Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
A guaranteed minimum withdrawal benefit (GMWB) rider associated with a variable insurance product guarantees:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A guaranteed minimum withdrawal benefit (GMWB) rider guarantees that the owner can withdraw at least a stated minimum amount each year — typically a percentage of the benefit base — for a defined period or until a cumulative amount is recovered, regardless of how the underlying investments perform. It is an income guarantee, not a death benefit guarantee, not a fixed crediting rate, and not a charge waiver. The rider addresses market risk: even if the account value falls, the guaranteed withdrawals continue. It is one of the living-benefit riders used with variable insurance products.
Why the other options are wrong
- B) Minimum death benefits are a separate guaranteed death benefit feature, not a withdrawal guarantee. GMWB guarantees the income the owner may withdraw.
- C) GMWB guarantees a minimum withdrawal amount each year, not a fixed crediting interest rate on the underlying account.
- D) Policy charges are not waived. The GMWB rider carries its own cost and guarantees withdrawals, not free coverage.
Memory hook
Markets tank, income stays — GMWB locks the spigot, not the rate.