NU Online News Service, Sept. 17, 4:08 p.m. – SAFECO Life Insurance Company, Redmond, Wash., a unit of SAFECO Corp., is introducing the SAFECO Secure Annuity.
The annuity is a single-premium, fixed, deferred annuity contract that provides two consecutive guaranteed interest rate lock periods of four years each.
At the beginning of the fifth contract year, SAFECO will offer the holder a new guaranteed rate and give the holder 30 days to decide whether to keep the annuity for the second four-year period.
SAFECO guarantees that the renewal rate will be at least 3%.
Because of the unusual structure, the annuity can pay a higher rate, and higher commissions, than short-term fixed annuities, but it can do so without forcing customers to lock themselves into long-term contracts, SAFECO says.
Customers must start with a minimum premium payment of at least $10,000.
One contract option lets holders withdraw up to 10% of the annuity’s balance per contract year without a withdrawal charge. Another option provides full access to contract funds if a holder is confined to a nursing home or hospital for 30 days or longer.