Advisor One’s Moshe A. Milevsky sings the praises of Transamerica’s Principium II variable annuity in the article “Transamerica Principium II.” The annuity is rated an 8 out of 10 stars because investors have choices regarding their insurance and investment options and their cost is based on those choices. The author believes that Transamerica is one of the few companies offering true guaranteed lifetime withdrawal benefits (GLWB) that truly protect against longevity risk, inflation, and sequence of return.
While the death benefit annuity only pays out the policy value, you pay much lower fees by not having a guaranteed minimum death benefit (GMDB). For those who would like more of a guarantee, they can pay extra for a return of premium or annual step-up option, but the option is not forced upon you.
Those opting for the living benefit rider, called the “Retirement Income Choice 1.2 rider,” are guaranteed at least a 5% increase for the first 10 years. During that time, if your “monthiversary,” or average monthly statement value, is higher than the 5% gain, you will get that increase. After the 10 years, your increase will be equal to your highest “monthiversary” value for the year.
During the income stage, you can withdraw 4% at age 59, 5% at age 65, and 6% at age 75. The numbers decline by .5% if you opt for the joint life option. For the subaccount investments, there are many Vanguard-based exchange-traded funds to choose from. The author believes that these are some of the best annuities for investors. The fees charged for the Principium II are based on the risk taken on by Transamerica for the options chosen by individual investors. This annuity could be a good variable annuity for you to check out.