Voya 2014 Annual Report Download - page 326

Voya Financial, Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The Company also offers optional guaranteed withdrawal benefit provisions on its indexed annuity products. This
provision guarantees an annual withdrawal amount for life that is calculated as a percentage of the benefit base, which
equals premium paid at the time of product issue, and can increase by a rollup percentage (mainly 7% or 6%, depending
on versions of the benefit) or annual ratchet. The percentage used to determine the guaranteed annual withdrawal
amount may vary by age at first withdrawal and depends on whether the benefit is for a single, or joint lives.
The Company’s major source of income from guaranteed benefit features is the base contract mortality, expense
and guaranteed death and living benefit rider fees charged to the contract owner, less the costs of administering
the product and providing for the guaranteed death and living benefits.
The Company’s retail variable annuity contracts offer one or more of the following guaranteed death and living
benefits:
Guaranteed Minimum Death Benefits (GMDB)
•Standard: Guarantees that, upon the death of the individual specified in the policy, the death benefit will be
no less than the premiums paid by the customer, adjusted for withdrawals.
•Ratchet: Guarantees that, upon the death of the individual specified in the policy, the death benefit will be
no less than the greater of (1) Standard or (2) the maximum policy anniversary (or quarterly) value of the
variable annuity, adjusted for withdrawals.
•Rollup: Guarantees that, upon the death of the individual specified in the policy, the death benefit will be no
less than the aggregate premiums paid by the contract owner, with interest at the contractual rate per annum,
adjusted for withdrawals. The Rollup may be subject to a maximum cap on the total benefit.
•Combo: Guarantees that, upon the death of the individual specified in the policy, the death benefit will be no
less than the greater of (1) Ratchet or (2) Rollup.
Guaranteed Minimum Living Benefits
Guaranteed Minimum Income Benefit (GMIB): Guarantees a minimum income payout, exercisable only on a
contract anniversary on or after a specified date, in most cases 10 years after purchase of the GMIB rider. The
income payout is determined based on contractually established annuity factors multiplied by the benefit base.
The benefit base equals the premium paid at the time of product issue and may increase over time based on a
number of factors, including a rollup percentage (mainly 7% or 6% depending on the version of the benefit) and
ratchet frequency subject to maximum caps which vary by product version (200%, 250% or 300% of initial
premium).
Guaranteed Minimum Withdrawal Benefit and Guaranteed Minimum Withdrawal Benefit for Life (GMWB/
GMWBL): Guarantees an annual withdrawal amount for a specified period of time (GMWB) or life (GMWBL)
that is calculated as a percentage of the benefit base that equals premium paid at the time of product issue and
may increase over time based on a number of factors, including a rollup percentage (mainly 7%, 6% or 0%,
depending on versions of the benefit) and ratchet frequency (primarily annually or quarterly, depending on
versions). The percentage used to determine the guaranteed annual withdrawal amount may vary by age at first
withdrawal and depends on versions of the benefit. A joint life-time withdrawal benefit option was available to
include coverage for spouses. Most versions of the withdrawal benefit included reset and/or step-up features that
may increase the guaranteed withdrawal amount in certain conditions. Earlier versions of the withdrawal benefit
guarantee that annual withdrawals of up to 7.0% of eligible premiums may be made until eligible premiums
previously paid by the contract owner are returned, regardless of account value performance. Asset allocation
requirements apply at all times where withdrawals are guaranteed for life.
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