Submitted by Anonymous on
Why the rant about simple interest?
These things are all based on simple interest.
Also, the benefit is there to serve as a floor in the event that overall stock and bond market performance is lousy and less than 7 percent.
The guaranteed minimum is not the only option that can increase the income benefit base.
Over the course of 10 years, it is likely that the minimum 7 percent guarantee will come into play less often than a market return adjustment to the contract value.
Who wouldn't want to invest with a floor of guaranteed return in this environment?
The upside is there if things are all rosy in the market, but the protection is also there if things don't turn-out as well as expected.
Simple interest is sure better than no interest.
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