This is an excerpt from an article Advantage Compendium by Jack Marrion.
http://www.indexannuity.org/ic2004.htm#1st

Guaranteed Withdrawal Features
A recent VA rider offers a guaranteed withdrawal allowing one to withdraw 7% a year until the original principal is gone (in 14.28 years). This is not a 7% return, this is a 0% return (but if you think it is a 7% return I am prepared to offer you 20% of your principal back each year for five years - just because I like you). There are different withdrawal levels available depending on the product, and the carrier then usually charges a fee for the rider.

The thinking behind the feature is a customer can play the market with the knowledge that they will still get all of their own money back. I looked back over the last fifty years and ran some historic hypotheticals whereby I withdrew 7% a year from the major stock indices. I never came close to running out of money in any 14.28 year period! At a 10% withdrawal rate I had a couple of hairy periods when I ended the principal-back scenario in September 1974, but even at a 10% withdrawal rate I still had money left after ten years in every other period I ran. Of course, I did not deduct any extra protection fees charged by the variable annuity for this feature, which might have made a difference.

Is the benefit worth an extra fee? I cannot put a price on peace of mind. For consumers bound and determined to market time themselves into the poor house by leaping from sub-account to sub-account as headlines change, this is a valuable benefit.

I don't know how you try to compare this VA feature to an index annuity. Every index annuity will offer a longer withdrawal period than any VA with this benefit, at whichever withdrawal rate is selected, simply because index annuities pay a minimum interest rate. Which has more upside potential? The variable annuity should have the advantage, but annual reset index annuities never lose value due to market declines, they simply show a year of no growth. I have never run numbers attempting to evaluate the effect of 7% or 10% annual withdrawals from an annual reset index annuity; perhaps I should.

Summary
All of this discussion misses the key point. The key point is an index annuity is a savings instrument designed to provide the potential for higher returns than other savings instruments, while protecting principal and credited interest. Variable annuity principal protection features are designed to lower the market risk of owning a variable annuity. They are products designed for two different worlds.