Four new index accounts have been added to Security Benefit Life's Total Value Annuity, the company announced. This is a product in a market segment in which sales are expected to rise with the delay of the Department of Labor's fiduciary rule.
One- and two-year accounts based on the Standard & Poor's 500 Low Volatility Daily Risk Control 5% Index, and one- and two-year accounts based on the S&P Multi-Asset Risk Control 5% Index, were added, the company said.
“Adding new index accounts gives financial professionals more options to diversify client portfolios and help clients reach their retirement-planning goals,” Doug Wolff, president of Security Benefit, said in a news release.
Total Value Annuity, a fixed indexed annuity (FIA), competes in the indexed segment of the fixed annuity world.
FIAs Headed for Record Sales?
Insurers sold $58 billion worth FIAs last year, according to Wink’s Sales & Market Report, and market analysts are waiting to see if the segment breaks last year’s record.
Second-quarter FIA sales rebounded 13 percent to $14.6 billion compared with the first quarter, though FIA sales were still down nearly 6 percent when compared with the year-ago quarter, Wink reported.
Overall, sales of FIAs seem to be recovering in the wake of the initial implementation of the Department of Labor fiduciary rule June 9, SunTrust Robinson Humphrey analyst Mark Hughes wrote in an update to clients.
Later in the summer, the Trump administration announced it would delay further implementation of key of the rule from Jan. 1, 2018, to July 1, 2019.
FIAs are more difficult to sell under the fiduciary rule, so any delay helps the sale of FIAs.
Market analysts at LIMRA earlier this month boosted their 2018 forecast for FIA sales by between 5 percent and 10 percent after forecasting in the spring that FIA sales in 2018 would drop between 15 percent to 20 percent.
Third-quarter annuity sales figures are expected next month.
Volatility Control Measures
Security Benefit Life sold $356 million worth of indexed annuities at the end of the second quarter, Wink reported.
The company sells a variety of FIA families: Foundations Annuity, Secure Income Annuity, Select Benefit Annuity and Total Value Annuity, the company said on its website.
Total Value Annuity is a flexible premium deferred FIA and the new index accounts are designed to offer a measure of volatility control.
Stocks in the S&P 500 Low Volatility Risk Control 5% account are weighted according to their volatility, with the least volatile stocks receiving the highest weights, for example.
The accounts were available to new purchasers as of Monday, and available to existing contract owners on contract anniversaries with an index term date beginning on or after Oct. 23, 2017, the company said.
Total Value Annuity now offers contract holders nine index interest crediting options and one fixed account option.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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