What this means to the beneficiary is that when the annuitant dies, the total premiums, plus interest, less withdrawals, is “enhanced” with an additional payment equal to the percentage above.
If an annuitant is 65 when they purchase their annuity, and then die 20 years later, their policy would have an death benefit “enhancement” equal to 45% of the annuity value at the time of death. If that annuity value was $100,000, then the death benefit would be $145,000.
These types of riders usually have an additional premium charge which is deducted from the annuity value. Essentially, it is life insurance that you don’t have to qualify for medically, that helps offset the income tax liability of untaxed gain inside a non-qualified (after-tax) annuity, as well as the untaxed values of a tax qualified annuity (IRA, or Individual Retirement Annuity).
This example is hypothetical and does not represent any specific rider with any particular insurance company.