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Which of the following guarantees the annuitant CANNOT outlive their benefits?

Rationale

Guaranteed lifetime withdrawal benefits ensure the annuitant CANNOT outlive their benefits.

These benefits provide the annuitant with a guaranteed income for life, regardless of how long they live or the performance of the underlying investments. This feature protects against the risk of outliving one's resources, making it a crucial aspect of certain annuity products.

A (Right of survivorship.) YOUR ANSWER

The right of survivorship pertains to the ownership and transfer of assets upon death, rather than guaranteeing income during the annuitant's lifetime. It allows co-owners of an account or property to inherit the assets directly, but does not address the issue of income security for the annuitant, nor does it ensure that benefits cannot be outlived.

B (Guaranteed lifetime withdrawal benefits.) CORRECT

This option guarantees that the annuitant will receive a specified amount of income for as long as they live, regardless of market conditions or how long they live. This feature specifically protects against longevity risk, ensuring that benefits will continue for the annuitant's lifetime, thus preventing the possibility of outliving their income.

C (Guaranteed minimum accumulation benefit.) YOUR ANSWER

This benefit guarantees a minimum value that the annuity will accumulate over time, but it does not ensure that the annuitant will receive income for life. While it provides some security regarding the investment's growth, it does not directly correlate with lifetime income provisions, and thus does not prevent the risk of outliving benefits.

D (Simple income rider.) YOUR ANSWER

A simple income rider may provide additional income, but it typically does not guarantee payments for the lifetime of the annuitant. It may offer a fixed income stream, but without the lifetime guarantee aspect, the annuitant could run out of funds if they live longer than expected, leaving them vulnerable to outliving their benefits.

Conclusion

Guaranteed lifetime withdrawal benefits are unique in their ability to ensure that an annuitant cannot outlive their benefits, providing financial security throughout their lifetime. Other choices, while offering various forms of financial protection or income, do not offer the same assurance of lifelong benefits, leaving the annuitant potentially exposed to the risk of living longer than their financial resources can sustain.

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