We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • Companies Apply Annuity Balm for Retirement Pain

    November 5, 2011 by Linda Koco

    November 02, 2011

    By Linda Koco
    Contributing Editor, AnnuityNews

    Recent annuity product rollouts are putting the spotlight on retirement income strategies as opposed to the how-much-you-can-accumulate focus of yesteryear, and advisors are of two minds about that.

    So many of the new annuity debuts mention retirement income that annuity historians may one day call this the all-about-income era.

    For accumulation-focused specialists, the trend may bring more attention to retirement income than they would like to see.

    According to Kevin Loffredi, vice president-insurance solutions for Morningstar, Chicago, some registered reps just don’t believe in using annuities to help clients build an income stream. “They say they can build an investment portfolio and systematic withdrawal plan that is better suited to the client’s needs, and that this is all that their clients need.”

    But other advisors Loffredi has trained welcome the growing focus on income products, he says, and they like the emergence of income planning tools and training they are seeing too.

    “They say this is great, because they now have tools that are positioned in a way that will help them help clients who are starting to retire,” he says. Some advisors like the products even if the policies don’t pay compensation on the assets put inside the products, he adds.

    The products

    The income focus has been building up for several years. But a review of new annuities that have been coming out in recent months shows that the trend is now more than a matter of focus. Retirement income talk seems to be everywhere, from variable annuities and fixed annuities on to indexed annuities or longevity annuities. Defined contribution plan providers are stepping forward, too. It’s a virtual tidal wave. Take a look.

    As this article was heading for posting, Sun Life Financial announced it was launching Sun Life Solutions, a variable annuity (VA) with a living benefit option that, as the company puts it, “allows investors to lock in a benefit base used to calculate income.”

    The product is a VA, so it does offer the associated subaccounts for the accumulation period. But the carrier announcement homes in on the income aspects, quoting an executive saying that a VA with a living benefit “can help investors who max out on their qualified retirement plans to not only secure guaranteed retirement income, but also lock in potential market gains.”

    Another carrier, AXA Equitable Life, added some oomph to the guaranteed income benefit rider in its Retirement Cornerstone VA, a product offering an investment account and a retirement income account.

    The carrier put a two-year “rate hold” on the deferral bonus roll-up and annual withdrawal rates on benefit bases of the VA’s guaranteed income benefit rider. The rate hold should give policyholders a “growth strategy” for riding out today’s low interest rates, according to Nick Lane, president -retirement savings, in a statement announcing the enhancement. And the retirement income hook? That should help protect retirement income, says Steve Mabry, senior vice president-individual annuity product development.

    Another example of income-focused VAs: Securian Financial Group debuted Ovation Lifetime Income, a lifetime income rider option for its MultiOption VA, which is underwritten by Minnesota Life. The rider guarantees income for life with withdrawals that can continue regardless of fund performance or contract value, and the carrier locks in any increases in the benefit base and the guaranteed annual income each year. The rider not only will provide a steady stream of retirement income, says Dan Kruse, second vice president in a rollout statement. It also “offers opportunities to boost that income during retirement.”

    Even big mutual fund players are pushing the income envelope. In October, for instance, Vanguard added a guaranteed lifetime withdrawal benefit rider to its Vanguard Variable Annuity. Issued by Monumental Life for an additional fee, the rider guarantees that a fixed percentage of the VA’s total withdrawal base can be withdrawn annually for the life of the annuitant (and spouse, if desired).

    The purpose is, yes, “to provide a steady income stream,” the company says.  (Other big-name mutual fund players have taken similar steps.)

    Many VA carriers already offer guaranteed minimum withdrawal benefit riders, but Vanguard’s move is notable not only because of the company’s mutual fund heft but also because it has already staked out turf in the retirement income arena (via managed payout funds aimed at retiree needs, target date funds, etc.). The new rider signals that the company is moving deeper into the income field.

    Pension-like products

    Two other carriers have brought out what they call “pension-like” approaches to the retirement income table in recent months; one product is designed for the defined contribution market while the other is designed for the individual market.

    The Hartford Financial Services Group has the defined contribution product. Called Hartford Lifetime Income, it is a fixed deferred annuity, supported by patents, for use as an embedded investment option inside of 401(k) retirement plans. This “in-plan” income option allows 401(k) plan participants to purchase income “shares” that provide $10 of guaranteed monthly income for life. So, if a participant has 50 income shares, that would generate $500 a month, the carrier says.

    New York Life and Annuity has the individual product. Called Guaranteed Future Income Annuity, it is a longevity insurance policy on a flexible-premium annuity chassis. Longevity insurance products defer the start of the income payout period for several years—typically until age 85 or after 10 or more policy years. The contract requires an initial premium payment of at least $10,000 and allows additional payments up to the income start date. Owners can defer or accelerate the income start date (not with the life-only option, though); include another annuitant in the payment stream; and select inflation protection and legacy options (including a cash refund).

    The Hartford and New York Life products are both being positioned as vehicles that will help create a pension-like income during the retirement years, even though they target different markets, use different policy structures and come from different carriers. That is a sure sign that carriers are zeroing in on a trend that many researchers have been reporting out — namely, that retirement-minded consumers are looking for ways to create income streams in retirement that are comparable to the monthly income provided by the fast-fading traditional pension plans.

    Accumulation still there

    Not all new annuity launches are income-heavy, which is to say that some do have an accumulation tilt to them. Still, even when carriers talk accumulation, the tendency today is also to talk income. 

    Take, for example, the Allianz 360 product that Allianz Life Insurance of North America. Marketed exclusively through the carrier’s new preferred distribution program, the product is a fixed indexed annuity. It has the upside potential and downside guarantees normally associated with the accumulation period of indexed annuities, but it also offers options for increasing the income benefits during both the accumulation and income phases of the product.

    Even rollouts of traditional deferred fixed annuities mention that guaranteed lifetime income options are available. The lifetime option has always been available in these products, of course, but now the carriers are pointing it out.

    Frank O’Connor, product manager of the variable annuity database at Morningstar, has been watching the growth in income products for some time. “The financial crisis notwithstanding, the benefit retooling that followed did not seem to diminish the availability of the lifetime income guarantees in VAs,” he says. “There was no slowdown in product development either.”

    That, he says, is a function of what the carriers are seeing. “They see the income need in consumers, and that is driving the addition of living benefit features to the products, and therefore driving the product sales.” In fact, he says, “when a living benefit is available, our research shows that the benefit is taken 87 percent of the time.”

    Reps who ignore income products may be doing this because they don’t understand the features, suggests Morningstar’s Loffredi.

    “The new products can be confusing,” he allows, “because a different sales process is often involved, with less focus on the investment and more on the emotional component—the living benefit (of retirement income) with the sleep-at-night factor (the guarantee).”

    Not every rep believes in sleep-at-night, Loffredi adds, so the insurance companies should probably take some time “to educate advisors on the value proposition of their income products.”

    Linda Koco, MBA, is a contributing editor to AnnuityNews, specializing in life insurance, annuities and income planning. Linda can be reached at linda.koco@innfeedback.com.

    © Entire contents copyright 2011 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

    Originally Posted at AnnuityNews on November 2, 2011 by Linda Koco.

    Categories: Industry Articles
    currency