stock market has been volatile for the past
three years, and there’s a good chance that your variable annuity has taken a
hit as well. But the good news is that your annuity’s beneficiaries might
receive some welcome protection during these challenging times.
Many investors purchased variable annuities because of their
professionally managed portfolios, income tax advantages, and flexible payout
options. One point that is often forgotten though is the “guaranteed death
benefit.” This term, however, can mean different things to different annuity
companies. To some firms it is just as basic as paying your heirs no less than
the original investment amount less withdrawals, even if the markets have
declined. To others it is a bit more complex, so it is important to understand
what you own. (Note: the guarantee is
based on the claims paying ability of the insurance company).
Some of the more common death benefits we have seen in
various annuity contracts are:
This provides for an increase each year above the original
investment. For instance this could be 5% annually until age 80.
Plus Percentage Option
Maximum Anniversary Value