FIXED INDEX ANNUITIES - Quick Links

Rates: 

   S&P 500 annual point-to-point with cap:

• 4.10% Cap ($150,000+)
  3.75% Cap ($10,000 - $149,999)
• In AK, CA & UT
  3.85% Cap ($150,000+)
  3.50% Cap ($10,000 - $149,999)

   iShares® U.S. Real Estate annual point-to-point with cap:

• 5.25 Cap ($150,000+)
  5.00% Cap ($10,000 - $149,999)
• In AK, CA & UT:
  5.00% Cap ($150,000+)
  4.75% Cap ($10,000 - $149,999)

   iShares MSCI EAFE ETF annual point-to-point with cap::

• 4.75% Cap ($150,000+)
  4.50% Cap ($10,000 - $149,999)
• In AK, CA & UT:
  4.50% Cap ($150,000+)
  4.25% Cap ($10,000 - $149,999)

   Declared Fixed Account Interest Rate:

• 2.10% ($150,000+)
  1.95% ($10,000 - $149,999)
• In AK, CA & UT:
  2.00% ($150,000+)
  1.85% ($10,000 - $149,999)

Issue ages:

• 0–90 (qualified); 0–90 (non-qualified) (85 in Texas)
• 0–75 (inherited IRA) & (inherited non-qualified)

Tax Qualifications:

• Non-qualified & qualified: 403(b) (traditional and Roth), IRA (traditional, Roth, SEP, SIMPLE and Inherited), 457(b) and inherited non-qualified

Minimum initial premium

• $50,000 non-qualified and qualified
• Maximum premium $1,000,000 ($500,000 age 86+)

3 Year surrender charge period: 

• 9.00%, 8.00%, 7.00%, 0.00% Thereafter
• During the first three contract years, MVA will also apply (not in AK, CA and UT)  

Free Withdrawals:

• 10% of the account value on the most recent contract anniversary
• RMD friendly

Waivers:

• Extended Care Waiver – 100% account value when criteria met
• Terminal Illness Waiver – 100% account value when criteria met

Not Available In: 

•   DE, NV, NY, VA

Choose 1 Time Commission or a Trail Commission: 

• 2.50% (0-75) or (Trial = 2.00% upfront & 0.25% Years 2+)
• 2.00% (76-85) or (Trial = 1.50% upfront & 0.25% Years 2+)
• 1.50% (86-90)  or (Trial = 1.00% upfront & 0.25% Years 2+)

Rates:

  Fixed Account:

• 2.40% ($100,000+)
• 1.95% ($10,000 - $99,999)

   1-Year Volatility Controlled Pt-to-Pt Indexed:

• 1.60 Spread ($100,000+) 
• 1.80% Spread ($10,000 - $99,999)

   1-Year Performance Triggered Indexed:

• 4.15% Cap ($100,000+) 
• 3.50% Cap ($10,000 - $99,999)

   1-Year Point-to-Point Indexed:

• 5.45% Cap ($100,000+) 
• 4.55% Cap ($10,000 - $99,999)

   1 Year S&P 500 Participation No CAP: 

• 41% Participation ($100,000+) 
• 36% Participation ($10,000 - $99,999)

Issue ages:

• 0 – 85, non-qualified and qualified

Available markets

• Non-qualified, qualified (IRA and Roth IRA)

Minimum initial premium

• $10,000 non-qualified and qualified
• Maximum premium (without approval) $2,000,000

Additional premiums:

• Additional premiums are applied to the Fixed Account & subject to a $50 minimum. Carrier has the right to limit additional premiums to $25,000 each contract year. 

Surrender charge period: 5 Years

• 9.00%, 8.00%, 7.00%, 6.00%, 5.00%, 0.00%
• California: 9.25%, 8.25%, 7.25%, 6.25%, 5.20%, 0.00%

Commission: 

• 2.70% (0-74)
• 2.20% (75-79)
• 1.20% (80-84)
• 0.50% (85)

Index Annuities Carrier Rates:

   Three Interest Crediting Strategy Options: 

• Declared Rate Strategy:
  2.00% Interest Rate - Interest credited daily & compounded
• S&P 500® Index Strategy:
  4.00% Cap - Annual Point to Point 
• Global Multi-Index Strategy
  40% Participation Rate - Annual Point to Point NO CAP

  Bonus:

• 4.00% of the Single Premium Paid (100% Vested Day 1)

   e-Application:

• Option available

   Issue Ages: 

• For Owner and Annuitant - 15 days through 85 years (Age last birthday)

   Premiums: 

• Minimum Premium Amount: $2,000 (Qualified and Non-Qualified)
• Maximum Premium Amount: $750,000

   Withdrawals:

• Allowed at any time and may be subject to a Surrender Charge
• Penalty Free Withdrawals allowed 
• Maximum Free Withdrawal Percentage: 10% each year and may accumulate up to 50% (Beginning Contract Year 2)
• Nursing Home Facility or Confined Care Facility Confinement: Maximum Free Withdrawal Percentage will be 100% when certain nursing home or confined care facility confinement conditions are met (Beginning Day 1) not available in CA and SD.

   Guaranteed Surrender Value

• This value is 87.5% of the single premium paid, plus bonus, accumulated at 3.00%, adjusted by net withdrawals

   Transfers/Re-allocations

• Are allowed at the end of each 1-year term period

   Maturity Date: 

• Maturity is reached on the contract anniversary following the Annuitant’s 100th birthday

   The Death Benefit:

• May be paid out in a lump sum or an available settlement option may be chosen

   Surrender charge period: 9 Years

• 9%, 8%, 7%, 6%, 5%k 4%, 3%, 2%, 1%, 0% Thereafter
• No Market Value Adjustment (MVA)

   Availability:

• States NOT approved in: AK, CT, ME, NY, VT

  Commission: 

• 4.50% Paper Application (0-75)
• 6.00% E-Application (0-75)
• 2.50% Paper Application (76-85)
• 3.00% E-Application (76-85)

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FSD's Marketing Approach To FIA's:

• FSD approaches FIA's with a traditional view of simplicity and guarantees. Utilizing crediting methods that have historically performed well has been a successful long term strategy. Many of today's FIA's have drifted from the simple and traditional crediting methods in the original designs to more complex and assumption based models.
  
• Highlight the guarantees and Illustrate the potential. The strongest guarantees in a fixed annuity are the minimum guarantees. Clients who understand the difference will never be surprised by the performance. No surprises will equal higher satisfaction.

•  "I have been told a securities license is required to sell FIA's: (this has never been the case, a Life Agent Only license is all that has been needed since inception)
  
• "FSD Financial offer FIA's?": (Yes, actually we have been involved so long we have experienced the EIA-FIA evolution. From limited availability, through 151a, and the entire DOL to date. We know the performance history, have seen the cap and spread renewals over time and the satisfaction levels associate with all these aspects. FSD's experience in the FIA marketplace guides our marketing today. It is our conclusion that most FIA's do not meet our standards of competitiveness and guarantees for the risk averse client.  
  
• Premium bonuses can offsets surrender charges: (This is a very short sided view of a long term product. A bonus is really just an advance on future earnings. Bonus products historically have lower renewal rates and longer surrender charge terms giving the carrier plenty of time to adjust as they see fit. If a client is in such bad shape, the new products guaranteed rates must be make the case and any additional gain above these guarantees would just be gravy.)