Which annuity riders and features should you choose?

Tuesday, May 09, 2023 05:00 AM - Comment(s)

Which annuity riders and features should you choose?

Customizing the contract to meet your individual needs

Riders are optional enhancements that are available on your annuity contract at an additional cost. They allow your financial professional to tailor your contract and help protect what’s most important to you. Please keep in mind that riders may not be available on all products.

What are the different types of riders?

1. Living benefits

Living benefit riders provide guaranteed lifetime income for you (and your spouse, when elected).

Can provide guaranteed increases, or roll-ups to your benefit base, for your future income
Offer consistent lifetime payouts that are based on the age when you take income, or on the younger spouses age, if elected

2. Death benefits

They allow you to pass assets to beneficiaries while potentially avoiding the time-consuming and costly probate process. Death benefits may be used to:

Continue payments to a designated beneficiary
Pay for the owner’s final costs (such as funeral, burial or estate planning)
Benefit a charity or organization that has been named as a beneficiary

Annuity contracts (not specific to death benefits) generally waive surrender charges due to terminal illness or injury.

Most products offer a standard death benefit — often the return of premium.

Some annuities offer optional death benefits that let you lock in the highest contract value (annually or monthly) or a set rate of interest (typically 3% to 5%), even if you pass away when performance is down. There are also annuities that offer a spousal protection feature on death benefits.

How does the spousal protection feature work?

A Spousal Protection Death Benefit helps spouses provide for each other no matter who passes away first and no matter which spouse owns the contract. With spousal protection, the surviving spouse can choose to:

Receive a guaranteed death benefit, or
Continue the contract at the amount of the death benefit or contract value, whichever is higher

Protection

The death benefit is payable to the surviving spouse regardless of who owns the contract.

Flexibility

Surviving spouses have the flexibility to continue the policy tax deferred without surrender fees as a new owner — or take a lump sum (again, without fees) to help meet their new life needs.

Availability

This feature is available on qualified or non-qualified money. For more information about the riders and features available on annuities, please speak with Annuity Pros via a consultation or our enquiry form.

Individuals and businesses who would like to connect with Annuity Pros can get in touch instantly via our enquiry form.

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