Jackson National Life joined the ranks of Prudential and Metlife this week when it delivered news that is would pull back on benefits from its variable annuity products. Jackson will continue to accept premiums for features that are going away, but they did employ the same tight time line Prudential rolled out a little more than a month ago.
Jackson will drop its joint life option on Life Guard Freedom Six Net and Life Guard Freedom Flex riders effective October 15, 2012. All newly issued contracts will not have the riders available and current contract holders who have no elected to add the rider will no longer be able to add it.
Also Jackson will pull its Perspective II Advisors and Perspective Rewards contracts. Jackson will also pull contract bonus credits for its products.
Sticking with a new and somewhat worrying trend, Jackson National Life made the announcement of the rider discontinuation at the beginning of this week, effective on the following Monday (less than a week away given the Holiday). This move caught ire among numerous financial professionals who feel the announcement's time line is prohibitively short.
We've been worried that more would follow the pull back from Met and Prudential, and we were looking to Jackson (one of the top players in the variable annuity market, and the top player in the independent Broker/Dealer market) as a bell weather regarding the severity of the situation.
Jackson has had a stellar reputation in this arena for having priced its products correctly from the outset, for placing guarantees about pricing that no other variable annuity provider had in place, and for having some of the most innovative and benefit rich features available.
However it would appear that even given their prudence, the well known annuity provider is not immune to low interest rates and low investment returns that are plaguing a lot of the industry.
Perhaps not all is lost for the variable annuity market. We did learn this week that Allianz is actually bumping it's roll up available on its variable annuity products.
Since this post went live we've been in contact with Jackson National Life regarding this announcement. We reached out to them looking for any additional comments they might have. Lori Stafford-Thomas, Jackson's Director of External Communications had the following to say:
As a result of today’s challenging economic environment, Jackson has elected to make a few changes to our Perspective Family of Variable Annuity products and our Retirement Latitudes Variable Annuity. The changes demonstrate our commitment to conservative product pricing and an approach to risk management that helps deliver the best value for consumers. Jackson continues to be a significant player in the VA market, and we are confident in our ability to address competitive challenges. We believe our Long-term Smart® approach enables us to offer quality products and services that meet clients’ retirement needs, including our latest product Elite Access, which is designed to provide the opportunity for greater portfolio diversification by utilizing alternative asset classes.
If we happen upon more information regarding Jackson National Life and their annuities, we'll be sure to bring you those updates.
Brandon launched the Insurance Pro Blog in July of 2011 as a project to de-mystify the life insurance industry. Brandon was born in Northern New England, and he currently calls VT home. He attended Syracuse University and graduated with a triple major in Economics, Public Administration, and Political Science.