According to a press release, the product, issued by Integrity Life Insurance Company (Cincinnati, Ohio) and National Integrity Life Insurance Company (Goshen, New York), and distributed by Touchstone Securities, Inc., is the first variable annuity to make available individual exchange-traded funds (ETFs) as subaccount options.  

VAROOM offers investors and their representatives access to 19 subaccount options (18 individual ETFs and a money market portfolio) from iShares and Vanguard. Representatives can build a portfolio of ETF-based subaccounts customized to the investor’s needs.   

The announcement explained that until now, ETFs were available in variable annuities using a fund-of-funds structure only. VAROOM allows investors and their representatives to pick and choose among individual ETF subaccounts representing a spectrum of equity, fixed income, international and alternative asset classes.   

The ETF subaccounts in VAROOM track indexes, resulting in relatively lower cost because passive fund management generally incurs fewer expenses than active management. VAROOM also offers a new optional living benefit rider that not only rewards investor patience by increasing the deferral percentage each full calendar year withdrawals are not taken, but also bases charges on the account value, and not the benefit base.