This article is the first installment of RIJ’s new occasional feature, RetiremEntrepreneursTM, about people who profit from the Boomer aging and retirement wave in novel, creative or socially-useful ways. For more information about Annuity Review, see this week’s cover story, “Where to Get Your Old VAs Appraised.”
RIJ: Annuity Review mainly serves owners of pre-2008 variable annuity contracts with rich living benefit riders, as well as the financial advisors of those people. Exactly what service do you provide?
RIJ: Annuity Review intends to help these contract owners “maximize” the value of their VA contracts… Won’t that hurt the insurance companies that issued the contracts?
RIJ: Are you saying that the people who own them and even the people who sold them in don’t know their value, and could surrender them without knowing what they’re giving up?
CORTAZZO: We’ve had wholesalers and regional directors from companies come in and we’ve asked them, How does this work and what happens in this situation. A very common answer we’ve gotten is, ‘I’m not sure, no one’s ever asked me that question…’
RIJ: You were a big fan of variable annuities when they were underpriced and had rich benefits. What’s your feeling about today’s “de-risked” contracts?
CORTAZZO: We have annuity contracts that, from ’02 to ’07, with lifetime income guarantees on them, net of fees, nearly quadrupled in five years because we were in high octane investments. That was wonderful. We don’t have anything that’s going to be able to do that today…
RIJ: You’re still using VAs, how are you using the new ones differently from the old ones?
RIJ: So, if variable annuities have a diminished role for your clients, why own them at all?
RIJ: How would you describe the type of person who should own a variable annuity with living benefits today?
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