What does GMDB stand for in the context of variable annuity contracts?

In the context of variable annuity contracts, GMDB stands for Guaranteed Minimum Death Benefit. This feature ensures that if the annuitant passes away before the contract's value reaches a certain threshold, the beneficiary will receive at least the amount that was initially invested (minus any withdrawals) or another predetermined value, whichever is greater. This benefit provides a level of security for investors, reassuring them that their beneficiaries will not be left with reduced or no financial support.

The focus on the death benefit addresses the needs of individuals who want to ensure that their investments provide some financial protection for their loved ones regardless of market fluctuations or timing of their passing. This safety net is particularly appealing in variable annuities, where the investment component can result in losses depending on market performance.

The other options refer to different types of guarantees associated with annuities, but they do not apply to the GMDB designation specifically. For example, benefits like the Guaranteed Lifetime Withdrawal Benefit and Guaranteed Minimum Accumulation Benefit pertain to different aspects of annuity contracts, such as withdrawal guarantees during retirement or minimum growth guarantees, which are not what GMDB defines.