Annuity News

John Bogle Urges Retirees to Ignore Bequest Motive

John Bogle thinks that the notion of leaving an inheritance is nice but certainly not essential. The Vanguard founder suggests that paying attention to one's personal finances and standard of living in retirement trumps the bequest motive since adult children should be able to take care of themselves: A lot of older people believe they should not spend their last dollar on the last day of their life. A lot of parents want to leave a nice little nest egg to their children. That's nice but not...

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Over a Third of U.K. Workers Plan to Delay Retirement Because of Recession

A significant portion of U.K. workers over the age of 55 are modifying their retirement plans in light of the recession and financial crisis. A study by U.K. retirement specialist MGM Advantage found that 1.85 million near-retirees are planning to work longer than expected in hope of repairing their pensions and personal finances. The study also revealed: 35% of near-retirees have done nothing at all to prepare for retirement. 9.3% of workers over age 55 have considered tapping into equity in...

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Variable Annuity Assets Increase Despite Decrease in Sales

Assets in variable annuities in the United States increased at a relatively strong pace in the three month period ending June 30, 2009. Assets increased to $1.19 trillion from $1.07 trillion. Much of the increase in assets appears to be attributable to the recovery in capital markets rather than strong sales of new products. MetLife was in the top spot followed by Prudential . Source: Bloomberg Full Story

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The Risks of Fixed Income and Fixed Annuities

Inflation can be a positive for the owner of a fixed mortgage since the real value of future mortgage payments decreases. Inflation is terrible for the receiver of fixed payments since the real value of future receipts is eroded by inflation. As Brett Arends of the Wall Street Journal suggests in a recent column, owners of Treasurys and other fixed income investments (bonds) should be acutely aware of the risks that exist in the current environment. One scenario suggests that owners of 10 year...

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Alleged Ponzi Scheme Could Impact Charitable Gift Annuity Market

Robert Dillie allegedly operated a fraudulent foundation from 1996 to 2001. The foundation involved a ponzi scheme that issued $55 million in gift annuities to over 400 donors. As a result of the case, the Federal Court of Appeals has concluded that gift annuities are investment contracts under federal securities laws. The Court's conclusion will likely have a meaningful impact on the marketing activities of charitable foundations that are actively promoting gift annuities. Source: On...

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Fixed Annuity Sales Rise to $27.8 Billion

Sales of fixed annuities in the United States were $27.8 billion during the second quarter of 2009. This represented an increase of 10% from the same period a year earlier, but a decrease of 20% from the previous record setting quarter. New York Life was the sales leader with $2.85 billion in sales. Aviva , Allianz and MetLife also posted strong sales. Source: Investment News Full Story

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NAIC Proposes More Stringent Rules for Annuity Sales

The National Association of Insurance Commissioners (NAIC) has proposed amendments to the regulatory framework that governs annuity sales. The NAIC Suitability in Annuity Transactions Model Regulation is the existing framework. The NAIC is proposing more stringent suitability guidelines for the sale of all types of annuities--including fixed annuities. The amendments would place insurance agents who sell fixed annuities under the same suitability guidelines that apply to financial advisors who...

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Variable Annuity Sales Decrease for Fifth Straight Quarter

Variable annuity sales in the United States decreased 24% for the three month period ending June 30. Total variable annuity sales for the second quarter were $31.9 billion, a 24% decrease from $42.2 billion during the same period in 2008. AIG and Hartford Financial Services Group were especially hard-hit with sales decreasing more than 50%. In contrast, sales at MetLife rose 27% to $4.5 billion, making the company the leading provider of variable annuities in the U.S. Source: Bloomberg Full...

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Life Settlement Sales by Seniors Have Doubled in Two Years

Life settlement sales made by seniors have doubled over the past two years to $11.8 billion. The financial crisis appears to have had an impact on sales as seniors are likely looking at all of their assets for sources of funds and liquidity . Experts do caution, however, that there are other ways to realize the value of a life insurance policy that do not involve loss of life insurance coverage: "If you're thinking about selling your life insurance mostly because you're strapped for cash, there...

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Buffett and Pictet Express Concerns About Inflation

Warren Buffett expressed his concerns about budget deficits and inflation risk in a recent New York Times op-ed piece. Asset managers at Pictet and Cie which is Switzerland's largest private bank also have concerns about inflation in the United States, and they are backing this view with part of the $60 billion in fixed income assets that they manage. Pictet is committed to periodic purchases of treasury inflation protected securities ( TIPS ) in light of their inflation thesis. Recent and...

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