Standalone Living Benefit

The standalone living benefit (SALB) is a living benefit feature that does not require the purchase of a variable annuity. A SALB is basically the same thing as the guaranteed lifetime withdrawal benefit (GLWB) that accompanies many variable annuities. What makes the standalone living benefit different is that the GLWB has been “stripped away” and can exist independently of the variable annuity. This allows the owner of the standalone living benefit to receive the guaranteed income and longevity risk protection of the GLWB without having to purchase a variable annuity. Standalone living benefits are intended to accompany a pool of money or assets that are being managed. The owner of a professionally managed private investment account who purchases a SALB would have all the features and protections of the GLWB.

Understanding the Value of Living Benefit Guarantees

Advisor Perspectives just published the first in a series of articles from Wade Pfau. These pieces are important and should be read by anyone considering guaranteed lifetime withdrawal benefits or any of the other optional...

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No Time for Guarantees

The concept is seductive: a financial product that provides upside exposure in the event that equity markets trend up and to the right while also providing a floor of protection in case the bottom falls-out from under markets again.

Sort of like having your cake and eating it too. Very tempting in light of the massive financial uncertainty that has existed for the past several years.

Products playing into this “upside plus protection” theme include (but are not limited to) variable annuities with guaranteed...

Longevity Risk and Portfolio Protection Without a Variable Annuity

Two of the most daunting risks faced by the majority of retirees are:

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...

NAPFA Provides Consumers with Quality Control while Maintaining Flexibility for Financial Advisors

NAPFA is the National Association of Personal Financial Advisors.

NAPFA membership consists of financial advisors who provide comprehensive...