Hoping to capitalize on Americans’ need for guaranteed retirement income, Northwestern Mutual is making a bigger push into the longevity annuity market.

It will do so by offering products currently available through qualified retirement plans to the retail market.

Northwestern Mutual rolled out two new guaranteed income annuity products in 2012, its Select Portfolio Immediate Income annuity and the Select Portfolio Deferred annuity. Both initially were marketed to target rollover money from 401(k) plans and IRAs.

Now, Northwestern wants to capture more of the annuity market by targeting investors’ personal savings, or significant lump-sums of money resulting from an inheritance, the sale of a home or the sale of a business.

Northwestern Mutual’s research shows that a significant number of Americans fear “longevity risk” into retirement. About a quarter of those surveyed aged 25 or older don’t feel they’ll be financially capable of living to 75; one-third don’t feel they’ll be prepared to live to 85; and 40 percent don’t feel they’ll be prepared to live to 95.

The company said its Portfolio Income Annuity products help protect against longevity risk, market risk, and inflation risk.

“These unique, patent-pending products have the potential to receive dividends that can be used to purchase additional income, helping to alleviate the concern of locking in payments from a fixed-income annuity in a low interest rate environment,” it said in a statement.

David Simbro, vice president of life and annuity product at Northwestern Mutual, said the public’s awareness of the need to better prepare for retirement is growing, but that there is uncertainty over how to adequately do so.

“Annuities are really the only financial tool that can create guaranteed lifetime income, which is especially important to those without traditional pension,” said Simbro.

The company’s Portfolio Income Annuity product suite has helped Northwestern Mutual capture about a 20 percent share of the annuity market.

As of August, the product suite has surpassed more than $1 billion in sales, the company said.

Instant Insights /

Northwestern Mutual extending annuities push to retail market

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