What If the Index in an Indexed Annuity Goes Away?
March 21, 2023 by Allison Bell
For life and annuity advisors, the current financial storm raises a new question: What if U.S. life insurers continue to do well, but the firms that produce some of the indexes inside indexed life and annuity products go away?
Credit Suisse, for example, has been producing the Credit Suisse Momentum Index, a global, multi-asset index that’s used in some individual indexed annuities.
Wink’s Note: Allison Bell of ThinkAdvisor posed the question –
“What if the index in an indexed annuity goes away?”
This is specifically about Credit Suisse, who offers seven different indexes on deferred annuities, which are offered by seven different insurance companies.
Ann Black‘s comments are dead-on. I have never read a product filing that does not include a provision that would allow the insurance company to substitute the index, for another, in the event the index “goes away.”
What is interesting is that most insurance folks don’t realize that an insurance company may discontinue an indexing method, even if the index doesn’t “go away.” It may be pulled from new business AND it may be discontinued on inforce contracts as well. – sjm
