Variable annuities & living benefits !!

A variable annuity is a tax-deferred financial product that pays benefits to the annuitant over a specified number of years and a death benefit to the annuitant's beneficiaries. The benefit paid to the annuitant is usually based on the purchase payments and the performance of the underlying investments. The underlying investments can be diversifies and rebalanced, which provides the investor with flexibility to monitor and manage his or her portfolio.However, a variable annuity product may be subject to a variety of fees, including surrender charges if withdrawals are made before certain periods and mortality and expense risk charges.

The living benefit--as the name suggests--is intended to guarantee the benefit provided to the annuitant and toward that end, usually offers guaranteed protection of the principal investment, the annuity payments and/or guarantees a minimum income over a specified period to the annuitant and beneficiary. There are several types of living-benefit features, including the following:

• Guaranteed Minimum Accumulation Benefit (GMAB)
• Guaranteed Minimum Withdrawal Benefit (GMWB)
• Guaranteed Minimum Income Benefit (GMIB)

With many investors seeing their retirement portfolios losing significant market value, a variable annuity with a living-benefit feature can be a good solution for protecting retirement nest eggs.

A key determining factor that affects the choice between an annuity and a traditional portfolio is the individual's need for guaranteed income. For someone with little or no risk tolerance or limited financial resources, an annuity may provide the needed guaranteed income stream.To know more about variable annuities and living benefits..Read here..