An Annuity Could Help Your Client Live Longer
The right kind of features might also help clients stay independent longer.
Some annuities come with living benefits that protect clients against outliving their income.
EquiTrust’s Bridge annuity comes with a different kind of living benefit: It could make clients live longer.
The Des Moines, Iowa-based company recently introduced a non-variable indexed annuity with a built-in long-term care rider and a built-in wellness program powered by Assured Allies, a Boston-based startup that has raised $65 million in investor funding — including $42.5 million that arrived in early March, as higher interest rates were killing banks and starving other capital-hungry startups.
For advisors, the combination of wellness programs with annuities raises questions about whether a wellness program bundled into an annuity is the sprig of parsley, the potato or, possibly, the meat.
What It Means
In addition to being a friendly ear, a family counselor, a restaurant guide and, when you get a chance, a provider of financial advice, you might find yourself becoming a life extension coach.
Wellness
For decades, health insurers have offered wellness programs that help participants eat better, exercise more and get the recommended preventive and routine care.
John Hancock pushed interest in wellness to a new level in 2015, when it began to work with Vitality, an arm of Discovery Ltd., to build a wellness incentive program into its life insurance policies.
The EquiTrust program relies on technology Assured Allies has developed to deliver services to older people, track the users’ health and see what interventions worked.
The firm can help older clients reduce the risk that they will fall, modify their homes in ways that will help them age in place, support family caregivers and use technology to prevent or postpone cognitive impairment.
EquiTrust annuity holders who participate in the program can increase the amount of benefits provided by the contract’s long-term care benefits provision.
The Assured Allies program offers the client help with staying healthy. Depending on how a wellness program is structured, it can also offer a health insurer, long-term care insurance providers, life insurer or other sponsor a chance to check in with a customer and see how likely the customer is to have problems that will lead to insurance claims or other costs for the sponsor.
Considerations for Advisors
Regulators and others at the National Association of Insurance Commissioners summarized some of the issues that might affect how an advisor sees a client’s annuity-based wellness program in a discussion paper about wellness programs tied to long-term care insurance.
Some of those concerns include:
- Figuring out how to measure how much a wellness program benefits an older client.
- Whether clients might end up having to include the value of some of the wellness benefits in their taxable income.
- How well the wellness program providers can keep client-related data confidential.
But the regulators also noted that the slow spread of valuable wellness benefits is a concern.
“Regulatory guidance may help innovators engage in this space,” officials noted.
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