Value-Lock10 Equity Indexed Annuity An Equity Indexed Annuity Product Issued By American National Insurance Company
Planning for retirement or future financial needs can be a challenging and frustrating process. There are many financial products on the market today, each appearing to meet specific financial needs. But how to decide which are right for you? There are a number of factors you may want to consider before making that decision: Time & Purpose - How long will it be before you need the funds you are accumulating for future financial needs? Are the funds being created to meet a specific need or to generate lifetime income? The impending retirement of the baby boomer generation will find many asking those questions as Americans expect to lead longer productive lives. They may be looking to fund new careers later in life or simply reap the rewards of the life they expect to live in retirement. Inflation - What effect will inflation have on those funds accumulating today for future financial needs? For example, a $10,000 purchase in 1989 would cost $17,445.97 in 2009. 1 How do you plan today to have that type of future purchasing power? Taxes - It s important to also consider tax implications while your funds are accumulating for the future. Do you have the ability to defer income tax on interest earned today within your financial vehicles during your income-earning years, until the time you withdraw the income to fund your future needs? And what effect will taxes have on the income you draw in retirement? No one can predict the future, but planning can help reduce some of the concerns about it. Balance - Are you looking for more potential in your financial vehicles and are you comfortable assuming more risk to achieve that potential? It s not unusual for someone nearing retirement to seek additional growth opportunities, but at the same time, no one wants exposure to undue risk. How do you achieve that balance of growth versus risk? It may seem that there are more questions than answers, but that s how building a sound financial plan begins. American National can help fund that financial plan with its strong portfolio of products offering both potential and security. 1 CPI Inflation Calculator U. S. Department of Labor
Value-Lock10 Equity Indexed Annuity Planning for a secure future Choosing a conservative funding vehicle may give you a feeling of security, but will your funds keep pace with inflation? On the other hand, choosing a vehicle with potentially greater growth may subject your funds to greater risk. Wouldn t it be nice to choose a financial vehicle that provides interest related to the performance of an index in an upside market while protecting against downside risk? Value-Lock for peace of mind The ANICO Value-Lock 10 EIA gives you the ability to respond to market changes. You decide during your 10-year indexing term how long you want the interest credited related to the performance of the S&P 500 Index. You can lock-in interest earnings related to any Index gains any time during the 10-year term, or you can continue to have interest credited related to the performance in the Index for the full 10-year term. It s your choice. Where does your funding choice fit on this growth spectrum? More Risk More Potential Growth Stocks Mutual Funds Variable Annuities The ANICO Value-Lock 10 Equity Indexed Annuity (EIA) may provide the answer. The ANICO Value-Lock 10 Equity Indexed Annuity, from American National Insurance Company, is a single premium deferred annuity, offering interest earnings related to the performance of the S&P 500 Index but not ownership interest in any individual stock or index. 2 Linking the interest earnings to the performance of the S&P 500 over a 10-year indexing term increases the potential for higher interest earnings than with a regular fixed annuity. Equity Indexed Annuities Fixed Annuities CD s Less Risk Less Potential Growth 2 S&P 500 Index does not reflect dividends paid on the stocks underlying the index.
Single Premium You may purchase your ANICO Value-Lock 10 EIA with a single premium as low as $5,000 (or $4,000 if these are qualified funds). Premium Enhancement Your ANICO Value-Lock 10 EIA will have a first-year premium enhancement, which can add to potential additional growth in your contract. 3 Index Performance The ANICO Value-Lock 10 EIA offers the opportunity to have interest credited related to the performance of the S&P 500 Index. The method used to determine the interest credited to the contract at the end of the 10-year indexing term is to compare the starting S&P 500 Index value on the date your contract is issued, to the average of all monthly S&P Index values during the 10-year indexing term. However, if you lock-in before the end of the 10-year indexing term, the comparison is between the starting S&P 500 Index value on the date your contract is issued and the average of all monthly S&P Index values to the date you lock-in. There is no cap to the amount of interest that may be credited to your contract. Past performance of the Index is no guarantee of future results; the Index may lose value. Participation Rate Your contract is eligible to have interest credited based upon any growth of the average monthly S&P 500 Index values during its 10-year indexing term at a participation rate that is declared at issue. If you choose to lock-in interest earnings before the end of the 10-year indexing term, your contract will have interest credited based upon any growth of the average index values from the date your contract is issued to the lock-in date at the participation rate that is declared at issue. Because an average is used, generally the interest return that you earn will be less than the actual index percentage gain for the index term. Value-Lock Flexibility The ANICO Value-Lock 10 EIA provides flexibility to respond to market changes by giving you the ability to lock-in interest earnings related to any Index performance at any time during the 10-year indexing term. If you do lock-in, we immediately credit a portion of the amount of interest related to the Index performance to your contract. After the lock-in date, we then credit interest to your contract at a fixed Value-Lock rate. This rate is calculated to credit the remaining portion of the interest amount, related to the Index performance as of the lock-in date, to your contract during the remaining years of the 10-year indexing term. Downside Protection As an annuity, the ANICO Value-Lock 10 Equity Indexed Annuity offers downside protection through the Guaranteed Surrender Value provision in your contract. This provision reflects a minimum guaranteed interest rate as required by your state. 4 Even if the index loses value during the 10-year indexing term, you re protected by this guarantee in the contract. 3 The premium enhancement is considered interest earnings by the IRS and like other interest earnings, it will be reported to the IRS on Form 1099 when withdrawn. If you cancel the annuity under the contract s free-look provision, you will not receive the premium enhancement. 4 The minimum guaranteed rate is fixed at issue and shown in your policy contract.
Surrender Charge Free Withdrawal Privilege At the beginning of the second contract year, you may withdraw up to 10% of your annuity value without incurring a Surrender Charge and Market Value Adjustment. 5 However, you may want to seriously consider other options before exercising the free withdrawal privilege. Any withdrawals made before lock-in, or prior to the end of the 10-year indexing term if lock-in has not been elected, will not have any interest earnings credited related to any index gains. Surrender You may surrender your Value-Lock 10 EIA during the 10-year indexing term and receive the greater of the annuity value, including any interest credits received on or after the date of lock-in, less Surrender Charge plus Market Value Adjustment if applicable, or the guaranteed minimum surrender value. During the indexing term, the guaranteed minimum surrender value is 90% of the premium, less any withdrawals, accumulated at a minimum guaranteed interest rate. The surrender schedule is as follows: Waiver of Surrender Charges In addition to allowing surrender charge free partial withdrawals for up to 10% of the annuity value each year starting with the second contract year, your Value-Lock 10 EIA offers two other times when the Surrender Charge and Market Value Adjustment may also be waived: Confinement Waiver When the contract owner is confined to a licensed hospital, licensed convalescent care facility, skilled nursing facility, custodial care facility, or licensed hospice facility for 60 or more consecutive days. Disability Waiver When the contract owner is physically disabled or diagnosed with a disabling terminal illness, prior to age 65. Please see policy form for complete details regarding the Confinement and Disability Waivers. Contract Year Surrender Charge 1st 12% 2nd 12% 3rd 11% 4th 10% 5th 9% 6th 8% 7th 7% 8th 6% 9th 5% 10th 3% 11th 0 Market Value Adjustment 6 A Market Value Adjustment (MVA) is an amount used to adjust the surrender value of the contract. The MVA is only applied during the 10-year indexing period and does not apply to any surrender-free partial surrender amounts. The MVA may increase or decrease the surrender value depending on the direction interest rates move. Generally the MVA decreases the surrender value when interest rates rise and increases the surrender value when interest rates fall. 5 Ordinary income tax at your current tax rate will be due on any withdrawal from a qualified contract. A federal tax penalty of 10% may be assessed on any withdrawals made prior to age 59½. Information provided is not intended to be legal or tax advice. You should consult with your attorney or tax advisor for your specific circumstances. 6 Market Value Adjustment may not apply in all states.
Death Benefit A Death Benefit is payable on the death of the Owner of the contract. The amount of the Death Benefit will depend on whether death occurs prior to lock-in, or after the date of lock-in. Prior to Lock-In: The annuity value plus interest credited related to Index performance from the date of issue to the date of death or the surrender value, if greater. On Lock-in or thereafter: The greater of the annuity value or the surrender value. Renewal After Indexing Term You may continue your contract at a fixed interest rate at the end of the 10-year indexing term. You will not participate in any further interest related to Index performance. If you do not choose to continue your contract, you may surrender at the end of the 10-year indexing term, with no surrender penalties. Maturity The ANICO Value-Lock 10 Equity Indexed Annuity will mature at the owner s age 95. Distributions must begin on this date. Settlement Options You may elect to receive the proceeds of your annuity in a lump sum or in a series of payments. We offer a variety of payment options. Your financial advisor can help you make the right choice for your needs at the time you elect to receive your annuity proceeds. The American National Story Chartered on March 17, 1905 by the company s founder, W. L. Moody Jr., American National began operations with $100,000 of capital and $20,000 surplus. Following a conservative investment philosophy, Mr. Moody believed that the company s profits should finance future growth, so American National did not pay dividends to investors in those early years. Mr. Moody envisioned a company that would flourish for centuries. His conservative business approach created a unique corporate culture that remains the heart of the Company today. This culture has helped American National persevere through wars, hurricanes, economic volatility, extraordinary technological advancements, evolving products, and the changing needs of policyholders and agents. American National remains financially strong and will continue to manage its business respecting the conservative principles of its founder, driven by its corporate vision to be a leading provider of financial services for current and future generations. Important Customer Information Information herein is not intended to be legal or tax advice. You should consult with an attorney or tax advisor for specific circumstances. This product may not be available in all states. The maximum issue age in Florida is 64. Information herein is not intended to be legal or tax advice. You should consult with an attorney or tax advisor for specific circumstances. This product may not be available in all states. Form PIA10A-NQ, PQ; PIA 10B-NQ, PQ Standard & Poor s, S&P, S&P 500, and Standard & Poor s 500 TM are trademarks of Standard & Poor s Financial Services LLC ( Standard & Poor s ) and have been licensed for use by American National Insurance Company. ANICO Value- Lock 7 & 10 Equity Indexed Annuities are not sponsored, endorsed, sold or promoted by Standard & Poor s and Standard & Poor s makes no representation regarding the advisability of purchasing ANICO Value-Lock 7 & 10 Equity Indexed Annuities. Not FDIC/NCUA insured Not a deposit Not insured by any federal government agency No bank/cu guarantee May lose value
Independent Marketing Group (IMG) is a division of American National Insurance Company. American National Insurance Company One Moody Plaza, Galveston, Texas 77550-7999 Form 4359 Rev. 03/11