guarantee that the client will be able to withdraw a certain percentage of the value of his or her benefit base, which has been growing by a guaranteed amount over the course of the annuity's deferral period (the guarantee is commonly somewhere between 4 and 8 percent) for the client's lifetime.
The SALB provides protection similar to that of the GLWB
while adding flexibility with the various types of assets that can be protected.
A GMWB is similar to a GLWB
, but a stream of income is guaranteed for a specified period rather than for the lifetime of the contract owner or annuitant.
In order to reduce the complexity of the annuity and make it easier for participants to calculate what their retirement income would be, many product providers have scaled down the features for the institutional versions of their GLWB
riders, Eng says.
The research also reveals that combining a FIA with a GLWB
rider and traditional mutual fund drawdown strategy is more likely to sustain annual income throughout retirement than either (1) a traditional mutual fund withdrawal strategy alone or (2) a combination of a variable annuity with GLWB
rider and a traditional mutual fund drawdown strategy.
Typically, a candidate for an annuity with a GLWB
rider would be between 65 and 72, with enough income from other sources to cover most of their expected needs over the next 10 years, Lofton says.
In the light of the growing importance of this market, in this paper we present a pricing model and define a fair price for a GLWB
in a market consistent manner.
Although the GLWB
guarantees an income stream that may appear similar to annuitization, there are substantial differences between withdrawals and annuitization.
Prudential Annuities, Prudential Financial's domestic annuity business, in January increased its Highest Daily Lifetime Five GLWB
Unfortunately, many annuities with a GLWB
can be complicated and expensive.
The rollup component of the GLWB
riders has been the subject of many recent changes, however.
Year Surrender Premium Agent's GLWB GLWB
PTP Charge Bonus Commission Rollup Charge Cap 2007 10 yrs.