Q: What is a Guaranteed Life Withdrawal Benefit (GLWB)?
A: This kind of Benefit provides an income stream by allowing minimum Withdrawals from the Accumulation Value, without having to Annuitize. The Withdrawal amount is usually computed as a factor times the accumulation value. Alternatively, it can be based on the accumulation in a separate GLWB shadow Fund. The factor (usually 2-8%) is based on the gender and age of the Policyholder at time of election.
The key difference from regular Withdrawals is that when the accumulation value falls to zero due to these Withdrawals, the payments will continue anyway, until the death of the Policyholder. In addition, before the accumulation value is depleted, the Policyholder has access to the funds, which continue to earn interest. If the Policyholder dies, the then accumulation value will be paid to their beneficiary.
May be offered as a Rider.
A: This kind of Benefit provides an income stream by allowing minimum Withdrawals from the Accumulation Value, without having to Annuitize. The Withdrawal amount is usually computed as a factor times the accumulation value. Alternatively, it can be based on the accumulation in a separate GLWB shadow Fund. The factor (usually 2-8%) is based on the gender and age of the Policyholder at time of election.
The key difference from regular Withdrawals is that when the accumulation value falls to zero due to these Withdrawals, the payments will continue anyway, until the death of the Policyholder. In addition, before the accumulation value is depleted, the Policyholder has access to the funds, which continue to earn interest. If the Policyholder dies, the then accumulation value will be paid to their beneficiary.
May be offered as a Rider.
