The U.S. arm of a Canadian financial services company has replaced the benefits guarantee options available with the Masters variable annuities with new guarantee options.
Sun Life Financial (U.S.), Wellesley Hills, Mass., a unit of Sun Life Financial Inc., Toronto, says it will be selling the Income ON Demand II Suite and Retirement Income Escalator II option collection in place of the Income ON Demand and Retirement Income Escalator living benefits options.
The Income ON Demand II suite offers a guaranteed annual withdrawal amount
The base version offers income storage as early as age 50, and the Plus version offers storage with a 7% bonus for waiting during the first 10 contract years if no withdrawals are taken during those years.
The Escalator option provides income storage with tiered income of 5% to 7% at different ages, depending on the owner’s age at the beginning of the stored income period.
The Retirement Income Escalator II offers a choice between a 7% bonus every year during the first 10 contract years if no withdrawals are taken in a given year, or maximizing income by receiving a higher lifetime withdrawal percentage as they age, with the percentage locked in at age of first withdrawal.
The current annual charge for Income ON Demand II product is 0.65% of the fee base, and the annual charge for the Demand II Plus product is 0.95% of the fee base.
The charge for the Escalator option is 0.8% of the fee base.
The annual charge for the Retirement Income Escalator II is 0.8% of the highest withdrawal benefit base for the account year.
Sun Life Assurance Company of Canada (U.S.) issues the annuities and living benefits options in most states and is responsible for backing the guarantees.