Wednesday, December 3, 2008

“Living Benefits” Annuity May Be Riskiest Product Ever Sold by Insurance Industry

Variable annuities that guarantee “living benefits” could end up costing insurers a lot more than what they charge for them and may result in falling stock prices. These variable annuities come with a GMWB (guaranteed minimum withdrawal benefit). An investor’s money is placed in various mutual fund-like "sub-accounts" in return for a guaranteed minimum payout, as well as a higher return if your mutual funds’ values increase by over a certain amount

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