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.