Product
In a payout annuity, you pay the life insurance company a lump sum of money in return for a stream of fixed regular payments. Typically, your payments will be monthly but can also be quarterly or annually. These payments will be for either a fixed term of years or for your lifetime.
The annuities that pay you for a lifetime are referred to as life annuities. Life annuities typically have a guaranteed payment period. If you die before the end of the guaranteed period, your beneficiary will receive the balance of the guaranteed income payments.
The annuities that pay you for a fixed term of years are referred to as term certain annuities.
Assuris Protection
If your life insurance company fails, Assuris will ensure that the payments under your payout annuity will continue and we will seek to transfer your policy to a solvent company.
- Assuris guarantees that you will retain at least 85% of your monthly income benefit. For policies that have a monthly income benefit of $2,000 or less, you will retain the full amount of your benefit.
Associated Benefits
Joint and Survivor Annuity
A joint and survivor annuity is a joint policy that continues regular payments for as long as you or the joint annuitant live.
Your joint annuity will not be added to any other Monthly Income Benefit protection that you or your joint annuitant may own individually when calculating the Assuris protection.
Lump Sum Payments
If you have a guarantee period on your payout annuity and you die before the end of that guarantee period, your policy may allow your estate to receive the present value of your payments as a lump sum.
Assuris will protect the lump sum in the same proportion as the monthly income payments.
Increasing or Decreasing Annuities
If your annuity increases or decreases under the terms of the policy, for example by inflation adjustments, it will be protected based on the payments being made at the date of failure. After the date of failure, your annuity will increase or decrease based on the protected amount.
Example 1
Monthly Income Benefit
/month
In calculating your Assuris protection, you will retain up to $2,000 or 85% of your monthly income benefit, whichever is higher.
Since the amount is less than $2,000 a month, your monthly income benefit is fully protected.
/month
Example 2
Monthly Income Benefit
/month
In calculating your Assuris protection, you will retain up to $2,000 or 85% of your monthly income benefit, whichever is higher.
Since the amount is more than $2,000 a month, the 85% is applied to your monthly income benefit.
/month
Adjusted Benefit
The liquidator, appointed to manage the failed company, will seek to sell the assets and transfer the liabilities with the aim to get the best value for policyholders. This will determine the recovery percentage.
Your benefits will be adjusted to the greater of the Assuris protection or the recovery percentage achieved by the liquidator.
For example, if your monthly income benefit is greater than $2,000 and the liquidator recovers 90% of the assets, your benefit will be adjusted to 90% instead of Assuris’ guarantee of 85%.
Original Benefit Amount
Recovery
Liquidator Recovery:
$3,600
($4,000 × 90%)
Assuris Protection:
$3,400
($4,000 × 85%)
Explanation
Since the liquidator’s recovery is greater than Assuris’ protection, you will retain $3,600 a month.
Questions and Answers
1. What happens if I have more than one policy?
Assuris protects each member company separately. If you have more than one policy with the same member company, all similar benefits are added together before Assuris’ protection is applied.
2. What if I receive quarterly or annual benefit payments?
For quarterly benefit payments the Assuris protection is $6,000/quarterly or at least 85% of the promised quarterly payments, whichever is higher.
For annual benefit payments the Assuris protection is $24,000/annually or at least 85% of the promised annual payments, whichever is higher.