Lifetime Income Riders
A lifetime income rider guarantees a withdrawal amount for as long as you live, even if the account runs to zero, while you keep the account. To understand it you have to understand that it runs on two numbers, and only one of them is your money.
Read this first
This is a fixed annuity. It is not a variable annuity, not a registered index-linked or “buffer” annuity, and not a security. We do not offer securities.
Guarantees are backed by the claims-paying ability of the issuing insurance company. They are not insured by the FDIC or any federal agency.
A lifetime income rider runs on two separate numbers. The account value is the real money: it is what you can withdraw or surrender and what passes to your beneficiaries. The benefit base, sometimes called the income base, is a bookkeeping figure used only to calculate the guaranteed withdrawal. It is not cash, is never available as a lump sum, cannot be surrendered, and does not pass to your heirs.
A roll-up rate applies to the benefit base, not to the account value. It is not a rate of return and it is not money you can take out.
The rider carries a charge, usually an annual percentage, and it is deducted from the account value. That is why an account value can fall in a period when the index credits nothing.
The problem it solves
An immediate annuity solves lifetime income but takes your lump sum permanently. Many people cannot accept that, and so end up with no guaranteed income at all — which is the worse outcome of the two.
A guaranteed lifetime withdrawal benefit is the industry's answer: keep the account, keep access to it, keep what is left for your heirs, and still have a withdrawal that is guaranteed to continue for life even if the account is exhausted. You pay an annual charge for that, and you accept a structure that is considerably harder to understand.
Three things happen, in this order
Two numbers start running in parallel
The account value is the real money — what you can withdraw, surrender, or leave to beneficiaries. The benefit base is a bookkeeping figure used only to calculate your guaranteed withdrawal. It is not cash and you can never take it as a lump sum.
The benefit base may grow by a roll-up while you wait
A stated rate applied to the benefit base, often for a defined period or until income starts. It is not a rate of return, and it is not money you can withdraw. It only makes your future guaranteed withdrawal larger.
You turn income on, and it continues for life
The withdrawal is usually a percentage of the benefit base set by your age at election. If the account value reaches zero and you are still living, the insurer keeps paying the guaranteed amount. The rider charge is deducted from the account value throughout.
Who this suits, and who it does not
The second list matters more than the first. An agent who only writes the first one is selling, not advising.
Worth considering if…
- You want guaranteed lifetime income but will not give up access to the principal, and you accept paying a charge for that combination.
- You will hold long enough for the guarantee to be worth its cost, and you understand you are buying insurance against living a long time.
- You can keep two numbers straight and will ask which one every figure you are shown refers to.
Probably not for you if…
- You were told the benefit base is your money. It is not, it never becomes a lump sum, and it does not pass to your heirs. If that is how the product was presented, stop and get it explained again by somebody else.
- You want the highest guaranteed income per dollar. An immediate or deferred income annuity buys more income for the same premium, because you are not paying a rider charge or retaining access.
- You will not use the income. Paying an annual charge for a guarantee you never switch on is the most common way people waste money in this product line.
Who we are appointed with
We are independent and appointed with the annuity companies below. Which of them we would approach for you depends on the product, your age, your state and what the contract has to do — rates, caps and payout amounts move constantly and differ sharply between companies, which is the practical reason for working with someone who can approach more than one. They are quoted for you directly rather than published here, where they would be stale within days.
- Allianz Life
- American Equity
- American National
- Americo
- Ameritas
- ASPIDA
- Athene
- Atlantic Coast Life
- AuguStar Financial
- Brighthouse Financial
- CL Life and Annuity
- Clear Spring Life and Annuity
- Columbus Life
- Corebridge Financial
- Delaware Life
- ELCO Mutual Life & Annuity
- EquiTrust Life
- F&G Annuities
- Fidelity Security Life
- Global Atlantic (Forethought Life)
- Guaranty Income Life (GILICO)
- Ibexis
- Knighthead Life
- Lafayette Life
- Liberty Bankers Life
- Lincoln Financial Group
- MassMutual Ascend
- Midland National
- Mutual of Omaha (United of Omaha)
- Nassau (Phoenix Life)
- National Integrity Life
- National Life Group (Life Insurance Company of the Southwest)
- National Western Life
- Nationwide
- New York Life
- North American Company for Life and Health
- Oceanview
- Oxford Life
- Pacific Life
- Penn Mutual
- Principal
- Protective Life
- Prudential
- Puritan Life
- Reliance Standard
- Revol One Financial
- Royal Neighbors of America
- S.USA Life / SBLI USA
- Sagicor
- Securian Financial (Minnesota Life)
- Sentinel Security Life
- SILAC
- Symetra
- Talcott Financial Group
- The Standard
- Upstream Life
Being appointed with a company does not mean that company offers every product on this page, and we do not represent every insurer. Which company suits you depends on the product, your age, your state and your health history. We publish no benefit, rate or feature for any company here until we can cite it to that company's own current material.
Servicing only — not available for new business
We can help with an existing contract from these companies — reviewing it, taking income from it, or understanding what you already own. We are not appointed to write new business with them, so if a new contract is what you need, it would be placed with one of the companies above.
- Genworth
- Security Benefit
- Transamerica
- Venerable (formerly Voya annuities)
Questions people actually ask
What is the difference between the account value and the benefit base?
The account value is your actual money: it is what you can withdraw or surrender, and it is what your beneficiaries receive. The benefit base is a bookkeeping number whose only job is to calculate your guaranteed withdrawal. You cannot take the benefit base as a lump sum, it cannot be surrendered, and it does not pass to your heirs. If somebody shows you the larger number without saying which it is, ask.
Is the roll-up rate a return on my money?
No. A roll-up applies to the benefit base, which is not money you own. It increases the figure used to calculate your future guaranteed withdrawal and nothing else. A contract can credit a roll-up on the benefit base for years while the account value goes nowhere, and the account value is the part you could actually walk away with.
What does the rider cost, and what is it charged against?
Riders typically carry an annual charge expressed as a percentage. Two details decide what it really costs you: which number it is calculated on — the benefit base or the account value — and which number it is deducted from, which is normally the account value. A charge calculated on a rising benefit base but taken from a flat account value drains the account faster than people expect. Ask both questions and get the answers in writing.
What happens if my account value reaches zero?
If the guarantee is in force and you have followed the rules, the insurer continues paying the guaranteed withdrawal for as long as you live. That is precisely what the rider insures and what the charge bought. What you no longer have at that point is an account: nothing is left to surrender and nothing passes to your beneficiaries. Note that taking more than the permitted amount in any year — an excess withdrawal — can reduce or void the guarantee.
Ask for a quote on Lifetime Income Riders (GLWB)
Tell us how to reach you and which state you are in. A licensed agent calls back, usually the same business day, and will tell you plainly if a fully underwritten policy would serve you better.
The other three
Same family, different jobs. Match the product to how long the need lasts.
Fixed Annuities
A contract that credits a stated interest rate for a stated period. A multi-year guaranteed annuity locks the rate for the whole term; a declared-rate contract resets periodically above a contractual minimum.
Worth a look if you have money you will not touch for a set number of years and want the rate in writing.
Fixed Indexed Annuities
A fixed annuity whose interest credit is calculated from the movement of a market index, limited by a cap, participation rate or spread, and floored so that a falling index credits zero rather than a loss.
Worth a look if you want more than a fixed rate but will not risk principal to market movement.
Immediate Annuities
You hand over a single premium and income starts almost straight away, for life or for a chosen period. The simplest annuity there is, and the one with the least to go wrong.
Worth a look if you want a guaranteed income floor under your essential expenses for life.
Deferred Income Annuities and QLACs
You buy the income now and it starts on a date you choose years later. Bought inside a qualified account and meeting the Treasury rules, the same contract is a QLAC.
Worth a look if you want to solve the last decade of retirement now, or are considering a QLAC.
Enhanced Income Riders (Income Doublers)
An optional rider that increases your guaranteed withdrawal, often doubling it, for a limited period if you cannot perform activities of daily living or are confined to a qualifying facility. It is often mistaken for long-term care insurance. It is not.
Worth understanding before anyone sells it to you as care coverage, because it is not.