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Mystery Variable Annuity Holders Tend to Drift Away: Ruark

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When a life insurer has a hard time providing basic information about an annuity holder, that may be a sign the annuity holder is likely to drop a contract.

Ruark Consulting LLC has published data supporting that possibility in its 2020 U.S. variable annuity market study.


Ruark analysts based the new study on data on 13.9 million policyholders and $675 billion in account value from 20 participating insurers.

That compares with data on 14 million policyholders and $795 billion in account value from 24 participating issuers for Ruark’s 2019 variable annuity market study.

One indicator the Ruark analysts examined is how often contract holders surrendered their contracts.

The annuity contract surrender rate is less than about 5% for contracts sold through career agents, independent agents, direct sales programs and full-service broker-dealers, and about 6% for contracts sold through banks, according to a study summary chart made available to the public.

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When the distribution channel is classified as “other/unavailable,” the surrender rate is close to 8%.

The Ruark analysts also found that contract holders without living guarantees are much more likely to surrender contracts than contract holders with guaranteed living withdrawal benefits (GLWB) are.

Surrender rates for GLWB contracts that were sold through agents or full-service broker-dealers are under about 4%, according to a Ruark summary chart.

The surrender rate is well over 10% for contracts without living benefits guarantees and a distribution channel classified as “other/unavailable.”

— Read What Influences VA Policy Owners?on ThinkAdvisor.

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