Why would an investor consider adding an inflation rider to their annuity?

An investor would consider adding an inflation rider to their annuity primarily to ensure that their payments maintain purchasing power over time. Inflation can erode the value of fixed payments made from an annuity, meaning that over the years, the same nominal payment could buy significantly less due to rising prices. By incorporating an inflation rider, the annuity payments are adjusted for inflation, helping to preserve the real value of those payments throughout the life of the contract. This feature is particularly important for long-term financial planning, as it helps to protect the investor's income against the diminishing effects of inflation and ensures they have sufficient funds to cover living expenses over time.

The other options do not accurately represent the core purpose of an inflation rider in the context of annuities. Lowering the initial investment amount, enhancing tax benefits, or avoiding market risk do not relate directly to the role of an inflation rider in maintaining purchasing power, which is the primary focus and benefit of including such a feature in an annuity.