Annuity FYI Blog

According to Investment News’ Darla Mercado, financial advisors are more loyal to Jackson National Life Insurance Co.’s variable annuity products than to any other company.  In the article, “Advisers most loyal to this VA provider,” we learn that Jackson National had the best variable annuity reviews followed by Prudential Financial Inc.  Jackson moved up from second place last year to throw Prudential out of the top spot this year.

Cogent Research performed the study of over 1,500 financial advisors.  They were asked what percentage of their business was dedicated to variable annuities and they rated their happiness with certain variable annuity factors.

Jackson’s internal wholesaler support had such a high ranking that it helped them grab the top spot.  Prudential had the highest variable annuity reviews for different product features, even though they didn’t get the top spot overall.  Advisors liked their guarantees, especially the Highest Daily feature.  Jackson does have nearly 100 subaccount choices as well, which still helped them reach number one.

The ChoicePlus variable annuity from Lincoln National kept them in third place this year.  Ameriprise Financial maintained their fourth place spot year to year.  Nationwide took the fifth spot from Ohio National, who came in seventh.  MetLife was in sixth place this year as well as last.  Sun Life, Allianz Life, and Transamerica finish the top ten for variable annuities.

Written by Rachel Summit

Transamerica Life Insurance Company is working on four new variable annuities with CUNA Mutual Group.  The variable annuities will be offered to credit union members according to the CU Insight press center.  They’ll be included in the MEMBERS brand of products and will be named MEMBERS Landmark, MEMBERS Liberty, MEMBERS Extra, and MEMBERS Freedom.  Each variable annuity offers different features for credit union investors.  The four new variable annuities are replacing the previous variable annuity offerings, but they will not affect credit union members who already carried those variable annuities.  Starting May 2 of this year, the MEMBERS brand of variable annuities will be offered in most states.

CUNA Mutual has offered annuities to their members since the 1980′s, but this is their first partnership with Transamerica.  Transamerica is an AEGON company, which has been in business since the early 1900′s.  They have an A+ (superior) financial strength rating from A.M. Best.  This partnership of variable annuities will be added to CUNA Mutual’s other annuity products, which include indexed, fixed, and single premium immediate annuities.  They pride themselves as having an “all-weather” portfolio of products.  Credit union members are being offered an expanding product line of variable annuities because annuities are becoming more popular in retirement for their guaranteed lifetime income.  CUNA Mutual realizes the importance of annuities for their members who are both saving for and living in retirement.

The Retirement Income Max rider is now available for purchase with Transamerica’s variable annuities.  According to Insurance News Net’s “Transamerica Broadens Suite of Retirement Income Solutions with Retirement Income Max,” the rider is meant to help investors make the most of their retirement.  This living benefit rider will cost more for annuity investors, but should help maximize their retirement income.  Transamerica Capital’s Chief Sales Officer says that the rider looks to meet the demand from investors to maximize their reliable stream of lifetime income and also protect it from downturns in the market.

Depending on your age at the time withdrawals begin, your withdrawal percentage will be 4.5%, 5.5%, or 6.5%.  This is for the single life option.  You also have growth on growth potential with the Retirement Income Max.  Transamerica’s popular Monthiversary and their 5% growth rate features give investors the potential for significant growth when you compare annuities.  When the markets are up, your highest Monthiversary level is locked in and your withdrawal base is automatically increased to this level.  If the market happens to be down, an annual compounding growth rate of 5% is given on the withdrawal base for up to 10 years.  This is only in years when a withdrawal is not taken.  If this new variable annuity rider appeals to you, speak with an annuity expert to find out more details.

According to “Taking off the glitz,” Darla Mercado of Investment News says that variable annuities are losing some of the benefits that made them so popular in the first place.  Many living benefit features were added and made more attractive last year in order to draw investors into variable annuities.  But since low interest rates make it more expensive for insurance companies to offer benefits like lifetime withdrawal benefit guarantees, some of the top sellers of variable annuities are offering less to investors.

Prudential and MetLife are two of the largest variable annuity providers and two companies that are pulling back on their benefits.  While Prudential used to base lifetime income on 6% compounded growth, they have lowered that to 5%.  They have also increased the amount of time investors must defer their annuity from 10 years to 12 years in order to receive their promised protected value.  MetLife has decreased the income annuity associated with the guaranteed minimum income benefit because of low annuity rates.

Advisors are not happy that the benefits they have been pleased to offer investors are being reduced and are looking to new companies for different variable annuities.  Ohio National Financial Services Inc. introduced a new 8% simple interest growth lifetime withdrawal benefit, available on your entire original payment.  Thomas B. Hamlin of Somerset Wealth Strategies is pleased with the annual reset and 8% growth offered by Ohio National.  Transamerica Corp.’s Retirement Income Choice 1.2 rider and their withdrawal benefit are other good annuity choices right now.

The article lists other good benefit options from Protective Life Insurance Co. and Jackson National Life Insurance Co.  It is suggested that Jackson may move up to be the top seller of variable annuities now.  MetLife and Prudential still have a lot to offer in the variable annuity market as well, even with trimmed down benefits.  The moral is that variable annuities are not “one size fits all” and really must be customized to the individual investor and their needs.

Advisor One’s Moshe A. Milevsky sings the praises of Transamerica’s Principium II variable annuity in the article “Transamerica Principium II.” The annuity is rated an 8 out of 10 stars because investors have choices regarding their insurance and investment options and their cost is based on those choices.  The author believes that Transamerica is one of the few companies offering true guaranteed lifetime withdrawal benefits (GLWB) that truly protect against longevity risk, inflation, and sequence of return.

While the death benefit annuity only pays out the policy value, you pay much lower fees by not having a guaranteed minimum death benefit (GMDB).  For those who would like more of a guarantee, they can pay extra for a return of premium or annual step-up option, but the option is not forced upon you.

Those opting for the living benefit rider, called the “Retirement Income Choice 1.2 rider,” are guaranteed at least a 5% increase for the first 10 years.  During that time, if your “monthiversary,” or average monthly statement value, is higher than the 5% gain, you will get that increase.  After the 10 years, your increase will be equal to your highest “monthiversary” value for the year.

During the income stage, you can withdraw 4% at age 59, 5% at age 65, and 6% at age 75.  The numbers decline by .5% if you opt for the joint life option.  For the subaccount investments, there are many Vanguard-based exchange-traded funds to choose from.  The author believes that these are some of the best annuities for investors.  The fees charged for the Principium II are based on the risk taken on by Transamerica for the options chosen by individual investors.  This annuity could be a good variable annuity for you to check out.