2011 Annuity Product Update – Fourth Quarter

by on Jan 05, 2012

Since the last installment of our quarterly Annuity Product Update, a strong group of products have been released or updated by the Annuity Monitor firms including six annuities – two variable annuities, two fixed annuities and two index annuities – and two optional benefit riders. Here is a look at what the Annuity Monitor firms’ were up to in the fourth quarter of 2011:

AXA Equitable – Accumulator Series Variable Annuity
The firm updated its flagship Accumulator Series variable annuity product to feature a 5.5% compounded deferral bonus roll-up rate on benefit base to age 85. The benefit base continues to compound at 5% after withdrawals begin, which clients can realize immediately or leave in the contract to further increase future lifetime income. Previously, the deferral bonus rate was 5% until age 80.
 
Sun Life Financial – Sun Life Solutions Variable Annuity & Sun Income Vision Living Benefit Rider
The new Sun Life Solutions variable annuity features a broad selection of death benefits, investment options and withdrawal charge options, and the new Sun Income Vision optional rider for guaranteed lifetime income. The Sun Income Vision living benefit offers a guaranteed benefit base that can increase with market gains but will not decrease due to market declines.
 
Vanguard – Guaranteed Lifetime Withdrawal Benefit Rider
The Guaranteed Lifetime Withdrawal Benefit (GLWB) optional rider’s key product features include guaranteed payments for life, protection against investment losses due to downward market fluctuations, additional withdrawals as needed and the ability to start, stop or skip withdrawals at any time.
 
The Hartford – Hartford Saver Solution & Hartford Saver Solution Choice Fixed Index Annuities
Both of The Hartford’s new annuities are indexed to the S&P 500 and feature, five- or seven-year surrender charge periods, and three interest-crediting methods – Annual Point-to-Point Cap, Performance Trigger and Fixed Rate. The Save Solution Choice index annuity also includes the Global Equity Index choice and a 10-year surrender charge period. These are the first new products unveiled by the firm in 2011.
 
Pacific Life – Pacific Index Choice Fixed Annuity
The new deferred, fixed indexed annuity features an immediate credit enhancement, three initial guaranteed periods based on retirement time horizon and a variety of fixed account and index linked options.
 
John Hancock – JH Elect Fixed Annuity
John Hancock replaced their pre-existing JH Signature fixed annuity with the new and improved JH Elect fixed annuity. The JH Elect product offers clients multiple rate guarantee period options, a lower minimum initial payment of $10,000, declining withdrawal charges and a nursing home-chronic/critical illness waiver.
 
Final Thoughts
Throughout 2011, we saw the Annuity Monitor firms introduce a healthy influx of new annuities and living benefit riders and the fourth quarter was no different. Many of the new products released in Q4 offer built-in product features that enable clients to capture gains due to the market upswings while also offering downside protection. Given the ongoing market volatility, we anticipate that this trend will continue in 2012 and will serve to ease the fears of prospective clients.