Regulatory calm and gradual increases in interest rates have started to revive annuity sales.
Brighthouse Financial Inc. has responded by introducing two new fixed annuities: the Brighthouse Fixed Rate Annuity and the Brighthouse Fixed Rate Annuity MVA.
The Charlotte, North Carolina-based company will be writing the policy through its Brighthouse Life Insurance Company unit.
Both of the new contracts are single-premium deferred fixed annuities.
One is a traditional fixed annuity. The other contract, the MVA version, with a market-value adjustment feature. The MVA feature lets Brighthouse change the guaranteed interest rate after a guarantee period expires.
A life insurer uses investments in bonds and other assets to generate the income for making the annuity interest payments. Because an MVA feature gives a life insurer some protection against falling interest rates, the insurer can offer higher initial rates on annuity contracts with MVA features.
Brighthouse is adding 0.15 percentage points to the base interest rate for consumers who buy the MVA version of the contract, rather than the traditional fixed version.
Both the traditional fixed contract and the MVA contract offer a purchaser the choice of an initial guarantee period lasting, three years, five years or seven years.
For both contracts, the product fact cards show that:
- There is no minimum issue age.
- The maximum issue age is 85.
- The minimum purchase payment is $25,000.
- The maximum purchase payment, without prior approval, is $ 1 million.
- The maximum annuitization age is the first contract anniversary after the owner’s 95th birthday.
The new contract rate flyers show, for example, that a purchaser who pays $50,000 for a traditional annuity without the MVA feature would get a base rate of 2.55%.
A purchaser who pays $50,000 for a fixed-rate contract with the MVA feature would get a base rate of 2.7%.
A purchaser who pays $200,000 for a contract with the MVA feature would get a starting interest rate of 2.85%.
Brighthouse also sells variable annuities and indexed annuities.
Brighthouse says it will sell the new annuities through its network of independent distribution partners.
Brighthouse Life filed the new contracts with the Interstate Insurance Product Regulation Commission (IIPRC), a body that takes in product filings for most U.S. states, Agents and brokers, and other members of the public, can see the filings by searching for Brighthouse using the form posted here.
— Read 3 Top New Life and Annuity Ad Campaigns, on ThinkAdvisor.