What are riders in the context of annuities?

Riders in the context of annuities refer to optional benefits that can be added to an annuity policy to enhance its features. These riders typically provide additional coverage or benefits tailored to meet the specific needs of the policyholder. For example, a common rider is a death benefit, which ensures that a designated beneficiary will receive a certain amount upon the annuitant's death. Other riders might offer guarantees for income or withdrawal benefits, depending on the terms agreed upon with the insurer.

These optional benefits give policyholders the flexibility to customize their annuity contracts according to their financial goals and risk tolerance. This customization can be a vital factor in the suitability of an annuity for a specific individual or situation, allowing for a more tailored approach to retirement planning and income security.