What is Annuity Rider?
A rider is an optional add-on feature attached to an annuity contract that provides benefits beyond the base product. Riders can enhance income guarantees, provide long-term care access, or add death benefit protections, but they often come with an additional annual fee.
Common Annuity Riders
- Guaranteed Lifetime Withdrawal Benefit (GLWB) – guarantees a minimum annual withdrawal for life, even if the account value drops to zero. Common on fixed index annuities.
- Enhanced death benefit – increases the death benefit above the standard account value, often based on a roll-up rate or highest anniversary value.
- Long-term care rider – provides increased withdrawals or benefit payments if the owner needs long-term care.
- Return of premium – guarantees that the beneficiary receives at least the original premium amount.
Do MYGAs Have Riders?
Most MYGAs do not include optional riders. They are designed as straightforward accumulation products with a guaranteed rate, no annual fees, and a standard death benefit. Riders are more common on fixed index annuities and variable annuities.
Frequently Asked Questions
What is an annuity rider?
A rider is an optional add-on feature attached to an annuity contract that provides benefits beyond the base product.
Do MYGAs have riders?
Most MYGAs do not include optional riders. They are designed as straightforward accumulation products with a guaranteed rate, no annual fees, and a standard death benefit.
What does a guaranteed lifetime withdrawal benefit rider do?
Guaranteed Lifetime Withdrawal Benefit (GLWB) – guarantees a minimum annual withdrawal for life, even if the account value drops to zero.
