Does evolution of species occur in short million year bursts or gradually? While the fossil evidence is not determinative, it appears to be some of both.1 An adaptive radiation occurred 530 million years ago during a “short” 20 million year period at the end of the dinosaur era. Something like modern-day rabbits, squirrels, gorillas, raccoons, bats, tigers, camels, whales, horses, and elephants came from a few prior species via rapid diversification and evolutionary specialization. Why did this happen, while other species ended up with no adaptation and no descending new species? We can’t know for sure, but more recently observed examples show that evolutionary success comes from environmental opportunity and a release or escape from competition. Perhaps stretching this analogy, I believe we are seeing the first real burst of product innovation and diversification in our fixed annuity industry since our nullification of SEC Rule 151a. With that uncertainty surmounted we have the opportunity to evolve our state-regulated secure insurance offerings.
Two examples of this are the products and partner distribution models Creative can offer: AVIVA-Annexus and Security Benefit Life—their exclusive partners.
I believe we are going to see a significant increase in preferred distribution models with proprietary product, delivered through dedicated high-quality marketing partners with the marketing company or insurance company. AVIVA and Annexus have just announced significant enhancements to their highly competitive BalancedAllocation Annuity (BAA), offering an income benefit rider whose value “rolls up.” The income benefit base not only increases by 5% compounded annually, but the actual performance is ADDED to the 5%. How big is that roll-up when combined with their best-performing, indexed interest crediting strategy? In addition, they are incorporating a very valuable inflation-protecting guaranteed lifetime payout option linked to the CPI.
Creative is blessed to have entered into a new relationship with Security Benefit Life (SBL) this year along with three other distributors. SBL is inaugurating the Total Value Annuity (TVA) with a first of its kind, proprietary, UNCAPPED, commodities-currency-interest managed futures allocation strategy. I predicted long ago that these designs would come, and while I was too optimistic on the timing, the evolutionary opportunity is now. In addition to this high-performing allocation, SBL is also incorporating an optional lifetime income benefit rider with a fixed rate increase in the income AND wealth transfer benefit base PLUS the actual allocation performance.
We are excited that these two companies have embraced adaptive radiation, and the many new concepts and products that will generate from their leadership. Call your Creative expert today to discuss the unique advantages and positioning of each of these companies’ products and to keep up with the coming evolution of the individual retirement insurance market.
Mike
1 Understanding Evolution. Online web resource, available at: http://evolution.berkeley.edu/evolibrary/article/0_0_)/evo_51.
FOR AGENT USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 12209 – 2012/2/29
The BalancedAllocation Annuity™ [BAA12 (09/09) and BAA8 (09/09) or state variation], fixed indexed annuities, and optional riders for which a charge is deducted, are issued by Aviva Life and Annuity Company, West Des Moines, IA. Product features, limitations and availability vary by State; see the Product Disclosure for details.
The Total Value Annuity, a fixed index flexible premium deferred annuity, and the Income and Death Benefit riders, optional riders for which an annual premium is charged, and are issued by Security Benefit Life Insurance Company (SBL), Topeka, KS.