Riders are optional features you can add to your base annuity contract to enhance benefits or add protections. Each rider comes with an additional cost, usually an annual fee expressed as a percentage of your account value or benefit base.
Common rider types:
Income Riders (GLWB/GMIB)
- Guarantee lifetime income regardless of account performance
- Typically cost 0.75% to 1.25% annually
- Create a separate "benefit base" for income calculations
- Popular on fixed indexed annuities
Enhanced Death Benefit Riders
- Guarantee beneficiaries receive more than standard death benefit
- May lock in highest anniversary value
- Cost varies based on enhancement level
- Good for legacy planning
Long-Term Care Riders
- Increase benefits or waive charges if you need LTC
- May double income payments for nursing home care
- Hybrid approach to LTC planning
- Costs vary significantly
Nursing Home Waivers
- Waive surrender charges after confinement period
- Often included at no additional cost
- Check specific qualifying conditions
- Provides emergency liquidity
Evaluating riders:
- Calculate total cost over expected holding period
- Compare to standalone products (e.g., LTC insurance)
- Ensure you understand how benefits are calculated
- Read the fine print on qualifying conditions
For Ocala retirees, carefully evaluating available riders ensures you get the specific benefits you need without paying for features you won't use.
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