NAVA (the Association for Retirement Solutions) has released its annual predictions for the variable annuity industry. President and CEO Cathy Weatherford predicts that demand for VA insurance guarantees–such as guaranteed lifetime income benefits, beneficiary protection, and VA living benefit guarantees–will keep growing, even in these uncertain economic times that have negatively impacted the sales of other types of variable annuities.
Variable annuity insurance guarantees are predicted to become more popular because they may offer greater security to investors. Those nearing retirement, especially, don’t want to risk their entire nest eggs for the chance at a comfortable life as a retiree. VA insurance guarantees can provide both, says NAVA; which explains their increased popularity in 2008 that is set to grow further in 2009.
The market for VA living benefit insurance guarantees has been expanding over the past few years and is also predicted to increase in ’09.
Finally, NAVA is promoting a Straight-Through Processing Initiative (STP) to improve the process of selling variable annuity products. It’s intended to streamline the sales process, increase transparency, and reduce industry costs; the goal is to make variable annuities easier for potential investors to understand and then buy. If the initiative is successful, NAVA’s bright predictions of higher profitability and sales for the industry might be accurate.