Deferred Variable Annuity – Rollup Rates
July 15, 2020 by Wade Pfau
We begin with the growth process for the guaranteed benefit base during the deferral or accumulation period before distributions begin. This growth is important because it is subsequently used to determine the amount of guaranteed lifetime income provided by the annuity. The deferral period can be skipped if the retiree wants lifetime distributions to begin immediately.
Deferred variable annuities with income guarantee riders generally support the ability to lock-in a guaranteed growth rate on the benefit base during the accumulation period before guaranteed distributions begin, including the ability to define the benefit base as the high watermark of the contract value of the underlying assets on anniversary dates over the history of the rider.