Insurer enlists advisors and clients to develop payout product

By Alain Thériault | October 20 2015 07:00AM

Nick Pszeniczny

Great-West and its subsidiaries formed focus groups to develop HelloLife, the payout program launched in September. The insurer learned that advisors will adopt the product faster if they helped develop it. 

HelloLife is a complex program. It lets retirees withdraw guaranteed lifetime income from annuities, and tap into market growth with segregated funds. The guaranteed and growth components of the program can be adjusted upward or downward depending on the client’s needs and risk tolerance. HelloLife annuities have four highly innovative characteristics. 

The insurer commissioned a study by Vision Critical in July 2015. It found that nearly half of Canadians have no spending plan for retirement and want to participate more actively in the detailed planning of their retirement income with their advisor. To meet this need, Great-West’s program includes a planner who can be reached online. 

Advisors are very receptive to this program because they helped shape it from the start, Nick Pszeniczny, executive vice-president of Individual Distribution and Marketing at Great-West told The Insurance and Investment Journal in an interview.  “It’s all about relationship and credibility,” he says.

The program achieves its mission because it reinforces the importance of the advisor when the client is approaching the withdrawal phase, Pszeniczny explains. “The client can start to think about how they deaccumulate constructively, and think to their income stream with somebody that can help them, advising them on the income they should have, and the way they should deaccumulate, given their lifestyle, financial needs, current assets and income flow taxation. It gives the advisor immediate credibility, bringing integrity to the planning process, as opposed to just making assumptions,” he continues.

The Great-West group of companies revamped its annuities based on the findings of its focus groups, Rob Ritchie, executive vice-president of Wealth Management, told The Insurance and Investment Journal. Four key options were identified: extended death benefit, transitional income period (offered on joint and survivor annuity); flexible income start date and short-term rate protection.

“The expanded death benefit offers six months of payment after the guaranteed period. The income transition period allows the spouse to continue to receive the same level of payments for six months. After all, the expenses don’t stop overnight. The flexible income start date gives an array of options, like starting on 4, 5 or 10 years. The short-term rate protection reflects the current environment of low long-term interest rates. It’s new in the market, to our knowledge,” Ritchie points out.

The balance between annuities and segregated funds is customized. “Every individual would have a different balance. I often heard that 50-50 is a good balance but we’ve gone a step further: we let the client and his advisor tailor this balance according to the circumstances and the risk appetite of the client,” Rob Ritchie explains.