I was recently informed that the Renewal Interest Rate on my fixed annuity will be 3.75% for 2006. I began this annuity last year (2005), aware that we were and remain in a period of rising interest rates. The introductory rate was 4.75%, a very good rate, although not excessive. Now Genworth seems to be low-balling the interest rate for 2006, perhaps to make up for the introductory rate. As far as I can see, this is an inferior rate that is not a market rate and not a competitive rate for the term and the substantial amount of money I have invested. I am frankly disappointed and feel taken advantage of by Genworth.
While I understand that the 4.75% was an introductory rate and thereby slightly higher than it might otherwise have been. And, I realize there are tax advantages to the annuity—advantages I gain but I believe at no cost to Genworth—it would seem that the return should more closely reflect the market value of the investment. I didn’t expect to do worse with Genworth than I would do with a savings account or a money market fund. Many of these instruments are now offering 4 and 4.25 percent. CD’s are 4.7-4.9%. Is Genworth taking advantage of me because I have already made a commitment and have lost some of my options? Is that how Genworth does business? This company does not deserve the trust of those interested in annuity income and it also raises questions about using annuities. Beware of Genworth and annuities.
Genworth Life Insurance Company (aka Genworth Financial), 6620 West Broad St., Richmond, VA 23230