Chris Conklin explains that fixed annuities offer advisers' clients greater safety than bonds, particularly in times of rising interest rates, while delivering returns similar to those offered by bond funds. Fixed annuities are safer because "both a client's original premium and any credited interest are contractually guaranteed to be protected…
Standard Insurance executive Rich Lane writes that advisers should have a frank conservation with clients about the pros and cons of purchasing an income rider for an annuity. Advisers should consider two aspects of annuities, accumulation and distribution, he writes. ThinkAdvisor (free registration)
Insurance companies responding to the Labor Department's new fiduciary rule are bringing fee-based fixed-indexed annuities to the retirement market at a brisk pace. Whether they achieve wide acceptance depends upon how distributors handle them, which isn't yet clear, industry experts say. InsuranceNewsNet Magazine
The companies that write fee-based variable annuities are increasingly shortening the period during which surrender fees are applied or eliminating them entirely, regulatory filings show. According to one expert, advisers can expect to see more short-term surrender products offered by insurance companies, as longer surrender charge products are seen as…
A MetLife survey found 52% of people who decided on a lump-sum payment from their retirement plans say it would have been easier to manage their budget if they had chosen the annuity option instead. InsuranceNewsNet online
Chris Conklin, a licensed agent and fellow of the Society of Actuaries, reviews some of the information that agents and advisors should provide to clients to overcome misleading criticisms of annuities that often appear in advertising. ThinkAdvisor (free registration)
Income annuities tend to be straightforward products that avoid the need to make systematic withdrawals from retirement portfolios, which are factors that could help retirees and pre-retirees aged 60 and older, said Jamie Hopkins of The American College of Financial Services. "For people with low literacy rates who are probably…
Practical considerations often make it wiser for people to annuitize part of their retirement portfolio than rely entirely on investment income, notes Wade Pfau of the American College of Financial Services. "Those favoring spending and true liquidity will find that it is much more difficult than commonly assumed for an…
Marti DeLiema, a post-doctoral fellow at the Stanford Center on Longevity, includes use of annuities among the strategies that help protect older retirees from exploitation and fraud. Taking income from an annuity makes it more difficult for criminals to gain access to retirees' savings, he explains. CBS MoneyWatch
Sales of variable annuities fell 21% last year, but they could recover when uncertainty over the requirements of the Labor Department's fiduciary rule is resolved, said Dennis Glass, president and CEO of Lincoln Financial. Companies that distribute variable annuities are "waiting for certainty so they can formalize what their practices…
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