Annuity News

Variable Annuity Sales Down 26% in First Quarter of 2009

Variable annuity sales in the United States continue to decline in the wake of the financial crisis and capital market turmoil. First quarter sales of variable annuities totaled $30.4 billion. This represents a 26% decrease from the same period a year ago. Total variable annuity sales for 2008 totaled $154.8 billion, a drop of 15.1% from 2007. The top 5 variable annuity companies in terms of revenue were lead by MetLife : By individual companies, MetLife re-captured the No. 1 spot, with $3.7...

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Retirement Income Product Innovation a Possibility in Wake of Financial Crisis

The financial crisis may have one unintended consequence that would prove beneficial for millions of retirees. There is a renewed focus among providers of retirement income products in the wake of the financial crisis. The crisis has provided an opportunity for the remaining life and annuity insurers and asset managers to rethink their product offerings. The result could be a wave of innovation that is focused on retirement income and asset decumulation rather than asset accumulation and...

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Watch-Out for Any Annuity Pitch that is Tied to a Reverse Mortgage

The cross-selling of annuities and reverse mortgages is problematic to say the least. There is clear potential for conflict of interest and pitfalls for elderly customers. Consumers should be on the look-out for any sales pitch that ties the two products together. There are, in fact, laws that define the need for separation of the two products during the marketing and sales process: Under the Housing and Economic Recovery Act of 2008, a lender or anyone else can’t require a HECM (a...

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Chief Investment Strategist from TIAA-CREF -- Think of Income When Considering Annuities

Annuities are all about producing income that will last according to P. Brett Hammond. Hammond is the chief investment strategist for TIAA-CREF asset management. In Hammond's view wealth creation and asset accumulation are fine, but producing income should be front and center when thinking about retirement: There's nothing wrong with wealth creation. In fact, it's fabulous. But the problem is if you're only thinking about wealth creation for retirement income, you may forget about all the other...

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The Death of Asset Allocation?

Risk mitigation through diversification across time and space are fundamental tenets of conventional financial theory. In other words, the idea is that stocks are safe in the long-run and risk or volatility can be reduced by owning assets in uncorrelated markets. The problem is that stocks are not necessarily “safe” over any time horizon and correlations between asset classes tend to increase dramatically during times of market distress such as the past year and a half. Target date...

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Study Indicates that Rapamycin Increases Longevity in Mammals

The Wall Street Journal reports that a recent study shows that Rapamycin is the first chemical to increase the longevity of mammals. Rapamycin was shown to increase the longevity in mice by 9% - 14%. In a related study on aging to be published in Science magazine, researchers show that sharply reduced calorie intake increased the lifespan of monkeys significantly. Source: Wall Street Journal (subscription required) Full Story

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Manulife Shoring-up Capital in Light of Hits to Variable Annuity Business

Manulife Financial continues to recover and shore-up its balance sheet after taking some hits to its previously unhedged variable annuity business: Manulife is still recovering from exposure to billions of dollars in liabilities incurred by its variable annuity business during the global economic crisis, when unhedged bets turned sour as stock markets tumbled. Source: Reuters Full Story

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What You Need to Know About Reverse Mortgages

Writing for The Chicago Tribune, Terry Savage has written the best reverse mortgage article I have come across. The article is professional, objective and comprehensively covers all of the basics: What are the benefits of a reverse mortgage? How does a reverse mortgage work? Some concrete examples. The downsides of a reverse mortgage. Where to go and who to talk to about reverse mortgages. It is a great article and starting point for anyone considering a reverse mortgage. Source: Chicago...

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How to Value Your Social Security Benefit

What is the present value of a $2,521 Social Security benefit to a woman who starts receiving the benefit at age 66 and has those payments last until she passes away at age 90? The answer is $412,896. This figure likely surprises many people. The reality, though, is that $412,896 is the amount you would need to purchase an annuity --if, that is, an annuity like this actually existed--that offers the $2,521 payment. It is also important for people to understand that the $412,896 should be...

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