Ameriprise 2015 Annual Report Download - page 151

The GMDB and GGU provisions provide a specified minimum return upon death of the contractholder. The death benefit
payable is the greater of (i) the contract value less any purchase payment credits subject to recapture and less a pro-rata
portion of any rider fees, or (ii) the GMDB provisions specified in the contract. The Company has the following primary
GMDB provisions:
• Return of premium — provides purchase payments minus adjusted partial surrenders.
• Reset — provides that the value resets to the account value every sixth contract anniversary minus adjusted partial
surrenders. This provision was often provided in combination with the return of premium provision and is no longer
offered.
• Ratchet — provides that the value ratchets up to the maximum account value at specified anniversary intervals, plus
subsequent purchase payments less adjusted partial surrenders.
The variable annuity contracts with GMWB riders typically have account values that are based on an underlying portfolio of
mutual funds, the values of which fluctuate based on fund performance. At issue, the guaranteed amount is equal to the
amount deposited but the guarantee may be increased annually to the account value (a ‘‘step-up’’) in the case of
favorable market performance or by a benefit credit if the contract includes this provision.
The Company has GMWB riders in force, which contain one or more of the following provisions:
• Withdrawals at a specified rate per year until the amount withdrawn is equal to the guaranteed amount.
• Withdrawals at a specified rate per year for the life of the contractholder (‘‘GMWB for life’’).
• Withdrawals at a specified rate per year for joint contractholders while either is alive.
• Withdrawals based on performance of the contract.
• Withdrawals based on the age withdrawals begin.
• Once withdrawals begin, the contractholder’s funds are moved to one of the three least aggressive asset allocation
models.
• Credits are applied annually for a specified number of years to increase the guaranteed amount as long as withdrawals
have not been taken.
Variable annuity contractholders age 79 or younger at contract issue can also obtain a principal-back guarantee by
purchasing the optional GMAB rider for an additional charge. The GMAB rider guarantees that, regardless of market
performance at the end of the 10-year waiting period, the contract value will be no less than the original investment or a
specified percentage of the highest anniversary value, adjusted for withdrawals. If the contract value is less than the
guarantee at the end of the 10-year period, a lump sum will be added to the contract value to make the contract value
equal to the guarantee value.
Certain UL policies offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that,
subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is
insufficient policy value to cover the monthly deductions and charges.
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