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Mon Dec 11, 2023
These charges will reduce the value of your account and the return on your investment
Surrender Charges:
Mortality and Expense charge
Administrative fees
Fund Management charge
Fees and charges for other features
Special features offered by some variable annuities, such as a stepped-up DB, GMIB, or LTCI, often carry additional fees and charges
GMDB - Guaranteed Minimum Death Benefit
GMAB - Guarantees Minimum Accumulation Benefit
offering a minimum of the premium rolled up at a pre-set interest rate
More complex guarantees could include the highest value ever reached, or
the value reached on the last policy anniversary
A common feature of a GMAB is a ‘ratchet‘ whereby the guarantee increases each year by the larger of a proportion of the fund’s actual return and a guaranteed minimum amount.
GMIB - Guaranteed Minimum Income Benefit.
this typically requires an accumulation phase and then an income phase.
The income levels are guaranteed, at outset, on minimum conversion rates regardless of movements in the financial and mortality markets.
These benefits are typically targeted at the retirement market.
GMWB - Guaranteed Minimum Withdrawal Benefit.
Kamal Sardana
Qualified Actuary with expertise in US GAAP, Solvency II and Python.