Annuity FYI Blog

The Sacramento Bee published a press release from John Hancock Financial Services introducing their new President of Annuities, John G. Vrysen.  He starts his position immediately and will be in charge of all aspects of John Hancock’s annuity business.  This includes variable annuities, fixed annuities, structured settlements, immediate annuity products, and other fixed products.  His boss is the President of U.S. Wealth Management, Hugh McHaffie.  Mr. Vrysen recently merged many of the company’s life insurance subsidiaries to increase company efficiency.

John Hancock’s President of Financial Services says that Mr. Vrysen has a plethora of both leadership experience and experience in their Variable and Fixed Annuities business.  Since 2008, he was the head of Strategic Initiatives, a position that will now be held by the previous President of Annuities, Marc Costantini.  Mr. Vrysen has worked for Manulife and John Hancock for more than three decades as the variable annuities’ chief actuary, the CFO of US Operations, the fixed annuities general manager, the COO of Wood Logan, and the COO for John Hancock Funds.

Written by Rachel Summit

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While demand for variable annuities is still very high, many insurers are stepping back from them quite a bit.  According to Investment News’s Darla Mercado in the article “VA carriers hunkering down,” life insurers have had a hard time hedging their variable annuities with living benefits.  Stock market volatility and low interest rates are making it expensive for insurers to offer variable annuities.  Genworth Financial stopped selling annuities at the beginning of 2011 and Sun Life Financial stopped their sales earlier this month.  Some of the biggest companies; like Jackson National, MetLife, and Prudential Financial; have stopped offering some of their living benefits and started using less risky investment options.

John Hancock Life plans to stop selling a lot of their annuity products as well as limiting their distribution channels.  As more companies do the same, there will be less competition in the industry and prices could rise.  Most advisors still send their clients to the top three sellers, MetLife, Jackson and Prudential.  There may be more room for the smaller companies in the future.  If living benefits drop below 5%, many advisors will be playing up the tax deferred growth benefit of variable annuities.  With fewer living benefits offered, advisors will go back to the root benefits of variable annuities, death benefits and tax deferred growth.  One advisor believes that 2013 will see a big focus on those benefits over the living benefits of variable annuities.

Written by Rachel Summit

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The newest product from John Hancock Annuities offers investors protection of their principal and an opportunity for growth to protect from the rising costs of inflation.  A company press release introduced ‘Inflation Guard’ this week.  While it is a typical fixed annuity because it offers the benefit of principal protection, this annuity has more to offer investors.  John Hancock Annuities’ President says that they are happy to grow their line of fixed annuities with this offer of growth to protect against inflation in the country.

Your principal is guaranteed as long as you keep your annuity to the full term of your contract.  In the contract’s initial year, you have a guaranteed fixed interest rate.  Each year after that, you will receive a floating rate based on yearly changes in the Consumer Price Index.  There will also be a guaranteed margin in your contract.  Interest rates cannot go below zero and will be capped at a rate determined in your annuity contract.  John Hancock does a weekly annuity rates comparison and update.

Inflation Guard seeks to meet a customer demand for flexible annuity products that help them combat inflation.  John Hancock believes that they are providing a solution and adding much value to their clients’ portfolios.  Each year, you can withdraw the interest from the previous year without penalty.  While there are no fees or sales charges up front, you will pay a penalty if you take the money out before your contract is up.  Withdrawing money before age 59 1/2 will cause additional taxes to be owed.  Speak with an expert if you are looking for a fixed annuity to help you combat inflation.

Written by Rachel Summit

While they aren’t the first company to outfit their employees with a high-tech innovation, John Hancock Financial Services, Inc. has just issued iPads to its wholesalers.  This information comes from “Hancock Follows Dreyfus Into the Apple Store” by Hung Tran of The Mutual Fund Wire.  John Hancock’s U.S. wealth management division has given the iPad to more than 200 wholesalers because of the product’s versatility.  They plan to use the iPad for annuity products, mutual funds, retirement plans and all other branches of their wealth management division.

A few months ago the Dreyfus Corp. gave all members of their sales staff that face clients iPad’s as well.  Most likely many other companies will follow in the footsteps of these innovators whether selling equity linked CDs or other financial products.  The iPad can eliminate mounds of paperwork by holding all of the information within.  In the case of John Hancock, their mutual fund wholesalers used something called the “Playbook,” which was a three-ring binder filled with hundreds of pages of information.  This included facts about products, fund information and presentations.  Not only will using the iPad streamline client information, it will make it much easier for companies to update and make changes.

In Jeff Benjamin’s Investment News article “Five ways to boost retirement income,” immediate annuities are at the top of the list.  The best way for retirees to make the most of the retirement savings they have built is to have diverse yet safe investments that will continue to generate income even in retirement.  By establishing a steady income stream that will carry you through rough economic times, you will be able to have the flexibility to manuever through assets with some risk to generate income in retirement.  Five investments that can help those of retirement age with their steady and reliable income stream are immediate annuities, individual bonds, reverse mortgages, convertible bonds, and master limited partnerships.

As the demand has increased for immediate annuities, they have become easier to understand for everyday investors.  A single-premium immediate annuity is one of the best ways to obtain guaranteed predictable income.  For investors who have already retired, the author recommends a simple no-load version without added riders like death benefits.  While your monthly income from the annuity may seem low, experts recommend using a portion of your retirement savings for an annuity and using that payout for everyday expenses.  Then the rest of your savings can be put towards other income growing investments.  New York LIfe, MetLife, Hartford, Nationwide, and John Hancock are some of the post popular insurance companies that work with annuity products.