Living Benefits Adding Value To Variable Annuity Returns

Variable annuity retirement plans are capable of offering a number of benefits to the retirement investors. Among all, there are a number of living benefits offered by these retirement investment vehicles. Though, you might have to spend extra amount for gaining the advantages of these living benefits, still you can’t resist the advantages of spending this extra amount.

Here are few most prominent living benefits associated with variable annuity returns.

Guaranteed Minimum Withdrawal Benefit

The guaranteed minimum withdrawal benefit is allowed with variable annuity contacts. This benefit allows the investor to take out a fixed percentage of the premiums paid towards a variable annuity plan. This percentage may vary from 5 to 7% and is applicable for the investor, even if there are unfavorable market conditions surrounding your investments.

Guaranteed Minimum Accumulation Benefit

This living benefit makes it certain that the contract value of the plan is never allowed to fall below the minimum value, determined at the time of annuity purchase. This benefit is applicable after a particular term and the minimum value if generally equivalent to the premiums paid on this plan.

Guaranteed Minimum Income Benefit

This is another useful living benefit associated with a variable annuity plan. According to this, when the investor is willing to withdraw the accumulated funds, he or she is promised a minimum amount of return, irrespective of the market condition.

Thus, you can find a number of attractive benefits associated with a variable annuity, which can help you to make correct usage of your investments.

Aspects Of Variable Annuity

Variable annuity plans are not the subjects of guarantee by FDIC or any other government or banking institute. You can find these plans available with insurance companies and it is recommended to go through the prospectus carefully to evaluate all terms and conditions. Here are few important aspects of a variable annuity:

• You can make investments in one lump sum payment or can make investments in different installments.
• You can receive a lump sum after maturation date or can fix returns in the form of installments.
• There are contract fees and other types of charges like surrender costs, mortality and expense risk charges and so on.
• You need to pay extra cost for availing living benefits, as discussed above.

The overall return on variable annuity investments can vary according to the market conditions and the sum assured may increase or decrease from the original invested amount.