What Is Income Rider? Definition

Why it matters

Income riders let an owner plan retirement income without giving up the account value up front. The income base is often not the same as the cash value, and it may not be available for withdrawal. Fees, growth rates, and payout percentages differ by carrier, and many riders require a waiting period or a specific start age. Ask how the payout is calculated and what happens to the money at death. Guarantees rely on the insurer's ability to pay.

Source: investor.gov

Where we use this term

Fixed vs fixed index annuity: how do they work and who do they fit?

Related terms

Rider: A rider is an optional add-on to an insurance policy or annuity that changes or adds benefits for an extra cost. It becomes part of the contract once attached.
Annuity: An annuity is a contract with an insurance company in which you pay a lump sum or a series of payments. In return, the insurer agrees to make payments to you, either right away or at a future date.
Fixed Indexed Annuity (FIA): A fixed indexed annuity (FIA) is an annuity that credits interest based in part on the performance of a market index, with a minimum guarantee. The owner does not invest directly in the index.
Annuitization: Annuitization is the process of converting an annuity's value into a stream of regular income payments. Payments may last for life or for a set number of years, depending on the option chosen.
Deferred Annuity: A deferred annuity is an annuity contract that delays payments until a future date chosen by the owner. Until then, the money can grow during an accumulation phase, tax deferred.

All 241 terms

Why it matters

Where we use this term

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