Annuity FYI Blog

It looks like videos are becoming increasingly popular to help explain annuity basics.  After Annuity FYI announced earlier this month that we have a string of informative videos on our youtube channel, Allianz Life has come out with some annuity videos of their own.  According to company press release, “New Allianz Life Animated Video Series Demystifies Today’s Annuities,” they have released three informative videos on their website.  The videos, titled “The ABCs of Annuities,” each last less than five minutes.  Retirement Realities, Annuity Basics, and Annuity Myths and Truths are the three different videos.

Allianz Life’s ‘Reclaiming the Future’ study found that many Americans had a negative opinion about the word annuity, even though their ideal retirement product has all the benefits carried by annuities.  Many of their opinions are based on information they were given about annuities decades ago, so greater information is one of the top goals for the annuity industry in general.  They want a product that will save them from the risk of outliving their money.  Guarantees, safety and security are what retirees desire; Annuity FYI and Allianz Life hope their videos will show retirees to compare annuities because they can give them exactly those things.

Written by Rachel Summit

Allianz Life recently found that the majority of Americans are searching for guaranteed income in retirement, but don’t know how to find it.  According to a company press release, Allianz Life Insurance Company of North America conducted a survey showing that 86% of non-retired Americans want to have a guaranteed income stream in their retirement.  That was the most popular choice for having a secure retirement; next was having a 401k plan, selected by 71% of those surveyed.  Transferring to a 401k annuity is an excellent way for those who already have 401k plans to receive the guaranteed income benefits of annuities.

Close to half of those surveyed said that obtaining this guaranteed retirement income stream was the most important retirement need that they had yet to meet.  They found it much more important than finding a job that offers a 401k or getting a diversified portfolio of investments.  The President and CEO of Allianz is not surprised to find so many Americans looking for a guaranteed income stream in retirement, but worries that Americans aren’t informed enough about the annuity products that can make this retirement income stream available to them.

Annuities pool risk, and they are the only retirement income products to do that, therefore annuities are the product to guarantee retirement income over your entire lifetime.  Of the non-retirees surveyed, only 8% currently have an annuity.  Shockingly, 40% don’t have any retirement investments at all and 26% don’t have a plan to get them through retirement.  Allianz Life is dedicated to working with consumers to educate them about the benefits of annuity products and help them make a secure retirement with a guaranteed income stream.

Written by Rachel Summit

According to Investment News’ Darla Mercado, financial advisors are more loyal to Jackson National Life Insurance Co.’s variable annuity products than to any other company.  In the article, “Advisers most loyal to this VA provider,” we learn that Jackson National had the best variable annuity reviews followed by Prudential Financial Inc.  Jackson moved up from second place last year to throw Prudential out of the top spot this year.

Cogent Research performed the study of over 1,500 financial advisors.  They were asked what percentage of their business was dedicated to variable annuities and they rated their happiness with certain variable annuity factors.

Jackson’s internal wholesaler support had such a high ranking that it helped them grab the top spot.  Prudential had the highest variable annuity reviews for different product features, even though they didn’t get the top spot overall.  Advisors liked their guarantees, especially the Highest Daily feature.  Jackson does have nearly 100 subaccount choices as well, which still helped them reach number one.

The ChoicePlus variable annuity from Lincoln National kept them in third place this year.  Ameriprise Financial maintained their fourth place spot year to year.  Nationwide took the fifth spot from Ohio National, who came in seventh.  MetLife was in sixth place this year as well as last.  Sun Life, Allianz Life, and Transamerica finish the top ten for variable annuities.

Written by Rachel Summit

According to Insurance Networking News’ Justin Stephani, “Annuity Writers Show Significant Growth.”  In a fixed annuity study performed by Beacon Research, they found that despite an annuity rates comparison showing declining interest rates, fixed annuity sales increased 8% quarter to quarter and 3% year to year.  These results from the first half of this year coincide with similar reports from LIMRA and the Insured Retirement Institute.  LIMRA found a 19% year over year increase for total annuity sales, in the period ending June 30.  The IRI reported a 10% increase for the second quarter’s year over year figures and a quarterly sales increase of 4%.

Beacon research was expecting increases in the indexed and income annuity products, especially because indexed annuity cap rates are still desirable compared to other choices.  They were expecting declines in both types of fixed annuities because of low interest rates, but only saw a decline in one of them.  Fixed rate non-market value adjusted (MVA) annuities were the only category to decline, dropping 5%.  Fixed rate MVA’s actually increased 4%, probably because investors seeking higher yields were happy with the slightly higher rates offered.  Income annuities increased 30% and indexed annuities went up 18%.  Western National Life sold more than $2 billion in fixed annuities for the top spot, followed by Allianz and New York Life.

Written by Rachel Summit

American Equity Investment Life Holding Co. CEO Wendy Waugaman was interviewed in the Des Moines Register article “W.D.M. firm’s CEO talks of annuities, economic growth.”  American Equity has the second highest sales of fixed equity indexed annuities, just above Aviva USA and behind Allianz Life.  The company was started in 1995 and went from selling $150 million of annuities in 1997 to $2 billion in 2001.  Their revenue is now up to $28 billion, largely based on sales of fixed equity indexed annuities.  Investors look to annuities even more in volatile markets and for good reason.  If you had purchased a fixed annuity in 1998 from American Equity for $100,000; the 2010 value would have been over $160,000.  In comparison, the same investment in an S&P fund would have been worth just under $109,000.

These guaranteed interest rates make annuities very popular, especially as 401k annuities purchased with some of a retiree’s 401k plan.  Waugaman answered questions about everything from annuity basics to the inner workings of American Equity.  When asked how American Equity makes money from annuities, she says that it is similar to a bank loaning your money to other people while paying you interest.  She says that they are growing faster than other annuity companies because of their excellent customer service to both agents and investors.  After being asked about interest rates, she was honest and said that they are frighteningly low.  She is hopeful that they will gradually increase so that they can offer higher immediate annuity rates and America can come out of the financial crisis.  American Equity has hired 80 people over the last six months and they have been in every area of the business.  American Equity is poised to retain their high position in the fixed equity indexed annuities market.