The Annuity Solutions division of Morningstar has published a report summarizing the variable annuity industry highlights of 2010 and predicting that “the pendulum [will] swing back toward more generous benefits during 2011” after the de-risking trend of 2009 and early 2010.
The report, “Continued Innovation Helps Fuel VA Sales in 2010,” also noted new filings of products not yet available:
- Allianz filed a Lifetime GMWB with a guaranteed withdrawal percentage based not on age, but on the rate of a 10-year treasury note. This ties payouts directly to market performance, removing the age factor. The benefit has not been rolled out yet.
- Lincoln National filed a new long-term care benefit that pays a monthly amount for long-term care expenses and costs 1.26% to 1.57%, depending on options chosen (fee calculation is complicated). This benefit pays for long-term care expenses up to three times the initial purchase amount (which must range from $50,000 to $400,000). Payments are offered monthly beginning after the first anniversary and are not taxable. The optional Growth feature gives the ability to increase the monthly maximum benefit amount using a calculation based on the investment growth and the remaining benefit base. The Growth option has a step-up feature through age 76. The benefit is capped at $800,000, covers a single life, and applies only to non-qualified assets.
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