| |
An Act Relative to Equitable Coverage in Annuity Policies – S.619/H.2970
Elizabeth Dunn, LWVM
Equal Rights/Reproductive Rights Specialist
Urge your legislators to support “An Act to Provide for Equitable Coverage in
Annuity Policies.” This legislation requires that state-regulated annuity
policies sold to residents of Massachusetts must be gender-neutral in all the
terms and conditions of the contracts, including premiums and benefits. Under
current contracts, women pay more than men to get an equivalent monthly annuity
payment or pay the same as men for a smaller monthly benefit when they retire.
Background
This bill has passed the Senate twice
on a voice vote.
An annuity is
a contract in which an insurance company, in exchange for premium payments,
agrees to future payouts either as one lump sum or as a series of payouts which
can be as income for life or as income for a period certain. The premiums paid
into an annuity, less applicable charges, grow tax-deferred until the insurer
begins making payments under the terms of the contract. An annuity is not a
savings account nor is it a life- or health-insurance policy. Annuities are most
often bought for future retirement income with proceeds from 401(k) plans or
life insurance because only an annuity can pay an income that can be guaranteed
for life.
Lead Sponsors
Senator Therese Murray and Representative Ruth Balser
Talking Points
-
Under federal law, all employment-based
annuities such as Social Security and pension plans must be gender-neutral.
The insurance industry in Massachusetts, however, does not even market
gender-neutral individual policies that will provide an income for life.
-
Annuities sold to women do not give them the
same value as those sold to men. A woman either pays a bigger premium than a
man to get an equivalent monthly annuity payment or she pays the same premium
as a man but gets a smaller monthly annuity.
-
Gender-based underwriting practices contribute
to the feminization of poverty. Recent data show that the median income from
all sources for women over 65 years of age is $6,600 while that for men is
$11,000. Some of this income gap results from archaic social policy that
allows the insurance industry to shortchange women’s privately purchase
annuity benefits.
-
The insurance industry argues that women live
longer than men. However, 84% of men and women have matched ages at death with
8% of men dying earlier and 8% of women dying later. Only some women live
longer than men. All women, however, are penalized with a reduced standard of
living, no matter what their lifespan is, while all men get a larger monthly
benefit, even though only a few die earlier than women.
-
In 1976, the Massachusetts voters ratified the
Equal Rights Amendment, which prohibits classification on the basis of race,
color, religion, sex, or national origin. The insurance industry, however,
ignores the ERA and still practices sex discrimination in the terms and
conditions of the annuity policies it sells.
|
