Taxes, tax advantages & tax-free transfers Tax deferral
Federal income taxes are deferred until the year interest is withdrawn. 3 There is no tax deferral if the owner is a corporation. If the owner is a trust or other entity, please consult a tax advisor regarding the tax-deferred status. The return of principal may also be taxable on tax-qualified annuities, such as traditional IRAs. Once the contract is annuitized, part of each annuity income payment is considered a tax-free return of principal (except tax-qualified annuities, such as traditional IRAs, where the principal may also be taxable). Taxable withdrawals prior to age 59½ may be subject to a 10% federal early withdrawal tax penalty. The penalty may be waived for death, total disability (as defined by the IRS), or if the payment is made as part of a series of substantially equal payments for the life expectancy of the owner (except tax-qualified annuities where the entire amount withdrawn may be subject to a 10% federal early withdrawal tax penalty). May be used for exchanges from a life insurance or endowment contract or another annuity. To maintain non-taxable status, the owner and annuitant must remain the same, and the owner cannot take receipt of the funds. 4 May be an initial tax-qualified contribution, or transfer or direct rollover of funds from IRAs or qualified retirement plans such as SEPs, Keoghs, 403(b)s or 401(k)s. 4
Tax-advantaged income
Pre-59½ withdrawals
Tax-free exchange
Tax-qualified plans
Charges & fees Initial sales charge
None. None.
Annual fee
Withdrawal charge schedule
The withdrawal charge is a percentage of the amount withdrawn in excess of penalty-free amounts (before application of any MVA) and declines over 10 years from the contract date. After the withdrawal charge period, no withdrawal charge will apply to any withdrawals. Contract year 1 2 3 4 5 6 7 8 9 10 Thereafter Withdrawal charge 8% 8% 8% 7% 6% 5% 4% 3% 2% 1% 0%
Withdrawal charge waivers The following riders allow you to make withdrawals without a withdrawal charge or MVA when certain conditions are met. There is no charge for these riders. Details about utilizing the riders, including qualifying conditions and waiting periods, are set forth in the riders. These riders are not available in all states. Extended care The owner must receive extended care for at least 90 consecutive days, beginning after the first contract year. The current extended care may not have started before the contract issue date. The rider terminates when the owner turns age 86.
Terminal illness
The owner must be initially diagnosed with a terminal illness after the contract date. One partial or a full withdrawal is permitted.
3 Unless your annuity is a Roth IRA, for federal income tax purposes, withdrawals are treated as earnings first, subject to ordinary income tax, and as a return of principal after earnings are exhausted. 4 State replacement forms may be required on Section 1035 exchanges of life insurance policies or annuities and rollovers and transfers from other annuities. Death benefit Payable on death of owner. Beneficiary will receive the greater of the contract value (without withdrawal charge or MVA) or the minimum withdrawal value. Benefits can pass directly to the designated beneficiary, avoiding the potential delays and cost of probate. Joint owners must be each other’s sole primary beneficiary.
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