REWahoo
Give me a museum and I'll fill it. (Picasso) Give
In his latest column, Scott Burns describes a variable annuity with "living benefits" offered by Prudential:
"In case you haven't heard about 'living benefits,' they are the newest wrinkle in variable annuities, magically providing income guarantees while you are living rather than a minimum value guarantee when you are dead."
No surprise, there's a catch - a very big one:
"...a portfolio expense of 1.20 percent, a charge of 1.65 percent for the variable annuity contract and an additional 0.60 percent for the lifetime income guarantee. That's a total of 3.45 percent a year that comes off the gross return."
Although I've seen some very high fees for some of these creative insurance products, this number seems amazing. I wonder if Prudential's 3.45% per year charge might set some sort of record.
"In case you haven't heard about 'living benefits,' they are the newest wrinkle in variable annuities, magically providing income guarantees while you are living rather than a minimum value guarantee when you are dead."
No surprise, there's a catch - a very big one:
"...a portfolio expense of 1.20 percent, a charge of 1.65 percent for the variable annuity contract and an additional 0.60 percent for the lifetime income guarantee. That's a total of 3.45 percent a year that comes off the gross return."
Although I've seen some very high fees for some of these creative insurance products, this number seems amazing. I wonder if Prudential's 3.45% per year charge might set some sort of record.