Sun Life introduces two income benefits

Sun Life Financial Inc. today released two income benefits. The company joins other insurers, such as Nationwide Mutual Insurance Co. and Pacific Life Insurance Co., which have sweetened their variable annuity offerings this year. Sun Life introduced its Sun Income Maximizer and Sun Income Maximizer Plus. The former allows customers’ benefit base to grow annually using an 8% simple interest bonus during the first 10 years before taking withdrawals. Clients’ benefit bases are eligible for an increase of at least 200% if they hold off on income payments until 70, or for 10 years, whichever date is later. The Maximizer Plus offers similar benefits, plus an annual 2.5% increase to clients’ benefit base and lifetime income. “The value proposition here is that part of your strategy should include a component that will go up,” said Steve Deschenes, senior vice president and general manager of annuities at Sun Life. “You’re getting that same merit increase in retirement to better address ongoing increases in costs.” Naturally, customers who select the rider will have to go with an investment model that allows Sun Life to manage the equity risk. Both riders call for 30% to 40% allocation in equities, Mr. Deschenes said. “You get better account protection in the market downdraft, and you have a fair amount of bond exposure in that portfolio,” he said. “You can build more certainty on providing a long-term guarantee, including a pay increase option. It’s more challenging to provide that off of an equity chassis.”