Annuity Income Riders

Comrade Financial Group offers many Annuity choices with Annuity Income Riders for all residents living in Maryland, Washington D.C. and Virginia.

What is an Annuity Income Rider?

In layman’s terms, An Annuity Income Rider is a rider or attachment to an Annuity Contract that through the Annuitant chooses an Income Rider attached to the contract for a fee that guarantees a value which is known as Income Value.

Annuity income riders are designed and available to provide safety of investment, predictable growth, guaranteed growth, lifetime income and peace of mind to people and business’s who are worried about running out of money in early or late retirement.

The Income Value of the contract will grow at a specified rate of return as described in the contract and are often referred as GLWB (Guaranteed Lifetime Withdrawal Benefit) or GLIB ( Guaranteed Lifetime Income Benefit). These riders do have a cost and the cost should be weighed against the benefit and overall performance of contract.

There are however several types of Values that are outline in Annuity contract. The Accumulation Value is your deposit plus interest and bonuses that builds over the time of the contract and is payable at death. This is kept separate from the Income Rider or Lifetime Income Benefit value. Think of this as a basket within a basket.

If the accumulation value basket that is based either upon a fixed rate of return or tied to an index does well, then most carriers will credit the % of gain from the accumulation value to the income value. Remember that the income value already has a set rate of return so for example in the AV basket foes a 5% return and your IV is set at 5.5% it is safe to say that your IV had a return of 10.5%.

Some carriers like most will have a 5% or 10% withdrawal option from the AV each year so if you elect to withdrawal from the AV, then it will also impact your IV as well.

Once you elect to receive these Lifetime Income payments, the percentage of the Income value can be distributed but some carriers base this on attained age so please read carefully. Some carriers allow this payment cycle to start and stop at any time. This is for compliance with RMD which is required minimum distributions.

Once you choose a GLWB or GLIB rider, make sure you read the whole contract or brochure. Some have nursing home waivers and spousal continuance provisions which i insist if I write the product.

I have been asked several times if Annuity Income rider benefits or payments can actually deplete or exhaust the AV and the answer is yes, but again your contract states that Income will be for life, even if the AV is depleted. That is one of the guarantees of the contract. Once the payments start, you still have access to the AV and interest can still be credited to the AV for as long as the contract is in force.

For more information how Income Annuity Riders can help you call or email anytime.