Faculty Publications

Title

The Next Generation of Income Guarantee Riders: Part 3 (The Income Phase)

Document Type

Article

Publication Date

12-11-2012

Abstract

What is the purpose of an income guarantee? Some view it as a traditional insurance product, meant to provide downside risk protection, while others like that it encourages clients to accept a more aggressive asset allocation, promising more upside without exacerbating worst-case outcomes. Can it really be both? Some would argue that guarantees aren’t worth bothering with at all, since many clients can expect to do just as well without paying the extra fees. So who’s right?