Question 47

Guaranteed lifetime withdrawal benefits ensure the annuitant CANNOT outlive their benefits.

Guaranteed lifetime withdrawal benefits provide the annuitant with a specified amount of income for life, regardless of how long they live or the performance of their investment. This feature ensures that the annuitant will receive consistent payments, effectively eliminating the risk of outliving their resources.

A) Right of survivorship

The right of survivorship pertains to the ownership of assets and does not relate to the income benefits received by an annuitant. This option is incorrect as it does not provide any guarantee regarding the longevity of income payments to the annuitant.

B) Guaranteed lifetime withdrawal benefits

This option is correct because guaranteed lifetime withdrawal benefits ensure that the annuitant will receive a predetermined income for life, making it impossible for them to outlive their benefits. This feature is specifically designed to protect against the risk of outliving one's financial resources.

C) Guaranteed minimum accumulation benefit

While this option offers a guarantee that the investment will reach a minimum value, it does not assure the annuitant of lifelong income. Therefore, it does not prevent the possibility of outliving the benefits, making it an incorrect choice for this question.

D) Simple income rider

A simple income rider may provide additional income but typically does not guarantee payments for life. This means that it could result in the annuitant eventually outliving their benefits, thus rendering this option incorrect.

Conclusion

Guaranteed lifetime withdrawal benefits clearly stand out as the only option that ensures an annuitant will not outlive their benefits, providing a reliable source of income for the duration of their life. The other options fail to offer this critical assurance, either focusing on asset ownership or providing limited income guarantees.