The finer points of some other features Tax treatment of income
3. If the maturity date of the contract is before the LPED , elect to begin taking the LPA under the terms of the GLWB value for the life of the annuitant(s). The LPA will continue but all other rights and benefits under the contract, including the death benefit and surrender value, will terminate and additional premium will not be accepted. GLWB rider charge The GLWB charge is 1.15% of the GLWB value each contract anniversary date. Your annual charge (called GLWB charge) is calculated by multiplying a charge percentage by the GLWB value on the contract anniversary. This charge will be deducted from your accumulation value on each contract anniversary until either your contract or GLWB rider terminates. If you terminate this rider, you will not be reimbursed for the charges previously incurred. The annual GLWB charge will be deducted each year including: • Years when a withdrawal is taken • Years after LPAs have started • Years when no interest is credited to the contract • Years during which you are confined to a qualified care center • When the rider continues following spousal continuance Although fixed index annuities guarantee no loss of premium due to market downturns and fluctuations, deductions from your accumulation value for optional rider charges could under certain scenarios exceed interest credited to your accumulation value, which would result in loss of premium.
If you chose to put in money that was already taxed, your annuity would be considered a non-qualified plan. A portion of each income payout from a nonqualified plan would be considered a return of premium. That amount would not be taxable, but any credited gains would be. Please note that neither North American, nor any financial professionals acting on its behalf, should be viewed as providing legal, tax or investment advice.
Consult with and rely on your own qualified advisor. Market value adjustment with external index
Your contract also includes a market value adjustment feature – which may decrease or increase your surrender value depending on the change in the market value adjustment external index rate since your annuity purchase. Due to the mechanics of a market value adjustment, surrender values generally decrease as the market value adjustment external index rate rises or remains constant. When the market value adjustment external index rate decreases enough over time, the surrender value generally increases. However, the market value adjustment is limited to the surrender charge or the interest credited to the accumulation value. Market value adjustments are applied only during the surrender charge period to surrenders in excess of the
penalty-free amount. Death benefit
The death benefit is payable upon the death of an annuitant or owner before the maturity date. The death benefit is the greater of: 1. Accumulation value as of the date of death; and 2. The minimum surrender value as of date of death The death benefit equals the accumulation value plus potential interest credits for the partial contract year as of the date of death. The death benefit may be reduced for premium taxes at death as required by the state of residence. Please consult with and rely on your own legal or tax advisor. Maturity date On the contract’s maturity date, three options may be available: 1. Elect to begin taking annuity payments as are defined in the contract 2. If the maturity date of the contract is after the LPED , continue the LPA under the terms of the GLWB value for the life of the annuitant(s). The LPA will continue but all other rights and benefits under the contract, including the death benefit and surrender value, will terminate and additional premium will not be accepted.
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REV 1-24
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