Annuity Benefits and Riders

Generally speaking, Fixed Annuities and Variable Annuities offer add-on Annuity Benefits and Options.  These can add significant cost to your annuity.  The following are the key riders to watch out for…

With added benefits come added expenses so be selective when you choose extra features and definitely do your homework so you know exactly what you are paying for.

We have put together a list of the most common riders available to consumers to give you an idea of what’s out there. You will likely come across other options and some that are specific to one contract.

We seek to teach you to be critical and objective so you can do a good job of evaluating your needs for any additional contract provisions that are being pitched. If you need some help with analysis, please Contact Us and we’ll be happy to walk through any rider or particular contract.

Here is a list of common riders you will encounter in your search for the proper annuity.

  • GMIB – Guaranteed minimum income benefits guarantee a base income upon annuitization for a specified period
  • GMDB – Guaranteed minimum death benefits are designed to protect the beneficiaries of the purchaser by paying a death benefit equal to the initial investment regardless of market conditions in the event of the purchasers death.
  • GLWB – Guaranteed lifetime withdrawal benefits give a minimum payment for the lifetime of the purchaser based on the value of the initial investment and a stated guaranteed minimum investment return.
  • GMAB – Guaranteed minimum accumulation benefits offer a minimum return of principal to the purchaser equal to the initial investment or the highest account value reached during accumulation depending on contract specifics.

These riders can be added to annuities for an additional cost, usually in the range of .5-.75% of the annual guaranteed yield. The costs vary from company to company.

This additional expense adds even more to the already higher than average cost of variable annuities so make sure you understand the product thoroughly before you invest.

Even after you learn the Decision Tools to make your own decisions, expert advice is essential.

Contact Us and we can help explain the benefits and disadvantages of each of these annuity benefits.

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