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.

Low Interest Rates Affecting Insurance Companies

The ultra-low interest rates that exist at the moment are affecting insurance company profitability and operations. On the profitability side, current policy premiums must be reinvested into bonds that have low yields and are fully priced. Investment income and underwriting profitability (which is often rare) are the main components of insurance company profitability. As large fixed income investors, insurance companies are challenged in the current interest rate environment. On the operations...

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The Link between Annuities and Retirement Well-Being

It appears that people who have access to the...

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Variable Annuity Sales Total $34 Billion During Third Quarter of 2010

Variable annuity sales in the United States increased 9.7 percent to total $34 billion during the third quarter of 2010. Variable annuity revenue figures continue to be concentrated among a handful of leading companies: Prudential Financial: $15.5 billion year to date. MetLife : $13.2 billion year to date. Jackson National Life: $10.47 billion year to date. TIAA-CREF : $10.42 billion year to date. Lincoln Financial : $6.6 billion. The total amount of variable annuity sales in the first 9 months...

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Guaranteed Living Benefit

Insurance

Variable Annuity

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Meir Statman on the Behavioral Obstacles Affecting Investing and Retirement Planning

Meir Statman is the Glenn Klimek Professor of Finance at the Leavey School of Business, Santa Clara University, and Visiting Professor at Tilburg University in the Netherlands.

His research on behavioral finance has been supported by the National Science Foundation, CFA Institute, and Investment Management Consultants Association (IMCA) and has...

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Defined Contribution Plan

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Personal Pension Plan

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MetLife is Nudging the World of Defined Contribution toward Income Annuities

Jody Strakosch is the National Director for MetLife’s Retirement Products Group. In this role, Jody has a broad perspective on developments in the institutional space. In other words, Jody is intimately familiar with how in-plan accumulation and point of retirement annuities are evolving in the defined contribution arena.

The...

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