Growth, Protection, flexibility, and a no-cost income rider!

Certain annuities offer all of the benefits of a traditional annuity – plus a great income benefit, all at no cost to you!

There are a number of advantages, or reasons, for adding a fixed index annuity (FIA) to your retirement portfolio. FIAs guarantee your principal, protect the principal from market volatility, provide tax deferral, and offer potential interest growth based on changes in an external benchmark stock market index.

Some annuities offer additional benefits as well. One such annuity is referred to as a “Type 2” FIA. It automatically provides the income value rider at no additional cost. This means that in addition to the baseline benefits of the FIA, you also enjoy additional accumulation potential and flexible access options. This particular type of annuity also provides the potential to receive a lifetime income that increases based upon the performance of an external index.
Read below to learn about these additional benefits.

How can the “Type 2” FIA help me accumulate for retirement?

All FIAs can help you accumulate for retirement, but the “Type 2” FIA product gives you even more ways to increase your accumulation potential.

  • We jump-start your income account value with a bonus1 on any premium you place in your annuity during the first three contract years. So, for example, if you had a $100,000 purchase payment, and a 15% bonus was offered by the insurance company, you would have $115,000 in the Income Account Value1, (sometimes referred to as a Protected Income Value) that would begin earning interest immediately.
  • Your income account value also receives an interest rate enhancement (sometimes referred to as an interest rate bonus) equal to 50% of the actual interest you earn from your chosen allocations. For example, if your allocations earned 4% interest for the year, the insurance company would credit your income account value
    with 6%.
  • This fixed index annuity also gives you the power of annual reset, which means you can earn an interest credit even if the index has not recovered previous contract year’s losses.
1To receive the Income Account Value, including any premium bonuses and interest bonuses, you may have to hold your annuity in deferral for a stated period of time, for example, at least 10 years, and begin receiving lifetime income benefit withdrawals between the ages of 60 and 100. You will not receive the premium bonus or potential interest bonuses if the contract is partially or fully surrendered, if traditional annuitization payments are taken, or if the Income Value rider is terminated. Bonus annuities many include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don’t offer a bonus feature.
Product and feature availability may vary by state and broker/dealer.

What flexible options do I have to access my “Type 2” FIA benefits?

Sometimes plans change and it’s important that your annuity has the flexibility to adapt with you. This product provides several ways for you to access your benefits.

  • After 10 contract years, you can elect to take lifetime income withdrawals from your income account value at competitive payout rates. Additionally, while you’re taking income, your income has the opportunity to increase in multiple ways:
    • Lifetime income withdrawals can increase1 based on any interest your chosen allocations have earned, plus the 50% interest bonus that continues to be credited for the life of the contract.
    • Your withdrawal income can double if you qualify. This additional benefit is triggered due to hospitalization or confinement to a nursing home or assisted living facility.2
  • You have the option of taking your full accumulation value after the surrender schedule has expired, which usually occurs after a period of 7-10 years. After such time, there would be no surrender charge. Even if the contract never earns any interest, at worst you will get your original premium payment back (less any withdrawals you’ve taken). Remember, the accumulation value does not include the premium bonus or interest bonus. These are included in your income account value only.
  • With a Type 2 FIA you have the ability to pass on a legacy to your loved ones. Your beneficiaries have a choice of taking the remaining income account value as a death benefit, which would be paid out over at least five years, or they can take the full accumulation value in a lump sum.3
quote61Annual maximum withdrawal increases apply to withdrawals taken from the income account value. To receive the income account value, the contract must typically be held in deferral for at least 10 contract years and lifetime withdrawals must be selected anytime between the ages of 60 and 100. The income account value is usually not available as a lump sum death benefit, but if elected is available to beneficiaries, and would usually be paid over a minimum of 5 annual payments.
2To receive the confinement benefit with this type of annuity or rider, you must typically be confined to an eligible hospital, nursing facility, or assisted living facility for at least 90 days in a consecutive 120-day period, and it is usually required, that the accumulation value must be greater than $0.00 for the confinement benefit to be received. Usually, confinement must occur after the first contract year and either during the contract year before the start of the lifetime income withdrawals or at any time thereafter.
3The lump-sum death benefit is equal to the greater of the accumulation value, cumulative withdrawal amount, or guaranteed minimum value. The income account value is usually not available as a lump sum death benefit, but if elected is available to beneficiaries, and would usually be paid over a minimum of 5 annual payments.
Distributions are subject to ordinary income tax and, if taken before 59 ½, a 10% tax penalty for premature distribution may apply.