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.

Annuity Product Persistency Levels are Increasing

Annuity persistency refers to whether people hold on to their existing annuity products or exchange them--typically through a Section 1035 exchange --for new products. Higher levels of persistency suggest that annuity owners are sticking with existing products which are likely more valuable than what would be available in the current market through an exchange.

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Annuity

Capital Market

Guaranteed Living Benefit

Section 1035 Exchange

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Annuity

Capital Market

Guaranteed Living Benefit

Section 1035 Exchange

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Variable Annuity Sales at Jackson National Rise 57 Percent

Variable annuity sales are, to say the least, strong at Jackson National Life Insurance Company.

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ING Preparing for IPO of U.S. Insurance Business

The Dutch financial services company ING Groep is preparing for an initial public offering (IPO) of its U.S. based insurance business. The company agreed to split its banking and insurance businesses when it gained approval from the European Commission to receive government funds during the financial crisis. ING has spent considerable time and resources addressing issues related to its U.S. variable annuity business, and the company feels that these efforts are almost complete with the business...

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Allianz Reports Strong Revenue Growth Coupled with Earnings Challenges Due to Low Interest Rates

Allianz Life Insurance Company of North America reported strong revenue growth for the third quarter of 2010. Fixed indexed annuity sales increased 36 percent and totaled $1.9 billion. Variable annuity sales quadrupled to $800 million. Allianz attributes the revenue growth to more risk averse consumers in the wake of the financial crisis.

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Fixed Indexed Annuity

Life Insurance

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Fixed Indexed Annuity

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Study Shows the Impact of Annuities on Retirement Security

The Center for Retirement Research at Boston College recently published a research brief that analyzes the impact of annuitization on retirement security .

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