Cost considerations

Learn about Vanguard’s variable and income annuity fees and our low-cost approach.

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Akweli Parker: I want to take this question from Joe who asks, “Does Vanguard offer an annuity that is low cost?” Can you talk about what we offer?

Danielle Corey: Absolutely. So, again, I’ll try to delineate by type. So starting with the variable annuity, Vanguard does offer a variable annuity that we’re very proud of from a fee perspective. So the average expense ratio of the Vanguard Variable Annuity is going to be 52 basis points versus an industry average of 2.26%, so that’s about an average of 70% savings there, which we think is important to making the value for our investors.

Akweli Parker: It might not sound like a lot immediately, but over time that makes a big difference, right?

Danielle Corey: Absolutely. And then on the income side, we also offer very competitively priced income annuity options—and I think the overall point though is that if you decide that you want to talk to someone at Vanguard about potentially purchasing an annuity, that our experts are not commissioned and their performance isn’t based on making a sale. It’s based on how well they’re educating our clients and helping them get to the right decision.

Important information

For more information about Vanguard funds or variable annuity products, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about the product are contained in the prospectus. Read and consider it carefully before investing.

All investing is subject to risk, including the possible loss of the money you invest.

This webcast is for educational purposes only and should not be viewed as an investment recommendation. We recommend that you consult a tax or financial advisor about your individual situation.

Product guarantees are subject to the claims-paying ability of the issuing insurance company.

The Vanguard Variable Annuity is a flexible-premium variable annuity issued by Transamerica Premier Life Insurance Company, Cedar Rapids, Iowa (NAIC No. 66281), and in New York State only, by Transamerica Financial Life Insurance Company, Harrison, New York (NAIC No. 70688). Form No. VVAP U 1101 (in Florida, Form No. VVAP U 1101 (FL), in Oregon, Form No. VVAP U 1101 (OR) (R), and in New York, VVA NY 0208(R13)). GLWB Rider Form No. RGMB 43 0811 (in Florida, RGMB 43 0811 (SI)(FL), RGMB 43 0811 (JT)(FL), in Oregon, RGMB 43 0811 (SI)(OR), RGMB 43 0811 (JT)(OR), and in New York, RGMB 43 0811 (SI)(NY) (REV), RGMB 43 0811 (JT)(NY) (REV)). Return of Premium Death Benefit Rider Form No. VVA RP 0811 (in Florida, VVA RP 0811 (FL), in Oregon, VVA RP 0811 (OR), and in New York, VVA RP 0811 (NY) (REV)), without agent representation. Policy and rider form numbers may vary by state and may not be available in all states. The Vanguard Group administers the Vanguard Variable Annuity for the issuer. The Vanguard Group, Transamerica Premier Life Insurance Company, and Transamerica Financial Life Insurance Company do not provide tax advice. Investors are encouraged to consult a tax advisor for information on how annuity taxation applies to their individual situations.

The Vanguard Variable Annuity has an average expense ratio of 0.52%, versus the annuity industry average of 2.26% (Source: Morningstar, Inc., as of December 2016); excludes fees for optional riders. Actual expense ratios for the Vanguard Variable Annuity range from 0.40% to 0.71%, depending on the investment allocation. The expense ratio includes an administrative fee of 0.10% and a mortality and expense risk fee of 0.19%. The expense ratio excludes additional fees that would apply if the Return of Premium death benefit rider or Secure Income (GLWB) rider is elected. In addition, contracts with balances under $25,000 are subject to a $25 annual maintenance fee.

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