Five Keys to Unlocking the Lifetime Income Annuity Safe

Report Summary

Five Keys to Unlocking the Lifetime Income Annuity Safe

As investors plan for long retirements, U.S. life insurers can use annuities to unlock guaranteed lifetime income and win clients.

Boston, January 07, 2014 – U.S. life insurers enjoy a unique opportunity to focus on their customers and establish the guaranteed income that baby boomer and other mass-market and mass-affluent investors want to ensure they can meet their expense needs during retirements that may last 25 years or more. But most investors do not understand annuity products, and most investors and financial advisors do not include annuities with lifetime income options in their investment strategies for five key reasons:

  • A technical skills gap
  • Overly expensive products
  • Fiduciary guidelines that prevent annuities’ inclusion in 401(k) plans
  • Absence of turnkey product, process, and technology platforms for retirement income
  • Outdated compensation approaches that penalize advisors for converting assets to income

This report examines the obstacles to mass adoption of annuity products to meet the lifetime income needs of mass-market and mass-affluent investors who have less than US$2 million in liquid assets. It also recommends next steps and solutions to life insurers, advisors, and the vendors that serve life insurers and advisors in the retirement income market.

This 15-page Impact Note contains four tables. Clients of Aite Group's Life Insurance service can download this report.

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