How can an annuity protect me from a volatile market?
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Guaranteed Living Benefit
Guaranteed living benefits (GLB) or living benefits are optional guarantees that can be embedded into variable annuity products. In the past, variable annuities could come with a guaranteed minimum death benefit (GMDB) which paid a minimum benefit upon death of the annuitant. Over the past decade, however, product development and innovation have flourished, and insurers offer income, accumulation, or withdrawal guarantees that can provide a significant measure of protection against market risk while the annuitant is alive. Some of these “living benefits” include: guaranteed minimum income benefit (GMIB); guaranteed minimum withdrawal benefit (GMWB); guaranteed lifetime withdrawal benefit (GLWB), and; guaranteed minimum accumulation benefit (GMAB). Guaranteed living benefits have proven to be incredibly popular. More than 95% of variable annuity sales in 2007 contained some form of living benefit. Guaranteed lifetime withdrawal benefits (GLWB) have proven to be one of the most popular guarantees.
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,
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