MetLife to kill VA living benefit this month

Insurer to stop issuing the GMIB Plus IV rider Feb. 24

Advisers hoping to get clients into MetLife’s GMIB Plus IV variable annuity rider are running out of time; the insurer soon will stop selling it.
According to a Feb. 6 filing with the Securities and Exchange Commission, MetLife will pull its Guaranteed Minimum Income Benefit Plus IV and its Enhanced Death Benefit III riders for future sales of its variable annuities Feb. 24.
Clients seeking those features need to have their paperwork filed with the insurer before the close of the New York Stock Exchange on that day.
The GMIB Plus IV rider, which offers 4.5% compounded growth in clients’ benefit base and permits 4.5% income withdrawals, features a broader array of investments than the wildly popular GMIB Max series of living benefits. Investors have more than 50 different funds from which to choose with the GMIB Plus IV, while the GMIB Max — now in its third iteration — gives clients four tactically managed portfolios and a bond portfolio.
High demand for the GMIB Max product, which offers 5% growth and 5% income withdrawals, led the insurer to stick with it and drop the GMIB Plus IV instead, noted MetLife Inc. spokeswoman Jessica Ong.
“The overwhelming response to our variable annuities with the Guaranteed Minimum Income Benefit Max living benefit and Enhanced Death Benefit Max optional riders with Protected Growth Strategies has validated that having a predictable income stream and more-consistent returns over time are equally important to our clients,” she said.
“Therefore, with respect to the variable annuities with optional benefits, going forward, we will be focusing our efforts and resources on GMIB Max and EDB Max,” Ms. Ong added.
VA sales were brisk for MetLife last year; the insurer brought in a total of $21.2 billion in new contracts last year through the third quarter, according to data from Morningstar Inc.
After a record-breaking third quarter, in which MetLife sold $8.56 billion in VAs, flows moderated during the fourth quarter, with sales reaching $7.2 billion.
The carrier this week announced fourth-quarter and 2011 earnings, reporting a profit for the full year of $6.7 billion, up from $2.67 billion.
For the industry overall, variable annuity sales were up 13% in 2011, reaching $159.3 billion, according to data from LIMRA. Sales of annuities in general reached $240.3 billion last year, up 8% from 2010. While growth in the first half of the year was strong, annuity sales waned in the third and fourth quarters.
“In this economic environment, VA companies are carefully managing the risks associated with their guaranteed-living-benefit riders, which has had an impact on overall sales trends,” said Joseph Montminy, assistant vice president, annuity research, at LIMRA.