Stingy variable annuity providers are beginning to relax their grip on benefits, according to the Insured Retirement Institute. In a report compiled by Advanced Sales & Marketing Corporation, IRI found benefit withdrawal percentages increased between 0.25% and 0.50%. Additionally, some carriers have made guarantees available for younger annuity owners.
The increase in benefits was generally accompanied by an increase in fees, however. The report found fee increases ranged from 5 bps to 45 bps.
Most changes were minor, though, the report notes. And while variable annuities are showing a trend towards increasing benefits, the pace of filings is slowing down. Just 76 material changes were filed by carriers in the second quarter, compared with over 140 last quarter. The second quarter of 2009 was “one of the most active ever,” according to the report, with 213 filings.
New contracts declined as well, falling from 26 to eight in the second quarter.
Living benefits are enjoying continued popularity. Of seven new benefits released in the second quarter, six were lifetime benefit withdrawals, the report found.
Among the benefits announced but not yet effective, are a long-term care benefit from Lincoln National, and a lifetime GMWB from Allianz that is tied to market performance, rather than age.