An annuity rider is an extra feature that can be added on to an annuity. There are various types of riders that can be added on a basic annuity to meet different criteria or to customize the annuity for the needs of the annuity holder. Riders can carry restrictions, and an annuity holder may add just one or multiple riders to their annuity purchase.
Annuity Death Benefit Rider
Death benefit guarantees that if the annuity holder dies before the payout begins, the beneficiary will be paid the full value or the total premiums paid, whichever is higher.
Annuity Living Benefit Rider
Annuity living benefit riders give three options: the first ensures the annuity holder will receive all of what they put into it, the second guarantee a minimum interest rate or higher, and the last that once payments begin, all payments stay the same.
Annuity Riders Increase Payment Options
Annuity riders increase payout options allowing you to choose from three options: a lump-sum payment, regular withdrawals until the money runs out, or guaranteed payments for life. Some riders offer both withdrawals and the lifetime annuity.
Annuity Rider Incentives
Some insurers are offering annuity rider incentives by matching contributions or through bonuses when you purchase an annuity.
Annuity Riders are not Free
Annuity riders increase the cost of an annuity. Riders can add up when adding multiple riders and dip into your rate of return.