What benefit does a guarantee income rider provide?

A guarantee income rider is a feature on certain annuity contracts that ensures the annuitant receives regular income payments for their lifetime, regardless of the performance of the underlying investments in the annuity. This guarantees financial security and peace of mind, particularly for individuals who are concerned about outliving their savings.

By adding this rider to their annuity, policyholders can be assured that they will continue to receive a predetermined income stream, which can be particularly valuable during retirement. This rider transforms the retirement planning landscape by providing a safety net, allowing individuals to budget better for their expenses in retirement without fears of fluctuating market conditions impacting their income.

The other options do not accurately define the purpose or benefits of a guarantee income rider. For instance, while certain riders may allow for withdrawals, the primary function of the guarantee income rider is to secure lifetime payments. Similarly, increased cash value or policy conversion features are not inherent characteristics of this kind of rider. Instead, the focus remains on the assurance of continued payments for life, making it a critical consideration for income stability in retirement planning.