1 / 56

Index Annuities and Income Riders

Index Annuities and Income Riders. Retirement Planning in the 21st Century or These Aren’t Your Fathers’ Annuities. 1930 - 2008. He – 62 She – 30. He – 63 She – 37. Rod Stewart & Penny Lancaster. American Gothic. Retire. Re-tire, noun:

adara-pugh
Download Presentation

Index Annuities and Income Riders

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Index Annuities and Income Riders Retirement Planning in the 21st Century or These Aren’t Your Fathers’ Annuities

  2. 1930 - 2008 He – 62 She – 30 He – 63 She – 37 Rod Stewart & Penny Lancaster American Gothic page 2

  3. Retire Re-tire, noun: To withdraw, or go away or apart, to a place of privacy, shelter, or seclusion: He retired to his study To go to bed: He retired at midnight To withdraw from office, business or active life, usually because of age: to retire at the age of 60 To fall back or retreat in an orderly fashion and according to plan, as from battle, an untenable position, danger, etc. To withdraw or remove oneself: After announcing the guests, the butler retired. Source: www.dictionary.com page 3

  4. Retirement in the News page 4

  5. Retirement in the News page 5

  6. Retirement – Are we ready? Brinker Retirement Indicator Survey, March 2008 “TYPICAL” RETIREMENT AGE AN ARCHAIC NOTION • “Do you think the concept of a ‘typical’ retirement age is still relevant in the US today? • 86% of financial advisors weighed in with a resounding “NO” • When asked why: • 59% said “traditional retirement is just an outmoded concept; people will work as long as they feel physically and mentally able” • 17% said “serious retirement saving began too late for most Americans” • 8% said “people are living longer, therefore they’re working longer” • When asked if their clients expect to work past 65: • 54% said Yes • 46% said No page 6

  7. Retirement – Are we ready? Americans view financial risk adversely. Majority of working and retired Americans say they are most interested in financial products that yield some minimum return without risk Among already retired Americans, 81% say their standard of living has decreased or stayed the same 85% of working Americans overwhelmingly feel their living standards will remain the same or decrease • 75% of retirees report that their retirement income is lower than their most recent salary • Workers in all age groups think Social Security is in serious trouble Axa – Equitable survey Senior Market Advisor, April 2008 page 7

  8. Among Leading Edge Boomers 69%worry aboutOUTLIVINGfinancial resources 80%are concerned about havingADEQUATE INCOME during retirement Boomers will collectivelyLIVE LONGERthan any other generation Leading Edge Boomers; Rethinking Retirement and Exploring Annuities. Harris Interactive Inc., for Guardian Life Insurance Company of America. page 8 For agent use only.

  9. 85 88 92 LONGEVITY RISK:HOW LONG WILL YOUR CLIENTS NEED INCOME? On average, what’s the life expectancy of today’s 65-year old? Male Age 65 Female Age 65 Couple Age 65 Source: Annuity 2000 Mortality Table. Figures assume client is in good health. page 9

  10. 1 out of 4 will outlive this age 85 92 88 92 LONGEVITY RISK:HOW LONG WILL YOUR CLIENTS REALLY NEED INCOME? But their plan will fail 50% of the time—if they play the averages! 1 out of 2 will outlive this age Male Age 65 94 Female Age 65 97 Couple Age 65 Source: Annuity 2000 Mortality Table. Figures assume client is in good health. page 10

  11. Among Leading Edge Boomers 48%were not sure of what their best choices were for saving for retirement 41%admitted they were not completely confident that their retirement savings and investments were diversified sufficiently Many still shaken by“recent”stock market turmoil- 57%concerned that stock market volatility would DECREASE their retirementINCOME. Leading Edge Boomers; Rethinking Retirement and Exploring Annuities. Harris Interactive Inc., for Guardian Life Insurance Company of America. page 11 For agent use only.

  12. National Underwriter Life & Health December 18/25, 2006

  13. Leading Edge Boomers; Rethinking Retirement and Exploring Annuities. Harris Interactive Inc., for Guardian Life Insurance Company of America.

  14. Boomers FOR INSTANCE… When asked their opinion of certain Product benefits… 71%liked the idea of a retirement vehicle That provides asteady stream of income Once they retire… And69%liked the idea of a vehicle that GUARANTEES THE PRINCIPAL !! Leading Edge Boomers; Rethinking Retirement and Exploring Annuities. Harris Interactive Inc., for Guardian Life Insurance Company of America. page 15

  15. Boomers Boomers are attracted to investments with certainGuaranteed features but don’t always recognize That they can get those features by buying… ANNUITIES ! Leading Edge Boomers; Rethinking Retirement and Exploring Annuities. Harris Interactive Inc., for Guardian Life Insurance Company of America. page 16

  16. Boomers YET… The study found… 86%of leading Boomers DON’T own Annuities 70%say they have not thought of buying an Annuity because… They don’t know enough about the product !!! Leading Edge Boomers; Rethinking Retirement and Exploring Annuities. Harris Interactive Inc., for Guardian Life Insurance Company of America. page 17

  17. Fixed Indexed Annuities for Boomers? Steady Stream of Income UpsidePotential CONTROLof retirement savings Safetyof Principal (assumes no withdrawals) Safetyof theIncome CONTROL of the Income page 18

  18. Let’s the perception

  19. Your Toolbox Recent Launches and the 1st Quarter 2008

  20. Income Select Platinum • 12 / 12 / 12 / 11 / 10 / 9 / 9 / 7 / 6 / 4 / 0 • Simple - 3 Interest Crediting Strategies • BIG rates: +1% Fixed, +2.25% Cap, +10% Par For agent education only. Not intended to solicit annuity or life sales to public. Income Select Platinum [form FPIAR (10/07) or state variation] is issued by American Investors Life Insurance Company, Inc., Topeka, KS. Product features, limitations and availability vary by State; see disclosure for details.

  21. Income Select Bonus • Addition to the Income Series • Industry-Leading Liquidity • Innovative Crediting Strategies • IncomeEdge/Income Edge Plus Withdrawal Rider • Walk-away 10-YEAR 10% Premium Bonus Product • Credited day 1, vests over 10 years • Competitive commission For agent education only. Not intended to solicit annuity or life sales to public. Income Select Bonus [form FPIAX (1/08) or state variation] is a fixed indexed annuity issued by American Investors Life Insurance Company, Inc., Topeka, KS. Product features, limitations and availability vary by State; see disclosure for details.

  22. Product Symmetry Income Select Plus 5% Bonus Core Product Income Select Platinum No Bonus Higher Crediting Income Select Bonus 10% Bonus Lower Crediting Choices for YOUR Clients!

  23. Guarantees lifetime income without annuitization! Prior to any withdrawals under the Income Edge benefit, the Income Account Value is guaranteed to increase at least 6% per year for the first 10 years. Three Choices for Withdrawals Free withdrawals Elect “Income Withdrawals” Elect “Lifetime Income Withdrawals” Automatic Step-ups Income Edge Rider(Rev. 09/07)

  24. Issue Ages 40-85^ 105% Income Account Multiple Immediate Rider Withdrawals^ Percentage ONLY 0.50% less for Joint Annuitants Non-natural Owners Rider charge begins immediately Income Edge Rider (Rev. 09/07) ^ Must be age 50+ for Lifetime Income W/ds

  25. Income Select Series Non-Bonus Annuities • 5 Year Withdrawal Schedule • Income Select 5 • 7 Year Withdrawal Schedule • Income Select 7 • 10 Year Withdrawal Schedule • Income Select 10 • Income Select Platinum *May not be available in all states, check for your state’s approval on www.Aviva.com/agents

  26. Income Select Series • Bonus Annuities • 10 Year Withdrawal Schedule • Income Select Plus – 5% • Income Select Bonus – 10% *May not be available in all states, check for your state’s approval on www.Aviva.com/agents

  27. Premium Limits • Minimum Initial Premium • $5,000 • Maximum Initial Premium (w/o home office approval) • $1,000,000 • Additional Premiums • $1,000 Minimum • $100,000 Maximum in any 12-month period All contracts are Flexible Premium Deferred Fixed Indexed Annuities For Agent Use Only – not for use with the General Public. Additional premiums are automatically deposited in to the Fixed Account if not made on a contract anniversary and may be allocated to indexed strategies at contract anniversary.

  28. Income Select Bonus

  29. Income Select Bonus Premium Bonus: • 10% applied for all premiums credited in the first two policy years • Premium Bonus Recapture Charge Rate Schedule 10, 10, 10, 10, 8, 7, 6, 5, 4, 2, 0% • Bonus is fully vested upon death of annuitant, as well any free withdrawals—Confinement, Home Health Care and Terminal Illness Waivers, 10% or 20% free, RMDs For Internal and Agent Education Only ~ Not for use in solicitation to the general public. Bonus annuities typically include lower cap rates, higher spreads or other restrictions that are not included in similar annuities that don't offer a premium bonus feature.

  30. Interest Crediting Strategies • 1 Fixed Strategy (1-Year Guar.) • 7 Indexed Strategies • 1-Year Point-to-Point Participation Index (No Cap) • 1-Year Point-to-Point Index • 1-Year Uncapped Average Index • 1-Year Monthly Cap Index • 1-Year Uncapped Multiple Index • 1-Year Multiple Index (No Spread) • 1-Year Average Index (No Spread) All indexed strategies lock-in and credit any index-linked interest credits each year. Market Indices do not include dividends paid on the underlying stocks, and therefore do not reflect the total return of the underlying stocks; neither an Index nor any market-indexed annuity is comparable to a direct investment in the equity markets. Indexed annuities are not registered securities or stock market investments and do not directly participate in any stock or equity investments. Clients who purchase MultiChoice Income Series annuities are not directly investing in a stock market index.

  31. Income Select Bonus • Issue Ages • 0 – 80 – no commission reduction for older ages • 10-YearWithdrawal Charge Schedule For Internal and Agent Education Only ~ Not for use in solicitation to the general public. Withdrawals in excess of the free amount are not credited with index interest for that term, are subject to withdrawal charges, premium bonus recapture charges and a market value adjustment, which are also imposed retroactively if the contract is surrendered within 12 months of a free withdrawal.

  32. Liquidity Options • 10% Free Withdrawal • Beginning in Year 1 • 20% Cumulative Withdrawal • If withdrawal was not taken in the previous contract year • Early Income Option • SPIA conversion option after year 1 • Next Generation Income Edge or Income Edge Plus Optional Lifetime Withdrawal Rider For Internal and Agent Education Only ~ Not for use in solicitation to the general public. Withdrawals in excess of the free amount are not credited with index interest for that term, are subject to withdrawal charges, premium bonus recapture charges and a market value adjustment, which are also imposed retroactively if the contract is surrendered within 12 months of a free withdrawal.

  33. Confinement Waiver • Waives withdrawal charges in the event of confinement to a qualified care facility • 100% of Accumulated Value Available after Year 1 • Requires 60 Consecutive Days of Confinement • No Age Restrictions • Other restrictions may apply For Agent Use Only – not for use with the General Public. May not be available in all States. In Texas, this benefit is available in the first year; waiver not available in Massachusetts.

  34. Terminal Illness Waiver • Waives withdrawal charges in the event of terminal illness • 100% of Accumulated Value Available after Year 1 • Requires Statement from Doctor stating that death will result within one year of diagnosis • No Age Restrictions • Other restrictions may apply For Agent Use Only – not for use with the General Public. Waiver not available in Massachusetts; in Texas, waiver is available in the first year; in Pennsylvania, waiver is referred to as the Terminal Condition Waiver.

  35. Home Health Care Waiver • Waives withdrawal charges in the event of qualifying home health care • 20% of Accumulated Value available annually after year 1 • Requires Statement from Doctor regarding inability to perform 2 of 6 activities of daily living (ADLs) • No Age Restrictions • Other restrictions may apply For Agent Use Only – not for use with the General Public. May not be available in all States. In Texas, this benefit is available in the first year.

  36. Death Benefit • Full Accumulated Value Upon Death of Annuitant for All Ages • No Commission Chargeback Upon Death For Agent Use Only – not for use with the General Public.

  37. Premier Guaranteed Minimum Withdrawal Rider for Life We are the original! We have now made it even better! Income Edge Rider [form AIR (Rev. 09/07) or state variation], an optional Rider for which an annual Premium is charged, is issued by American Investors Life Insurance Company, Topeka, KS. Product features, limitations, and availability vary by state.

  38. Income Edge & Income Edge Plus • Now Two Great Choices to Offer Your Clients

  39. Choice #1 Income Edge Rider(Rev. 09/07) • 105% Income Account Multiple • 6% Guaranteed Growth on the Income Account Value, prior to withdrawals 105% is applied to the Adjusted Accumulated Value and Income Account Value for all Premium; the Accumulated Value of the Base Contract is applied at 100%.

  40. Guaranteed Accumulation $100,000 Premium 6% Guaranteed Accumulation Regardless of Actual Index Performance Assumes 100% allocated to the Indexed Strategies and no withdrawals. Rider withdrawals will stop the 4% guaranteed growth in the Income Account Value.

  41. Income Edge Rider(Rev. 09/07) *Income Account Value For Agent Use Only ~ not for use in advertising to the public.

  42. Choice #2 • Income Edge Plus Rider • Income Doubles for Confinement • Wellness Benefits: Mayo Clinic Health Risk Assessment, Personal Health Management Portal, Access to As Mayo 24-hour Nurse Line, Quarterly Mayo Clinic newsletter and calendar – with Agent contact info • 7.2% Guaranteed Growth on the Income Account Value, prior to withdrawals See contract for qualifying confinement criteria.

  43. Income Edge Plus Income Account Value $100,000 Initial Premium 7.2% Guaranteed Interest for the First 10 Contract Years Amounts assume $100,000 Initial Premium, no rider Withdrawals, no additional Premium, and a restart of the Accumulation Years after the 10th Contract Year. Rider Withdrawals stop the guaranteed growth.

  44. Restart – Accumulation Years • Step-up of Income Account Value to actual Accumulated Value if indexed interest credits outpace 6% or 7.2% guaranteed growth • Available on or after 5th contract anniversary • Increased Income Account Value also increases the guaranteed income distribution amount • Upon restart, Rider benefit is based on the current charge at the time of restart. • Re-starting begins a new 10-year accumulation period • Must wait at least 5 years between “Restarts” Restart initiates a new accumulation phase with the 6% guarantee in the Income Account Value for a new 10-year period. In addition to extending the guaranteed period, the Restart locks-in any indexed interest credits above the 4% guarantee in the Income Account Value. The restart is no longer available after taking income under the rider. If the cost of the rider is higher at the time of a Restart, it may be increased to the current charge at the time of Restart, but is guaranteed to never be more than 1.0%. The charge will never decrease even if the charge is lower at the time of restart. A Restart will not cause the withdrawal charge schedule to start over.

  45. Power of RestartImpact on Income Account Value Restart Income Account Value Accumulation Based on $144,223 Hypothetical example assumes $100,000 initial premium and varying annual interest credits and no withdrawals. This example is for illustration purposes only and is not indicative of past, nor intended to predict future performance of the annuity. Use of alternate premium and rate assumptions will produce different results.

  46. Immediately at Issue! Must be > Age 50 for Lifetime Income Withdrawals. Income Withdrawals can be elected at any age. No longer 1-year waiting period for Rider withdrawals! Rider Income Withdrawal Availability For Agent Use Only ~ not for use in advertising to the public. Taxable amounts withdrawn prior to 59½ may be subject to a 10% IRS penalty. Withdrawals in excess of the free amount are not credited with index interest for that term, may forfeit potential interest credits, may be subject to withdrawal charges and a market value adjustment. Withdrawal charges and MVA are imposed retroactively if the contract is surrendered within 12 months of a free withdrawal (not applicable to the Income Select 10 or Income Select Platinum).

  47. Options for Distribution4 Choices Take normal distributions without starting Rider Annuitization: • Total loss of control over the asset for the client • Irrevocable option Elect the Income Withdrawal under the rider and receive up to 8% annually of the Income Account Value until it reaches zero Elect Lifetime Income Withdrawal receive Annual Guaranteed Income for Life • Maximum control over the asset for the client Income Withdrawal percentage is 4% if attained age 50 and increases by 0.5% every five years until reaching the maximum 8% upon attained age of 90. Amount is then guaranteed as long as there are no excess withdrawals. Rider withdrawals stop the 4% guaranteed growth in the Income Account Value. page 53

  48. Single Withdrawal PercentagesHow is the Income Determined? page 54

  49. Joint Withdrawal PercentagesHow is the Income Determined? page 55

  50. Automatic Step-UpDistribution • On each contract anniversary following the first elected withdrawal, customers are eligible for an automatic step-up • Annual benefit will be “stepped-up” (increased) if the “Adjusted” Accumulated Value exceeds the Income Account Value at the time • Customers must notify issuing company if increase is not desired Assumes 100% of the premium is allocated to the Indexed Strategies and no withdrawals. Income Withdrawal steps-up only if Accumulated Value exceeds the Income Account Value at the time that Income Withdrawals began.

More Related