What does a Guaranteed Lifetime Withdrawal Benefit provide to the annuitant?

• A. Guarantees the annuitant will not outlive benefits
• B. Increases the death benefit
• C. Provides higher returns on premiums
• D. Eliminates surrender charges

Answer: (A)

The idea being tested is longevity protection through an annuity rider. A Guaranteed Lifetime Withdrawal Benefit ensures that the annuitant can take withdrawals for life, even if the underlying account value drops to zero. In other words, it guarantees a stream of payments for as long as the person lives, so they won’t outlive their income from the plan. This is not a death benefit to heirs, it doesn’t by itself increase returns on the premiums, and it doesn’t remove surrender charges. The guarantee relies on the rider having been elected and meeting its rules, and withdrawals are typically set up as a fixed schedule or percentage of the benefit base, continuing for life regardless of market performance.