Annuity FYI Blog

Pacific Life has a way to increase your retirement income with their fixed indexed annuity, even if the markets don’t increase in your favor.  Their Pacific Index Choice deferred fixed indexed annuity has been popular lately as those nearing or in retirement seek to protect their savings while hoping for growth in the markets.  But in the event that the markets don’t increase, while your principal will still be safe, there is a new option available that still allows you to increase your retirement income.

The Enhanced Lifetime Income Benefit gives you the option to grow your income, regardless of what happens in the marketplace.  Your income base will increase by 8% every year for ten years if you put off taking your withdrawals for an extended time.  This can add up to a significant amount of money, especially for people who haven’t earned interest on their annuity due to a declining financial index.

The company press release gives an example of someone who purchases a $100,000 annuity with the Enhanced Lifetime Income Benefit.  By waiting ten years before taking withdrawals, the 8% increase would give this person a $180,000 income base instead of the $100,000.  Monthly payments vary based on the other options associated with the annuity, such as whether it is a lifetime income annuity or a death benefit annuity, but you could receive up to 7% annually from this fixed indexed annuity.

Written by Rachel Summit

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For more than twenty years, research and consulting firm Dalbar has come up with a list of the companies offering the best annuity service.  Their list for 2011 includes both big and small names, but all of the winners have the best customer service in the industry.  This year’s Annuity Service Awards go to AXA Equitable-Equivest, Prudential Financial, Pacific Life, New York Life, SunAmerica Annuity and Life Assurance Company.  Dalbar’s press release, “Dalbar Announces Its 2011 Annuity Service Award Winners in Financial Services,” lists the winners and the criteria for having the best annuity services.  Thousands of tests are done over the course of each year looking into the customer service at these annuity companies.

The industry only averages a 69% friendly engagement when customers initially call the company.  The service award winners are friendly and let their customers know they are appreciated 95% of the time, in comparison.  Annuities are complex products, and making sure that customers understand their product and are comfortable with all aspects is crucial.  Annuity award winners make sure their clients know all of the details from an expert and follow up with them 85% of the time, while the industry as a whole only does it about half of the time.  These companies are also all consistent with their superior treatment of customers and their company practices.  Since this award was introduced 15 years ago, New York Life has won it 12 times and the other winners have all won between 5 and 11 times.

Written by Rachel Summit

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The list of the top variable annuities sold in bank channels this year was just compiled.  The Bank Investment Consultant article “The Most Wanted List (of Variable Annuities,” by Kerry Pechter, talks about the most popular variable annuities of the year thus far.  It’s well known among financial consultants and advisors that variable annuities do not sell themselves; the benefits need to be sold to investors.  The benefits of protection from a down market and potential for upside market gains are what many investors are looking for today.  Variable annuity sales in the bank channel increased in the first quarter of this year, while sales in many other channels actually declined.

Jackson’s National Perspective II was the top seller.  Jackson appeals to investors and advisors looking for more flexibility and a lot of options as opposed to a low cost.  Their GLWB option, called the Joint Lifetime Freedom 6, offers increases in the guaranteed benefit base.  Prudential’s Advisor Plan III and APEX II have been replaced by a new, similar product but still account for the second highest bank annuity sales.  Their aggressive marketing and their “Highest Daily 6 Plus” living benefit, along with fees in line with other annuity products on the market have helped maintain Prudential’s variable annuity success.

The third best selling of the bank channel variable annuities is Nationwide Bank of America’s Future Venue.  The product offers L.inc, a popular and affordable lifetime income rider.  Pacific Life’s Voyages is the least expensive and most conservative on this list.  When you compare annuities with these options, conservative investors tend to be satisfied with Pacific Life’s CoreProtect Advantage lifetime income option and their other riders without rollups.  Variable annuities with GLWBs and rollups are great investments in today’s economic climate.  It’s important for advisors to speak with their clients about the products since clients rarely research variable annuities on their own.

When buying an annuity, it’s very important that the insurer providing the product is stable. Doing so minimizes the risk that you will lose part or all of your investment. Ratings are a good way to find out about a company’s strength. Here are TheStreet.com’s 10 strongest annuity insurers, as reported by Melissa Gannon:

1. Teachers Insurance and Annuity Assocation of America (TIAA-Cref)
2. State Farm Life Insurance Company
3. Country Life Insurance Company
4. State Farm Life and Accident Insurance Company
5. American Family Life Insurance Company
6. New York Life Insurance and Annuity Corporation
7. Massachusetts Mutual Life Insurance Company (MassMutual)
8. Pacific Life Insurance Company
9. New York Life Insurance Company
10. Fidelity Investments Life Insurance Company

Pacific Life and GEAM are collaborating on a variable annuity product for the first time. As of February 1st, Pacific Life has begun to offer the GE Investments Total Return Fund in its variable annuity platform, according to a press release. The fund from GE Asset Management Inc. is intended for investors who are looking for a long term, transparent product that seeks the highest total return with prudent investment risks. Such a product seems to fit the needs of baby boomers close to retirement. It plans to achieve that goal by using both current capital and its appreciation.