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We like to use the rider on the V/A and go agresively into the sub accounts. Not much reason to stay safe and then put protection on it. We then use a fixed index also with an income rider so that both accounts prop each other up. It also helps with RMDS down the road because the V/A we use actually takes care of those (RMD friendly). If we had someone who didn't want the income rider on the V/A, we would suggest something other than a V/A.
We had a recent case where someone went into a V/A and had some huge gains in one year. The client decided to pull the money after one year and anti-up all the penalty costs and the tax hit. Ended up coming out about 4k less than he walked in with but had now converted all that money into tax free money which apparently was what he wanted to do all along. Had we known, we would of went a different route. We were pretty shocked but he was done and he was happy. With his pile of cash along with two socials and two pensions (husband and wife) totaling 10k a month, he said if he couldn't live on that with his cash pile then he didn't deserve to.
The fees of the V/A are taken in stride when you are getting 10% to 20% returns and then some clients will still cry about it. I still wouldn't suggest a V/A without the rider in most cases, especially when we are talking about decent sized accounts and retirement. Now if you are far from retirement that is a different story but then again I would suggest something other than a V/A for that.
