Annuity FYI Visitor Blog

Just over a year ago Transamerica Life Insurance Company introduced the Prinicipium II variable annuity product, according to an August 25 company press release entitled “Transamerica’s Principium II Variable Annuity Continues to Gain Market Share.”  The product is marketed as a lower-cost variable annuity that has ETF-based sub-accounts, is easy to understand, and offers optional benefits in line with Transamerica’s other products.  Transamerica believes itself to be one of the first companies to offer lower-cost options for their investors.  They see many of their competitors developing similar variable annuity offerings.

Sales have grown each month in 2009 for Transamerica’s variable annuities and they attribute much of that growth to the Principium II.  Investors costs are kept low largely because of the ETF-based sub-account options.  Vanguard is the ETF provider for 2 of Transamerica’s sub-account choices because they keep investor costs low and have great expertise in index management.  Transamerica’s CEO believes that their lower-cost variable annuity presence is driving the company’s sales success this year.

Fixed annuity sales in the United States were $27.8 billion in the second quarter of 2009, according to a press release from Beacon Research.  While the sales were a 20% decrease from the first quarter, they were 10% higher than the second quarter in 2008.  From the highest sales to the lowest, the annuity products sold were book value, indexed, market value adjusted, and fixed income.  All but one type were an increase from the second quarter in 2008.  Indexed and income annuities were up from the previous quarter, while the other two types fell.  Fixed annuities can be purchased with a 401k annuity transfer or an upfront one time purchase.

New York Life took over the top sales spot last quarter from MetLife.  The rest of the top ten was as follows: Aviva USA, Allianz Life, AEGON/Transamerica, American Equity Investment, RiverSource Life, MetLife, Lincoln Financial Group, Jackson National Life, and Western National Life.  New York Life maintained the top sales in both the book value and fixed income annuity products.  The leading indexed annuity seller remained Aviva.  The only change in leaders of the individual products was American National taking over the top sales spot of market value adjusted annuities.  Beacon uses the sales results of 53 insurance companies which represent 86% of annuity sales to determine their findings.

According to a press release by Beacon Research, fixed annuity sales estimates in the U.S. for the first quarter of this year were $34.9 billion.  The Fixed Annuity Premium Study comprised of data from 53 insurance companies, which account for about 86% of this market.  This sales number was not only the highest since 2003 when the study was first completed, but was also 78% higher than the same quarter last year.

The four types of annuities assessed ranked in sales high to low starting with book value annuities, indexed, market-value adjusted, and immediate.  All 4 showed increases from last year’s 1st quarter, while only book value annuities increased from the prior quarter.

The top ten sales leaders were MetLife, New York Life, Aviva USA, RiverSource Life, AEGON/Transamerica Companies, AIG, Allianz Life, Jackson National Life, Principal Financial Group, and USAA Life.  You can check out more of the study information in Beacon Research’s press release.  Contact one of our experts with any questions about fixed annuties from the top ten companies and more.

Transamerica Life Insurance Company has made positive changes to its variable annuity living benefit rider, according to the company’s press release May 1st.  These changes add new options to your investment choices along with the benefit of cost flexibility.  Transamerica says that the main structure of the rider has not changed.  According to executive vice president and national sales manager Dave Paulsen, “the new rider reflects our ongoing goal to offer industry-leading solutions while prudently and responsibly managing our business.”

Clients can now choose an open allocation option or designated allocation option.  Any investment opportunity available in the annuity can be accessed in the former.  The latter can be split up into any of 3 groups of investment options.  The best news is that you are not stuck with whatever option you choose because Transamerica allows switching between the two options.  An Annuity FYI expert can give you all the information you need to make an educated choice when looking at this and other annuity opportunities.