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AIG Unit Updates Annuity

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American General Life Insurance Company has relaunched the Horizon Index Annuity contract.

American General, Houston, a unit of American International Group Inc., New York, says the revision will increase the premium bonus on the 12-year version to 5%, from 3%, and the premium bonus on the 9-year version to 4%, from 2%.

AIG also will put a new emphasis on marketing the 2-year, point-to-point crediting methodology.

The bonuses are credited and vested immediately but subject to surrender charge, American General says.

Annuitization is never required.

Customers who choose the 2-year, point-to-point crediting methodology today will get a 20% cap, American General says.

That cap, which is more generous than the caps offered by many other issuers, “offers tremendous value and opportunity to consumers who realize the markets and economy may be at a critical inflection point,” Larry Nisenson, a senior vice president in American General’s annuity business, says in a statement about the product.

“While limiting downside risk has always been a key draw of index annuities, capturing upside opportunities is also critically important,” Nisenson says. “Sweetening the premium bonus, which credits and is vested immediately, adds further value to the customer in an environment where value is being scaled back in many cases.”

American General is responsible for backing the product guarantees.