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Retirement Planning > Retirement Investing > Annuity Investing

Merit Life Aims to Ramp Up Annuity Sales

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What You Need to Know

  • Merit Life Insurance is best known for its Banyan CDA contract.
  • Martin Woll, a former Equitable executive, joins the company as its chief operating officer.
  • Cliff Merrill, a Prudential veteran, will be the new chief distribution and product development officer.

Merit Life Insurance — a company best known for its contingent deferred annuity contracts — is staffing up.

The Shelton, Connecticut-based company has hired Martin Woll, who has been the chief operating officer at Equitable’s individual retirement division, to be its chief operating officer.

The company has also added Cliff Merrill, formerly vice president for strategic distribution at Prudential Financial’s retirement income solutions business, as its chief distribution and product development officer.

The company has also changed the name of its contingent deferred annuity contract to “Banyan,” and announced plans to roll out new retirement income solutions.

Merit Life has backing from 777 Partners, a Bermuda-based reinsurer with about $7.5 billion in assets.

What It Means

Some life insurers may be tilting away from exposure to annuity guarantee risk, but plenty of other insurers want to sell your clients annuities.

Contingent Deferred Annuities

A contingent deferred annuity is a contract that can convert an ordinary investment portfolio that meets the CDA issuer’s eligibility criteria into an arrangement that can provide a guaranteed stream of income.

A CDA could appeal to a client who likes the idea of getting a guaranteed stream of income but who is leery of putting assets in the hands of insurers, or who wants to use a somewhat unusual investment strategy that’s conventional enough to meet the CDA issuer’s eligibility standards.

The Merit Life CDA contract can guarantee annual distributions of 5% for eligible covered portfolios, the company says.

The minimum age of an annuitant is 45. Income payments can begin any time after a vesting period and before age 95.

The annual fee is 0.55% per year of the wealth management account’s value. That fee is in addition to the wealth management firm’s own advisory services fee.

Eligible portfolios must meet target portfolio investment guidelines. An eligible portfolio could have 45% to 75% of its assets in equity-linked investments and 25% to 55% in fixed-income investments.

Up to 10% can be invested in approved fixed-income alternative investments, such as the “real assets of commodity-based industries,” such as assets involved with the production of energy, chemicals, minerals and forest products.

The size of the covered portfolio as of the issue date can range from zero to $10 million.

Merit Life

Investment firm 777 Partners acquired Merit Life from an affiliate of One Main in 2019. Merit Life’s parent is also the parent of 777 Re, a Bermuda-based reinsurer.

Merit Life is licensed in 45 states, the District of Columbia and the U.S. Virgin Islands, according to a Banyan CDA contract prospectus.

The CEO is David Anderson. From 2019 through 2021, he was chief operating officer of National Guardian Life. Before that, he spent 27 years at Thrivent Financial, and six years as the president of TIAA-CREF Life Insurance Company.

Although the company is based in Connecticut, its corporate offices are in Charlotte, North Carolina.

The New Executives

Woll, the new COO, has been at Equitable and predecessor companies for about 15 years, most recently serving as program chair for innovation.

Merrill has been at Prudential for 16 years. He has a bachelor’s degree from Colgate and a master’s degree in business from Columbia.

(Image: Adobe Stock)