Speak with a Registered Agent: 1-866-223-2121

Speak with a Registered Agent: 1-866-223-2121

Important Changes in Variable Annuities


By

Wall Street Journal reporters Leslie Scism and Liam Pleven recently highlighted the modifications made by insurers to variable annuity benefits. These annuities have been very popular with baby boomers looking for a safer retirement plan with tax benefits and a minimum return. However, the current slump in the economy has made many insurers unable to meet investment guarantees. It has increased the cost of hedging to fight the downside of these annuities; in the year it ending October 31, the cost of hedging has been said to increase by 80%, making the sale of the riskiest variable annuities less financially viable.

Scism and Pleven report on the trend of insurers either increasing the prices of their annuities or decreasing their benefits. For example, AXA Equitable Life Insurance Company recently discontinued their 6.5% guaranteed minimum income benefit plan, and increased the fee of their 6% annuity by 0.15%. Insurance companies may phase out selling their most costly annuities, and industry analysts also predict the advent of new products that will allow insurers to raise fees in the future. There is also the possibility that insurers may end up consolidating.

For more information about the product mentioned in this article contact us here:

Information Request Form

If you have questions or would like more information, please complete this form and a licensed professional will be happy to help. For the fastest response, please select 'Phone' as your Contact Preference.

By providing your information and clicking 'Submit' above, you acknowledge that you have read and agree to this site's privacy policy. You also provide your consent to be contacted at the email address or phone number provided above (including any wireless number) by licensed agents or representatives from or on behalf of AFYI Holdings Group, LLC and other companies to provide the information requested and/or offer annuities or financial products. You understand that these calls or SMS messages may be generated using an automated telephone dialing system, a pre-recorded message, or artificial voice. Consent to receive such messages is not a condition to purchase any goods or services. You may opt out at any time by following the instructions in the messages you receive.  Receiving quotes and information through our website is free, and you are under no obligation to purchase any goods or services as a result of this request. You affirm that you are the subscriber of the provided telephone number or that the subscriber authorized you to provide the number. Message and data rates may apply. AFYI Holdings Group, LLC is committed to respecting your privacy and adhering to all applicable laws and regulations, including the Telephone Consumer Protection Act (TCPA).