Annuity DNA

Guaranteed annuity products are one of the most complex, and thus most misunderstood, products in retirement income planning. To further muddy the waters, many structured retirement income products have the term “annuity” in their names, although they have little to do with the original Roman concept of lifetime income, and offer few, if any, mortality credits.

In the world of structured retirement income products, financial services companies currently offer so-called variable annuities, fixed annuities, deferred annuities, immediate annuities and equity-index annuities, to name just a few; each with their own risk and return features. As a result, the current retirement income landscape is extremely confusing to end-users, few of whom have training in actuarial science and derivative valuation.

To bring structure to this rapidly-evolving market, The QWeMA Group has developed a proprietary algorithm for extracting the amount of longevity insurance, mortality credits, stock market “crash” protection, and other insurance and protection factors in any and all annuity products.

We call our process “Annuity DNA Extraction.” We complete the extraction by analytically disaggregating an annuity’s promised cash flows into SIX + one individual sub-components:

• Basic market exposure
• Fixed income payout
• Pure life insurance
• Pure longevity insurance
• Market crash insurance
• Inflation and COLA hedges
• Loads and fees.

Want to know what’s inside your guaranteed annuity product? Contact The QWeMA Group for a confidential DNA Extraction.