"kastnna" <kastnna@[EMAIL PROTECTED]
> wrote
> 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.
So I see, as an example,
http://www.metlife.com/Applications/Cor****ate/WPS/CDA/PageGenerator/0,4773,P250%5ES926,00.html?FILTERNAME=@[EMAIL
PROTECTED]
> 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.
I think that's one potential (but not definite) drawback to
many: That the principal or what remains of it is often lost
at death. Of course, as I was trying to propose in response
to Douglas, I see these vehicles as insurance policies as
much as an investment. So no, one does not necessarily get
back what one put in. But one might also get back more than
one put in. An annuity (variable or otherwise) with
reasonable fees is always to some extent about peace of
mind.
To me the other major drawbacks are
1. committing for a long period of time before one can
exercise (so to speak) the GMIB. Ten years seems usual.
2. expiration of the GMIB at about age 85, or so it seems
typical.
I think these are im****tant caveats when mentioning a 6%
GMIB. Not to say (1) and (2) above are "bad" things. More
that, with all due respect and IMO, it's not quite as great
a deal as your post might lead one to believe. (Granted the
constraints of posting preclude a complete discussion.) I
would in fact be very interested in an investment vehicle
that guaranteed a return of max(6%, annual S&P 500
appreciation less 3%). But with the caveats, these annuity
GMIB products are not attractive to me. With the ten-year
requirement, I am not sure they would be attractive at any
age.
These annuities are also sure darn complicated, which to me
means the insurance company finds ways to make their money.
This is their right, but I cannot feel secure without
understanding what the company is getting in exchange for my
purchase.
Two cents on this produce from a consumer.
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