Guaranteed Earning Increase Death Benefit

AAA

DEFINITION of 'Guaranteed Earning Increase Death Benefit'

A type of option that annuitants can purchase for their retirement annuities. This option would guarantee the beneficiary that the plan would receive an additional pre-determined amount of money that would be above and beyond the death benefit in the event that the annuitant dies before the annuity's maturity.

INVESTOPEDIA EXPLAINS 'Guaranteed Earning Increase Death Benefit'

For example, Jack had purchased a guaranteed earning increase death benefit option of 5% on his $150,000 retirement annuity. If Jack passes away before he can start collecting his annuity, his beneficiary, Jill, will be able to collect a total of $157,000 ($150,000 + 5% of $150,000).

RELATED TERMS
  1. Annuity

    A financial product that pays out a fixed stream of payments ...
  2. Guaranteed Minimum Accumulation ...

    A rider on a variable annuity, which guarantees the minimum amount ...
  3. Annuitant

    1. A person who receives the benefits of an annuity or pension. ...
  4. Guaranteed Lifetime Withdrawal ...

    A rider on a variable annuity that allows minimum withdrawals ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Guaranteed Minimum Income Benefit ...

    A type of option that annuitants can purchase for their retirement ...
RELATED FAQS
  1. Can the non-spouse beneficiary of an IRA name a successor beneficiary?

    Whether the beneficiary of an individual retirement account (IRA) can name a successor beneficiary (second generation beneficiary) ... Read Full Answer >>
  2. Is an annuity a perpetuity?

    An annuity can be a perpetuity, depending on how it is set up. An annuity is an investment that makes regular payments throughout ... Read Full Answer >>
  3. What are the most common deferred tax assets used by individuals?

    Deferred tax assets โ€“ those that are only taxed when funds are withdrawn or the asset is sold โ€“ are quite common in estate ... Read Full Answer >>
  4. Are annuities for seniors only?

    Though annuities tend to be advertised primarily to seniors, there is no reason why younger generations should not make the ... Read Full Answer >>
  5. What is a longevity annuity?

    A longevity annuity is an investment contract with an insurance company designed to address the potential financial problems ... Read Full Answer >>
  6. What is the difference between a fixed and variable annuity?

    For many people, saving for retirement means tucking money away in a diverse range of investments. Because traditional savings ... Read Full Answer >>
Related Articles
  1. Retirement

    Establishing A Revocable Living Trust

    This arrangement allows you to have more control over your estate - both before and after your death.
  2. Options & Futures

    An Estate Planning Must: Update Your Beneficiaries

    Life changes make it time to rewrite your plan's designations.
  3. Retirement

    The Cost Of Variable Annuity Guarantees

    These products tempt investors with some impressive benefits - but they come at a price.
  4. Economics

    Understanding Perpetuity

    Perpetuity means without end. In finance, a perpetuity is a flow of money that will be received on a regular basis without a specified ending date.
  5. Professionals

    Are Longevity Annuities in 401(k)s a Good Idea?

    An in depth look at the arrival of longevity annuities in 401(k)s and IRAs.
  6. Retirement

    How To Move From Nest Egg To Income?

    Income vs. a nest egg is closely tied to what most of us are ultimately interested in for retirement โ€“ maintaining our standard of living and to travel.
  7. Retirement

    Strategies To Build Your Retirement Portfolio

    Retirement indexes are designed to estimate how much an investor would need to have saved today to generate annual income in retirement, starting at 65.
  8. Investing

    What are Fixed-Income Securities?

    For a fixed-income security, the periodic return on the investment is the same throughout the life of the security. Principal is returned at the time of maturity. The payment can be in the form ...
  9. Professionals

    Monthly Pension Or Lump-Sum: Which Is Better?

    When a client is faced with the choice of a monthly pension or a lump-sum payment, which one is better? Here's a quick guide on how to decide.
  10. Professionals

    Immediate Annuities: What To Watch Out For

    Immediate annuities can provide substantially higher monthly payouts than other fixed-income instruments, but also have some key limitations.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center