VAs Get New GMWB Options

Policyowners can also start and stop withdrawals at any time, without forfeiting future income credits or lifetime income protection, the company says.

The company uses "protection-based pricing" with both features, says Rob Scheinerman, senior vice president-product management. This is a patent-pending pricing model that is designed to make living benefit features sustainable, he says, by aligning the living benefits fee with the cost of hedging used to support the benefits.

Details on the new options:

- The 6% GMWB is for customers seeking more income earlier in retirement, when spending is often highest, says the company. The feature allows a partial income credit even in years withdrawals are taken, it adds. During the first 12 years, as long as the withdrawal is within the feature's parameters and less than 6%, clients receive an income credit for the difference between the withdrawal amount and 6% of the policy's income base, the company says.

- The 8% GMWB is designed for policyowners who can wait to take income and are looking for maximum income potential in retirement, says the company. It provides an 8% income credit in each year withdrawals are not taken during the first 12 years. It also provides a withdrawal rate of up to 5.5% as early as age 45, the company says, noting that this approach provides greater access to the policy's income base when withdrawals do begin.