A recent Wall Street Journal article notes that owners of variable annuities with guaranteed living benefits (GLB) have been largely immune to the fallout from the financial crisis.
"One of the best investments of the past decade was one of the most derided: the variable annuity."
The protection offered by GLBs such as the guaranteed minimum withdrawal benefit is discussed.
"Because of such guarantees, many holders of variable annuities actually saw their accounts increase 6% or more in value last year, when the Standard & Poor’s 500-stock index dropped nearly 39%"
As discussed in a recent interview with variable annuity industry analyst Ryan Hinchey, the Journal article notes the fact that many of the best variable annuity deals are gone. Prices are now higher and product features are less generous.
That said, the value that the products delivered to owners through the financial crisis is still there for prospective buyers.
Source: Wall Street Journal (subscription required)
- Log in to post comments
