Annuity benefits prove their value.In the secular bull market of the 1980s and 1990s, critics of variable annuities Variable annuitiesInvestment contracts whose issuer pays a periodic amount linked to the investment performance of an underlying portfolio. had a great time panning the value of the product's death benefit as worthless. But from 2001 to 2003, variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. writers paid contract beneficiaries death benefits of $2.8 billion more than the value of the annuities, evidence of the value of the guarantee, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the National Association for Variable Annuities, Reston, Va. The death benefits made up for short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. market losses. The basic death benefit, one of several insurance features of the product, ensures that an investor's beneficiaries receive the greater of either the purchase payment or the market value of the annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. at the time of death. Most variable annuities today offer enhanced death benefits, which allow investors to periodically lock in market gains, thus insuring against future market downturns. "No matter what stage of life people are in, this insurance protection gives them the confidence to stay invested in the stock market, where the highest returns have historically been," said Mark Mackey, the association's president and chief executive officer. |
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