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 the annuitant with a reliable income for as long as they live, regardless of the performance of the underlying investments or the total amount withdrawn.
A) Right of survivorship.
Right of survivorship pertains to property ownership and inheritance rather than income benefits from an annuity. It ensures that upon the death of one owner, the remaining owners retain full ownership of the property, but it does not guarantee any income or benefits for the annuitant.
B) Guaranteed lifetime withdrawal benefits.
Guaranteed lifetime withdrawal benefits specifically ensure that an annuitant receives a predetermined income for life, thereby eliminating the risk of outliving their financial resources. This feature is designed to provide peace of mind regarding retirement income.
C) Guaranteed minimum accumulation benefit.
Guaranteed minimum accumulation benefits focus on ensuring that the value of an annuity will not fall below a certain level, often applied to the principal invested. However, it does not guarantee lifetime income, so the annuitant may still outlive their benefits if withdrawals exceed the accumulation.
D) Simple income rider.
A simple income rider typically offers a fixed amount of income for a specified period but does not guarantee that the annuitant cannot outlive their benefits. This means that once the specified term ends, the annuitant may face a lack of income if not properly managed.
Conclusion
Guaranteed lifetime withdrawal benefits are crucial for ensuring that an annuitant has a consistent income stream for life, effectively preventing the risk of outliving one's assets. In contrast, the other options do not provide the same level of income security, leaving the annuitant vulnerable to financial uncertainty in later years.