Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
A guaranteed minimum withdrawal benefit (GMWB) rider guarantees the owner of a variable annuity or variable life product that:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A GMWB rider guarantees a defined annual withdrawal amount, typically a percentage of the benefit base, payable for life or until the benefit base is exhausted, even if the account value has fallen below that amount. The insurer makes up the shortfall from its own funds, so the owner has downside protection on withdrawals while still participating in upside performance. This makes the rider a popular income guarantee feature on variable products.
Why the other options are wrong
- B) The rider does not guarantee account growth at any fixed rate; it guarantees withdrawal amounts, not investment returns.
- C) The rider funds the guaranteed withdrawals; it does not reimburse all market losses in cash.
- D) Surrender charges are governed by the contract's own provisions and are not automatically eliminated by the rider.
Memory hook
GMWB: withdrawals stay on schedule even when the account sinks. The insurer backstops the income promise.