NU Online News Service, March 17, 2004, 1:22 p.m. EST – A unit of Guardian Life Insurance Company of America, New York, has introduced a variable annuity and an income guarantee rider.[@@]
Guardian is issuing the products, the Guardian Investor Asset Builder variable annuity and the optional guaranteed minimum income benefit rider, through its Guardian Insurance & Annuity Company Inc. unit.
The new Asset Builder annuity offers a variety of investment vehicles, asset-allocation tools and death benefit choices.
A customer who buys the Asset Builder annuity or Guardian’s existing Guardian Investor Income Access variable annuity can choose to pay an extra fee for the income guarantee rider.
Guardian Insurance, which backs the guarantees, will determine the amount of guaranteed income by applying a conservative annuity rate to the annuity’s “guaranteed income base.”
The guaranteed income base is “the greater of: the premium payments accumulated at 5% per year, adjusted for withdrawals, until they accumulate to 2.5 times the cumulative net premium payments received or the annuitant attains age 85 (whichever occurs first), OR the highest contract anniversary prior to the annuitant’s 81st birthday plus any premiums received after this date, adjusted for any partial withdrawals,” Guardian says.
The annual fee for the guarantee is 0.5% of the guaranteed income base on the contract anniversary, deducted proportionally from each allocation option, Guardian says.
The GMIB is available only at issue and is not available if the annuitant is age 75 or older, Guardian says.
Guardian is limiting total first-year premium payments for contracts covered by the income guarantee rider to $500,000.
Operating expenses for the investment options range from 0.34% to 1.91%, mortality and expense risk charges range from 1.05% to 1.55% of the net asset value of the variable investment options, and the maximum potential declining surrender charge is 8%, Guardian says.