Annuity step-up feature is a provision, often in income or death benefit riders, that allows the internal benefit base to increase to a new high watermark when the account value reaches certain peaks, such as on contract anniversaries. Step-ups lock in favorable market performance for future income or death benefit calculations, even if account values subsequently decline. Step-up features can work in tandem with roll-up guarantees, combining promised growth with opportunities to capture upside. While attractive, they usually come with rider fees and specific rules governing when and how step-ups occur.

Advisors highlight annuity step-up features when describing how income or death benefits can increase over time in strong markets. They review statements with clients to identify when step-ups have occurred and how they affect future guaranteed payments. In income planning, advisors may time activation decisions to occur after a major step-up to maximize payouts. They also clarify that step-ups do not mean clients can withdraw the stepped-up amount as cash. Understanding annuity step-up features helps advisors link market performance to long-term guarantees in a way that is motivating but not misleading.