How Likely Is That Annuity to Stick?
June 13, 2024 by Allison Bell
Will your client’s new annuity stay in force for decades, or only until the surrender-charge period ends?
Or, will it suddenly just go poof? Members of the Society of Actuaries Research Institute’s Individual Annuity Experience Committee studied that topic together with LIMRA.
Click HERE to read the full story via Think Advisor
Wink’s Moore on the Market: This article had me thinking…
It is about whether annuities will remain inforce, or not.
The Society of Actuaries “excluded registered index-linked annuities, traditional variable annuities and non-variable indexed annuities from the study.”
*****So, the study was about fixed and MYG annuities.*****
The article indicates that “In spite of the publicity that annuities with guaranteed living benefit riders receive, fewer than 1% of the contracts in the data submitted came with such a rider.”
Well, that is because less than 2% of fixed/MYG annuities even offer a Guaranteed Lifetime Withdrawal Benefit?
And researchers found that “About 39% of the contracts included in the study were surrendered by their owners in the year the surrender charge expired.”
Maybe if insurance companies didn’t drop the credited rate after surrender charges expire, this wouldn’t be the case? hashtag JustSayin
Interestingly, products with MVAs were surrendered more than their non-MVA brethren, at the expiration of surrender charges.
Overall, and interesting study. Thanks Allison Bell at ThinkAdvisor, for the compelling content! -sjm