Maximizing a Client’s Variable Annuity Income

March 9, 2021 by James Kavanagh

Insurers are fixated on in-the-moneyness (ITM), so should you be.

There have been several articles published recently about the challenge that insurance companies have in forecasting variable annuity policyholders’ behavior, such as how policyholders manage and make decisions about their contracts. Getting it right is critical to insurers’ profitability.

Their big concern is when a variable annuity contract gets into a deep ITM condition. This happens when the present value of the insurer’s estimated future policyholder income from the contract is significantly greater than contract’s account value.

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Originally Posted at ThinkAdvisor on March 9, 2021 by James Kavanagh.