Annuity

An annuity comes in many forms, but a simple definition is that an annuity is a contract that converts a sum of money into a series of periodic payments for an agreed upon period of time. An annuity can be thought of as a financial vehicle that converts a pool of money into a stream of income. Annuities are most useful in addressing the financial planning needs of people in or approaching retirement. Annuities are unique in the financial world because they can provide protection against the risk or outliving one’s assets (longevity risk) by guaranteeing income payments in perpetuity or any other selected amount of time. Annuities can be viewed as a type of personal pension plan. Social Security is similar to an annuity in that money contributed over the course of one’s working years is converted into a series of periodic payments that provide income during retirement.

Banks Generate $734.5 Million in Annuity Fee Income During First Quarter of 2009

Bank holding companies generated three quarters of a billion dollars in annuity fee income during the first three months of 2009--an annual run rate of approximately $3 billion. The fee income is essentially commissions from sales of various annuity products in the banks. Sales by annuity type were not broken-out in the study that came from Michael White Associates. That said, the increase in fixed annuity sales in the first quarter of 2009 likely contributed to robust bank sales. Banks...

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Annuities and the Financial Media – Don’t Believe Everything You Read

The annuity industry is a large and increasingly important part of the financial services landscape. Millions of Baby Boomers are retiring and will be in need of stable sources of income and protection from...

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Annuity

Fixed Indexed Annuity

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Annuity

Fixed Indexed Annuity

Owners of Variable Annuities Shielded from Market Crash

A recent Wall Street Journal article notes that owners of variable annuities with guaranteed living benefits ( GLB ) have been largely immune to the fallout from the financial crisis. "One of the best investments of the past decade was one of the most derided: the variable annuity ." The protection offered by GLBs such as the guaranteed minimum withdrawal benefit is discussed. "Because of such guarantees, many holders of variable annuities actually saw their accounts increase 6% or more in...

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Annuity

Guaranteed Living Benefit

Guaranteed Minimum Withdrawal Benefit

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Annuity

Guaranteed Living Benefit

Guaranteed Minimum Withdrawal Benefit

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MetLife Introduces Low Cost Variable Annuity

MetLife recently announced the launch of a simple, low cost variable annuity called Simple Solutions. The Simple Solutions variable annuity will be sold through banks and is intended to address retirees and near-retirees in the range of 60-80 years of age. Features and highlights include: A guaranteed lifetime withdrawal benefit of up to 6% of the initial investment if withdrawals begin after age 76, 5% between 65 and 75, and 4% if before age 65. Automatic annual increases of the GLWB if the...

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Guaranteed Lifetime Withdrawal Benefit

Variable Annuity

Mortality and Expense Charge

Mortality

Investment Management Fee

GLWB

Asset Allocation

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Annuity

Asset

Guaranteed Lifetime Withdrawal Benefit

Variable Annuity

Mortality and Expense Charge

Mortality

Investment Management Fee

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The Absolute Return Unicorn - Investment Products Offering Both Gains and Protections Prove Elusive

The asset management industry has struggled to provide older investors and retirees with investment products that provide returns with little or no risk of losing principal.

In other words, the industry has not had any success in developing investment products that provide return without any risk.

A recent Wall Street Journal...

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