An income benefit is not the same as cash value.
Optional income riders may provide contractual withdrawal benefits, but the rules and calculations vary by product.
Understand the different values.
An annuity can have an account value, a surrender value, and a separate income benefit base. The income base is often used only to calculate an eligible withdrawal amount; it is not necessarily money you can take as a lump sum.
A stated increase in an income base is not the same as an investment return on your premium. Compare the cash values and income provisions separately.
| Value | What it generally describes |
|---|---|
| Account / accumulation value | The contract value after credits and applicable charges or withdrawals. |
| Surrender value | The amount available upon ending the contract after applicable charges and adjustments. |
| Income benefit base | A contractual calculation value used to determine eligible income benefits; usually not a cash-out value. |
What to ask about a rider.
- When can eligible income begin?
- How is the withdrawal percentage determined?
- What fee applies, and which value is used to calculate it?
- What happens if withdrawals exceed the permitted amount?
- How do joint-life and survivor features work?
- What happens if account value reaches zero under the rider rules?
- How are death benefits affected?
Annuities are long-term insurance contracts and are not suitable for everyone. Surrender periods, surrender charges, withdrawal restrictions, fees, and tax consequences may apply. Guarantees are subject to contract terms and the claims-paying ability of the issuing insurance company. Product features and availability vary by carrier and state.
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