What does a GMWB rider in a variable annuity guarantee?

• A. Rider guarantees a minimum withdrawal stream.
• B. Rider guarantees a minimum death benefit.
• C. Rider provides guaranteed income for life.
• D. Rider waives premiums.

Answer: (A)

The main idea is that a GMWB rider guarantees a minimum withdrawal stream. It ensures you can take out a predetermined amount each year, up to the contract’s guaranteed total withdrawals, regardless of how the investments perform. The guarantee is tied to the withdrawal base, not the current account value, so even if markets fall and the account value goes down, you’re still entitled to the minimum withdrawals outlined in the rider. This is different from a death benefit (that’s a GMDB), and from guaranteed income for life (that’s a GLWB). It also isn’t a premium waiver, which is a separate feature.