2012 Annuity Product Update – First Quarter

by on Apr 02, 2012

altSince the last installment of our quarterly Annuity Product Update, four new products have been released or updated by Annuity Monitor firms including one variable annuity, two indexed annuities and one fixed annuity. Here is a look at what the Annuity Monitor firms were up to in the first quarter of 2012:

Allianz Life – Allianz 365i Fixed Index Annuity
The firm introduced the new Allianz 365i Annuity to its already impressive suite of fixed index annuities. The new product offers clients the potential for interest based on changes in a market index, a 6% premium bonus on money placed into the annuity within the first three years, flexible income options and free withdrawals each year of up to 10% of the total premium paid.

Jackson National – Elite Access Variable Annuity
The new Elite Access variable annuity offers more than 40 professionally managed investment options designed in varying investment styles, tax-deferred earnings and transfers between investment options, and a five-year withdrawal charge schedule. Additionally, the new variable annuity will not offer any living benefit riders or step-ups.

Lincoln Financial Group – Lincoln OptiChoice New York Fixed Indexed Annuity
The firm now offers the pre-existing Lincoln OptiChoice fixed indexed annuity to New York customers. The fixed index annuity offers the option to allocate the policy premium between a fixed account or an indexed account tied to the performance of the S&P 500 Index and a variety of income options including lifetime income payments. Additionally, the indexed account for New York contracts includes an index credit percentage, which is activated if the ending S&P 500 Index value is equal to or greater than the beginning S&P 500 Index value over a one-year term.

New York Life – Secure Term MVA Fixed Annuity II
The firm updated its Secure Term MVA Fixed Annuity with the release of the Secure Term MVA Fixed Annuity II. The product offers clients tax-deferred accumulation, multiple banded interest rates that increase for larger premium payments, a market value adjustment provision that enables clients to gain a potentially higher initial interest rate and a choice of three initial interest rate guarantee periods. The amount of the market value adjustment is determined by a formula that measures the change in the U.S. Treasury Constant Maturity yield plus the applicable Barclays Capital U.S. Corporate Bond Index from the issue date to the surrender or excess withdrawal date. If the interest rates on which the MVA is based are lower than when the annuity was purchased, the MVA will be positive thus adding money to the annuity and vice versa.

Final Thoughts
In our last Annuity Product Update in early January, we stated that due to the ongoing market volatility we expected to see more products that enable clients to capture gains from market upswings while also offering downside protection. This expectation is holding true thus far in 2012, as three of the four aforementioned products – New York Life Secure Term MVA Fixed Annuity II, Lincoln OptiChoice New York Fixed Indexed Annuity and Allianz 365i Fixed Index Annuity – contain that very feature. It should also be noted that no Annuity Monitor firms released a new optional benefit rider throughout the first quarter of the year.