Filed Under:Annuities, Fixed Indexed

The variable annuity buyout binge, part 2

Photo credit: patpitchaya
Photo credit: patpitchaya

Last month, we explored the recent trend of variable annuity (VA) insurers deciding that they no longer want to be obligated to the “shadow” value guarantees that are offered through their products’ guaranteed living benefit (GLB) and/or guaranteed death benefit (GDB) riders. While these riders were initially developed to equalize the sales of VAs (particularly during times of market volatility), they have now become a burden to the companies that underwrite them. Today three insurers have essentially proposed a cash buyout should their policyholders voluntarily surrender their GLB and/or GDB riders.

Before we commence our exploration of the potential problems this presents, we should discuss early VA rider product development. When these riders emerged in 1996, regulators were quick to step in, and establish replacement guidelines to avoid the potential for annuity purchasers giving up a perfectly good in-force annuity for a newer one that may be…well, not as good as their in-force annuity. But why on earth wouldn’t these clients want to exchange their in-force annuities for something that is “new and improved?”

Featured Video

Most Recent Videos

Prospects not listening to voice mail? Arrange a phone date


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]


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


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

Dementia: It's more than Alzheimer's


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

Related resources

More Resources


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.
Nichole Morford

Nichole Morford
Managing Editor

Thank you for subscribing to LifeHealthPro Daily!

Check Out More eNewsletters Now! Close

Advertisement. Closing in 15 seconds.