Any advisor or layperson who has general questions about deferred income annuities (DIAs) can find most of the answers in a new Insured Retirement Institute whitepaper entitled “Deferred Income Annuities: Insuring Against Longevity Risk.”
The whitepaper describes in sufficient but not excessive detail how DIAs work and how they compare with other types of annuities, such as single premium immediate annuities, variable annuities with income riders and fixed indexed annuities with income riders.
The IRI also explains why people would purchase a DIA (to protect against running out of money, to provide income for medical expenses later in life) and how they can use DIAs (by creating sequential or overlapping layers of DIA income in retirement) to maintain inflation-protected income throughout retirement.
An insurance agent or financial advisor might hand out this brochure to prospective clients. It doesn’t refer to specific products by name. Some of the information about DIAs came as a surprise, such as the assertion that DIAs (unlike SPIAs) typically can’t be liquidated for a commuted value after purchase.
Aside from providing information about DIAs, the brochure also includes information that professionals may find familiar, about longevity risk, the risk of disability in old age, market risk, and other risks that a source of guaranteed lifetime income can mitigate.
© 2013 RIJ Publishing LLC. All rights reserved.