The Cost of GMDB on Variable Annuity

• Main Authors: Po-wei Chu, 朱博瑋
• Other Authors: Wenyan Shiu
• Format: Others
• Language: en_US
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/71975214574071349463

碩士 === 逢甲大學 === 保險所 === 95 === In the past few years, the variable insurance is one of the hottest products on the market, but policy value depends on investment performance during accumulation period. If investment performs poorly, policyholder is not indemnify when lost occurs. Hence, the GMDB rider was created. This rider is an option that protects the policyholder if policyholder passes away during accumulation period, premium will be returned in full. However, since this rider is an option and option has value. In this paper, we will simulation the cost of GMDB. From the study, we found that even under VaR (95) GMDB does not cost much. Insurance company can choose either to charge the rider or use it as a selling point to attract customers.