Morningstar Advisor - Summer 2007 - 74

By the Numbers: VAs Living Benefit Has Another Plus: Clients Stay Invested Just over 30% of total variable annuity sales (excluding 403(b) sales) are concentrated in the top 15 contracts, a ratio that has remained fairly consistent over time. With the exception of MetLife’s Preference Plus Select, which is used primarily in the 401(k) plans of small and midsize employers, the highest concentration of assets in these products is in either a fund of funds investment option (Lifestyle Growth Series II in John Hancock’s Venture III) or a subaccount that is a significant component of an asset allocation model (RiverSource VP Diversified Bond in RiverSource RAVA4 Advantage). As discussed in the spring issue of Morningstar Advisor, to maintain a living benefit guarantee, many contracts require investors to fully allocate to specific fund of funds or asset-allocation models and to periodically rebalance the portfolio. While the guarantee itself is structured to provide protection of account value and income, the allocation requirement can be a hidden benefit for certain investors. Investors are often tempted to chase the returns of hot funds and markets. With living benefit guarantees, investors are forced to ride out the lows and won’t miss out on market upturns. A living benefit isn’t the only way to encourage clients to allocate appropriately—and it does add additional costs—but it can get nervous investors comfortable with staying invested in a way that gives them a better chance of reaching their goals. K Frank O’Connor is manager of Morningstar’s variable annuity software applications. Sales Rank Contract Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 RiverSource Life Insurance Company RVS RAVA4 Advantage Jackson Natl Life Insurance Co Perspective II John Hancock Life Insurance Co (USA) Venture III Pacific Life Insurance Company Innovations Select AXA Equitable Life Insurance Co Accumulator Elite 2006 Metropolitan Life Insurance Preference Plus Select Hartford Life Insurance Company Leaders 3 American Skandia Life Assurance Co XTra Credit Six Pacific Life Insurance Company Value Hartford Life Insurance Company Director M AXA Equitable Life Insurance Co Accumulator Plus 2006 AXA Equitable Life Insurance Co Accumulator 2006 American Skandia Life Assurance Co APEX II John Hancock Life Insurance Co (USA) Venture (2006) Jackson Natl Life Insurance Co Perspective L Series Lincoln National Life Insurance Company American Legacy III View AXA Equitable Life Insurance Co EQUI-VEST 300/400 Nationwide Life Insurance Co BOA - Achiever ING USA Annuity and Life Insurance Co GoldenSelect Landmark ING USA Annuity and Life Insurance Co GoldenSelect PREMIUM PLUS Fidelity Investments Life Ins Personal Retirement Lincoln National Life Insurance Company ChoicePlus Assur. (L Share) Lincoln National Life Insurance Company American Legacy III MetLife Investors USA Insurance Company MetLife Investors Series L VA RiverSource Life Insurance Company RVS RAVA4 Select ING USA Annuity and Life Insurance Co GoldenSelect ES II Lincoln National Life Insurance Company Am. Leg. Shareholder’s Advan. Hartford Life Insurance Company Director M Outlook MetLife Investors USA Insurance Company MetLife Investors Series XC VA Pacific Life Insurance Company Pacific Portfolios John Hancock Life Insurance Co (USA) Venture Vantage Thrivent Financial For Lutherans Thrivent - Flexible Prem. DVA (New) Nationwide Life Insurance Co BOA - All American Gold AIG SunAmerica Life Assurance Company Polaris II A-Class Platinum Series Ohio National Life Insurance Co. ONcore Lite Genworth Life and Annuity Insurance Co. RetireReady Choice New England Life Insurance Co American Forerunner Series Sun Life Assurance Co of Canada (US) Masters Flex American Skandia Life Assurance Co Advisors Plan III Nationwide Life Insurance Co BOA - America’s Future II MetLife Investors USA Insurance Company PrimElite III Allianz Life Ins Co of North America High Five Pruco Life Insurance Premier VA X Series Lincoln National Life Insurance Company ChoicePlus Assur. (Bonus) Lincoln National Life Insurance Company Multi-Fund Peoples Benefit Life Insurance Vanguard VA American Skandia Life Assurance Co LifeVest II Lincoln National Life Insurance Company ChoicePlus Assur. (B Share) AIG SunAmerica Life Assurance Company Polaris Platinum II Pacific Life Insurance Company Pacific Voyages Data as of March 31, 2007 GMWB Guaranteed Minimum Withdrawal Benefit GMIB Guaranteed Minimum Income Benefit 74 Morningstar Advisor Summer 2007
Morningstar Advisor - Summer 2007

Table of Contents for the Digital Edition of Morningstar Advisor - Summer 2007
