Part of an article that is being written for a financial publication

by Frank Sisco, CPA, PFS

Certain principal-protected annuities guarantee that, after a stipulated period of time such as 10 years, the owner can get back the original principal if the account value becomes less than that amount (e.g. New York Life's Mainstay Premium Plus annuity with the Investment Protection Plan.)

Other principal-protected annuities offer, as an alternative to the account value, a guaranteed stream of payments, which are calculated on a value that is based on the greater of (a) the grown value using a certain percentage (e.g. 6%) or (b) the highest anniversary value. The annuity payments can be elected after a certain waiting period (often 10 years) and are paid for period of time stipulated in the annuity contract. Several types of annuities make annuity payments for life with a period certain of 10 years (as in the case of MetLife XC, Equitable Accumulator or Accumulator Plus, Manulife Venture or Venture III.) In some cases a shorter period such as 10 years is used, as in the USAllianz Alterity or Rewards annuity. Various annuities use different terms to refer to the guaranteed stream of payments. Some refer to it as Guaranteed Minimum Income Benefit (GMIB) or Guaranteed Retirement Income Program (GRIP). MetLife Investors refers to it as “The Living Benefit” and an excerpted page from a brochure is linked below. Interested investors should review the prospectus and any supplements and get the help of a skilled financial advisor (to help compare various annuities and help select which mix is appropriate), who is also a registered representative and capable of arranging the investment. Please note that certain annuities are permitted in certain states
Click below for the illustration chart.
Chart of The Living Benefit from MetLife Investors for its XC variable annuity.

By Frank Sisco, 12/10/2002