72. Which of the following guarantees the annuitant CANNOT outlive their benefits?
Answer: B
Guaranteed lifetime withdrawal benefits ensure the annuitant CANNOT outlive their benefits.
Guaranteed lifetime withdrawal benefits provide a safety net for annuitants, ensuring they receive a steady income for life, regardless of how long they live. This feature prevents the risk of outliving their financial resources.
A) Right of survivorship.
Right of survivorship refers to a legal arrangement in which, upon the death of one party, their share of an asset automatically passes to the surviving party. It does not relate to the income or benefits received by an annuitant, and therefore does not guarantee that they cannot outlive their benefits.
B) Guaranteed lifetime withdrawal benefits.
Guaranteed lifetime withdrawal benefits are specifically designed to ensure that annuitants receive a fixed income for life, making them immune to the risk of outliving their benefits. This option is the correct choice as it directly addresses the concern of longevity risk.
C) Guaranteed minimum accumulation benefit.
A guaranteed minimum accumulation benefit typically ensures that an annuity will grow to a certain minimum value over time, but it does not guarantee that the annuitant will receive income for life. Thus, this option does not address the issue of outliving benefits.
D) Simple income rider.
A simple income rider allows an annuitant to receive regular income payments for a specified period, but it does not guarantee payments for life. Therefore, there is a risk that the annuitant could outlive the benefits provided by this rider.
Conclusion
Guaranteed lifetime withdrawal benefits stand out as the only option that explicitly ensures the annuitant cannot outlive their benefits, providing lifelong income security. Other options, while they may offer certain benefits, do not provide the same level of assurance against longevity risk, making them inadequate for this purpose.