Page 27 - DON'T MAKE ME SAY I TOLD YOU SO - ANNUITY CHAPTER ONLY

183 Don’t Make Me Say I Told You So

Living Benefits

In most variable annuities, you must select a living benefit rider at

the time you purchase the product. This feature is optional. Some
contract riders are irrevocable, so once you’ve chosen one it will

apply for the life of your contract. In most cases, you can’t elect to
have more than one living benefit per contract. All of these optional

benefits have specific guidelines, so it’s extremely important to
understand both the benefits and the limitations of each rider you

select for your contract.

Industry Range for Living Benefit Fees

Living Bene t *Fee Range

Guaranteed Minimum Withdrawal Bene t 0.20% - 0.65%
Lifetime Guaranteed Minimum Withdrawal Bene t 0.30% - 1.10%
Guaranteed Minimum Income Bene t 0.30% - 0.75%
Guaranteed Minimum Accumulation Bene t 0.20% - 0.75%

*Fee may be a percent of either contract value or bene t amount.
Source: Morningstar

Adding up all of the fees of an annuity, it could cost the investor
anywhere from 2.25% to 3.5% or more per year for the contract.

The value of these expenses depends on whether the investor
believes the benefits and guaranteed features of the annuity

justify the costs.

Chapter 4: Annuities

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