What Is a Guaranteed Lifetime Withdrawal Benefit (GLWB)?

GLWB: The Most Popular Annuity Rider

A Guaranteed Lifetime Withdrawal Benefit (GLWB) is an optional rider added to a deferred annuity — usually a fixed indexed annuity — that guarantees you can withdraw a specific amount every year for the rest of your life, no matter what happens to your account value.

How a GLWB Works

When you add a GLWB rider, your contract has two separate “buckets”:

• Account Value: Your actual money — what you’d get if you surrendered the policy
• Income Base (Benefit Base): A separate, guaranteed-growing value used only to calculate your income payments

The income base typically grows at a guaranteed rate (e.g., 7% per year) during the accumulation phase, regardless of market performance. When you turn on income, your annual withdrawal is calculated as a percentage of the income base (the “payout rate”).

Example: GLWB in Action

• You invest $300,000 in an FIA with a GLWB rider
• Income base grows at 7% guaranteed for 10 years
• After 10 years: income base = ~$590,000
• Payout rate at age 70: 5.5%
• Annual income: $590,000 × 5.5% = $32,450/year ($2,704/month) — for life
• Even if your account value drops to zero, income continues

What Happens If the Account Value Runs Out?

The insurance company keeps paying. This is the core guarantee — the insurer is on the hook for your income for as long as you live, even after the account value is depleted.

GLWB Costs

Riders typically cost 0.75%–1.25% per year, deducted from your actual account value (not income base). This is the price for the guarantee — evaluate whether the guaranteed income justifies the cost based on your situation.

Joint GLWB Option

Most carriers offer a joint version that covers both spouses. Payout rates are slightly lower, but income continues until the last surviving spouse passes away.