John Hancock has lowered the minimum guaranteed interest rate on its fixed annuities from 3% to 2% in states where permissible. In response to consumers’ reluctance to lock in a rate over a long period of time, the firm is also offering investors the choice of a one-year guaranteed rate as opposed to a five-year rate.

In addition, the firm has extended its surrender charge period from five to six years, in order to enable the company to invest in longer-term, higher-paying fixed-income investments. The old schedule of penalties of 7% for withdrawing in years one or two, 6% in years three or four and 5% in year five remains intact, but Hancock will now charge an additional 4% on withdrawals in year six.

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