FIAs are often positioned as an alternative to bonds, but there’s always been one issue: they weren’t truly a differentiated asset class. Our GAP Rider eliminates that objection with guaranteed gain.
Expert Author
Joe Schafer
Regional Vice President, Sales at Guaranty Income Life Insurance Company
There’s a bond alternative you likely haven’t seen yet.
What you have seen are traditional fixed indexed annuities positioned as a bond alternative. For the client who wants to avoid stock market risk but still wants their money to work for them, it’s a familiar story:
Principal protection, index-linked growth potential, no direct market exposure.
However, the problem has always been that a fixed indexed annuity isn’t a truly differentiated asset class because growth is still tied to the movement of the market.
Guidepath Growth FIA with the GAP Rider solves that. It’s the next era in bond alternatives.
Why Today’s Bond Market Calls for an Alternative
In a traditional 60/40 portfolio, bonds have long played an important role. They were used to provide income, add stability, and help diversify away from stock market risk.
But bonds come with their own risks.
When interest rates rise, existing bonds usually lose value. That’s because newer bonds may pay higher rates, making older bonds less attractive.
When interest rates fall, investors face a different problem. Existing bonds may rise in value, but new bonds usually pay less income.
That’s what happened after 2008.
To support the economy, the Federal Reserve pushed interest rates close to zero. Bond yields fell and stayed low for years. For many investors, that meant bonds no longer produced the level of income they were used to receiving.
The takeaway is simple: bonds may still have a place in a portfolio, but they don’t always deliver the predictable income, or stability, clients expect.
That’s why financial professionals have looked for other ways to put clients’ “safe money” to work.
Guaranteed Gain with the Potential for More
Today, many popular bond funds are yielding around 2% as shown in the chart:
| Short Duration Bond Funds | 5-Year | 10-Year |
|---|---|---|
| Vanguard Short-Term Bond (BSV) | 1.68% | 1.98% |
| SPDR Bloomberg 1-3 Month T-Bill (BIL) | 3.34% | 2.15% |
| Schwab Short-Term US Treasury (SCHO) | 1.82% | 1.74% |
| Most Popular Bond Funds | 5-Year | 10-Year |
|---|---|---|
| Vanguard Total Bond Market (BND) | 0.18% | 1.67% |
| iShares Core U.S. Aggregate Bond (AGG) | 0.18% | 1.64% |
| Vanguard Total International Bond (BNDX) | 0.29% | 1.78% |
| Vanguard Intermediate-Term Bond Index (BIV) | 0.45% | 2.02% |
| iShares Core USD Bond Market (IUSB) | 0.53% | 2.02% |
| American Funds The Bond Fund of America (RBFGX) | 0.41% | 2.21% |
Guidepath Growth FIA offers greater growth potential with a variety of index options and competitive crediting strategies, including guaranteed caps as high as 11%*.
But without the GAP Rider, the least a client can earn in any given year is still 0% if the indexes don’t perform.
The GAP Rider changes that.
This optional rider guarantees a minimum accumulation value at the end of the selected term: 120% of premium at year five, or 130% at year seven, less withdrawals. The GAP Rider benefit has an annual fee of 0.20%, deducted from the accumulation value during the contract term. This fee does not reduce the guaranteed minimum.
Index options give clients the opportunity to earn more. If index crediting helps the contract’s accumulation value grow beyond the guaranteed minimum, the client receives the higher accumulation value. If not, the GAP Rider guarantee applies.
There’s no market risk, because the guarantee doesn’t depend on index performance.
And there’s no interest rate risk, because once the contract is issued, the guaranteed minimum factors are locked in.
Making this a risk-free return on clients’ money.
In summary, bonds still have a place in client portfolios. But for a portion of bond allocations, other fixed income allocations, or cash on the sidelines, the Guidepath Growth FIA with GAP Rider offers guaranteed gain with the potential for more.
It’s the next era of bond alternatives.
See how Guidepath Growth FIA with GAP Rider may be a good fit for a portion of your clients’ portfolio.
Related Posts
A Fast-Growing Small Business Niche for Financial Professionals in 2026
Discover the small business niche for financial professionals growing fastest in 2026 and how to position your practice to reach these next-gen creator clients.
Financial Education Blueprint: Building Credibility in a Trust Recession
Learn how financial professionals can use financial education to build trust, attract next-gen clients, and grow their practice in a trust recession.
Help High-Earning Millennials Reduce Debt
Help high-earning millennials reduce debt so they can start investing and compounding wealth. Use a ready-made video to start client conversations today.
* New money rates subject to change
Sources:
BSV-Vanguard Short-Term Bond ETF | Vanguard
State Street SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) Performance History – Yahoo Finance
Schwab Short-Term U.S. Treasury ETF (SCHO) Performance History – Yahoo Finance
Vanguard Total Bond Market Index Fund (BND) Performance History – Yahoo Finance
iShares Core U.S. Aggregate Bond ETF (AGG) Performance History – Yahoo Finance
Vanguard Total International Bond Index Fund (BNDX) Performance History – Yahoo Finance
Vanguard Intermediate-Term Bond Index Fund (BIV) Performance History – Yahoo Finance
iShares Core Universal USD Bond ETF (IUSB) Performance History – Yahoo Finance
American Funds The Bond Fund of America (RBFGX) Performance History – Yahoo Finance
Guidepath Fixed Indexed Annuity is underwritten and issued through Guaranty Income Life Insurance Company. Guarantees are backed by the financial strength and claims paying ability of the company. Product availability and features may vary, and some features may not be available in all states.