Insurance Agent Forum

[insuranceexec]

To those of you who sell annuities and add the income riders to those annuities; I am curious.


What do you like about the products you are selling?

What would you like to see changed?

I have been invited to attend a product design meeting with a company that will go unmentioned for obvious reasons.

I have attended many of these design meetings in the past, but have yet to help develop an annuity with an income rider.

I look forward to the discussion.

[InsureGuy5]

Personally, I think this is a very small niche market. Why not purchase a deferred annuity and then annuitize it on your own terms? This will give the insured more flexibility.

In my opinion, annuitants need an out clause if they decide not to annuitize over their life, but still have some guarantees.

[Charpress]

Annuitization is a one-way street. It irrevocably changes the contract and you have an inflation time bomb waiting to go off.

Income riders allow you to turn income on and off as you wish. They have much more flexibility.

[insuranceexec]

Originally Posted by Charpress

Annuitization is a one-way street. It irrevocably changes the contract and you have an inflation time bomb waiting to go off.

Income riders allow you to turn income on and off as you wish. They have much more flexibility.

I knew I could count on you for an intelligent response.

What would you like to see changed about the way income annuities pay out?

[Charpress]

On the riders, I would like to see more opportunity for the beneficiaries to participate in the full enhanced rider value, not just the accumulation value.

Aviva does this well. I believe Allianz allows beneficiaires to participate in the full value if they just agree to take it over 5 years. That seems reasonable enough to me --except I don't think it applies if income has been started prior to death.

With some companies, the enhanced value is either lost entirely or the benes have to take the value over their lives. That is not good.

[insuranceexec]

Good feedback; I appreciate it.

[BrokersAllianceAnnuities]

Thanks for the excellent thread, insuranceexec. I would like to see the carriers put more emphasis on the Contract Value side of the equation, so that the annuitant could actually earn real interest on 100% of the initial premium.

Most, not all of the Contract Value options are fairly weak. If there was a carrier that could step up to the plate with something substantially better, it would set off some valuable competition where the consumer (first), their beneficiaries and the agent/advisor would benefit.

One idea would be to add a Term Life, or even a Permanent Life option to the Contract Value side that would provide a substantial Death Benefit versus whatever is left over in the Contract Value for the Death Benefit.

[insuranceexec]

Originally Posted by BrokersAllianceAnnuities

Thanks for the excellent thread, insuranceexec. I would like to see the carriers put more emphasis on the Contract Value side of the equation, so that the annuitant could actually earn real interest on 100% of the initial premium.

Most, not all of the Contract Value options are fairly weak. If there was a carrier that could step up to the plate with something substantially better, it would set off some valuable competition where the consumer (first), their beneficiaries and the agent/advisor would benefit.

One idea would be to add a Term Life, or even a Permanent Life option to the Contract Value side that would provide a substantial Death Benefit versus whatever is left over in the Contract Value for the Death Benefit.

Excellent comment! I thank you for posting.