Symetra Enhances its Freedom Income Annuity Offering
BELLEVUE, Wash.--(BUSINESS WIRE)-- Symetra Life Insurance Company announced today a new enhancement to the Symetra Freedom Income Annuity.Clients that want to use qualified or tax deferred money to purchase Symetra Freedom Income, including rollovers from a 401(k), 403(b) or IRA, can now defer their payment start date beyond age 70 ½.1 This gives clients more retirement income choice and flexibility.
Symetra Freedom Income is a form of longevity insurance2, which provides cost-effective guaranteed, pension-like income for the later years of retirement. Clients use a small portion of their savings, usually 10 to 15 percent depending on age and deferral period, to buy a future income stream today, when the initial purchase payment will be quite small compared to the potential payout down the road.
With the new patent pending enhancement, they can use qualified or non qualified money and select a date up to age 94 to begin collecting income based on their unique financial needs. With lifetime income needs taken care of, the client has flexibility with the remaining portfolio. Once the fixed payouts begin, they provide the client payments for the rest of their life, or a certain period of time, whichever is selected at purchase.
“Previously, if a client wanted to use tax-deferred money for Symetra Freedom Income, or other longevity products in the marketplace, payments had to begin at 70 ½,†said Rich Lindsay, senior vice president of the Life and Annuities division at Symetra Financial. “Symetra’s innovative solution gives clients the flexibility to defer the payout to a later age if they so choose. Because longevity insurance provides guaranteed money for the later years of retirement, extending the age when payments begin is an important option.â€
Symetra Freedom Income is a cost effective way to guarantee a client’s money will last as long as they are alive. Because the customer is locking in the payment stream now, the initial purchase payment will likely leverage a larger guaranteed income stream for the money. For example, if a 55 year-old male client wants $2,500 a month for life and purchases the monthly income to begin at age 80 using Symetra Freedom Income, the premium would be around $50,000.
However, if the same client purchased a single premium immediate annuity at age 80 instead, the premium would cost about $230,000 at today’s rates. Capturing today’s pricing is particularly valuable because the future cost of annuities will likely increase if average life spans continue to lengthen.
Longevity insurance removes the “how long should my money last†question by providing a finite time to plan around. Customers can then allocate the rest of their retirement assets portfolio to provide income until the longevity insurance kicks in. This gives clients time to assess their risk versus return situation, which could allow them to take a more aggressive approach to investing early on in retirement. It also shortens the period of time that assets would be exposed to market risk. While immediate annuities also provide a timeframe to plan around, the key advantage to longevity insurance over this product is its cost-effectiveness.
For more information on longevity insurance, visit www.symetra.com/longevity101.
Guarantees and benefits are subject to the claims-paying ability of Symetra Life Insurance Company.
Symetra Freedom Income Annuity, a single premium deferred-payout annuity is issued by Symetra Life Insurance Company, 777 108th Ave. NE, Suite 1200, Bellevue, WA 98004 and is not available in all states or any U.S. territories. Contract form number is LIA-76 2/08, LIA-80 3/08 or state variation.
About Symetra Financial
Symetra Financial Corp. and its subsidiaries provide employee benefits, annuities and life insurance through a national network of benefit consultants, financial institutions and independent agents and advisors. Headquartered in Bellevue, Wash., Symetra and its subsidiaries have approximately $19 billion in assets.3 Symetra is owned by an investor group led by White Mountains Insurance Group, Ltd. and Berkshire Hathaway Inc.
For more information, visit www.symetra.com.
1 Qualified contracts with payment start dates later than age 70½ are subject to IRS Required Minimum Distribution (RMD) rules. If RMDs are taken from this annuity, as opposed to other funds, annuity payments and any optional death benefit under this annuity will be reduced. Consult your tax advisor for more information. Patent Pending.
2 The term “longevity insurance†refers to a concept, not the name of an insurance product. Some states define longevity insurance as an annuity with payout option only and with no death benefit.
3 Total GAAP assets and combined liabilities and stockholders’ equity at Dec. 31, 2008. AORP76 0409.
Symetra Financial
Colin Johnson, 425-256-5049
Source: Symetra Financial
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