On Apr 4, 6:28 pm, "Elle" <honda.lion...@[EMAIL PROTECTED]
> wrote:
> Could you please give a link to an annuity company that has
> such a guarantee?
Most annuity companies offer such guarantees. The general term is a
"guaranteed minimum income benefit" (GMIB). There are a number of spin-
offs of the GMIB, but I believe it is the most common, useful, and
easy to understand. I hate to tout products, but MetLife offers the
"GMIB plus" which is one of the most common I encounter. The one I
most recently looked at had 1.55% M&E charge + 0.80% for the GMIB+
rider, and fund expenses of 0.50-1.25% (don't quote me on those last
figures, memory doesn't serve). That's why i estimated roughly 3% in
total fees.
> Can you say what happens, generally speaking, to the annuity
> when the client dies?
It depends on the "state of the annuity". If the contract has been
"annuitized" it functions just like any other annuity. If there is a
period certain or joint survivor owner then payments may continue for
a specified length of time. Otherwise they are lost just like any
other annuity. However, one can have an annuity, and withdraw income
from it, without "annuitizing" the contract (I've always hated the
counterintuitiveness of that). In that instance (which has been the
far more likely case thus far) the beneficiaries receive one of two
figures: the greater of the contracts actual cash value OR the GMIB
base. The actual contract value will usually be higher if the
investments have continually increased in value (continually, not "on
average"). If the investements have decreased in value, remained the
same, only marginally increased, or have increased but experienced
great variance, the GMIB amount will be higher.
I hope that helps. If not, I will be happy to try again.
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