Clients still insist on guaranteed lifetime withdrawal benefits, a survey by Phoenix Companies found. The report, released Tuesday, found 70% of annuity professionals said GLWBs were “must-have” features on the annuities they’ve sold over the past 12 months.
By comparison, just 11% of respondents said a combination of benefits were a must-have feature in annuities, and just 6% of respondents said their clients were demanding principal preservation income riders.
They expect demand to rise over the next 12 months, though. Looking ahead, 37% of respondents said that over the next 12 months, GLWBs will be the only must-have feature on annuities, while a quarter said there would likely be a combination of benefits in high demand.
The need for guaranteed income is certainly driving client demand; 62% of respondents said that need is why their clients are demanding certain benefits. However, 24% of respondents said their clients were trying to address multiple needs with one product.
“This survey shows that the need for guaranteed income in retirement continues to be a top priority for consumers and the annuity professionals who advise them,” Mark Fitzgerald, national sales manager for Saybrus Partners, Phoenix’s distribution subsidiary, said in a statement. “That’s just part of the story, however. More and more, consumers are looking to meet other needs, notably accumulation and chronic care benefits, and would like the ease of a combination annuity product that does it all.”
A third of respondents said they would like to see accumulation features added to annuities, and 28% said they wanted income guarantees. Almost a quarter identified chronic care benefits as an important rider they would add to annuities if given the opportunity.
Almost half of respondents said they’d like annuity providers to offer less complex products over the next year. Simpler products were vastly preferred over better tools to work with current products. Just 18% said they would like providers to focus on better illustration tools, the same percentage who said they wanted better mobile tools.
“For both carriers and advisors, finding the right balance between products that can address multiple needs and products that are less complex will continue to be a challenge,” said Fitzgerald. “For carriers, that might mean developing better illustration tools. For IMOs and agents, it points to the critical role education and advice play in navigating the breadth and complexity of solutions found in the retirement marketplace.”
Phoenix surveyed 102 independent marketing organization professionals, carriers, independent agents and vendors at the National Association for Fixed Annuities’ 2013 NAFA IMO Summit in Aspen, Colo., in October.
Check out What Do Annuity Buyers Want? by Michael Finke on ThinkAdvisor.