Sammons Retirement Solutions is moving forward with a new variable annuity despite many carriers steering clear of variable annuities. Since interest rates have been low and the stock market volatile, insurers like MetLife and Prudential have lessened their variable annuity business. Sun Life Financial, out of Canada, actually left the variable annuity business altogether. These companies worry about hedging their living benefit guarantees with a less than ideal financial market. But Sammons says that you just have to focus on the other benefits variable annuities have to offer, those related to tax deferral. This information comes from Darla Mercado’s Investment News article, “Others retreat, but this carrier is charging into the VA business.”
Sammons has been a staple of the fixed annuity market in the past, but is excited to introduce their variable annuity to the industry. A new unit of Sammons Financial Group, Sammons Retirement Solutions is also the sister company to Midland National Life Insurance Co. Sammons’ variable annuity will have up to 80 different choices in the investment menu. They believe that focusing on simplicity and the tax-deferral benefits of variable annuities will make them successful in this new endeavor. By staying away from the guaranteed living benefits that are stressing out insurers, Sammons is able to keep costs low and choices high. They have chosen to compare annuities based on their ability to defer taxes throughout the accumulation period. This switch in focus on the benefits of variable annuities is likely to be a new trend in the marketplace.
Written by Rachel Summit
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