Prudential Says No More Money into HD Five, Six, and Seven

[BNTRS]

Hmmm,

In my opinion this one is kind of a big deal:

Prudential Announces Freeze on New Contributions to Popular Annuities | The Insurance Pro Blog

I say that because for years I was told who cares if a company closes an annuity they have to keep the original guarantees. This is true, but only for the money that's in the contract.

 

[SWM]

My understanding was that it was for additional contributions to existing contracts only.

 

[VolAgent]

My understanding was that it was for additional contributions to existing contracts only.

Still a pretty big deal. A lot of contracts were sold with the promise, buy it now and you can always add more money later. Both the agent and the client were counting on that.

I spoke with my first mentor just last week about it. He was selling a lot of Pru HD 5. He has previously had Mass, Jackson, and Metlife taken away from him, either by the company or his principal with the B/D. I guess he is off to find yet another VA.

 

[BNTRS]

Exactly, the idea that now someone can't place money in their account because Pru won't let them is kind of troubling to me.

I don't want to be all sensational about it. I don't think the sky is necessarily falling. But if I owned a VA with Pru that I was contributing to regularly (say an IRA), I'd be pissed if suddenly they told me I wasn't allowed to put money into the contract, which was supposed to be an option. That's the whole idea behind a flexible premium annuity.

 

[SWM]

Still a pretty big deal. A lot of contracts were sold with the promise, buy it now and you can always add more money later. Both the agent and the client were counting on that.

I spoke with my first mentor just last week about it. He was selling a lot of Pru HD 5. He has previously had Mass, Jackson, and Metlife taken away from him, either by the company or his principal with the B/D. I guess he is off to find yet another VA.

Very true, the available products are quickly exiting the market. My favorite was the ING Goldent Select which was one of the first to leave.

 

[iceco1d]

Yeah I saw that. No surprise. Fixed annuities with 3.0%+ MGIRs will be next.

Mutual funds have done that on occassion as well (although they usually close to new investors only...some have refused new contributions as well for existing investors).

 

[rikwells]

Still a pretty big deal. A lot of contracts were sold with the promise, buy it now and you can always add more money later. Both the agent and the client were counting on that.

I spoke with my first mentor just last week about it. He was selling a lot of Pru HD 5. He has previously had Mass, Jackson, and Metlife taken away from him, either by the company or his principal with the B/D. I guess he is off to find yet another VA.

This is very true. A lot of people purchased prudential annuities with the living benefit to lock it in for future contributions. I did some research on this and it looks like you can actually still contribute to HD5, but not to HD6, HD7, or LT5. Your buddy's clients with HD5 should be ok. With interest rates so low insurance companies have been upping their cost for these living benefits as well as reducing the benefits.