What is a guaranteed minimum withdrawal?

The GMWB is a type of insurance rider, which means it's an optional addition to a primary insurance policy. Riders like the GMWB enhance the policy's coverage and benefits, providing additional protection and flexibility to policyholders.

A guaranteed minimum withdrawal benefit (GMWB) is a financial product feature that offers investors peace of mind. It ensures policyholders can withdraw a predetermined percentage of their investment each year, safeguarding their finances against unforeseen market fluctuations.

One of the primary objectives of a GMWB is to protect policyholders during market downturns. When the market performs poorly, investors can still access their funds without fear of losing their entire investment due to declining asset values.

The key benefit of a GMWB is its stability. Regardless of the market's performance, policyholders can rely on receiving a consistent percentage of their investment annually. This feature is particularly attractive to investors seeking predictable income streams.

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