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.
Key takeaway: Riders add optional benefits to an annuity contract, usually for an additional fee. MYGAs generally do not use riders. FIAs and variable annuities commonly do.
