Defined terms for the annuity market and lifetime income landscape.
A guaranteed minimum death benefit (GMDB) is a rider on a deferred annuity that guarantees the beneficiary will receive at least a specified minimum amount upon the contract owner's death regardless of account value, funded through the mortality and expense charge or a separate rider charge.
A guaranteed minimum income benefit (GMIB) is a rider attached to a deferred annuity contract that guarantees the contract owner the right to convert a defined benefit base into a stream of lifetime income payments at contractually specified rates, in exchange for a separately disclosed annual rider charge. Why it matters The GMIB is one of the principal lifetime-income riders historically sold with variable annuities and remains relevant in current product design even where new s
A guaranteed minimum withdrawal benefit is an income rider on a variable annuity or fixed indexed annuity that guarantees the right to withdraw a specified percentage of a separately-tracked benefit base each year for life, even if the underlying account value falls to zero.
The guaranty association assessment mechanism is the statutory process by which surviving licensed carriers in a state fund the guaranty association's obligations to contract owners of an insolvent carrier, subject to state-statutory caps on how much any one carrier can be assessed in a given year.
A hardship withdrawal is a distribution from a defined contribution plan taken while the participant is still employed, permitted only when the participant faces an immediate and heavy financial need that meets one of the categories specified by Treasury regulations.
