GLWB value for that year. This means the income base loses an entire year of 8% compound growth — which at 8% compound over 10 years is a significant forfeiture. For example, if the GLWB value has grown to $150,000 by year 7, an excess withdrawal in year 7 means the GLWB value does not receive the $12,000 of compound roll-up credit it would have received in that year (8% of $150,000). That lost credit also does not compound in years 8, 9, and 10 — the missed roll-up year creates a permanent reduction in the final GLWB value and therefore a permanent reduction in the lifetime income that value would have produced. The Income Pay Pro is designed for buyers who commit to the 10% free withdrawal provision as their primary access mechanism during the accumulation phase, with the guaranteed LPAs providing structured income when the time comes. For buyers who anticipate needing more than 10% annual access during the surrender period for reasons beyond income needs, a product with more liquid features would be more appropriate than the Income Pay Pro.

The Income Pay Pro 10 supports both single-life and joint-life income through its GLWB rider, and spousal continuation is also available for couples. For joint income scenarios, the LPA is calculated based on the attained age of the youngest covered person — meaning the payout percentage applied at income activation is determined by the younger spouse’s age rather than the older spouse’s. This has a planning implication: the younger spouse’s age lowers the payout percentage compared to what a single-life income based on the older spouse’s age would produce, but the guarantee extends over two lifetimes rather than one. Spousal continuation is a separate, important feature for couples. If the contract owner passes away and the surviving spouse is the designated beneficiary, the surviving spouse may elect to continue the contract in force rather than taking the death benefit as a distribution. Under spousal continuation, the GLWB rider remains active, the 8% compound roll-up continues if income has not yet been activated, and the surviving spouse can activate income on the same contract at the same GLWB value accrued through the date of continuation. This prevents the scenario where a death event forces an untimely liquidation of the annuity at a disadvantageous point in the deferral period. For couples planning to use the Income Pay Pro as a joint retirement income tool, the interplay between the joint-life LPA, the Nursing Home Multiplier for either spouse, spousal continuation, and the LPA Reserve provides a comprehensive set of planning features that most competing income FIAs do not match in a single contract design.

The Income Pay Pro is structured as a modified single-premium FIA with the ability to activate income as early as age 50 — within 30 days of issue for qualifying buyers. This means income does not have to be deferred; buyers who are already at their income target age at the time of purchase can begin LPAs almost immediately after contract issue. However, the product’s most compelling economics emerge when the 8% compound roll-up is allowed to work for a meaningful deferral period — 5 to 10 years from issue. For immediate income scenarios, the GLWB value at issue is the premium multiplied by the payout factor for the current age, without any roll-up applied. The resulting income amount in an immediate scenario will be lower than a competing SPIA or period certain income product designed for immediate payouts, because the GLWB structure is optimized for deferred income and the 1.15% annual rider fee reduces the contract value even in year one. Buyers who need the highest possible guaranteed income stream beginning immediately — within the first year of purchase — are typically better served by a single-premium immediate annuity (SPIA) or a deferred income annuity (DIA) structured for the specific income start date, rather than an income FIA designed around the compound roll-up deferral advantage. The Income Pay Pro earns its most competitive positioning in the 5- to 10-year deferral window — for buyers who are 57–70 at issue and planning to activate income between their mid-60s and age 70–75. For buyers who plan to activate income within 1–2 years of purchase, comparing the Income Pay Pro against immediate income alternatives at the same premium and income start date will often reveal that the GLWB structure’s short-deferral economics are less competitive than a simpler dedicated income product.

The Income Pay Pro’s embedded GLWB rider charges 1.15% of the GLWB value annually, deducted from the accumulation value on each contract anniversary. To position this in the current income FIA market: the 1.15% charge is above the Allianz Core Income 7’s 1.25% maximum cap (though the Core Income 7 uses AV for calculation), below the Atlantic Coast Life Income Navigator’s 1.50%, and comparable to the Corebridge Power 10 Protector Plus Income’s approximately 1.10% and the Midland National Income Planning Annuity’s embedded 1.25% GLWB cost. A meaningful structural distinction: the Income Pay Pro charges 1.15% of the GLWB value — not the accumulation value. During the deferral period with 8% compound growth, the GLWB value grows substantially faster than the accumulation value (which is being reduced by the rider fee deductions). This means the dollar amount of the annual fee increases significantly each year during deferral, because it is calculated on the growing GLWB base. In practical terms: as the GLWB value compounds from $100,000 to $200,000 over 9 years, the annual fee goes from $1,150 to approximately $2,300. Over the full 10-year deferral period, the cumulative rider fees deducted from the accumulation value are substantially higher in dollar terms than the nominal 1.15% rate suggests. This is not a hidden cost — it is a disclosed product mechanic — but it should be modeled explicitly in any income illustration, because the accumulation value (and death benefit) will be materially lower after 10 years of fee deductions on a growing GLWB base than a simple 1.15% × original premium calculation would suggest.