John Hancock Venture Variable Annuity Prospectus (2023)

FAQs

Are variable annuities sold with a prospectus? ›

Variable annuities and their underlying fund investments are sold by prospectus only. The prospectuses contain the investment objectives, risks, fees, charges, expenses and other information regarding the contract and underlying funds, which should be considered carefully before investing.

Variable annuity prospectuses contain important information about the annuity contract, including fees, expenses, risks, investment options, and other important information.

Rule 2330 requires a registered principal to review and determine whether to approve a customer's application for a deferred variable annuity before sending the application to the issuing insurance company.

Benefits of Variable Annuities

The biggest benefit of a variable annuity is the potential growth your money could earn. Compared to many other types of annuities, such as fixed annuities, a variable annuity potentially offers the best possible return. This is because your money is in the markets.

Financial planners don't like them for the fees involved

"You're paying a financial advisor their fees on the annuities, and you're also paying an actuary fee for them to do basically those time value of money calculations and life expectancy calculations.

You can lose money in a Variable Annuity.

Variable annuities are investment-based retirement plans. You are investing in stocks, bonds, mutual funds, etc. If the investment performance is unfavorable, you will lose money.

High Fees. Variable annuities are one of the most expensive financial products in the marketplace. They come with myriad fees and charges, including mortality and expense fees, mutual fund subaccount management fees, contract maintenance fees, and other miscellaneous costs.

They're largely buying annuities that shield from volatility in stocks and bonds amid broader concerns about recession and the U.S. economy. Financial advisors generally counsel clients to use annuities as a guaranteed income source in retirement.

Generally, the annual charge for riders ranges from 0.25% to 1% a year. In total, average fees on a variable annuity are 2.3% of the contract value and can be more than 3%. It's important to know what you're paying for.

[1] Weirdly, Rule 2330 does NOT explicitly cover recommendations involving a “strategy,” as Rule 2111 does. If you read Rule 2330, it only “applies to recommended purchases and exchanges of deferred variable annuities and recommended initial subaccount allocations,” i.e., actual transactions, not strategies.

What is rule 498 summary prospectus? ›

Rule 498 requires funds to present certain information on a cover page or at the beginning of the Summary Prospectus, including: (i) the fund's name and the share class(es) to which the Summary Prospectus relates; (ii) the ticker symbol of the fund's securities or, if the Summary Prospectus relates to one or more ...

The Securities and Exchange Commission requires that security issuers file a prospectus when offering investment securities to the public. The prospectus provides details about the investment/security and the offering.

A fixed annuity guarantees an investor a fixed return on their investment. Considered a lower risk product than variable annuities, fixed annuities help investors protect their capital and receive income payments from their retirement savings while avoiding the rollercoaster of the stock market.

Higher investment risk.

Variable annuities do not offer guaranteed investment returns. If your investments do poorly, it's possible your balance may not grow or may even lose money.

Are they safe? Suze: I'm not a fan of index annuities. These financial instruments, which are sold by insurance companies, are typically held for a set number of years and pay out based on the performance of an index like the S&P 500.

Fidelity, with higher customer service ratings, personalized consulting on the front-end to plan your annuity strategy, low fees, and several annuity options, earned our praise as the overall best. Fidelity offers six annuities that address retirement income, asset protection, and income generation.

What are the best alternatives to an annuity? Depending on your strategy for retirement income, alternatives to annuities include bonds, dividend-paying stocks, CDs, retirement income funds and variable life insurance.

You should not buy an annuity if Social Security or pension benefits cover all of your regular expenses, you're in below average health, or you are seeking high risk in your investments.

There's a high internal “mortality and expense” fee that probably adds up to 1-2%. In the case of the variable annuity, you're most likely subject to terrible investment options that cost another 1% over their index fund counterparts. A big-selling point for annuities comes from a place of fear.

One option to get out of a bad variable annuity is simply to terminate the contract. Yes, you can cash out. But beware: cashing out of an annuity can have tax consequences and surrender charges, and you may miss out on potential benefits, depending on the annuity contract and your personal situation.

What is better than an annuity for retirement? ›

There are a variety of options that are better than an annuity for retirement depending on your financial situation and goals. These include deferred compensation plans, such as a 401(k), individual retirement accounts, dividend-paying stocks, variable life insurance, and retirement income funds.

The return in a variable annuity isn't guaranteed. The value of the subaccounts you choose could go up or down. If the value goes up, you could make money, but you could lose money if the value goes down. Variable annuities are considered securities, not insurance.

Fixed Annuities (Lowest Risk)

Fixed annuities are the least risky annuity product out there. In fact, Fixed annuities are one of the safest investment vehicles in a retirement portfolio. When you sign your contract, you're given a guaranteed rate of return, which remains the same no matter what happens in the market.

These subaccounts fluctuate in value with market conditions and the principal may be worth more or less than the original cost when you decide to surrender the policy. With variable annuities, the individual annuity owner bears ALL of the investment risk.

But what happens to your immediate annuity payments if the stock market crashes? The good news is that your payments are protected and guaranteed. Even if the stock market plummets, you will still receive your payments as scheduled. This is because immediate annuities are not invested in the stock market.

Are annuities based on interest rates? Yes, annuities are based on interest rates. The higher the interest rate, the higher the annuity payments will be.

Unfortunately, annuity companies sometimes fail, and when they do, policyholders can lose a lot of money.

Their popularity has dropped primarily because of market performance, the fine print on returns, and their hidden fees. Fees can include underwriting, fund management, and penalties for withdrawals prior to age 59½, among others.

Fixed annuities offer guaranteed returns ranging between 3% and 5.25%, while the interest rates of variable annuities depend on the performance of a connected investment portfolio. Annuities with higher interest rates also carry a greater risk of losing money.

Current average annuity rates fixed can expect between 3.60% and 5.25% ranging between 2 years and ten years in length. Use our fixed annuity calculator to solve your guaranteed rate of return.

What is the rule 2330 annuity? ›

Rule 2330 requires principal review and approval "[p]rior to transmitting a customer's application for a deferred variable annuity to the issuing insurance company for processing…." In circumstances where an insurance company and its affiliated broker-dealer share office space and/or employees who carry out both the ...

The new rule permits variable annuity and variable life insurance contracts to use a summary prospectus to provide disclosures to investors. A summary prospectus is a concise, reader-friendly summary of key facts about the contract.

Rule 2165 permits a member to place a temporary hold on a securities transaction or disbursement of funds or securities from the account of a Specified Adult customer when the firm reasonably believes that financial exploitation of that adult has occurred, is occurring, has been attempted or will be attempted.

What Is SEC Form 425? SEC Form 425 is the prospectus document companies must file to disclose information about their business combinations. A business combination may refer to a merger between two or more companies, or a consolidation.

Rule 424(b)(1). A prospectus filing that adds only pricing information that was previously omitted from an effective registration statement pursuant to Rule 430A must be filed on the second business day after pricing or first use, whichever is earlier.

Rule 482 permits registered investment companies and business development companies to advertise generally, without having to qualify the advertisements as a prospectus under Section 10(a) of the Securities Act of 1933, as amended, or to accompany or precede the advertisement with such a prospectus.

A prospectus, whether a single document or consisting of separate documents, shall be valid for 12 months after its approval for offers to the public or admissions to trading on a regulated market, provided that it is completed by any supplement required pursuant to Article 23.

It is not necessary for every company to file a prospectus. A statement in lieu of prospectus is filed with the Registrar of Companies Act instead of Articles of Association. Private companies are not required to file a prospectus.

Companies that wish to offer stock or bond for sale to the public must file a prospectus as part of the registration process with the SEC. Companies must file a preliminary and final prospectus. However, the SEC has specific guidelines as to what's listed in a prospectus for various securities.

How long you actually live is one of the more significant risks faced by retirees. The longer you live beyond your actuarial life expectancy, the better the annuity option generally becomes because of the guaranteed lifetime payment. If you are in poor health, you may find the lump sum more attractive.

Are annuities a good investment in 2022? ›

According to a 2022 report on CNBC, the average immediate annuity payouts increased 11% for men and 13% for women in the first half of 2022. And sales of fixed-rate deferred annuities were up 44% over the same time, according to the insurance industry group LIMRA.

With some annuities, payments end with the death of the annuity's owner, called the “annuitant,” while others provide for the payments to be made to a spouse or other annuity beneficiary for years afterward. The purchaser of the annuity makes the decisions on these options at the time the contract is drawn up.

You can lose money in an annuity if the insurance company backing it goes bankrupt and defaults on the obligation. Annuity owners can take steps to avoid this, but if it happens, they could potentially lose some of their account value. A level of protection does exist, however.

Most variable annuities provide a guaranteed death benefit, which means that if the contract has not already been annuitized, the insurance company will make a payment to the named beneficiary upon the death of either the owner or annuitant, depending on the contract.

Annuities And The Wealthy

They use annuities for a variety of reasons, including estate planning, tax savings, and more. In this guide, we will discuss some of the most common reasons why high net worth individuals use annuities.

The Five-Year Rule dictates that the non-spousal beneficiary of a non-qualified annuity must withdraw the entire balance within five years of the owner's death. This rule provides the beneficiary with several options about when to receive the death benefit proceeds.

An agent selling variable annuities must have a state license and be registered with the Financial Industry Regulatory Authority (FINRA).

Because of investment risks, variable policies are considered securities contracts. They are regulated under the federal securities laws. Following the federal regulations, sales professionals must provide a prospectus of available investment products to potential buyers.

Issuers of fixed annuity contracts do not have to file securities registration statements or provide a prospectus to a potential purchaser.

Most variable annuity contracts are B-share products. They are offered with no initial sales charge, but cancellation of the contract during its early years may trigger a withdrawal charge known as a surrender charge.

At what age can you withdraw from a variable annuity? ›

To avoid owing penalties to the IRS, wait to withdraw until you are 59 ½ and set up a systematic withdrawal schedule. What is the free annuity withdrawal provision? Many, but not all, insurance companies allow you to withdraw up to 10% of your funds prior to the end of the surrender period.

Disadvantages of variable universal life insurance

VUL is typically subject to surrender charges for a period of up to 15 years (more or less depending on the carrier) which can be very high in the early years of the policy.

The greatest risk in a variable life insurance policy is the risk of the investments. The insurance company doesn't guarantee any rate of return (in most cases) and doesn't offer protection for investment losses. Like any investment, the cash value component of a variable life insurance policy comes with risk.

The Securities and Exchange Commission requires that security issuers file a prospectus when offering investment securities to the public. The prospectus provides details about the investment/security and the offering.

Immediate annuities tend to be the best annuities for seniors because they begin paying out within 12 months of purchase.

Annuities: Annuity commissions are generally built into the price of the contract. Commissions usually range anywhere from 1% to 10% of the entire contract amount, depending on the type of annuity. For example, fixed-indexed annuities generally earn advisors a 4% commission.