Annuity Purchase Pitfalls
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Living Benefits
Living benefits or guaranteed living benefits (GLB) 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). 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.
AXA Equitable Releases Innovative Variable Annuity
AXA Equitable Life Insurance Company has been an innovator in the variable annuity industry. The company was a pioneer in the area of guaranteed living benefits with the launch of the first guaranteed minimum income benefit . AXA has recently launched a new variable annuity product named "Retirement Cornerstone." Retirement Cornerstone features a "dual account platform" that provides the potential for long-term asset accumulation and growth as well as downside protection through a guaranteed...
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The Top Reasons to Consider an Annuity
Annuities are complex, largely misunderstood, and often misrepresented in popular financial media.
The reality, though, is that these financial products are becoming an increasingly important part of the financial plans of millions of people around the world. In fact, annuities are a vital component of the...
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Fund Managers Working on Offerings that Include Income Guarantees
Some of the world's largest asset managers are working on development of fund offerings that include features such as income guarantees or principal protection. In contrast to standalone living benefits, the new products would actually be embedded into a mutual fund offering. Firms such as Pimco, Russell Investments and John Hancock have expressed strong interest in and are actively developing such offerings. The availability of lower cost insurance features and regulatory complexities are...
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Financial Advisors on the Defensive as Variable Annuities Prove to be Among Best Wealth Management Vehicles of Past Decade
A recent article from Wall Street Journal columnist Leslie Scism discusses the value that has been preserved and delivered over the past several years by variable annuities and living benefits. Despite intense media criticism and generally negative perceptions among financial advisors, variable annuities have been among the best wealth management vehicles of the past decade. The performance and value have been especially evident during the recent capital markets implosion. Scism makes the...
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