What describes a variable annuity death benefit rider that locks in gains?

A variable annuity death benefit rider that locks in gains is best described as a ratchet. This mechanism allows for the death benefit to increase over time based on the performance of the underlying investments in the annuity. Specifically, when the account value increases, the death benefit gets "locked in" at that higher value, ensuring that the beneficiaries receive at least that amount upon the annuitant's death. If the account value decreases thereafter, the death benefit does not drop; it remains at the higher 'locked in' level.

This feature provides a level of protection for the policyholder's beneficiaries, ensuring they receive the best available value from the annuity. Ratchets serve as an important benefit in managing investment risk, as they prevent the death benefit from declining after periods of market gains. This is particularly valuable in volatile markets where investment values can fluctuate significantly.

In contrast, other options do not accurately encapsulate the locking mechanism associated with gains in a variable annuity's death benefit. For example, a low water mark typically refers to the lowest value an investment can reach before they might apply restrictions on withdrawals or charges, while enhanced earning benefits focus more on additional growth mechanisms rather than on safeguarding gains specifically. GMIB, or Guaranteed Minimum Income Benefit