Massachusetts Mutual Life Insurance Company has announced changes to the options available with two of its flexible-premium deferred variable annuities.
The changes affect buyers of the MassMutual Transitions Select and MassMutual Evolution VA contracts.
One change, the introduction of a Custom Allocation Choice investment option, will give holders more ability to choose their own investments along with help from a service that will rebalance portfolios automatically each quarter, according to MassMutual, Springfield, Mass.
MassMutual also has modified the standard death benefits within new MassMutual Transitions Select and MassMutual Evolution contracts, the company says.
If contract owners die during their annuity’s asset accumulation phase, the new standard death benefit guarantees beneficiaries “the greater of either contract value or purchase payments, less any withdrawal adjustment and applicable charges,” MassMutual says.
The new standard benefit is available to annuity buyers up to age 76.
MassMutual is replacing the guaranteed minimum income benefit rider sold with the contracts with a choice of the MassMutual Guaranteed Income Plus 5 or the MassMutual Guaranteed Income Plus 6 GMIB riders.
The Plus 5 rider now costs 0.65% of the contract GMIB value, up to a maximum of 1.5%, and the Plus 6 rider costs 0.8% of the GMIB value, up to a maximum of 1.5%.
The GMIB riders, available only with new contracts, provide a GMIB value equal to “purchase payments made during the first 2 contract years adjusted for any withdrawals and increased by a compound annual interest rate of 5% or 6% for Guaranteed Income Plus 5 and 6, respectively,” MassMutual says.
“From the second contract anniversary prior to age 76 (based on the annuitant), the benefit may be reset to equal current contract anniversary value,” the company says.
The maximum GMIB value for the Plus 5 rider is 200% of purchase payments in the first 2 years or from the most recent reset.
The Plus 6 maximum is 250%.
“If an investor’s benefit exceeds their contract value, it may be applied to a fixed or variable annuity income payment option beginning 10 years after purchase or last reset, provided the annuitant is 60 to 85 years old,” MassMutual says.
A customer can elect a GMIB rider at contract issue but can cancel the rider at any time, MassMutual says.
MassMutual is responsible for backing the product guarantees.