What is an Income Rider? It is an optional benefit that can be attached to an annuity for an additional annual fee, and will provide a lifetime income stream that you can turn on in the future.
Some Income Riders grow at a contractually guaranteed rate that will compound during the deferral years for future lifetime income. Other Income Riders lock in market gains that can be used for future lifetime income. Sounds great in theory, huh? Well, it can be...if utilized properly.
With income riders, the income value is completely separate from the accumulation value. It typically grows at a fixed rate of interest, and when the retiree elects to start taking lifetime withdrawals, a payout factor is applied to the income value to determine the guaranteed annual withdrawal. If the accumulation value is higher than the income value when the policyholder decides to withdraw the income, then the accumulation value is used in the payout calculation instead. Once the amount of guaranteed withdrawal is calculated, the retiree may withdraw that amount from the annuity every year for life.
- Living (enhanced) Benefit Riders
Living benefit riders are another optional benefit that may be chosen on many annuity contracts. These riders must be requested at the time an annuity holder begins an annuity, as it is highly unusual to be allowed to add a living benefit rider to an existing annuity.
Ww are living longer lives and enjoying longer retirements. This means you have more time to spend with your family, more time to travel and more time to enjoy your miletsones. At Synergy, we believe longevity should be celebrated. That's way we design cases with income you cannot outlive.