Morningstar Launches New Variable Annuity Review Tool

Morningstar, Inc. has launched a new web-based tool that allows financial professionals to easily research and evaluate variable annuity contracts.

Live today, the Morningstar Annuity Intelligence describes features in a variable annuity in simplified terms, says Kevin Loffredi, vice president, annuity solutions, software division, of Chicago-based Morningstar.

“The main purpose of the tool is to have a place for reps, and their compliance departments, to go to to have a clear understanding of how the annuities work,” Loffredi says. Information on an individual annuity contract can be accessed from one central page, he notes.

For example, the program details how benefits will be paid out if one spouse dies, thereby eliminating misunderstandings, Loffredi says.

The Morningstar Annuity Intelligencepermits side-by-side comparisons of two contracts, which can be useful from a compliance standpoint when comparing the fees and possible savings of going from one contract to another, Loffredi says. “That shows the clients, FINRA and the home office the benefits of making the transaction,” he says.

Among the features displayed are: step-up provisions; the impact of withdrawals on benefits; caps on the benefit base, if any; investment restrictions; and spousal continuation. The Annuity Intelligence program also contains suitability forms from the broker-dealers that are automatically populated with fees and rider costs. The program also features a lifetime income calculator, which displays the amount of guaranteed income an annuity benefit will provide for a client based on certain criteria, such as age and deferral years.

The program lists which annuity contracts can be sold in each state, a capability requested by Morningstar reps who want to know what they can actually sell in their jurisdiction, Loffredi says.