Income benefit base vs. cash value
Two numbers, two different jobs. Here is how to read them when you compare retirement income options.
When you review an annuity with a lifetime income rider, you may see both an account value and an income benefit base. They serve different purposes.
The account value reflects the value of the annuity under its crediting and fee rules. The amount available if you surrender the contract may be lower because of surrender charges, a market value adjustment where applicable, and other contract provisions.
The income benefit base is used to calculate rider withdrawals. A bonus or roll-up applied to this base does not necessarily add the same amount to your account value. You generally cannot cash out the benefit base as a lump sum.
A payout percentage applied to the benefit base determines an income amount under the rider terms. That percentage is a withdrawal calculation, not the contract’s investment return. Compare the actual monthly income, rider cost, access to funds, and death benefit together.
Ask your advisor to show these values separately in the insurer’s illustration. A clear comparison should explain what can be withdrawn today and what may be paid as lifetime income later.