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GLWB

GLWB, which stands for guaranteed lifetime withdrawal benefit, is also referred to as a guaranteed minimum withdrawal benefit for life. The GLWB is an optional “living benefit” guarantee that can be embedded into a variable annuity product. The GLWB allows the contract holder to, at a minimum, withdraw a fixed percentage of the total annuity premiums each year regardless of market performance. The income payments are guaranteed for life. The GLWB does not require annuitization. For example, Catherine invests $150,000 into a variable annuity and selects a GLWB that provides 4% annually. The capital markets have performed terribly and as a result the variable annuity contract value is only $75,000 at the end of 10 years. Catherine is in a good position though because she will receive $6,000 ($150,000 x 4%) per year for the remainder of her life. This lifetime income is guaranteed and is not limited to the amount of the initial $150,000 premium payment.

Fidelity Variable Annuity Offering Reaches $1 Billion in Sales in First Year

Fidelity Investments recently announced that it reached $1 billion in sales with its MetLife Growth and Guaranteed Income ("MGGI") variable annuity product offering.

The MetLife Growth and Guaranteed Income product has only been available since November 2009.

The MGGI product is manufactured by MetLife and distributed exclusively by Fidelity.

The MGGI product is a deferred variable annuity with a living benefit rider.  The living benefit rider is a guaranteed lifetime withdrawal benefit (GLWB) that offers between 4 and 6 percent.

Glenn Daily on Buying Annuities and Why it Might Make Sense to Wait

Glenn Daily is one of the top financial advisors in the country. 

Specializing in life insurance and annuities, Glenn is widely recognized for his deep technical expertise and high level of objectivity as his services are strictly on a fee-only basis.

The annuity buying decision is complex and can be affected by commission-based financial incentives. Glenn’s writing, interviews and services are a great way to cut through some of the clutter.

New Retirement Income Annuity from Fidelity and MetLife

Two leading companies are partnering to provide a new annuity offering.

MetLife has developed the "MetLife Growth and Guaranteed Income (MGGI)" product that will be distributed exclusively through Fidelity.

The MGGI is a deferred variable annuity that contains a guaranteed lifetime withdrawal benefit (GLWB) that, depending on the age of the client, ranges between 4 and 6 percent of the initial single premium.

Standalone Living Benefits Provide Guaranteed Income without Annuities

The standalone living benefit (“SALB”) is a relatively new and innovative product in the retirement income arena.

A SALB is basically the same thing as the guaranteed lifetime withdrawal benefit (GLWB) that accompanies many variable annuities.  The GLWB feature allows the contract holder to withdraw a fixed percentage of the total annuity premiums each year regardless of market performance.

Cons of a guaranteed lifetime withdrawal benefit (GLWB)

What are the cons or downsides of a guaranteed lifetime withdrawal benefit (GLWB) from the annuitant's perspective?

What are the downsides of a GLWB rider for the annuitant?

This question is answered and open for discussion in the forum section and can be accessed by clicking on the following:

http://www.annuitydigest.com/forum/cons-guaranteed-lifetime-withdrawal-benefit-glwb

MetLife Introduces Low Cost Variable Annuity

MetLife recently announced the launch of a simple, low cost variable annuity called Simple Solutions.

The Simple Solutions variable annuity will be sold through banks and is intended to address retirees and near-retirees in the range of 60-80 years of age.

Features and highlights include:

Vanguard Applies for Guaranteed Lifetime Withdrawal Benefit (GLWB) Rider

Vanguard is seen expanding variable annuity features with an SEC application for a guaranteed lifetime withdrawal benefit (GLWB).

The precise cost of the rider, which can apply to one owner or joint owners, and the payout rates at various age bands were left blank in the application, although Vanguard provided an example that set the rider cost at one percent of the income base. The minimum initial payment is $5,000 and a $25 annual fee is assessed when the account value drops below $25,000.

Source: On Wall Street

High expenses or fees are one criticism I have heard regarding annuities. Can you explain the fee structure around annuities?

Annuities are products that combine insurance and, in the case of variable annuities, asset management.  Costs are absolutely critical, so definitely ask you financial advisor to spell-out the costs for each of the items discussed below.

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