By Cyril Tuohy
In a sign that the annuity industry is serious about broadening distribution channels for its hottest-selling product, Allianz Life announced that it has made its Essential Income 7 fixed index annuity available through the Wells Fargo index annuity platform for advisors.
Fixed index annuity products have sold very well recently, with index annuity sales setting a quarterly record of $13 billion in the second quarter. This is an increase of 40 percent over the year-ago period, data from the LIMRA Secure Retirement Institute show.
LIMRA said it was the first time that quarterly index annuity sales have accounted for more than 50 percent of total fixed annuity sales, with second-quarter index annuity sales accounting for 52 percent of total fixed annuity sales.
Index annuity sales totaled $24.3 billion in the first half of this year, an increase of 41 percent over the same period in 2013, LIMRA said.
Todd Giesing, senior analyst with LIMRA Secure Retirement Institute Annuity Research, said in August that sales of fixed index annuities could reach $50 billion by the end of the year due to product innovation and expansion of the distribution.
Allianz said Essential Income 7 offers annuity contract holders several choices during the accumulation phase of the annuity and during the distribution or withdrawal phase.
For customers still saving for retirement, lifetime withdrawal percentages are guaranteed to increase every year until withdrawals begin, the company said.
Contract holders must be older than 50 before taking lifetime withdrawals, but can opt for a predictable income stream, or choose from an income that has the potential of going up every year, the company said.
“Americans manage unexpected expenses, rising health care costs and inflation during their retirement and Essential Income 7 Annuity can help by providing a level of certainty in their portfolio,” Allianz Life chief distribution officer Tom Burns said in a news release.
Essential Income 7, similar to other annuities in the fixed index annuity class, offers protection from market downturns, as well as the potential for higher gains during market upturns, along with tax-deferred growth and lifetime retirement income.
Essential Income 7 belongs to a family of Allianz fixed index annuities that include Core Income 7 and Signature 7.
The “7” moniker refers to the surrender charge period. Contract holders seeking to withdraw money before the first day of the eighth year of the contract incur extra charges.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
© Entire contents copyright 2014 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.