At Age 85, AXA’s VA Owners Can Swap GMIBs for GLWBs
November 23, 2008
AXA Equitable Life has redesigned its long-running Accumulator variable annuity so that certain 85-year-old contract owners have a choice other than annuitization.
After age 85, contract owners who have purchased the product’s guaranteed minimum income benefit (GMIB) rider now have the option to continue their contracts with a guaranteed lifetime withdrawal benefit (GLWB) instead.
“Previously at age 85, our clients had to choose between exercising their GMIB by annuitizing or discontinuing the guarantee. Now, they have the flexibility to maintain a lifetime income guarantee and stay invested, while retaining the elected death benefit,” said Claude Methot, AXA Equitable executive vice president and chief product officer.
Under the new design, they can replace the GMIB with a GLWB option at age 85. That will give them liquidity, a range of equity investment choices, and the security of an annual payout of either 6% of the guaranteed income base for life or 7% of the account balance for life.
“The patent-pending enhancement offers clients a method for staying invested in equity-based investment options, while at the same time accessing a predictable stream of retirement income,” the company said in a release last week.
The rules of the Accumulator’s original GMIB rider do not change. Under those rules, contract owners can convert their guaranteed income base to income after waiting at least 10 years after election but no later than the first contract anniversary after they reach age 85. Prior to conversion, there’s a roll-up feature: the income base (premiums minus taxes and withdrawals) grows by 6% per year (or 3% for certain low-risk investments).
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