Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
A guaranteed minimum withdrawal benefit (GMWB) rider on an annuity or life policy provides that:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
A guaranteed minimum withdrawal benefit is a living-benefit rider that guarantees the owner can withdraw a specified minimum amount each year — often structured to return the original premium or a guaranteed income base over time — regardless of how the underlying account performs. If investment losses reduce the account value, the guarantee still allows the scheduled withdrawals. Withdrawals above the guaranteed amounts or before age 59½ may still be subject to tax and surrender charges, and the death benefit is a separate rider.
Why the other options are wrong
- A) No rider guarantees a doubling of the account value; GMWB guarantees withdrawal amounts, not investment performance.
- C) Withdrawals remain subject to ordinary income tax on the gain and may incur early-withdrawal penalties.
- D) GMWB is a living benefit for the owner's withdrawals; the death benefit guarantee is a different feature.
Memory hook
GMWB: a floor on what you can take out, whatever the market does.