What does “guaranteed income benefit” (GIB) provide?

The guaranteed income benefit (GIB) is designed to offer investors a minimum level of income during retirement, providing a sense of financial security irrespective of the performance of the investment portfolio. This benefit assures policyholders that they will receive a specified amount of income, typically for the duration of their retirement or for a defined period, even if the underlying investments experience volatility or decline in value.

This feature is particularly appealing to individuals who want to ensure that they have a reliable source of income to cover living expenses in retirement, as it helps mitigate the risks associated with market fluctuations. By guaranteeing a minimum income level, the GIB addresses concerns about the sustainability of retirees' financial resources, making it an essential component for those looking for stability in their retirement planning.

In contrast, other options do not encapsulate the key functionality of GIB. A fluctuating income based on market performance does not provide the assurance of minimum income that GIB offers. A fixed income over a specified period without guarantees lacks the security aspect of the GIB. Finally, a one-time payout at retirement does not relate to the continuous income provision characteristic of GIB, which aims to support individuals over the course of their retirement.