NU Online News Service, Sept. 29, 2004, 5:39 p.m. EDT
The National Association for Variable Annuities, Reston, Va., says variable annuities proved their worth during the recent market downturn.[@@]
From 2001 to 2003, while the market was down, variable annuity issuers paid out death benefits with a value at least $2.8 billion greater than the value of the annuities, NAVA reports.
The gap was due to product guarantees that required the issuers to maintain stable death benefits despite short-term market losses.
"The reality is that no one can predict his or her own mortality," NAVA President Mark Mackey says in a statement about the death benefit figures. "Variable annuities are unique in their ability to insure against untimely death by offering investors guaranteed protection of their principal investment."
Stabilizing contract death benefits can encourage consumers to keep their money invested in the stock market during bear markets, Mackey adds.
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