Options for accessing funds What if you need funds sooner than you planned?
Know the lingo Market value adjustment (MVA) The MVA refers to a feature which may decrease
or increase your surrender value. See the “finer points” section for more details. Surrender charge
Like most annuities, you’ll be limited in when and how much you can withdraw from your annuity penalty-free. However, the MNL Income Planning Annuity does allow you access to a portion of the funds each year. Starting within the first contract year, a penalty-free withdrawal (also known as a penalty-free partial surrender) of up to 5% of initial premium may be taken once each contract year. It is important to discuss potential withdrawals with your financial professional so that you understand the impact of any withdrawals on your contract. The portion of any withdrawal that exceeds the penalty-free amount will be assessed a surrender charge and possibly a market value adjustment. Withdrawals may be treated by the government as ordinary income. If taken prior to age 59 1/2, a withdrawal could also be subject to a 10% IRS penalty. Withdrawals will reduce your accumulation value accordingly. Required minimum distributions If you purchase the Annuity Contract with “tax-qualified” money, tax code and IRS regulations may require you to take “required minimum distributions” (RMDs) from your Annuity Contract each year after you reach the applicable age as determined under the tax code and IRS regulations. Regardless of the tax type of your Annuity Contract, upon your death your beneficiaries may be subject to RMDs as determined under the tax code and IRS regulations.
If you need funds before you planned, you may run the risk of incurring what’s called a surrender charge. A surrender charge is assessed on any amount withdrawn in excess of the penalty-free amount, and may result in loss of premium during the surrender charge period. Full surrender – surrender value If you decide to surrender or terminate your Annuity Contract, the surrender value is the amount that is available to you as a lump sum. The surrender value is equal to the accumulation value, subject to market value adjustment, less applicable surrender charges, and applicable state premium taxes. The surrender value will never be less than the minimum requirements set forth by state law, at the time of issue, in the state where the Annuity Contract is delivered or issued for delivery. The minimum surrender value will never be less than 87.5% of all premiums less any surrenders (after MVA or reduction for surrender charges) accumulated at a rate not less than the rate required or otherwise directed by your Annuity Contract.
How withdrawals impact how your annuity grows
If you take withdrawals other than your LPAs, you won’t experience the full benefits of this annuity. Your accumulation value will be reduced for any withdrawals taken either before or after lifetime payments begin. Excess withdrawals may be subject to surrender charges and market value adjustments (if applicable) and will ultimately impact your future lifetime payments. Your annuitization options You can choose to receive annuity payments based on your choice of several annuity options. Once you elect an annuitization option, it cannot be changed, and all other rights and benefits under the annuity end. The payment amount and number of payments will be based on your annuity’s surrender value and the annuitization option you choose (state variations may exist). See table on right for available payout options.
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