Protective Asset Builder Indexed Annuity

Transcription

1 Protective Asset Builder Indexed Annuity Citi Flexible Allocation 6 Excess Return Index Overview PABD.5540 (11.16)

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3 For clients who are seeking options for protected asset growth leading into or during retirement, it makes sense to identify a product solution that shares the same focus. That s why Protective Life developed the Protective Asset Builder Indexed Annuity with exclusive access to the Citi Flexible Allocation 6 Excess Return Index. This solution is specifically designed to offer accumulation-focused clients straightforward options to enhance growth opportunities, while also providing protection and volatility control.

4 Options to Enhance Growth Opportunities When it comes to building retirement savings, it s important to offer your clients diverse allocation options to help them get started. It s also important for clients to have the ability to adjust their allocations if things change along the way. Protective Asset Builder offers your clients more opportunities to grow contract value with four interest crediting strategies, two index options and the flexibility to reset allocations every 1 2 years. Help clients create custom growth strategies by choosing from the following interest crediting options: Fixed Strategy Annual Point-to-Point Strategy Annual Trigger Strategy 2-Year Participation & Spread Strategy Credits a fixed rate of interest daily regardless of market performance Annual interest credit based on the performance of the S&P 500 Index Participation Focus Spread Focus Biennial interest credit based on the performance of the Citi Flexible Allocation 6 Excess Return Index The three S&P 500 Index based strategies are complemented by a strategy based on the Citi Flexible Allocation 6 Excess Return Index. Exclusively available with Protective Asset Builder, this index may allocate to a Core Portfolio, Reserve Portfolio or cash. It uses a dynamic allocation process and volatility control mechanism to strive for positive and consistent returns.

5 Index Performance Each index is built differently, and as a result, will perform differently. The example below shows the actual historical performance of the S&P 500 Index along with hypothetical back-tested performance for the Citi Flexible Allocation 6 Excess Return Index until its inception date on July 18, 2014, and the actual performance of that index after July 18, Take a look at how diversifying purchase payments among strategies tied to these two indexes might offer a balance of growth opportunities when performance varies over ten years. 180 Inception date for the Citi Flexible Allocation 6 Excess Return Index In 2009, the Citi Flexible Allocation 6 Excess Return Index would have experienced positive performance, while the S&P 500 Index declined In 2015, the Citi Flexible Allocation 6 Excess Return Index maintained consistent performance, but the S&P 500 Index experienced higher performance S&P 500 Index Citi Flexible Allocation 6 Excess Return Index The S&P 500 Index performance is actual historical performance for the period shown. The inception date for the Citi Flexible Allocation 6 Excess Return Index was July 18, 2014 and performance shown is net of (1) an excess return deduction based on the 3-month USD Libor rate and (2) certain notional transaction costs and exposure costs of administering the index. Neither the hypothetical nor the historical performance of either index reflects the amount of interest credited to an investment in an interest crediting strategy during the time period depicted. Actual results for a specific annuity contract depend on the crediting strategy chosen and the spread or participation rate for the time period(s) shown. Interest is credited on the last day of the applicable crediting term, therefore the amount of interest credited to a contract s value, if any, depends on the index value on that day and not over the entire crediting period. All index performance data for the Citi Flexible Allocation 6 Excess Return Index before July 18, 2014, is hypothetical because the index did not exist before that date. Hypothetical back-tested index performance information is subject to significant limitations. Citigroup Global Markets Limited developed the rules of the index with the benefit of hindsight that is, with the benefit of being able to evaluate how the index rules would have caused the index to perform had it existed during the hypothetical back-tested period. The fact that the index generally appreciated over the hypothetical back-tested period may not therefore be an accurate or reliable indication of any fundamental aspect of the index methodology. Furthermore, the hypothetical back-tested performance of the index might look different if it covered a different historical period. The market conditions that existed during the hypothetical back-tested period may not be representative of market conditions that will exist in the future. In providing the hypothetical back-tested and historical index performance information above, no representation is made that the index is likely to achieve gains or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by a particular investment. One of the limitations of hypothetical performance information is that it did not involve financial risk and cannot account for all factors that would affect actual performance. The actual future performance of the index may bear no relation to the hypothetical back-tested performance of the index. The relationship between the performance of the Citi Flexible Allocation 6 Excess Return Index and the S&P 500 Index shown in the table above is not an indication of how the performance of the two indexes may compare in the future. By including performance information for these two indexes, no suggestion is made that the S&P 500 Index is the only index to which the hypothetical back-tested performance of the Citi Flexible Allocation 6 Excess Return Index should be compared.

6 Volatility Control with the Citi Flexible Allocation 6 Excess Return Index The Citi Flexible Allocation 6 Excess Return Index is designed to perform based on hypothetical exposure to different asset classes with features designed to limit volatility. It does this through the use of a dynamic allocation process to allocate to the Core Portfolio when both the Trend Indicator and the Citi Risk Aversion Indicator are favorable, and to the Reserve Portfolio at all other times all while attempting to limit its realized volatility to 6% annually by allocating a portion of the index to non-interest bearing cash. The index includes two portfolios: Core Portfolio U.S. equities, international equities, commodities, real estate and U.S. Treasuries Reserve Portfolio Gold and U.S. Treasuries On a monthly basis, the Citi Flexible Allocation 6 Excess Return Index applies established rules to allocate hypothetical exposure to either the Core Portfolio or Reserve Portfolio based on two market signals, which use historical data and the perception of market participants views of future events. Trend Indicator Monitors whether the assets included in the Core Portfolio are trending upward or downward over a specified period of time. Citi Risk Aversion Indicator Seeks to measure relative levels of risk aversion by tracking market signals that are assumed to reflect market sentiment at a point in time. When the two market signals as measured by the Citi Flexible Allocation 6 Excess Return Index indicate that the Core Portfolio is in a positive or neutral trend and that there is lower risk aversion (values less than 0.5), it allocates to the Core Portfolio. Otherwise, the index allocates to the Reserve Portfolio. Here s how it works: Trend Indicator POSITIVE TREND NEGATIVE TREND Citi Risk Aversion Indicator LOW HIGH Exposure to Core Asset Exposure to Reserve Asset Exposure to Reserve Asset Exposure to Reserve Asset

7 Volatility Control Mechanism The Citi Flexible Allocation 6 Excess Return Index also attempts to limit its volatility to 6% annually by hypothetically allocating a portion of the index to non-interest bearing cash. Each day, the index s 21-day short-term realized volatility is compared to the 6% risk control. If short-term volatility exceeds the 6% target, a calculation is used to determine the percentage that is shifted away from either the Core or Reserve Portfolio and into the cash component in order to bring the index volatility to within the 6% target. n Core or Reserve Portfolio n Cash Account 6% > 6% Protective Asset Builder is a solution that s truly designed to meet your clients retirement accumulation needs. Through the combined power of diverse interest crediting strategies and index options like the Citi Flexible Allocation 6 Excess Return Index, your clients can have the enhanced growth potential, protection and volatility control needed for their retirement savings goals. Start meeting your clients accumulation needs today! Visit these online resources or contact us for help

8 Citi and Citi and Arc design are trademarks and service marks of Citigroup Inc. or its affiliates, are used and registered throughout the world, and are used under license for certain purposes by Protective Life Insurance Company or its affiliates (the Licensee ). Citigroup Global Markets Limited ( Citigroup ) has licensed the Citi Flexible Allocation 6 Excess Return Index (the Index ) to the Licensee for its sole benefit. Neither the Licensee nor Protective Asset Builder (the Product ) is sponsored, endorsed, sold or promoted by Citigroup or any of its affiliates. Citigroup makes no representation or warranty, express or implied, to persons investing in the Product. Such persons should seek appropriate advice before making any investment. The index has been designed and is compiled, calculated, maintained and sponsored by Citigroup without regard to Licensee, the Product or any investor in the Product. Citigroup is under no obligation to continue sponsoring or calculating the index. CITIGROUP DOES NOT GUARANTEE THE ACCURACY OR PERFORMANCE OF THE Index, THE Index METHODOLOGY, THE CALCULATION OF THE Index OR ANY DATA SUPPLIED BY CITIGROUP FOR USE IN CONNECTION WITH THE PRODUCT AND DISCLAIMS ALL LIABILITY FOR ANY SPECIAL, INDIRECT,CONSEQUENTIAL DAMAGES EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. Please see investmentstrategies.citi.com/cis/us for additional important information about the Citi Flexible Allocation 6 Excess Return Index. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ( SPDJI ), and has been licensed for use by Protective Life. S&P and S&P 500 are registered trademarks of Standard & Poor s Financial Services LLC ( S&P ); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Protective Life. Protective Asset Builder is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index. All non-guaranteed components of the indexing formula may change and could be different in the future. Indexed interest could be less than that earned in a traditional fixed annuity, and could be zero. For product details, benefits, limitations and exclusions, please consult the contract, product guide and disclosure statement. These documents describe the terms and conditions that control the insurance company s contractual obligations. All payments and guarantees are subject to the claims-paying ability of Protective Life Insurance Company. Neither Protective Life nor its representatives offer legal or tax advice. Purchasers should consult with their legal or tax advisor regarding their individual situations before making any tax-related decisions. Annuities are long-term insurance contracts intended for retirement planning. Protective Asset Builder is a limited flexible premium deferred indexed annuity contract issued under policy form series FIA-P-2011 or FIA-P Protective Asset Builder is issued by Protective Life Insurance Company located in Birmingham, AL. Policy form numbers, product availability and features may vary by state. Protective Asset Builder is not an investment in any index, is not an investment in any stock, equity bond or commodity, and does not provide dividends. PABD.5540 (11.16)