The departure of Sun Life Financial from the annuity industry was disappointing, to say the least. When Delaware Life Holding acquired the fixed, variable, and indexed annuity business from Sun Life, we weren’t sure if they would try to expand upon that business. Sun Life had not been selling new annuity products for more than a year before they sold off their annuity business to Delaware Life, according to Linda Koco of Annuity News in the article “Delaware Life Debuts Its First Annuity.” Delaware Life became an annuity and insurance carrier in August when they purchased the business from Sun Life. Many experts thought that the company would wait out the low interest rate environment before introducing any products of their own, while others held hope that they would innovate in the industry. Delaware Life put all the questioning to rest with the introduction of their first annuity product.
The Pinnacle MYGA is a fixed annuity that offers guarantees and lets you choose your contract length. This single-premium deferred annuity offers you the choice of a 3, 5, 7, or 10 year guarantee period. There are surrender charges if you take your money out before the second year. After that, you can take up to 10% each year in the form of a withdrawal. Interest rates are fixed and currently range from 2%-3.5%, depending on the length of your contract. Once you have reached the renewal date, you have the option to take your money out penalty free or renew the contract. If you renew, the interest rates will change based on the markets and your surrender charge timeline will be back in effect. Qualified annuities require a $5,000 minimum payment and non-qualified annuities require $10,000.
Delaware Life’s president says that their new Pinnacle MYGA fixed annuity is made for “retirement-oriented investors” who will value the security of fixed interest rates, tax-deferral, and the option to provide lifetime income. This annuity will be distributed through five independent marketing organizations and sold in 47 states. When Delaware Life acquired the annuity business from Sun Life, they also transferred 500 employees to the new company. They are helping to manage the 450,000 existing annuity policies that were acquired from Sun Life Financial. Their annuity expertise will likely be used in Delaware Life’s new business endeavor, selling their own annuity products. This new fixed annuity is good news for the annuity industry because it shows people that there are still new and valuable products out there, even if interest rates remain low. Delaware Life is likely to continue innovating and adding more annuity products to their line-up.
Written by Rachel Summit