Date posted: October 30, 2010
While a new law went into effect this year allowing for great tax benefits for linking your annuity to long term care insurance, there is only one available product in the state of Ohio currently. J. Brendan Ryan of Cincinnati.com wrote about the new benefit in his article “Linking long-term care insurance to annuities” this week. Tax benefits when you compare annuities used to pay for long term care insurance and those which do not are great. When you begin receiving payments on a deferred annuity, the money is taxed as ordinary income traditionally. If you desire to take the money out before you are 59 1/2 however, you usually get taxed an additional 10%. But if the money is used to pay for long term care costs that qualify under this new law, the withdrawals are free of taxes.
If you have purchased a deferred fixed annuity, the growth from your guaranteed or the current interest rate is included under these tax benefits. The product currently being offered in Ohio grows at the current interest rate, or your guaranteed rate in the lowest scenario, to accumulate what the author calls Balance A. It also has the potential to grow a Balance B for added long term care expense accumulation. Once you start taking the funds out, Balance A is used first and then Balance B will be used if remaining payments are due to cover the eight years of payments eligible under this annuity. Similar annuities linking to long term care insurance are expected on the market soon, but the challenge of getting the products just right are causing many companies to delay putting them on the market.
Date posted: October 29, 2010
According to Insurance News Net’s Bill Kenealy in “New York Life Upgrades Mobile Offerings,” high tech customers can access even more information directly from their mobile phones. New York Life Insurance Co. has added even more options for mobile users of the Virtual Service Center (VSC). Their VSC is a self-service online tool for updating and viewing information related to one’s accounts with New York Life.
Policy and account owners can obtain detailed information on their annuities and other life insurance policies directly from their mobile phones and even make changes. Some of the different options include checking beneficiary information, premium payments, and cash value. They can also transfer funds from one account to another, change their future payments, and even update the way their investments are allocated.
As soon as they login, the information will be automatically sized to fit their mobile device’s screen size and resolution. New York Life is committed to providing their customers with the newest innovations in technology to make life simpler. They can now access this information 24/7 from anywhere convenient to them. Whether checking their annuity rates or confirming the amount of their premium payment, New York Life’s customers can do it all from their mobile phones.
Date posted: October 28, 2010
The National Association of Insurance Regulators issued new suitability standards this summer that they hope investment advisers will follow. According to Investment News’ “IRI to launch ‘painless’ annuity training platform” by Mark Schoeff Jr., the annuity sales training will be uniform across the board of investment advisers because one website will handle everything. While only two states have plans in place to implement the regulations, there are 29 other states committed to beginning the suitability requirement process. Iowa will be the first state to require the suitability regulations be followed, beginning January 1. Their investment advisers will be able to use this new website system for their training because it will be up and running on November 22 of this year.
The Insured Retirement Institute worked with RegEd, a compliance company, to get the training program up and running. Advisers will receive specific training related to the suitability of annuity products to meet the new suitability standard. The training will include a range of annuities from a 401k annuity to various other types of fixed and variable annuities. These suitability standards were put in place to protect worried consumers who hear the small percentage of negative stories about annuities from the media. While the majority of annuity products are not too complex or expensive to begin with, this across the board training is meant to eliminate any abusive practices by advisers. There are incentives in place to encourage the 19 states who haven’t yet implemented the regulations to do so.
Date posted: October 26, 2010
July was a tough month for sales of variable and fixed annuities in banks, but August saw an increase in sales for both products through the bank channel. According to Bank Investment Consultant’s “Variable Annuities Mount a Comeback in Banks,” Howard J. Stock states that variable annuities actually saw the largest increase. Sales increased 14% in August to $1.3 billion, which is even 27% higher than they were in January of this year. The total sales for variable and fixed annuities in August was $2.9 billion. Fixed annuity sales are $1.6 billion currently, after a record high in October. After May sales of $1.5 billion for variable annuities, the highest this year, sales remained low for months until climbing back up recently.
Before the second quarter of 2010 overall annuity sales had not increased for seven consecutive quarters. With a 16% increase from the first to the second quarter this year, it looks like annuity sales numbers are strong and will continue on that path. While they have not yet released the third quarter sales numbers for variable and fixed annuities, market trends may indicate that they will remain high. Since there is still a zero spread between fixed annuities and CDs like equity linked CDs, that can bode well for fixed annuity sales. On the variable annuity side, sales of mutual funds are up and that usually indicates good sales for variable annuities since both provide exposure to the market. It looks to be a good year for variable and fixed annuity sales in the bank channel.
Date posted: October 25, 2010
UPDATE: March 24, 2013
A couple years ago I wrote about how Aviva USA was excited to expand their indexed annuity product line and slowly increase their business to keep up with the growth they had been maintaining over the four previous years. With their newest fixed indexed annuity product series launched earlier this month, Aviva USA continues their promise to offer better retirement products to consumers. TargetBenefit Annuities give customers more flexibility and are less complex than some other indexed annuities.
The product is simple because your guaranteed lifetime income is calculated using only your premium, age, and how long you wait to receive payments. TargetBenefit annuity products offer a statement of benefits that details the exact amount you’ll be paid out upon withdrawal no matter what happens in the markets. This is the first product offering such a helpful and detailed statement. You can choose between two income riders; one allows you to choose a fixed lifetime income benefit while the other offers a lower guarantee coupled with more market participation. Another popular rider triples the income payments if the annuity holder goes into a long term care facility. There are many choices of interest crediting facilities and withdrawal charge periods with the TargetBenefit Annuity.
Demand from consumers brought about this new indexed annuity offering from Aviva USA. From the inflation rider to keep up with the pace of rising costs to the option of delaying payments and just receiving a lump sum future payout, the options offered are those requested by customers. While you get the peace of mind of having planned for your future retirement needs, you also have the option to make changes to those plans as your life folds out.
Original Post below:
While Aviva USA’s parent company has a long history abroad and even some in America, it’s growth in the four years it has been working out of Des Moines is substantial. According to The Des Moines Register‘s David Elbert, (the) “Insurer’s roots go back to Newton, (Isaac that is.)” Aviva USA just opened the new Des Moines headquarters and they are hoping to organically grow along the rate that they have for the past four years.
Aviva’s US operations were sold in 2001 because the London based company was not seeing profit from them. At the time, the company was not yet known as Aviva; that came after a series of mergers in 2002. Although Aviva was one of the biggest insurance companies in the world, they did not come back into the US until 2006 when they bought AmerUs Group of Des Moines for $2.9 billion. Since AmerUs was a leader in the sale of equity indexed annuities, then a relatively new investment, the company was attractive to Aviva. The other reason they liked AmerUs so much was that they had a large network of insurance agents nationwide who were independent and loyal. This investment in AmerUs brought about Aviva USA.
Since 2006, Aviva USA in Des Moines has grown from AmerUs’ 600 employees to the 1,300 who just relocated to the company’s new $150 million home office located in West Des Moines. Aviva USA has grown between 30 and 40 percent each year and hopes to continue growing at a rate of around 10 percent a year through organic growth rather than acquisitions. Aviva USA’s annuities sales and life insurance products have kept them financially strong during the recent economic turmoil. While AmerUs was unable to compete in the large sales channel controlled by BGA’s (brokerage general agents), Aviva as the sixth largest insurer does not have that problem. They are expanding and growing at a significant rate.