I'm starting to get concerned that insurance companies are so intent on making variable annuities simple and transparent that soon the products will be all but impossible to understand.
And I'm not just talking about consumers here. Advisors, too, will have to be continually on the lookout for the newest, most innovative features and how they interlock with all the other modular elements that constitute the variable annuity in the early 21st century.
To paraphrase the marketing slogan of a no longer existent automobile brand, "This isn't your father's variable annuity."
Please don't think I'm against simplicity and transparency–not at all. These characteristics are not only welcome but long overdue. But with features in VAs multiplying faster than hamsters, it's a brave soul who will venture into the world of annuity buying without taking along the equivalent of instructions from MapQuest on how to get from point A to point B.
This development is good for those advisors who keep up to date with the latest dots on the VA landscape and how they connect. The need for advisors has never been greater than it is now to navigate through this newly simple and transparent world.
For the absolute latest information on what is happening in the VA world regarding using the product for income in retirement you won't do better than Linda Koco's cover story on page 12. It's all laid out there–the innovative thinking and the results thereof.
What it shows is that insurers–contrary to the rap they often get in the media–have been remarkably responsive to consumer needs and desires. The sheer profusion of guarantees in variable annuities–especially since the early 2000s when so many investors got burned as the dot-com bubble burst and the market went down in flames–is enough to gladden the heart of even those aficionados most addicted to acronyms.
