GMAB is an acronym that stands for guaranteed minimum accumulation benefit. A GMAB is an optional “living benefit” guarantee that can be embedded into a variable annuity product. The GMAB guarantees a minimum contract value—regardless of investment performance—after a set period of time. The minimum contract value is typically equal to or greater than the total premium. For example, Catherine invests $150,000 into a variable annuity and selects a GMAB. 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 the variable annuity contract value is still $150,000 at the end of 10 years.
Expenses should be a top priority for any financial services consumer. Many people have been conditioned to be aware of expenses when it comes to investment products. Indexed-bases investment management companies such as
Annuities are products that combine insurance and, in the case of variable annuities,
