While many advisors steer their clients away from variable annuities, with the recent addition of a guaranteed lifetime withdrawal benefit rider to its no-load variable annuity, Lincoln, Nebraska-based Ameritas Advisor Services has not only enhanced the flexibility of its annuities, but also taken another step toward making variable annuities more appealing instruments for retirement income.
"All the large variable annuities players are looking to revise their products," says Russ Wiltgen, VP of individual annuity product management for Ameritas. "We feel we have a good design here and a client will be better off with this solution because it offers a guaranteed lifetime protection and payments."
Combined with the new rider–which offers benefits that are rarely available on a no-load platform–the Ameritas no-load variable annuity enables fee advisors to help their clients continue to build on their existing assets while providing a flexible guaranteed source of income during post-retirement years, Wiltgen says. The combined product and rider are attractive because they offer, low cost tax-deferral; flexibility for the client to decide when and if they want to activate the rider at all, at no extra cost; guaranteed withdrawals up to the lifetime withdrawal benefit amount (regardless of the policy's value) until the owner's death; and the latest in living benefit design features at a low cost.
Indeed, the cost of the product and its no-load character are critical, says Mitch Politzer, senior VP of Ameritas Advisor Services.
"When you have products that don't have commissions in them, you are able to make them extremely competitive and the value you can deliver this way to a consumer is far greater," Politzer says. "In both the insurance and the annuities business, commissions are usually high, so when you don't have these costs to factor in, you have a much better platform."
Politzer says that Amertias's no-load variable annuity sells for about 60% cheaper than other products on the market because it carries no fees. The product is invested in a wide variety of different funds, which also helps to keeps costs low, he says.
