Annuity FYI Blog

For those hoping for a variable annuity that will not reduce death benefits when a lifetime income option is used, The Hartford’s annuity enhancement is for you.  According to Market Watch’s “The Hartford Enhances Its Variable Annuity To Help Consumers Achieve Both ‘Living and Giving’ Goals,” this variable annuity upgrade allows you to leave a legacy to charity or to heirs.  The variable annuity products are in Hartford’s Personal Retirement Manager (PRM) line of products.  When doing variable annuity reviews, it has been difficult in the past to provide yourself with lifetime income and make sure you have something to leave behind without one taking away from the other.  One of Hartford’s VP’s says that their PRM variable annuities will be able to provide you with both.

When opting for Hartford’s Future6 Guaranteed Minimum Withdrawal Benefit, you can also choose to add the Future6 Death Benefit.  The Death Benefit lets you take income withdrawals without reducing the death benefits at all.  When you die, the death benefits paid out will be the higher number of the premiums invested or the contract value when your income payments began.  This is all based on the fact that you haven’t met any predetermined limits.  Along with these enhancements, some of the costs associated with their PRM variable annuities are also going down.  Hartford’s man in charge of global annuities says that they are just demonstrating their longstanding commitment to the annuity marketplace.  They are confident that annuities meet America’s growing need for retirement income and savings.

Written by Rachel Summit

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In the Wall Street Journal article, “Restyled Annuities Offer Fewer Choices,” Leslie Scism says that variable annuities with lifetime income guarantees don’t have as many investment options as they did a few years ago.  When the market was stronger, insurance companies used a wide range of investment options to compete with other insurers.  Once the market took a steep downturn, while the minimum income guarantees were fantastic for investors, insurance companies took a hit to keep their promises to investors.  Insurers are now requiring most investors to choose a more conservative investment mix, something they refer to as reduced volatility.

MetLife, Hartford Financial, and AXA all have new products that limit investors from having the majority of their money in high risk investments.  This helps protect both investors and insurers from huge swings in the market, while still keeping the income guarantees annuity products are known for.  By giving up complete control over how their money is invested, people are helping keep the insurance companies in tact so that their income guarantees will be around when they start taking annuity payments to last their lifetime.

Some advisors are not happy with the changes to variable annuities that insurance companies are making.  But the article gives many reasons why variable annuities are still a valuable investment, despite a decline in the options available for investing.  The value of an increasing benefit base is great and will not happen if the underlying accounts happen to suffer large losses.  These new variable annuities are good for those looking for predictability.  They’re still a better choice than low fixed rate investments right now and their popularity is shown in part by the success of Prudential’s version of the less risky variable annuity.

Written by Rachel Summit

Financial advisors whose clients hold annuities haven’t had to worry about fielding concerned investors’ calls in this tumultuous market.  According to The Wall Street Journal article “Annuities Provide Safety, At a Price,” author Russell Pearlman says that annuity sales have been increasing due to the difficulty in the financial markets.  Annuity sales went down in 2008, 2009, and 2010; but are expected to increase in 2011.  With the increasing interest in the best annuities on the market, companies like Hartford and New York Life are introducing new and improved products to meet investor demands.  But they have often seen an increase in annuity sales before they can even get their new products on the market.  New York Life’s main fixed immediate annuity has seen a sales increase of 62% since last year at this time.

Both fixed annuities, which guarantee you a specific rate of return, and variable annuities, in which your rate of return varies while you receive tax benefits, have seen an increase in sales.  For an added fee, you can guarantee that you will receive payments over your lifetime even in a declining stock market.  You can also opt for a death benefit annuity where your payments will continue going to your heirs after your death.  Principal Financial Group says that now is a great time for an annuity if you want to maintain exposure in the markets while guaranteeing a specific income level.  The article points out the importance of speaking with an expert and knowing all the complexities involved before purchasing an annuity.  They take a lot of risk out of investing so many investors are sleeping soundly at night knowing that they have a guaranteed stream of income.

Written by Rachel Summit

Clients of the Hartford Financial Services Group have a lot more investment options now when they are searching for a variable annuity.  In the Annuity News Journal article “The Hartford Introduces New Annuity Options,” Steve Thompson discusses the new choices available.  Years of a volatile stock market have pushed many investors to the security of annuities, because of their guaranteed lifetime stream of income and risk protection from the equity market.  In particular, variable annuity products give an appreciation potential during a rising stock market while also guaranteeing some type of minimum return.  Hartford’s variable annuity, called the Personal Retirement Manager, will have some new options and riders for investors.

Safety Plus guarantees investors at least ten years of accumulation benefits, with both protection of principal and participation in the market.  After the ten years, investors who transfer their money to the Personal Pension Account Service with Hartford will be credited a bonus to their future payout rates.  The Future5 and Future6 options give market participation with a 5 or 6% deferral bonus after determining what your guaranteed portion will be.   These bonuses will stand firm upon maturation and won’t depend on the immediate annuity rates at the time.  Hartford’s new service, Personal Protection Portfolios, is available with Safety Plus and Future6.  The assets in your account are spread over multiple investment options which will diversify your risk and allow you to participate in many different markets.  There are also two new death benefit annuity options for investors who are very concerned about passing their annuity on to a beneficiary after death.  All of Hartford’s new variable annuity products are for the benefit of their consumers and are working to meet changing demands.

In order to keep up with customer demand, Hartford Financial Services has three new variable annuities to offer investors.  The Stocks and Shares article “Hartford Financial Services In Variable Annuities Launch,” discusses Hartford’s current situation.  The Personal Retirement Manager group of variable annuities is popular with many pre and post retirees.  They have added three new personal protection riders for investors to choose from when selecting their variable annuity products.

The president of Hartford’s Wealth Management division says that the company is working hard to give their customers retirement security.  With competitive prices as well as benefits in their annuity products, the new variable annuity options are attractive to many investors.  Hartford is looking to grow their annuity business as they work to improve their customers’ retirement security.  Although their stock price is down 2.3% over the past three months, the addition of these new variable annuities might help bring that price higher than 25.01 a share.