Variable Annuity

Bob MacDonald has had a storied career as a leading entrepreneur and executive in the financial services industry.

Some of Bob’s roles include: president and CEO of ITT Life; founder, chairman and CEO of the highly successful LifeUSA, and; CEO of Allianz Life of North America.  Bob is also a noted business author with several best-selling management books to his credit.

As a widely acknowledged thought leader and product innovator in the financial services industry, Bob is able and willing to share a wealth of experience and insights.

Jerry Golden--often referred to as the father of variable life insurance and variable annuities--has had a distinguished career as an innovator and entrepreneur in both the insurance and personal retirement businesses.

Jerry most recently spent four years as president of the Income Management Strategies Division at MassMutual after selling his business to the company in June, 2005.

Since leaving MassMutual in May, 2009, Jerry has been actively developing a new venture which will deliver yet another set of innovations to the personal retirement marketplace.

LIMRA reports that total individual annuity sales declined by 11 percent in 2009.

Sales of all types of individual annuity products in the United States totaled $234.9 billion in 2009.

Variable annuity sales totaled $127 billion, a decrease of 18 percent for the year.

Indexed annuity sales totaled $29.4 billion, an increase of 9 percent relative to 2008.

Investment News reports that two life insurance companies are suing a handful of broker dealers over the sale of variable annuities to terminally ill annuitants.

The suit involves a Rhode Island-based attorney who allegedly solicited terminally ill people through advertising and an offer of $2,000 per variable annuity purchase.

The Financial Industry Regulatory Authority ("FINRA") has reported that the number of arbitration cases related to the sale of variable annuity products increased from 47 cases in 2008 to 123 cases in 2009.

Overall, the number of arbitration cases surged 43% to 7,137.

This increase in investor grievances is not surprising given what a difficult year 2009 was for many.

Investment News reports that many of the variable annuity cases involve "products with risky subaccounts and clients over age 60 with 10% - 25% of their net worth in the annuity.

AXA Equitable Life Insurance Company has been an innovator in the variable annuity industry.

The company was a pioneer in the area of guaranteed living benefits with the launch of the first guaranteed minimum income benefit.

AXA has recently launched a new variable annuity product named "Retirement Cornerstone."

Retirement Cornerstone features a "dual account platform" that provides the potential for long-term asset accumulation and growth as well as downside protection through a guaranteed income benefit option.

Much has been said about the impact of the financial crisis on variable annuity products and insurers.

Wall Street Journal columnist Leslie Scism recently wrote about the first wave of variable annuity product redesigns to hit the post financial crisis market.

Common themes include simplicity, cost efficiency and conservative benefit features.

Scism provides some very good detail on the most recent wave of guaranteed living benefit features.

Source: Wall Street Journal

Variable annuity net asset values have recovered to pre-financial crisis levels.

Buoyant capital markets over the past several months have resulted in the first increase in variable annuity net asset values in fifteen months.

Gross variable annuity sales in the third quarter of 2009 were $31 billion.  Qualified sales were $20.8 billion while non-qualified sales were $10.2 billion.

Two of the most daunting risks faced by the majority of retirees are:

Although mentioned previously, it is worth noting again that Moshe Milevsky is the most active, creative and interesting voice in the asset decumulation industry.

Moshe produces copious amounts of outstanding materials that shed light on the world of annuities for both professional and consumer audiences.