FIA Lifetime Income Benefits
November 4, 2020 by Wade Pfau
FIAs also frequently offer optional lifetime income guarantee benefits in the same manner as variable annuities (VAs). These guaranteed lifetime withdrawal benefits (GLWBs) are what can make particularly valuable in a retirement income plan. Though the names for different pieces may vary, the discussion from the previous chapter still applies in terms of rollup rates, the potential for step-ups, guaranteed withdrawal rates, and so on. The lifetime guaranteed rates vary by age and are also available for joint contracts at a reduced level or a higher fee. These aspects are all designed to work in similar ways as with a VA. As well, FIAs are deferred annuities. Receiving lifetime income through the optional rider does not formally annuitize the contract while a positive contract value remains.