Startup Has Plan to Sell Annuities

Bloomberg writer Suzanne Woolley reported earlier this month that, “[Matt Carey] and two co-founders are building a way for consumers to more easily buy what has notoriously been a hard sell: annuity contracts, both those that create an immediate income stream and others that produce income years down the road. The idea was inspired in part by the research of Olivia Mitchell, a professor and retirement security expert at the Wharton School of the University of Pennsylvania.

“One of Blueprint’s innovations involves how deferred-income annuities are sold. They typically require five- or six-digit sums in return for a future stream that, should someone die prematurely, may never be used. Carey’s website spits out a quote for a contract in 60 seconds and requires an initial investment of $5,000.

The real twist is part of a trend that’s swept industries from mattresses to clothing to movies: subscription-based business models. After the initial investment, buyers can increase their retirement income stream with deposits of as little as $100 a month to create what Blueprint calls ‘a personal pension.'”

The article noted that, “New York Life Insurance Co. and Guardian Life Insurance Co. are Blueprint’s current partners in the subscription service. New York-based Blueprint, which acts as a fiduciary, gets a one-time commission of 1% to 4% of the initial investment when it sells immediate, deferred and qualified-longevity annuity contracts, or QLACs. (A QLAC is an annuity funded by money from a qualified retirement plan or an IRA.) For the subscription product, the commission is split into two payments over two years.

“Blueprint just announced seed funding of $2.75 million from a group including Green Visor Capital, where former Visa Chief Executive Joseph Saunders is a general partner, and NextView Ventures, where Lee Hower, an early PayPal employee and member of the founding team at LinkedIn, is a partner. The board of advisors includes [Mark Iwry, a key architect of retirement policy in the Obama administration], who isn’t an investor, and Jean Chatzky, personal finance editor of the ‘Today’ show, who has invested.”

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