Filed Under:Annuities, Fixed Indexed

Extreme makeover: Variable annuity edition

Photo credit: Vichie81
Photo credit: Vichie81

Ask Andrew Lord, founder and president of Essential Planning, LLC, in Portsmouth, N.H., if more of his clients are purchasing annuities with lifetime income riders now and he answers plainly, “I don’t see anybody buying them without them.”

In fact, a few years ago, when he saw the growing demand for guaranteed lifetime withdrawal benefits (GLWBs), Lord renewed his securities license so he could sell variable annuities (VAs) with those add-ons. “Took all the tests again like when I was a kid because I thought it was such an important benefit for my clientele,” he says.

Yet Ferris concedes that annuity producers, like Prudential, are not immune from current capital market conditions. Therefore, carriers are fine-tuning their benefit platforms. For example, Ferris says that prior to 2008, roll-ups were generally in the 6 percent to 8 percent range; today, roll-ups bounce between 4 percent and 5 percent.

“For the sustainability of these solutions over the long-term, I think it’s prudent of our industry” to make those adjustments, Ferris says.

Andrew Lord has two answers to that dilemma. On one hand, each case must be reviewed individually in the context of what the policyholder wants to accomplish. “A lot of that has to do with the performance of the policy, the timing of when they bought it, and the client’s other assets,” Lord says.

Yet, he is also outspoken in his belief that the policyholder may not be the ultimate beneficiary of the proposed modifications. “I believe at the end of the day it has very little to do with enhancing benefits for the client and a lot to do with a carrier trying to jettison a liability,” Lord says.

Featured Video

Most Recent Videos

Prospects not listening to voice mail? Arrange a phone date

Provided by LIFEHEALTHPRO

Redesigning your phone life is more important than finding the “best words” for a voice mail in today’s culture.

Behind the scenes with Vicki Gunvalson [VIDEO]

Provided by LIFEHEALTHPRO

In this exclusive interview, Vicki Gunvalson shares how she built a $15 million a year annuity business by planning for...

Regulator: Market may need to reinvent LTCI

Provided by LIFEHEALTHPRO

Cioppa says Maine's governor wants to spur the creation of better products.

Dementia: It's more than Alzheimer's

Provided by LIFEHEALTHPRO

An association calls for policymakers to remember lesser-known neurodegenerative conditions.

Related resources

More Resources

Comments

Power your business with up-to-the-minute insurance news, analysis, and best practices from LifeHealthPro Daily eNewsletter – FREE.

Power your business with LifeHealthPro Daily eNewsletter – FREE.

Enter a valid email address.
Close
Nichole Morford

Nichole Morford
Managing Editor

Thank you for subscribing to LifeHealthPro Daily!

Check Out More eNewsletters Now! Close

Advertisement. Closing in 15 seconds.