Income Rider On Annuity

The income rider guaranteed lifetime withdrawal benefit rider is typically an optional feature on fixed indexed annuities and variable annuities and serves as an alternative to annuitization.

Income rider on annuity. The two primary deferred annuity product types that an income rider can be attached to are fixed index annuities fias and variable annuities vas. The most popular annuity benefit available today is what the annuity industry calls an income rider. The advent of income riders has opened a gusher of annuity sales for insurance companies and given annuity owners a breath of fresh air. They now can own a retirement asset that can both grow principal and guarantee a lifetime income a good income rider on the right annuity can keep your financial plan flexible and secure.

Some income riders grow at a guaranteed rate that will compound during the deferral years. Not all fias and vas offer income riders but. Most income riders cost around 1 per year that gets deducted from your accumulation value which is the real value of the annuity if you were to terminate the contract or pass away. Although rates can vary income riders will typically cost you around 75 basis points annually.

On the one side you have the accumulation value or walk away amount. You can t buy one as a stand alone product but only as an attachment you choose to add to a. Adding an annuity income rider to a deferred annuity policy will for an additional annual fee provide a lifetime income stream that you can turn on in the future. The income rider is an annuity rider like a pension will distribute a guaranteed retirement income for life to a retiree.

A rider is a benefit that you can add to some deferred annuity policies that solve for a specific need like income legacy or long term care. This would be the potential growth from the separate accounts in a variable annuity i e.