Annuity FYI Blog

In collaboration with the Legacy Marketing Group, Phoenix Companies is introducing new fixed annuity products.  Annuity News Journal’s Steve Thompson introduces CommandMark in the article, “The Phoenix Companies announce the launch of a new annuity product.”  Phoenix believes this is the perfect time for an annuity product tailored to consumer need because consumers have been flocking to annuities.  Legacy works with annuity companies to develop products that will best suit investors.  CommandMark is meant for retirees or those who are in the active planning stages for their retirement.  The first fixed annuity has just been released, but CommandMark will be a series of annuity products.

Some of the benefits to investors will be multiple indexing strategies, bonus options for vesting, and different income riders.  There will also not be a penalty for taking out ten percent of the value after the first year.  This is significant because the withdrawal penalties are disliked by many investors.  Different ways to diversify are built into CommandMark.  The Gold Strategy annuity differs from fixed equity indexed annuities because the investor chooses a strategy based on the price of gold.  Other products will have choices based on other investments.  The Average Blended Strategy will be the closest to fixed equity indexed annuities.  The crediting rate will be based on three different indexes followed over a three year period.  Speak to an expert if you think any of these fixed annuity products will be right for you.

According to a company press release from Business Wire, “Phoenix Company Releases (a) New Indexed Annuity.”  Their newest annuity product gives investors more options for customizing their retirement products.  The Phoenix Personal Income Annuity is a fixed equity indexed annuity distributed through Saybrus Partners.  It is a single premium annuity with six different indexed accounts as well as a fixed account, protection of your principal, and the choice of adding a guaranteed lifetime withdrawal benefit (GLWB).  A spokesperson from Saybrus Partners said that this new indexed annuity was born from investors looking for more flexibility and customization along with the guaranteed income, principal protection, and potential market gains that come with a fixed equity indexed annuity.

Two different riders are available for the Phoenix Personal Income Annuity.  The “Income Strategy: Today” includes immediate annuities and those delayed up to two years, but is used only for investors looking to take withdrawals within three years.  A 30% bonus is credited to the Benefit Base for immediate annuities, 37 1/2% for those taken after one year, and 45% for those taken after two years.  With the “Income Strategy: Tomorrow” rider, investors looking to keep their money in the fixed equity indexed annuity for three years or more offers a 14% annual credit to the Benefit Base through the first ten years as long as no withdrawals are taken.  The annuity premium, due upon purchase, can be between $15,000 and $1 million.  Both companies are excited to offer investors the stability and flexibility they are looking for now.

The Phoenix FamilyShield AnnuitySM is a single premium immediate annuity just introduced by The Phoenix Companies, Inc.  Insurance News Net’s article “Phoenix Launches Single Premium Immediate Annuity Designed to Assist with Medicaid Planning” states that this immediate annuity is meant to protect a spouse by providing income if the other spouse needs Medicaid or another form of government assistance.  People that don’t carry long term care insurance usually get assistance from Medicaid or another form of assistance if they have to go into assisted living or nursing home care later in life.  This new immediate annuity product allows a spouse to use marital funds to get a guaranteed income stream so that they can maintain their standard of living when their spouse enters a long term care facility.

The FamilyShield Annuity meets Medicaid guidelines and is customizable with many options.  Investors can use non-qualified or qualified funds, but must make a one time purchase with at least $10,000.  The monthly annuity payments begin immediately and can be set up for a period of two to thirty years.  There are death benefits for a spouse or other beneficiary if the annuity owner dies before the term runs out.  To meet Medicaid regulations, the annuity is non-transferable, non-assignable, and irrevocable.  There is not a cash value that can be drawn from the annuity.  This is why it is meant for investors and their spouses who are applying for Medicaid or other government assistance.  Just purchasing this annuity does not mean that one will be eligible for Medicaid.  The Ohlson Group, Inc. helped to develop this new immediate annuity and will be one of its select distributors.

According to Matthew Sturdevant of The Hartford Courant, “Indexed Annuities (are) a Perfect Investment During (the) Recession.”  His interview with Dana Pederson of Phoenix Cos. explains why equity indexed annuities are so important for investors and so popular right now.  An indexed annuity is almost like a hybid of a fixed annuity and a variable annuity.  Since your investment is linked to an equity index, you have the potential to earn money if there is a gain in your index.  But unlike variable annuities, there is no risk of losing money because insurance companies hedge the risk of your investment and while you may not make any money, you definitely won’t lose any.

With record sales of equity indexed annuities in 2009, 2010 has the potential of beating even those sales figures.  Driving the sales are the fact that investors have had time to learn about these safer investments as well as the burning desire to actually invest in a safer product after the past two years of market turmoil.  The guaranteed income riders attached to these annuities are also helping to increase their popularity.  Most equity indexed annuities are purchased with a lump sum and must be held for at least ten years.  While they are set up to deplete by paying you guaranteed income for either your lifetime or as long as the value remains, death benefits for a beneficiary are available if the investor passes away with a remaining account balance.

According to Insurance News Net’s article “Phoenix Cos. Forms Alliance for Indexed Annuities, Continues to Seek New Distribution Channels,” the Connecticut based company is looking to sell their products through many new channels.  They are now collaborating with AltiSure Group, an annuity company that also designs and distributes life insurance.  The companies will work together in developing equity indexed annuities and life insurance in hopes to bring them to a much greater number of consumers.  Independent marketing organizations distribute Altisure’s products.  All combined in 2009, they had $4 billion of annuity premiums sold.

James D. Wehr took over as President and CEO at Phoenix in May 2009.  He has been working to increase the company’s financial strength ratings by opening new distribution channels like this partnership and coming out with some alternative products for generating retirement income.  They began private labeling their products, so that Phoenix became the private label manufacturer with a different financial institution actually putting their name on Phoenix’s products.  Their A.M. Best financial rating increased last week from a B+ (Good) to an A- (Excellent).  Their outlook was also listed as stable.  As fixed annuity rates remain fragile, Phoenix looks to their equity indexed annuities and other annuity products to help customers gain the retirement income that they need.