VARIABLE ANNUITY AND FIXED INDEXED ANNUITY DISCLOSURE FOR PURCHASES AND EXCHANGES IN A NON-RETIREMENT ACCOUNT

Transcription

1 VARIABLE ANNUITY AND FIXED INDEXED ANNUITY DISCLOSURE FOR PURCHASES AND EXCHANGES IN A NON-RETIREMENT ACCOUNT Client Information Client name: Social security #: Representative name/rep code: Name of carrier: Name of product: Amount of purchase: Indicate type and amount of initial payment below: Check $ 1035 Exchange Estimated Dollars: $ Direct Transfer Estimated Dollars: $ Other Estimated Dollars: $ Section 1: Source of Funds Section 2: Details about Transfer/Exchange Are you selling any securities to fund this annuity? (e.g. Mutual Funds, ETFs, Stocks, Bonds) Yes No: Skip To Section 3 Name(s)/Ticker(s) of specific investment(s) exited: OR Detailed statement attached How long has the client owned the existing investment? 0-3 yrs 3-5 yrs 5-10 yrs >10 yrs Is the source of funds from a sale/liquidation where you were the selling agent on the original product? Yes No If this annuity is being funded from the liquidation of another investment that is subject to a CDSC, what is the total of fees or surrender charges that will be incurred? $ COMPLETE THE FOLLOWING ONLY IF SELLING MUTUAL FUNDS I acknowledge the following: (Initial Each line) I may currently have the ability to make changes or exchanges between funds within the same mutual fund family without additional charges. I may incur a tax liability on any profit realized. I understand that I may have paid a commission when I originally purchased these shares and in selling these shares and purchasing a new product I may incur a new commission charge. Reducing my holdings in mutual funds can result in an increase of commission for future mutual fund purchases for myself and my immediate family due to the loss of potential breakpoints (volume sales change discounts). I will refer to the funds propectus for complete breakpoint information. Member of FINRA/SIPC Page 1 of 6 ADPE 4/17

2 Section 3: Annuity Exchange & Replacement Is this an exchange? Yes: complete this page. No: skip to section 5 This exchange is: Partial Full Values of surrendering policy: Market Accumulation: $ Death Benefit: $ Income Benefit: $ Initial investment in surrendering policy: USE AMOUNT BEING EXCHANGED/TRANSFERRED TO ANSWER THE FOLLOWING QUESTIONS: SURRENDERING POLICY Approximate amount of 1035 exchange/transfer $ $ Policy surrender charges on this transaction $ $ Total cash surrender value (market value less surrender charges) $ $ PROPOSED POLICY Years remaining in surrender period yrs. yrs Amount of death benefit $ $ Total annual charges (M&E, admin, and rider fees) % % CHECK ALL DEATH BENEFIT OPTIONS THAT APPLY: Premium guarantee death benefit (e.g. amount deposited into contract) Step up to account value death benefit Guaranteed step-up death benefit (list percentage) (e.g. 4%, 5%, 6%) % % No guaranteed death benefit (beneficiaries receive contract value which may be lower than amount invested) If the proposed exchange/replacement will result in a reduction of the death benefit, please explain why this is suitable: List the guaranteed amounts of any existing living benefits and check all living benefits elected in the proposed policy. SURRENDERING POLICY Income benefit base $ $ Age expecting to start withdrawals: Rider withdrawal rate at that age (GMIB or GMWB: Use % allowed for the period when client anticipates starting withdrawal) Return of principal guarantee $ $ Will the withdrawal rate be reduced if accumulated value of policy is depleted? If yes, What is the reduced withdrawal rate? (if not flat rate, attach table) Income benefit step up Other: Yes No Table Attached Daily Quarterly Monthly Annually If the proposed exchange/replacement will result in a reduction of the living benefit, please explain why this is suitable: PROPOSED POLICY Yes No Table Attached Daily Quarterly Monthly Annually Member of FINRA/SIPC Page 2 of 6 ADPE 4/17

3 Section 4: Please complete the following questions regarding the annuity being purchased. 1. Is this transaction: An initial purchase or a variable annuity A subsequent or add-on to an existing annuity 2. How long does the client anticipate holding this annuity contract? Less than 5 years More than 5 years 3. Is the initial allocation of funds to the sub-accounts consistent with the customer s stated investment objective? Stated investment objective: Yes No (please explain): N/A fixed index annuity 4. The client intends to use this annuity investment for? (check all that apply) Current Income Future Income Lump Sum Payment Pass to Beneficiary 5. If the client intends to use this annuity for income, when does the client anticipate starting distributions? 6. If starting income in the next 12 months, what is the anticipated annual income that will be withdrawn? $ Less than 1 year Between 1 & 5 years Between 6 & 10 years More than 10 years Income is not the intent 7. Does the client have life insurance? Yes No 8. What percent of the client s total liquid net worth is being used for this purchase? 9. What percent of the client s total liquid net worth will be in annuities after this purchase? If more than 50%, why is this concentration appropriate? 10. Has the client had any exchanges/replacements of annuities in the past 36 months? 11. Other than tax deferral, select the feature that is the primary reason for this purchase: 0-25% 26-50% 51-60% 61%-75% >75% 0-25% 26-50% 51-60% 61%-75% >75% Yes No Death Benefits Living Benefits: Other (please explain): Principal protection 12. Explain how the proposed annuity and any riders are consistent with the client s age, investment time horizon and needs/ objectives. Take into consideration surrender periods, age restrictions, or waiting periods before lifetime benefits can be exercised: 13. If this is an exchange/replacement, please explain why the existing contract cannot meet the client s needs and/or objectives: Member of FINRA/SIPC Page 3 of 6 ADPE 4/17

4 14. Describe the client s current and anticipated liquidity needs and explain how the proposed annuity is consistent with those needs. 15. If the client s gross household income is less than $25,000 and/or the liquid net worth of the household is less than $50,000, please explain how the purchase of this annuity is financially suitable. 16. To assist in the prompt review and approval of this transaction, please provide any additional information you considered when recommending this annuity: Section 5: Client Acknowledgement SURRENDER: I understand that if I change my mind regarding this purchase I may cancel the contract within a predetermined period of time as provided for by the free look provision specified in the prospectus, which allows me to surrender the contract for any reason without incurring any charges. I understand that should I surrender my contract, the riders I have purchased will be forfeited and I will only be able to redeem or transfer the surrender contract value. I understand that if this product has a surrender charge, I will pay that charge during the surrender period on any withdrawals in excess of permitted amounts. WITHDRAWALS: I understand that under current tax laws, withdrawals from my investment made prior to age 59½ generally are subject to ordinary income taxes and a 10% IRS penalty. I understand that non-annuitized withdrawals from variable annuities purchased after August 1982 are taxed as earned first, principal last (Last In First Out or LIFO ), and that when I withdraw my earnings they will be taxed as ordinary income. I understand that taking withdrawals from this product may decrease the amount of guaranteed income or death benefit amount I will be eligible to receive. GENERAL: I have received a prospectus for the product being purchased and have had ample opportunity to review the information included. I have determined that my investment portfolio should include this product. I have determined that this investment is consistent with my risk tolerance and overall investment strategy I have been informed that any guarantees associated with this product are subject to the ongoing claims-paying ability of this issuer. I understand that if I elect to purchase a rider, the expenses will be charged as long as I hold the contract and may increase after issue. The prospectus contains detailed information about riders. If requesting a 1035 exchange, I have been shown a comparison on page two of the fees and expenses between the product being surrendered and the product being purchased. I have been informed of any applicable fees and expenses associated with this product. I have determined that the costs associated with this product are acceptable given my investment objectives. I have been given the opportunity to ask questions and receive answers concerning the terms and conditions of this investment and have received any additional information I deem necessary to evaluate my investment. I understand that the gains in this product grow tax-deferred, and that if this product is placed in a qualifying retirement account I would not gain any additional tax deferral advantages. I understand that Veritas Independent Partners does not provide tax advice and I should consult my tax advisor regarding any tax related matters. I understand that hypothetical illustrations presented prior to purchase of this annuity were for illustrative purposes only. Hypothetical illustrations are created to demonstrate possible reactions annuity products could have under certain circumstances. I understand that my advisor and Veritas Independent Partners will be compensated for the sale of this product and that specific information about compensation can be found in the prospectus or by asking my advisor. I understand that if I have any questions about the information contained in this document and I would like to speak with someone at the Veritas Independent Partners home office, I can contact the sales and supervision department, Member of FINRA/SIPC Page 4 of 6 ADPE 4/17

5 I agree that this agreement shall be governed by the laws of the state of Arkansas without regard to its conflict to the law s provisions and shall insure to the benefit of me and Veritas Independent Partners, LLC s representative successors and assigns, and shall be binding on me and my representatives, attorneys-in-fact, heirs, executors, administrators and assigns. Section 6: Fees and Expenses For this annuity, consider any charges and fees, including mortality and expense, and administrative charges (M&E/A); as well as investment management fees for the portfolio options. Also consider that if you have selected a rider or other optional features there may be an additional cost. VARIABLE ANNUITY COST (IF NOT PURCHASING A VARIABLE ANNUITY, SKIP TO THE FIXED/INDEXED SECTION BELOW) Variable Annuity contracts are generally available in four share classes. The share class selected will determine the fees and surrender charges associated with your variable annuity contract. The share classes sold at Veritas do not contain a front-end sales charge. This type of annuity may, however, contain a surrender charged referred to as the contingent-deferred sales charge (CDSC) if a partial or full surrender of the annuity is taken within the defined surrender period. Annuities with a shorter CDSC period usually have higher M&E/A costs. When purchasing an optional rider, you should consider the long term nature of the rider when deciding whether or not you want to pay an additional cost for a shorter CDSC. The most common share classes and the typical CDSC period are as follows: B Share - 7 Year CDSC C Share - No CDSC (fully liquid) L Share - 4 Year CDSC Bonus Share* - 9 Year CDSC * Bonus Shares include a premium bonus that is added to your contract value. You should consider whether or not the bonus received outweighs the additional cost of the product. Select the share class being purchased: B Share C Share L Share Bonus Share If choosing a share class other than B share, please explain why this is the most suitable: VARIABLE SUBACCOUNT COSTS: The subaccounts may include actively managed portfolios, exchange traded funds, indexed or indexedlinked portfolios, alternative investments and other quantitative-driven strategies. The cost of the different investment choices varies and investors should refer to the product prospectus for cost information. FIXED OR INDEXED ANNUITY COST (IF NOT PURCHASING A FIXED OR FIXED INDEXED ANNUITY, SKIP TO THE NEXT SECTION) Type of Annuity (Choose one): Fixed - Interest Rate % Indexed Typically, fixed and indexed annuities do not have up-front sales loads or ongoing expenses. In fixed annuities, the insurance company s costs are built into the interest rate paid on the contract. In indexed annuities, the close is built into the spread, margin, cap rate, participation rate, and/or other features of the contract. Both fixed and indexed annuities are subject to a Contingent Deferred Sales Charge (CDSC). ESTIMATED COST OF THIS ANNUITY M&E/A (Not Applicable if Fixed or Indexed) Cost = Rider Name: Cost = Rider Name: Cost = Rider Name: Cost = Total = The CDSC or surrender period is in effect for years. Annuity riders are enhancements to a basic annuity offered by an insurance company. Since these riders add additional cost, it is important to understand the benefits to you, the policy owner. Please list the need that each of the riders above satisfies, use additional pages if necessary. Member of FINRA/SIPC Page 5 of 6 ADPE 4/17

6 Section 6: Arbitration Agreement This agreement contains a pre-dispute arbitration clause. By signing an arbitration agreement the parties agree as follows: i. All parties to this agreement are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed. ii. Arbitration awards are generally final and binding, a party s ability to have a court reverse or modify an arbitration award is very limited. iii. The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings. iv. The arbitrators do not have to explain the reason(s) for their award unless in an eligible case a joint request for an explained decision has been submitted by all parties to the panel at least 20 days prior to the first scheduled hearing date. v. The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. vi. The rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible for arbitration may be brought to court. vii. The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this agreement. No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action, or who is a member of the putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: i. The class certification is denied; or ii. The class is decertified; or iii. The client is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this agreement except to the extent stated herein. If you agree that all claims, controversies and other disputes between you and Veritas Independent Partners, LLC, (Veritas) and its affiliates, including Veritas Independent Partners Insurance Agency, LLC, and any of their directors, officers, employees, registered representatives or agents arising out of or relating to this agreement or any orders or transactions therein or the continuation, performance or breach of any agreement between you and Veritas whether entered into before, on, or after the date this account is opened, shall be determined by arbitration conducted by, and subject to the arbitration rules then in effect of FINRA. If FINRA declines jurisdiction, then you agree to have the arbitration conducted by and subject to the rules then in effect of the American Arbitration Association. This agreement to arbitrate shall be specifically enforceable under prevailing law and procedures. All federal and state statutes of limitations, doctrines and repose and time bars shall apply to any arbitration proceeding, and nothing in this agreement shall be deemed to limit or waive the application of any such statute or doctrine. The award rendered by the arbitrators shall be final. And judgement may be entered upon it in any court having jurisdiction over the parties. Counsel can advise you on how this provision may affect you. To assist the government in fighting the funding of terrorism and money-laundering activities, U.S. federal law requires financial institutions to obtain, verify and record information that identifies each person (individuals and business) who opens an account. What this means for you: when you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. Veritas provides financial products and services, and does not provide tax or accounting services. Advisors may provide tax, accounting or other services through their independent outside businesses but these services are separate and apart from, and are not supervised by Veritas. All payments for the purchase of annuities should be made by check or ACH transfer payable to the insurance company and not Veritas, advisor or his/her independent company. When you purchase an annuity through Veritas you will receive periodic account statements that reference Veritas directly from the insurance company. If you believe you made an investment through Veritas but did not receive confirmation or statement, please call us at I/WE acknowledge review and approval of all of the information contained on all seven pages of this insurance purchasing disclosures for variable annuities. Client Signature: Client Signature (Joint Owner): Registered Rep Signature: Principal Signature: Member of FINRA/SIPC Page 6 of 6 ADPE 4/17