Friday, July 31, 2009
"De-Risked" VAs Still Have Value
Once the focus of negative press for their high cost relative to other investment options, variable annuities are now in the firing line for their newly diminished benefits, but in a new whitepaper Variable Annuity Living Benefits – Do They Still Make Sense After the Changes?, Scott Stolz, president of Raymond James’s insurance subsidiary Planning Corp. of America, argues that while variable annuities are down, they’re certainly not out...
...Old contracts, for example, would guarantee that an account would double over a 10-year period, and the industry was confident at the time that market growth would mean that guarantee would never be needed. But a $1 million account in 2000 might be worth $440,000 today, and insurers are stuck holding the bag for 5% of $2 million for life in this example...
Financial Planning: "De-Risked" VAs Still Have Value
...Old contracts, for example, would guarantee that an account would double over a 10-year period, and the industry was confident at the time that market growth would mean that guarantee would never be needed. But a $1 million account in 2000 might be worth $440,000 today, and insurers are stuck holding the bag for 5% of $2 million for life in this example...
Financial Planning: "De-Risked" VAs Still Have Value
Permalink posted by markw @ 5:34 AM 
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