Overall, the Guardian Investor variable annuity seems like a pretty standard, solid offering with features and an expense structure that is in-line with industry averages.
What is somewhat confusing is the optional living benefit features that are offered with the VA.
The Guardian offers a handful of flavors of guaranteed lifetime withdrawal benefit (GLWB). The company refers to these various flavors as:
- Target Now
- Target Future
- Target 200
- Target 250
The Target Now comes with step-ups only and no annual minimum guarantee. The Target Future has the step-ups and a 7 percent (as of 2012) minimum guarantee.
The Target 200 (which is more expensive than the Target Future) has the 7 percent guarantee and additionally offers a 200 percent cumulative guarantee over 10 years. Confusing as 7 percent compounded over 10 years is roughly a doubling, so why pay for the cumulative guarantee.
Similarly, the Target 250 offers a 250 percent cumulative guarantee over 15 years for an additional fee. The thing is, 7 percent compounded over 15 years is 275 percent cumulative. Why pay extra for a cumulative guarantee that seems irrelevant?
