Volatility and Competition Squeeze GLWB Fees: Costs Are Sensitive to Many Internal and External Risk Factors

July 2008

More than a year ago, annuities guru Moshe Milevsky caused a mild sensation by publishing an article that called variable annuity guaranteed lifetime withdrawal benefits "underpriced." Now, thanks to a stretch of stomach-churning stock market volatility that has driven up the cost of hedging those guarantees by as much as 45 basis points, many other VA industry watchers agree.

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