Annuity income riders create a separate value (benefit base) that is used for the sole purpose of calculating withdrawal amounts under the rider. The benefit base does not represent an available lump sum that can be withdrawn from the contract.
What is annuity basis?
Annuity: A contract issued by a life insurance company that provides for tax deferral of investment income until withdrawn from the contract. Cost Basis: Your initial payment/premium(s) paid to a nonqualified annuity is known as the cost basis in your contract.
What is the benefit base?
Benefit base means the guaranteed balance (as described in the applicable prospectus) used to determine claims payable to Policyholders of the Reinsured Contracts under guaranteed minimum income benefit provisions of the Reinsured Contracts in deferred status.
What are annuities based on?
Annuity payments can last for as long as you live – or even longer – because the payments are based on your life expectancy. On the surface this sounds great, but annuities are among the most commonly misunderstood and misused financial products.