for a secure Retirement Foundation Gold (ICC11 IDX3)* *Form number and availability may vary by state.

Transcription

1 for a secure Retiremet Foudatio Gold (ICC11 IDX3)* *Form umber ad availability may vary by state.

2 Where Will Your Retiremet Dollars Take You? RETIREMENT PROTECTION ASSURING YOUR LIFESTYLE As Americas, we work hard everyday to ear a icome to take care of our families, educate our childre ad provide for a secure retiremet. As retiremet age approaches, we are wise to cosider: Are Our Retiremet Dollars Safe? How Will Taxes Affect Our Stadard of Livig? What Happes To My Family if I Become Ill? Do We Have Eough Moey to Retire? INDEXED ANNUITIES FOR YOUR RETIREMENT PORTFOLIO Idexed auities are fixed auities that provide a opportuity to potetially ear more iterest tha traditioal fixed auities ad other safe moey alteratives. This is doe by basig iterest eared o a icrease i a equity idex. You cotrol how your auity grows by choosig the idex creditig methods o each Cotract Aiversary. The idices we use to determie idex values for this auity are the S&P 500 ad the 10-Year U.S. Treasury Bod. A very importat beefit is that your premium ad credited iterest ca ever be lost due to idex volatility. Whe purchasig a idexed auity, you ow a auity cotract backed by America Equity Ivestmet Life Isurace Compay, you are ot purchasig shares of stock or idexes. 2 BENEFITS OF ANNUITIES At America Equity, our iovative tax deferred auities help you maximize both growth ad safety for your hard eared retiremet dollars, ultimately offerig you the peace of mid you deserve. We uderstad that creatig a retiremet est egg is hard work ad while may people take ito cosideratio market risk, there are five other factors you should cosider as well: Safety Of Premium Avoidace Of Probate Icome Taxes Liquidity Guarateed Icome SAFETY OF PREMIUM Fixed auities by their very ature are cosidered a safe moey alterative. It is a cotract betwee you ad the isurace compay for guarateed iterest ad guarateed icome optios. All Guaratees are based o the fiacial stregth ad claims payig ability of America Equity. AVOIDANCE OF PROBATE I the case of premature death, your beeficiaries have the accumulated fuds withi your auity available to them ad may avoid the expese, delay ad publicity of probate. Your amed beeficiaries ca choose to receive the proceeds as mothly icome or a lump sum paymet.

3 TAXABLE VS. TAX - DEFERRED $180,611 Tax - Deferred $158,040 Tax - Deferred After Lump Sum Taxes (28%) Foudatio Gold (ICC11 IDX3) LIQUIDITY America Equity provides you with opportuities to withdraw fuds at ay time (subject to applicable surreder charges). This auity cotract allows pealty-free withdrawals of up to 5%, after the first cotract aiversary. A cumulative Pealtyfree withdrawal optio available (Referece page 6 for details). America Equity also has available certai riders which icrease liquidity i the evet of cofiemet to a ursig home, or if diagosed with a termial illess. (Riders ot available i all states) $100,000 $153,327 Without Tax Deferral YEARS Note: Example assumes 3% aual iterest rate ad 28% tax bracket. This hypothetical example is for demostratio purposes oly. INCOME TAXES Oe of the primary advatages of deferred auities is the opportuity to accumulate a substatial sum of moey by allowig your premium ad iterest to grow taxdeferred. Ulike taxable ivestmets, you pay o taxes o your auity iterest util you begi to take withdrawals or receive icome. This allows your moey to grow faster tha i a taxable accout. With our auities you ear iterest o your premium, iterest o your iterest ad iterest o what you would ormally pay i icome taxes. Oce withdraw your earigs are taxed as ordiary icome. The chart above illustrates how much more your moey grows over a 20-year period with a tax-deferred auity compared to a accout that is curretly taxed. GUARANTEED INCOME America Equity ca provide you with a guarateed icome from this tax-deferred auity. You have the ability to choose from several differet icome optios, icludig paymets for a specified umber of years or icome for life, o matter how log you live. TAX TREATMENT You may be subject to a 10% federal pealty if you make withdrawals or surreder this auity before age 591/2. If this auity is withi a qualified pla all distributios may be taxable. Uder curret tax laws auities grow tax deferred ad a auity is ot required for tax deferral i a qualified pla. Ay distributio may cause a taxable evet. Neither America Equity or our agets offer legal, ivestmet or tax advice. Please cosult your ow persoal advisor for these matters. FOUNDATION GOLD Foudatio Gold is a Fixed Idexed Auity that allows for the accumulatio of moey over a log period of time. Because of the Bous credited o all premiums paid i the first Cotract Year, it allows for a more rapid accumulatio of iterest tha other fixed auities. The Bous is applied to your Values immediately, but is vested over time. This meas that the loger you hold o to your auity, the greater the payout to you becomes. I additio, we vest the Bous 3 Is Protectio from Losses Importat to You?

4 The Foudatio Gold: Choices & Diversificatio 100% immediately i the death beefit, so i the ufortuate case of your early death, your beeficiary will receive the etire Cotract Value, icludig 100% of the Bous. So, just how do the iterest creditig ad bous vestig features work, ad how do they affect your log-term accumulatio of wealth for retiremet? Let s take a look: PREMIUM PAYMENT & ALLOCATION You may direct your iitial premium paymet i ay combiatio you choose, ito either the Fixed Iterest Strategy or ay of the Idexed Strategies. Ay additioal premium paymets you make after your iitial premium will automatically go ito the Fixed Iterest Strategy. At each Cotract Aiversary, you may choose to trasfer betwee the differet Iterest Creditig Strategies, givig you greater flexibility. Your Accrued Premium Amout is the portio of the Cotract Value resultig from Premiums paid plus Iterest, less Withdrawal Amouts. INTEREST CREDITING You have ie differet Iterest Creditig Strategies optios to choose from i determiig how we will credit iterest to your Cotract Values. Additioally, we provide a Miimum Guarateed Iterest Rate which guaratees you a miimum retur upo surreder. We calculate all Iterest Rates as effective aual rates, compouded daily. To calculate Withdrawal or Surreder Amouts we track Iterest credits to Accrued Premium Amout ad Accrued Bous Amout o a pro-rata basis. CHOICES This auity offers 8 idex ad 1 fixed Iterest Creditig Strategies. The S&P 500 Idex cotais stocks from 500 various idustry leaders ad is widely regarded as a leadig bechmark for U.S. stock market performace. 10-Year U.S. Treasury Bod Strategy is desiged to mirror geeral market iterest rates. Growth i this Strategy is determied by the aual chage i the 10-Year U.S. Treasury Bod, plus a Coupo Rate each Cotract Year. The percetage chage i the Treasury Bod is calculated ad the Coupo Rate is added. The Cap is applied to this sum ad the Asset Fee Rate is subtracted. The Idex Credit for the year is determied by multiplyig the result by the Treasury Bod Strategy o the Iterest Credit Calculatio Aual Mothly Average Aual Poit to Poit Mothly Poit to Poit Average sum of idex closes o mothly Cotract Aiversary Percetage of aual icrease i the Idex Aual sum of mothly chages i the Idex with cap less a asset fee 4 Idex Availability S&P 500 S&P 500 & 10-Year U.S. Treasury Bod Frequecy of Iterest Credit Cap, Asset Fee Rate (AFR) or Participatio Rate Available S&P 500 Aually Aually Aually Choice of Cap & AFR or Participatio Rate Choice or Cap & AFR or Participatio Rate Cap & AFR

5 last Cotract Aiversary, less withdrawals ad applicable surreder charges. Choice Of: Cap Rate - A upper limit applied to the Idex credit. Cap rates are subject to chage, declared each Cotract aiversary, ad guarateed to ever be less tha 1% o the Aual Mothly Average, Aual Poit to Poit, Mothly Poit to Poit, ad Bod Yield with Cap Creditig Strategy. -OR Participatio Rate (PR) - The stated percetage of ay Idex icrease credited to the auity cotract. PRs are subject to chage, declared aually, ad guarateed to ever be less tha 10%. (O S&P 500 oly) INDEX CREDITING STRATEGY CHOICES America Equity auities allow for aual trasfers betwee differet strategies allowig you greater flexibility i utilizig the iterest creditig strategies available. A Trasfer of Values (TOV) letter ad form are set oe moth prior to the Cotract Aiversary as a courtesy. Aual Mothly Average - Idex Credits are based o 12 dates durig the year. The average is calculated by addig the 12 Idex amouts o each mothly date ad dividig by 12. Caps or Participatio Rates are applied to the Idex Credit Calculatio. Aual Poit to Poit - O each Cotract Aiversary the Idex value is compared to the previous years Idex value. The Idex Credit is based o the icrease i the Idex value from poit to poit. Caps or Participatio Rates are applied to the Idex Credit Calculatio. Mothly Poit to Poit - Each moth a percetage of chage is calculated. Caps are applied to ay icrease. The sum of the resultig mothly values, less a asset fee, is the Idex Credit applied o each Cotract Aiversary. Fixed Iterest based o a curret declared iterest rate guarateed to ever be less tha the Fixed Iterest Strategy Miimum Guarateed Iterest Rate stated i the auity cotract. Performace Triggered (PT) - O each Cotract Aiversary the PT Idex Price is compared to the previous aiversary s PT Idex Price. The PT Rate is credited if the PT Idex Price o the curret Cotract Aiversary is equal to or greater tha the previous Cotract Aiversary s Idex Price. The miimum PT Rate is 1%. Bod Yield with Cap (BYC) - O each Cotract Aiversary the Bod Price is compared to the Bod Price o the previous aiversary. The Idex Credit is based o the decrease i the Bod Price. Caps &/or Asset Fees are applied to the BYC Iterest Credit Calculatio. Performace Triggered (PT) Bod Yield with Cap Fixed Rate PT Idex Price equal to or greater tha the previous aiversary s PT Idex Price Percetage of aual decrease i the Bod Price Fixed Iterest Rate Declared S&P Year U.S. Treasury Bod Not Applicable Aually Aually Daily Not applicable Cap, AFR Not Applicable 5

6 Foudatio Gold Beefits ad Accessibility BONUS We pay a Bous of 7% of all premiums received i the first Cotract Year. We add this Bous to the Cotract Value o the date we receive Premiums, ad we allocate it to the same values as your Premiums. Accrued Bous Amout is the portio of the Cotract Value resultig from the Bous, plus Iterest, less Withdrawal Amouts. Surreder Charges do ot apply to your Accrued Bous Amout. BONUS VESTING The Bous vests over a 10-year period. Each year after the 1st Cotract Year, you become Vested i a percetage of the Bous, util you become 100% Vested at the ed of the 10th Cotract Year. The Vested amouts of the Bous are the amouts that you do ot forfeit as a result of a early Partial Withdrawal or Surreder. If you take a Partial Withdrawal or Surreder you will receive the Vested portio of your Bous accordig to the followig schedule. 1) At Partial Withdrawal - the pro-rata portio of the Partial Withdrawal Amout allocated to your Accrued Bous Amout multiplied by the Bous Vestig %; or 2) At Surreder - your Accrued Bous Amout multiplied by the Bous Vestig % mius the o-vested portio of ay Pealty-free Withdrawals take from your Accrued Bous Amout i the last 12 moths. The Bous is always 100% Vested i the Death Beefit. Premium Bous Cotract Yr Vestig Schedule % WITHDRAWALS You may make Withdrawals from your Cotract Value at ay time. Withdrawals iclude Pealty-free Withdrawals ad Partial Withdrawals. We will determie Withdrawal Proceeds takig ito cosideratio ay Pealty-free amout available, ay Surreder Charges, ad Bous Vestig. 1) Pealty-free Withdrawals Oce each Cotract Year, after the first Year You may take oe Pealtyfree Withdrawal of up to 5% of the Cotract Value. If the Pealty-free withdrawal is ot take i ay Cotract Year, it may be carried over to the ext Cotract Year for a maximum Pealtyfree withdrawal of 10%. Pealtyfree withdrawals are ot subject to Surreder Charges ad Bous Vestig. 2) Partial Withdrawals You may make Partial Withdrawals at ay time. We will first determie ay amout of the Partial Withdrawal that would be Pealty-free. Amouts above the Pealty-free amout are subject to Surreder Charges ad the Bous Vestig Schedule. 6

7 All Withdrawals are pro-rated betwee the Accrued Premium Amout ad the Accrued Bous Amout of the Cotract Value. We apply a Surreder Charge to your Accrued Premium Amout ad Vestig to your Accrued Bous Amout. Withdrawals i excess of the Pealty-free Withdrawal Amout will cause loss of part of your Accrued Bous Amout. DEATH BENEFIT The Death Beefit is the full Cotract Value of your auity cotract ad is paid i a lump sum with o surreder charges, plus 100% Bous Vestig, to your amed beeficiaries. Other icome optios may also be available. CONTRACT VALUE Your Cotract Value equals the sum of your Fixed Strategy, plus your Idexed Strategies. ACCESSIBILITY 5% PENALTY-FREE WITHDRAWALS We uderstad that access to your moey is very importat. While most fiacial vehicles charge pealties for Withdrawals before maturity, this auity offers a aual 5% Pealty-free withdrawal oce each year, begiig i year 2. If o Pealty-free Withdrawals are take for two or more successive cotract years, the carryover Pealty-free withdrawal percetage balace ca be accumulated up to the maximum of 10%. I the first year, you may receive systematic withdrawals of iterest or Required Miimum Distributios from the Fixed Iterest accout as quickly as 30 days after your Cotract is issued.* NCR-100** This rider is automatically icluded, at o cost, for auitats uder age 75 at issue. This allows you to take a 100% pealtyfree withdrawal after the 3rd Cotract Aiversary if cofiemet i a Qualified Nursig Care Ceter occurs after the ed of the 3rd Cotract Year ad cotiues for at least 90 cosecutive days. If cofiemet occurs i the 2d or 3rd Cotract Year the a 20% pealty-free withdrawal is allowed. TIR-100** This rider is automatically icluded, at o cost, for auitats uder age 75 at issue. This allows you to take a additioal pealty-free withdrawal of up to 100% of the Cotract Value if the diagosis of a termial illess by a qualified physicia occurs after the first Cotract Year, ad is expected to result i death withi oe year. MINIMUM GUARANTEED SURRENDER VALUE (MGSV) At o time will the Surreder Value of the Cotract be less tha 87.5% of all Premiums received, less ay Withdrawals, accumulated at Miimum Guarateed Iterest Rate stated i the Cotract. The MGSV is a separate calculatio from Cotract Value. * Not guarateed ad subject to chage ** NCR-2-PA i PA, TIR-1 i TX. 7 See Product Disclosure for further details. Foudatio Gold (ICC11 IDX3)

8 The Foudatio Gold: Choices & Diversificatio CASH SURRENDER VALUE The Cash Surreder Value is the amout We pay if you Surreder the Cotract. It equals the greater of the Accrued Premium Amout mius ay surreder charges, plus the Vested portio of the Accrued Bous Amout, or the Miimum Guarateed Surreder Value. SURRENDER CHARGES We deduct a Surreder Charge o Partial Withdrawals or Surreders durig the Surreder Charge Period accordig to the followig schedule. Surreder Charges are determied as follows: 1) At Partial Withdrawal, the Partial Withdrawal from your Accrued Premium Amout multiplied by the Surreder Charge Percetage; or 2) At Surreder, your Accrued Premium Amout, plus ay Pealty-free Withdrawals from your Accrued Premium Amout i the last 12 moths, multiplied by the Surreder Charge Percetage. Surreder Cotract Yr Charge % Age SCENARIO So, how exactly does all of this work? Let s look at Sally Joes. She is a 50-yearold woma plaig for her retiremet. She curretly has $100,000 that she has set aside to pla for retiremet, but wats to fid a log-term accumulatio istrumet to assist i that plaig. Her curret daily expeses ad eeds are take care of through her work ad other icome, so the $100,000 is t eeded for ay immediate use. Sally s aget has told her about fixed idexed auities ad how they may provide a solid icome i retiremet. He tells Sally about the auity. He states that it ca provide a solid iterest rate, some of which ca be determied by likig to a stock market idex, so it may provide the opportuity for a iterest rate greater tha that of a traditioal fixed auity. I additio, she has the optio of puttig some or all of her moey i a Fixed Iterest Strategy, ad she ca trasfer betwee the Idex ad Fixed Strategies at the begiig of each Cotract Year. Additioally, the Foudatio Gold auity offers a 7% Bous o all premiums paid i the first year. Because the Bous vests durig the Cotract period, the loger she holds the auity the more of the Bous becomes vested. While the full Bous is part of the death beefit, if she surreders the cotract or completes a Partial Withdrawal she will forfeit a portio of the Bous. 8

9 Sally is iterested i this auity for these optios, ad asks the aget to demostrate just how the Bous works, how she could access her moey if eeded, ad just how much she would have to pay i Surreder Charges or how much of her Bous she might forfeit should she liquidate her auity early. The aget put together some basic iformatio to demostrate for Sally how the Foudatio Gold Auity might work. Some basic assumptios were: 1) Iterest Rate 2% o-guarateed ad assumed for all Cotract Years 2) Pealty-free Withdrawals i Years 2, 3 ad 4 followed by a full Surreder of the auity i Year 5 Accrued Premium Amout With those basic assumptios he proceeded to demostrate for her how the Foudatio Gold credited Iterest, Bous amouts, ad how the pro-rata distributio of Iterest credited ad Withdrawals take from the Premium Amout ad Bous Amout would work: With o Pealty-free Withdrawals i the first year, Sally s Cotract Value grows with the additio of the Bous plus Iterest credited. Sally s aget remids her that the Iterest is calculated o the amout attributed to her Premium Paid ($100,000 x 2% = $2,000) ad her Bous (first year Premium x 7% = $7,000 Bous; Accrued Bous Amout Cotract Value Year 1 Begiig Balace 100,000 7, ,000 2% Iterest 2, ,140 Balace 102,000 7, ,140 Year 2 Begiig Balace 5% Free Withdrawal Balace After Withdrawal 102,000 7, ,140 5, ,457 96,900 6, ,683 2% Iterest 1, ,074 $7,000 Bous x 2% =$140) Her Cotract Value has ow grow to $109,140 (Premium Amout $102,000 + Bous Amout $7,140 = Cotract Value $109,140). At the begiig of the 2d Cotract Year, Sally may ow take a 5% Pealtyfree Withdrawal, if she chooses. For this demostratio, that meas she will have a Withdrawal of $5,457 (Cotract Value of $109,140 x 5%). The amout of the Withdrawal is deducted o a pro-rata basis betwee the Premium Amout ad the Bous. Sally s aget the showed how this trasactio would be hadled i Years 3 ad 4. Balace at Ed 98,838 6, ,757 9 Foudatio Gold (ICC11 IDX3)

10 Foudatio Gold (ICC11 IDX3) Sally likes what she sees. She uderstads that part of her Cotract Value is the result of her Premiums paid ad Iterest o those Premiums. This is called the Accrued Premium Amout. She also uderstads that part of the Cotract Value results from the Bous ad Iterest o the Bous, ad that this is called the Accrued Bous Amout. Fially, she sees how both of these amouts are reduced o a pro-rata basis whe she makes a Withdrawal. She also uderstads that should she uexpectedly die, her beeficiary would receive the etire Cotract Value at the time of her death. Sally asks her aget to the demostrate what would occur if she chooses to Surreder her auity at the begiig of the 5th Cotract Year. Sally iforms her aget that she will purchase a Auity. Sally really thiks that the Foudatio Gold Auity provides her with a solid fiacial tool that will allow her to accumulate more moey for her retiremet years. She uderstads that the loger she maitais the auity, the more of the Bous will vest. She has a Guarateed Iterest Rate o 87.5% of that Premium, which meas that eve i the ulikely evet that the Idex optios she chooses ever go up, she will get back at least her origial Premium plus the iterest accumulated or the miimum guarateed rate if held util the ed of the surreder charge schedule. Year 3 Begiig Balace 5% Free Withdrawal Balace After Withdrawal Accrued Premium Amout Accrued Bous Amout Cotract Value 98,838 6, ,757 4, ,288 93,896 6, ,469 2% Iterest 1, ,009 Balace at Ed 95,774 6, ,478 Year 4 Begiig Balace 5% Free Withdrawal Balace After Withdrawal 95,774 6, ,478 4, ,124 90,985 6,369 97,354 2% Iterest 1, ,947 Balace at Ed 92,805 6,496 99,301 Year 5* Begiig Balace Full Surreder Charge 5.25% 92,805 6,496 99,301 4,872 Vestig 40% 2,599 Surreder Value 87,933 2,599 90,531 *Assumes full surreder more tha 12 moths after last Pealty-free withdrawal. 10

11 Real Beefits of Idexed Auities Aual Mothly Average (Idex-5) S&P 500 Miimum Guarateed Cotract Value (09/30/98) *This graph is based o actual credited rates for the period show o the Idex-5 product, which is o loger available for sale. Past performace ot a idicatio of future results. Please call our Marketig Departmet for ew product iformatio. The S&P ad/or Dow Joes is a product of S&P Dow Joes Idices LLC ( SPDJI ), ad has bee licesed for use by America Equity Ivestmet Life Isurace Compay. Stadard & Poor s ad S&P are registered trademarks of Stadard & Poor s Fiacial Services LLC ( S&P ); Dow Joes is a registered trademark of Dow Joes Trademark Holdigs LLC ( Dow Joes ); Stadard & Poor s, S&P ad/ or Dow Joes are trademarks of the SPDJI; ad these trademarks have bee licesed for use by SPDJI ad sublicesed for certai purposes by America Equity Ivestmet Life Isurace Compay. America Equity Ivestmet Life Isurace Compay s Foudatio Gold is ot sposored, edorsed, sold or promoted by SPDJI, Dow Joes, S&P, their respective affiliates ad oe of such parties make ay represetatio regardig the advisability of ivestig i such product(s) or do they have ay liability for ay errors, omissios, or iterruptios of the S&P ad/ or Dow Joes. 11 Year A HISTORY OF AMERICAN EQUITY S INDEX-5 * (9/30/98-9/30/13) This history of America Equity s Idex-5 Idexed Auity demostrates the powerful beefits of Idexed Auities with the aual reset iterest creditig desig. All of our curret products offer aual reset desig as well. The Idex-5 did exactly what it was supposed to do give the cotract ower the opportuity to accumulate value based o the appreciatio of the S&P 500 Idex, without the risk of loss of premium i years whe the S&P 500 was egative. All of this supported by a Miimum Guaratee. This is ot a illustratio. These results should ot be a idicatio that Idexed Auities will outperform the S&P 500. This simply demostrates the powerful beefits of Idexed Auities with the aual reset iterest creditig desig. All of America Equity s curret products offer aual reset desig.

12 for a secure Retiremet Foudatio Gold (ICC11 IDX3)* It is the America Equity dream to help Americas ejoy their retiremet years with fiacial security. We care about providig products that protect you ad your family. Our employee/owers are committed to esurig peace of mid for your retiremet future. Our commitmet to usurpassed service ad strog cotract ower beefits has allowed America Equity to experiece cosistet, record growth i our idustry. I fact, we re the umber 3 producer of idexed auities.+ Whe you buy a America Equity auity, you are buyig a promise, a promise that we will always be there whe you eed us. If you wat a auity that ca offer you safety of premium, flexibility, tax advatages, accessibility whe you eed it ad a chace to have a lifetime icome, we have it. We re the Oe to offer you diverse fiacial plaig choices for your retiremet dollars. * Form umber ad availability may vary by state. + Source: Wik s Sales & Market Report, [2Q2013]. D.J. Noble, Executive Chairma 6000 Westow Pkwy West Des Moies, IA (fax) SB A.M. Best uses 15 ratig categories ragig from A++ to F ad measures performace i the areas of Ivestmet Quality, Capital Adequacy, Policy Reserves, Cost Cotrol ad Maagemet Experiece. A A- ratig from A.M. Best is its fourth highest ratig. For the latest ratig, access