The fundamental characteristics of variable annuities are that they are a security, and their separate accounts are comprised of equity, bond and cash investments. Those separate accounts have management fees associated with them. Many variable annuities have income or death benefits riders as well as mortality charges. All these items comprise the cost of a variable annuity. The question then becomes whether the expenses are valued at the benefits of the contract. Before the market meltdown of 2008, many variable annuities had high income crediting rates; after the market pullback, rates significantly retreated. Steve and Tim walk you through the mortality mechanics of variable annuities.
The views expressed here are those of the author and not necessarily those of ProducersWEB.
Reprinting or reposting this article without prior consent of Producersweb.com is strictly prohibited.
If you have questions, please visit our terms and conditions
Steve Savant is the host of the daily producer show, Let’s Get Down to Business, and the weekly consumer show, Steve Savant’s Money, the Name of the Game. Both shows are sponsored by Ash Brokerage. Steve is the #1 online author and videographer of insurance content. Steve has been cited on FO... More
Steve Savant recently shared that How advisers can profit by the history of life settlements with LISA CEO Darwin Bayston on Let's Get Down to Business with syndicated financial columnist Steve Savant. http://youtu.be/bYRFrmwToJ0