New ‘Immediate Need’ Annuity Listed on Exchange

Agents and financial advisors in the market for a medically underwritten single premium immediate annuity will be able to model income estimates for Genworth Financial’s new product listed on the CANNEX Income Annuity Exchange.

Genworth’s Income Assurance Immediate Need Annuity, launched last year, offers lifetime monthly income for less healthy buyers between the ages of 70 and 95.

Income from the annuity can be used to pay for medical care, long-term care, living and other expenses.

Listing the annuity on CANNEX helps advisors immediately present the income concepts and premium associated with this kind of annuity, said Gary Baker, president of CANNEX USA, a pricing and analysis service supporting the annuity market.

Underwritten income annuities can take up to six weeks to generate a quote and that’s one reason why they remain a small segment of the market in the U.S. But the payouts range between 20 and 50 percent higher than traditional income annuities, Baker said.

But CANNEX exchange’s quoting process allows advisors access to payment estimates based on adverse health conditions at different ages, said Jerry Larkin, national sales manager with Genworth, in a news release.

Sharing pricing and benefits data will mean reaching more advisors and highlighting Income Assurance Immediate Need in the context of other income annuity options, he said.

Minimum premium for income Assurance Immediate Need is $50,000 and rises to a maximum premium of $1 million without home office approval, Genworth said on its website.

Annual cost of living adjustments of 1 to 8 percent are available with Genworth’s new annuity, the Richmond, Va.-based company said.

A Hint a Future Direction

Income Assurance Immediate Need represents one of a new class of hybrid life and annuity products that give owners the opportunity to pay for long-term care and other expenses.

A top concern among retirees is paying for medical expenses in retirement and people with chronic conditions can expect to pay higher health care expenses, hence the market for annuity options.

From the long-term care perspective, Genworth’s annuity is an example of repositioning long-term care in a way that is more attractive for investors and an example of targeting older clients who aren't candidates for long-term care coverage, Baker said.

From the income annuity category perspective, a market where sales are rising, Income Assurance Immediate Need is an example of repositioning traditional income annuities to an older demographic, he added.

Genworth’s is the first annuity of its kind listed on CANNEX Annuity Exchange, which is used by more than 400 financial institutions and supports more than 500,000 financial advisors around the country, Baker said.

Higher Rates, More Income

Rising interest rates have helped push income annuity payment yields to their highest levels in nearly six months, CANNEX reported last month.

A person investing $100,000 into an immediate income annuity on March 29 can expect to receive, on average, about $530 per month for a yield of 6.37 percent.

That represents an increase of about $20 per year over what the average annuitant would have received for an identical annuity investment on Feb. 22, according to the CANNEX Payout Annuity Yield Index – or PAY Index.

Slowly rising rates are good for fixed annuities because it means insurers can raise the payouts and annuitants receive more in their pockets.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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