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- Title
Measuring the Value of a Guaranteed Lifetime Withdrawal Benefit.
- Authors
Bernard, Garth A.
- Abstract
According to LIMRA, most new variable annuities are sold with some form of living benefit rider that assures the buyer that certain benefits will be available regardless of market performance. However, some guaranteed benefits are not paid in a cash lump sum, making it difficult for the lay investor to determine the value of the guarantee. This paper provides a methodology for determining the value of a guaranteed lifetime withdrawal benefit (GLWB) as a simple rate of return on the amount invested in the variable annuity and identifies five of the most common misperceptions about the GLWB feature.
- Subjects
LIVING benefits; SURVIVORS' benefits; LIMRA International Inc.; VARIABLE annuities; GUARANTEED investment contracts; RETIREMENT planning; LIFE insurance disability benefits
- Publication
Journal of Financial Service Professionals, 2010, Vol 64, Issue 2, p38
- ISSN
1537-1816
- Publication type
Article