MarketWatch takes an interesting look at how companies that are providing products to mitigate retirement risks and generate income for older Americans are leaving the business or raising rates.
For example, MetLife announced last year that it was leaving the long term care business and Genworth said it will stop selling variable annuities earlier this month.
“As you prepare for retirement with the purchase of retirement-related products, you can expect to continue to see many changes in offerings in the marketplace,” said Christine S. Fahlund, a vice president and senior financial planner at T. Rowe Price Investment Services Inc.
“From a business perspective, it’s to be expected that when demand is low or profits become thin, as with long-term-care insurance and variable annuities respectively, that certain players will decide that the game is no longer worth the candle,” said Kerry Pechter, editor of the Retirement Income Journal. “Of course, industry consolidation can eventually lead to reduced competition and less attractive pricing — but that’s a nebulous threat that no one needs to lose sleep over right now.”
The fact that companies are leaving the business is good news according to Chuck Yanikoski, president of Still River Retirement Planning Software. “It would be nice to think that some big companies pulling away is a recognition that the current standard operating procedure is not working,” Yanikoski said. “That could potentially make room for a better approach.”
Read the rest at the link below.