What You Need to Know
- American Life received regulator approval in April 2020 for a free contract value enhancement rider.
- An annuity holder who has the rider is supposed to get a bonus if Social Security benefits fall sharply.
- A patent application lists David Duley and Timothy Hill as the inventors and a Duley company as the patent application filer.
Annexus — a large annuity distributor — plans to offer consumers a new tool they can use to protect themselves against Social Security retirement income disruption.
The Scottsdale, Arizona-based company has agreed to work with PlanGap to add a Social Security income disruption rider to non-variable annuities. The rider can pay an annuity holder a bonus if Social Security program changes slash benefits.
The Annexus Effort
Annexus hopes to line up the relationships with the insurer and investment bankers it needs to implement the new Social Security disruption rider program by the end of the year.
Don Dady, the co-founder of Annexus, said in a comment about the new PlanGap relationship that Social Security benefits are many Americans’ most valuable retirement asset.
“Clients insure their home, cars and other valuables in their life,” Dady said. “We believe they will also want to protect their retirement from a reduction in Social Security benefits.”
The Secure Companies Patent Application
PlanGap is a Milton, Georgia-based affiliate of The Secure Companies Inc. of Atlanta.
David Duley, the CEO of The Secure Companies and the founder and CEO of PlanGap, is licensed as a life insurance agent in Georgia. The Georgia agent information database shows he he is appointed with Great American Life Insurance Company and American Heritage Life Insurance Company.
Duley and Timothy Hill, a Milliman actuary, applied in 2019 for a patent for a “system and method for issuing and trading catastrophe bonds.”
Duley and Hill told the U.S. Patent and Trademarks Office that insurers often use catastrophe bonds to protect insureds against risks resulting from natural disasters.
“The catastrophe bond concept has never been applied to the non-diversifiable risk associated with political events that can have deleterious effects on investments or benefits,” Duley and Hill say in their patent application. “Accordingly, there is a need in the industry to develop systems and methods to issue such bonds.”
The applicants suggest a list of triggering events could include a reduction in expected program benefits or a reduction in benefits.
The American Life Annuity Rider Filing
The Interstate Insurance Compact — a body that reviews insurance and annuity filings for participating states — approved a “contract value enhancement rider” based on the PlanGap strategy in April 2020.
American Life & Security Corp., a Nebraska-based insurer that’s part of Midwest Holding, asked to add the annuity to an ordinary single-premium multi-year guaranteed annuity.