The Broker s Sales Guide to an Individual Fixed Annuity from The Standard

Transcription

1 Focused Growth Annuity The Broker s Sales Guide to an Individual Fixed Annuity from The Standard With a Focused Growth Annuity you ll find a rewarding combination of safety, tax deferral and choice. standard insurance company

2 Focused Growth Annuity The Focused Growth Annuity from The Standard is a single premium deferred annuity offering multiple interest rate guarantee periods and flexible withdrawal options. The Focused Growth Annuity is designed to optimize the growth potential of your client s retirement savings while preserving capital all without the risks associated with the investment markets. Your client may choose either a five- or six-year interest rate guarantee period and receive the current rate for the length of the guarantee period. At the end of the guarantee period, your client will benefit from competitive renewal rates based on the current interest rate environment and current market conditions. In addition, your customer will be spared the hassle of a 30- or 60-day window at the end of the guarantee period, during which time contract owners are generally required to make a decision prior to the start of a new surrender period. The Focused Growth Annuity offers a variety of ways for your client to access funds before the end of the surrender-charge period without paying a surrender charge. Easy withdrawal methods include payments of interest earnings, IRS Required Minimum Distributions from qualified plans, and nursing home and terminal condition waivers. Details of these flexible withdrawal features follow. Issue Ages The maximum issue age on an owner or annuitant for the Focused Growth Annuity is 90. Initial Premium $15,000 is the minimum initial premium necessary to establish the contract. $1,000,000 is the maximum initial premium allowed for establishing an Focused Growth Annuity; higher amounts may be permitted with prior approval from the home office. Additional Premiums Once an Focused Growth Annuity is established, your client may pay additional premiums during the first 90 contract days. Any additional premiums received will be credited with the interest rate in effect at the time of the deposit, unless the additional premium results from a rollover, transfer or exchange request that may benefit from an interest-rate lock. Fees There are no annual contract fees. Premium Guarantee After the surrender-charge period, the owner or beneficiary will not receive less than 100% of the total premium payments, less any previous withdrawals or outstanding loan 1 balances. 1Loans on a 403(b) Tax Sheltered Annuity contract are available only after the surrendercharge period has been completed. page 1 not FOR USE WITH CONSUMERS

3 Selling Points Competitive Interest Rate Guarantees The Focused Growth Annuity offers strong growth potential through competitive interest rates. The Standard has a longstanding history of excellent fixed annuity performance and competitive renewal rates. Whether your client chooses the Focused Growth Annuity s five- or six-year guarantee option, the initial interest rate is guaranteed to remain level during the initial rate period. After the guaranteed rate period, your client will then enjoy competitive renewal rates based on current market conditions. Interest Rate Lock The Focused Growth Annuity may make available an interest rate lock. If available at the time of purchase, this would allow The Standard to hold a rate for a set time period from the home-office receipt of a request for a rollover, transfer or exchange. If the funds were to be received within this window, the client would receive the greater of the held interest rate or the current interest rate. If the premium is received after the rate-lock period, it would be credited the interest rate in effect at the time the premium is received. For more specific information, contact the sales team. Five-Year Guarantee Period The five-year option guarantees the current interest rate for five contract years. It is a level-rate guarantee and does not include a first-year rate bonus. After the fifth year, your client will receive renewal interest rates based on current market conditions, and the interest rate is guaranteed to never go below the contractual minimum guaranteed rate. Six-Year Guarantee Period The six-year option guarantees the current interest rate for six contract years. It is a level-rate guarantee and does not include a first-year rate bonus. After the sixth year, your client will receive renewal interest rates based on current market conditions, and the interest rate is guaranteed to never go below the contractual minimum guaranteed rate. Tax Advantages Unlike many other savings and investment products, income taxes on Focused Growth Annuity funds are due only when your client makes withdrawals or begins taking regular distributions generally at retirement, when the tax bracket may be lower. As a result, interest accumulates on principal, on earnings and on money otherwise paid in income taxes. Practical Surrender-Charge Periods Because the Focused Growth Annuity is specifically designed to perform over the long term, if a client needs access to funds during the surrender period (in excess of any free withdrawal provisions), a surrender charge will be assessed according to the tables below. Focused Growth Annuity 5 Surrender-Charge Schedule Contract Year Surrender Charge 8% 7% 6% 5% 4% Focused Growth Annuity 6 Surrender-Charge Schedule Contract Year Surrender Charge 8% 7% 6% 5% 4% 3% Market Value Adjustment Feature During the surrender period, an MVA is applied to withdrawals or surrenders that are subject to surrender charges. The MVA is based on changes in the yields on U.S. Treasuries and may increase or decrease the annuity s surrender value. During the surrender period, the owner or beneficiary will never receive less than 90% of total premium payments (91% in some states), less any previous withdrawals, outstanding loan balances or applicable loan interest. The MVA is a key design feature that helps optimize the growth potential of the Focused Growth Annuity over the long term. The presence of an MVA helps protect the insurance company against early withdrawals from the annuity, and in turn, the MVA allows the insurance company to credit a higher interest rate to the annuity contract. For those clients who do not plan on taking distributions beyond the surrender-free withdrawals allowed during the surrender period, the MVA can work to their advantage by helping them receive a more competitive interest rate. The MVA is a key design feature that helps optimize the growth potential of the Focused Growth Annuity...[it] allows the insurance company to credit a higher interest rate to the annuity contract. page 2 not FOR USE WITH CONSUMERS

4 Flexible Withdrawal Features Market Value Adjustment Examples The following examples illustrate the effects of possible MVA adjustments on a withdrawal from the Focused Growth Annuity. Consider the combined charges for early surrender when Treasury rates increase or decrease. The sample calculation below assumes the Five-Year Treasury Index Rate is 3.00% at issue and either rises to 5.00% or drops to 1.00%. The numbers following are for illustration purposes only; results may vary. Combined Surrender Charge and Market Value Adjustment on Focused Growth Annuity 5 End of Unchanged Increased Decreased Year at 3.00% to 5.00% to 1.00% 1 8.0% 11.6% 0.3% 2 7.0% 12.4% 1.2% 3 6.0% 9.7% 2.1% 4 5.0% 7.0% 3.0% 5 4.0% 4.2% 3.8% 6 0.0% 0.0% 0.0% 7 0.0% 0.0% 0.0% Combined Surrender Charge and Market Value Adjustment on Focused Growth Annuity 6 End of Unchanged Increased Decreased Year at 3.00% to 5.00% to 1.00% 1 8.0% 11.6% -1.6% 2 7.0% 14.0% -0.8% 3 6.0% 11.4% -0.1% 4 5.0% 8.7% 1.0% 5 4.0% 6.0% 1.9% 6 3.0% 3.2% 2.8% 7 0.0% 0.0% 0.0% Payments of Interest Earnings Regular payments of earned interest are available after the contract has been in force for 30 days. Your client may choose to receive monthly, quarterly, semiannual or annual interest payments. Payments cannot be less than $100. Electronic Funds Transfer (or direct deposit ) is available for regular payments. 10% Annual Withdrawals Owing to the growth orientation of the Focused Growth Annuity, 10% Annual Withdrawals are not available free of surrender charge. IRS Required Minimum Distributions The Focused Growth Annuity is available for purchase as an IRA, 403(b) Tax-Sheltered Annuity or other tax-qualified plan. If purchased as a tax-qualified contract, the IRS Required Minimum Distributions (RMDs) attributable to the account value of the annuity will be distributed without the assessment of a surrender charge. The Standard guarantees its calculation of RMDs and will pay any fines or penalties associated with an incorrect amount that is calculated by The Standard. However, The Standard will not be responsible for incorrect calculations due to incorrect information provided by the contract owner. This guarantee is limited to calculations made on accounts administered by The Standard. Substantially Equal Periodic Payments Substantially Equal Periodic Payments (SEPPs) are not available on the Focused Growth Annuity. Annuitization Your client may convert the Focused Growth Annuity into an income annuity with The Standard and pay no surrender charges. Your client must choose a Lifetime Income option or a Period Certain option of five years or longer. Nursing Home Benefit After the first contract year, if your client becomes a nursing home resident for 30 or more consecutive days, The Standard will waive surrender charges on all withdrawals, transfers and surrenders during the period of confinement. Written documentation is required. The nursing home waiver is not available in Massachusetts. page 3 not FOR USE WITH CONSUMERS

5 Compensation Commission Amounts Terminal Condition Benefit If your client is diagnosed with a terminal condition, The Standard will waive surrender charges on all withdrawals, transfers and surrenders. Written documentation is required. State-specific conditions apply to the terminal condition waiver. Out of Surrender After the end of the surrender period, your client may withdraw some or all of the Focused Growth Annuity funds without surrender charges. Accommodating Income Options When it s time to switch from the accumulation phase to the income phase, you ll want several payment options to present to your client. Some retirees prefer regular installment payments for a specific period; others want a predictable, guaranteed lifetime income. Whatever the long-term goals and financial needs, The Standard has an option to match. Life Income Life Income with Installment Refund Life Income with Certain Period Joint and Survivor Life Income Joint and Survivor Life Income with Installment Refund Joint and Survivor Life Income with Certain Period Joint and Contingent Survivor Life Income Certain Period Your broker contract details the amount of commission paid to you. If you have questions about your compensation, please contact your Master General Agent or our sales team. Commission Chargeback Surrenders Death 100% of the commission will be recaptured on contracts surrendered in the first six contract months. 50% of commission will be recaptured on contracts surrendered in the seventh to twelfth contract months. There is no chargeback on death of an owner or annuitant except in those cases where the deceased was age 86 or older at contract issue, in which case: 100% of the commission will be recaptured on death in the first six contract months. 50% of commission will be recaptured on death in the seventh to twelfth contract months. Annuitization 100% of the difference in commission between the deferred-annuity compensation and the immediate-annuity compensation will be recaptured in the first 12 contract months. page 4 not FOR USE WITH CONSUMERS

6 Sales Support For additional information, please contact your Master General Agent or our sales team at (800) Marketing Materials New Business Forms New Business Submission Annuity New Business, P5C The Standard PO Box 711 Portland, OR Street Address For Overnight Deliveries Annuity New Business, P5C The Standard 1100 SW Sixth Avenue Portland, OR Forms and Materials Following is a list of common new-business forms. You may find all these and others at Be sure to check product availability and revision dates to ensure you re using all the correct forms and materials for your state. Application Index Annuity Application Deferred Annuity Application Immediate Annuity Application 8513 Product Disclosure Index Growth Annuity Disclosure Secured Rate Annuity Disclosure First Rate Annuity Disclosure Focused Growth Annuity Disclosure Principal Growth Annuity Disclosure Flexible Premium Deferred Annuity Disclosure Tailored Income Annuity Disclosure Stable Income Annuity Disclosure Optimize Growth With This Annuity The Focused Growth Annuity offers a robust set of features, including a market-value adjustment, to optimize growth potential. This annuity is an ideal choice for a long-term saver who can appreciate the benefits of tax-deferred growth, protection and limited access to funds. Few taxable investments provide this blend of safety, growth and flexibility. Other Required Forms Ta x-deferred annuities benefit from the effect of triplecompounding, meaning that an annuity earns interest on the principal (initial premium payment); on the interest itself (amount credited as account growth based on the contract interest rate); and on the amount that would have been paid as income taxes. Rate Guarantees The annuity account will be credited an interest rate that is guaranteed for five or six years, depending on the option selected. After that guarantee period, the contract will receive subsequent renewal rates based on the current economic and interest-rate environment. The annuity contract is assigned a guaranteed minimum rate; the renewal rate will never be set below this rate. Interest is calculated and credited daily. Ta x- Qualification Options This annuity may be established as an Individual Retirement Annuity, 403(b) Ta x-sheltered Annuity or Simplified Employee Pension to initiate or continue a qualified retirement savings account. Lump-sum deposits and complete or partial exchanges of non-qualified funds may also be accepted into this annuity. Eligibility A Focused Growth Annuity may be established for an owner and annuitant age 90 or younger. The minimum premium amount is $15,000 and the maximum is $1,000,000. Greater amounts may be considered, but must receive home-office approval prior to application. Advantages of Ta x Deferral Ta xes will be due only when withdrawals or distributions are made from the annuity. This will generally be during retirement, when most people find themselves in a lower tax bracket. As a result, interest accumulates on principal, earnings and on money otherwise paid in income taxes. With a Focused Growth Annuity you ll fi nd a rewarding combination of safety, tax deferral and choice. Acknowledgement of Suitability Replacement Notices State-Specific Disclosures NAIC s Buyer s Guide To Fixed Deferred Annuities Supplemental Various Various Request for Rollover, Transfer or Exchange With a Focused Growth Annuity you ll fi nd a rewarding combination of safety, tax deferral and choice. Authorization to Accept 403(b) Tax-Sheltered Annuity Rollover, Transfer or Exchange TSA-A Request for Inherited Individual Retirement Annuity Request for EFT of Annuity Payout Substitute IRS Forms W-4P and W S T A N D A R D I N S U R A N C E C O M P A N Y page 5 not FOR USE WITH CONSUMERS

7 Focused Growth Annuity The Broker s Sales Guide to an Individual Fixed Annuity from The Standard Standard Insurance Company Individual Annuities 1100 SW Sixth Avenue Portland OR A subsidiary of StanCorp Financial Group, Inc (03/09) not FOR USE WITH CONSUMERS