An income rider — often a guaranteed lifetime withdrawal benefit (GLWB) — is an optional add-on that lets you take a guaranteed level of withdrawals for life while keeping access to any remaining contract value. It usually carries an annual fee.
The guaranteed income is backed by the claims-paying ability of the issuing insurance company and is not FDIC insured. Riders use a separate 'benefit base' to calculate income, which is generally not a cash value you can withdraw as a lump sum.
Example
A retiree adds an income rider so that at 67 they can withdraw a guaranteed amount each year for life, even if the contract value is later depleted.
This definition is for general educational purposes only and is not financial, tax, or legal advice. Tim Hartle is an independent insurance professional. Annuity guarantees are subject to the claims-paying ability of the issuing insurance company and are not FDIC insured. Rules and product features vary by situation and by state. Please consult a qualified advisor about your own circumstances.