Strategic Insight Checks Out New Retirement Income Solution

Strategic Insight published an in-depth report containing detailed information on standalone living benefits (SALBs) based on proprietary document research and extensive interviews.

The SALB makes the income guarantees offered on variable annuities (VAs) available on mutual funds and managed accounts. “Guaranteed Retirement Income Beyond Annuities: Standalone Living Benefit, A Novel Product Solution for Mutual Fund and Managed Account Investors” provides insurers, mutual fund companies, managed account providers and broker/dealers with key information for analyzing and understanding this new product, Strategic Insight said in a news release.

The Securities and Exchange Commission (SEC) approved the first SALB in March and four different contracts are on the market today, according to the announcement. The guarantees are similar to guarantee lifetime withdrawal benefits (GLWBs) on VAs, though they are generally simpler, in part because they are intended to be sold through financial advisers. Policyholders retain full control of the assets covered by the guarantee; however, the contract establishes a guaranteed stream of lifetime income if the value of the covered account is depleted through withdrawals or poor market performance.

“There are tax and other differences between SALBs and VAs,” said Tamiko Toland, principal researcher and author of the report and editor of Annuity Insight, a research and competitive intelligence provider for the VA industry, in the release. “However, the real innovation with these products is the extension of lifetime income guarantees to assets outside of annuities. The availability of additional options means that more investors will have access to predictable and sustainable income in retirement.”

The report includes:

  • design and marketing of currently available products and those awaiting approval
  • regulation and taxation
  • market potential
  • implementation strategies
  • comparison with VAs,
  • risk management and design issues,
  • broker/dealer appetite,
  • context for delivery in the fee-based advisory space.


More information is available here.