Prepared For John Client Prepared On August 5, 2013 Prepared By Joe nt 999-555-2000 Guaranteed Lifetime Riders Outlook Plus 5 Security Life (Advisor XL) Guaranteed Lifetime Withdrawal Rider Security Secure Annuity Freedom Rider
Overview General Information John Client, age 62 starts after 3 years at age 65 State: Colorado Premium $ 100,000 (non-qualified) For products that use market interest, a rate of 1.50% is used For products that use the CPI, an inflation rate of 2.00% is used Guaranteed Lifetime Riders Security Life (Advisor XL) Guaranteed Lifetime Withdrawal Rider Security Secure Annuity First year benefit: $7,277 Lifetime income value (30 Years): $218,303 Outlook Plus 5 First year benefit: $7,053 Lifetime income value (30 Years): $211,587 Freedom Rider First year benefit: $6,326 Lifetime income value (30 Years): $189,770 created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 2 of 13
Payout By This report shows the value of waiting. Each year you wait the income you can receive will increase. The roll up rate will continue to grow and the payout rate will continue to increase for most riders. Security Life (Advisor XL) Guaranteed Lifetime Withdrawal Rider Security Secure Annuity With 8.00% Premium Bonus Outlook Plus 5 With 9.00% Premium Bonus Freedom Rider With 4.00% Premium Bonus Rollup Payout Single LifeTime Payment 62 108,000 5.20 5,616 63 7.00 115,560 5.30 6,125 64 7.00 123,649 5.40 6,677 Enhanced 65 7.00 132,305 5.50 7,277 14,554 66 7.00 141,566 5.60 7,928 15,855 67 7.00 151,476 5.70 8,634 17,268 68 7.00 162,079 5.80 9,401 18,801 69 7.00 173,424 5.90 10,232 20,464 70 7.00 185,564 6.00 11,134 11,134 71 7.00 198,554 6.10 12,112 12,112 72 7.00 212,452 6.20 13,172 13,172 73 7.00 227,324 6.30 14,321 14,321 74 7.00 243,237 6.40 15,567 15,567 75 7.00 260,263 6.50 16,917 16,917 76 7.00 278,482 6.60 18,380 18,380 77 7.00 297,975 6.70 19,964 19,964 78 7.00 318,834 6.80 21,681 21,681 79 7.00 341,152 6.90 23,539 23,539 80 7.00 365,033 7.00 25,552 25,552 81 7.00 390,585 7.10 27,732 27,732 82 7.00 417,926 7.20 30,091 30,091 83 7.00 447,181 7.30 32,644 32,644 84 7.00 478,483 7.40 35,408 35,408 85 7.00 511,977 7.50 38,398 38,398 86 511,977 7.60 38,910 38,910 87 511,977 7.70 39,422 39,422 88 511,977 7.80 39,934 39,934 89 511,977 7.90 40,446 40,446 90 511,977 8.00 40,958 40,958 91 511,977 92 511,977 Rollup 62 114,000 Payout Single LifeTime Payment 63 4.00 118,560 5.00 5,928 64 4.00 123,302 5.00 6,165 65 4.00 128,235 5.50 7,053 66 4.00 133,364 5.50 7,335 67 4.00 138,698 5.50 7,628 68 4.00 144,246 5.50 7,934 69 4.00 150,016 5.50 8,251 70 4.00 156,017 6.00 9,361 71 4.00 162,258 6.00 9,735 72 4.00 168,748 6.00 10,125 73 4.00 175,498 6.00 10,530 74 4.00 182,518 6.00 10,951 75 4.00 189,818 6.50 12,338 76 4.00 197,411 6.50 12,832 77 4.00 205,308 6.50 13,345 78 4.00 213,520 6.50 13,879 79 4.00 222,061 6.50 14,434 80 4.00 230,943 7.00 16,166 81 4.00 240,181 7.00 16,813 82 4.00 249,788 7.00 17,485 83 4.00 259,780 7.00 18,185 84 4.00 270,171 7.00 18,912 85 4.00 280,978 7.50 21,073 86 4.00 292,217 7.50 21,916 87 4.00 303,905 7.50 22,793 88 4.00 316,062 7.50 23,705 89 4.00 328,704 7.50 24,653 90 4.00 341,852 8.00 27,348 91 4.00 355,526 8.00 28,442 92 4.00 369,747 8.00 29,580 Rollup 62 104,000 Payout Single LifeTime Payment 63 6.75 111,020 4.50 4,996 64 6.75 118,514 4.50 5,333 65 6.75 126,514 5.00 6,326 66 6.75 135,053 5.00 6,753 67 6.75 144,169 5.00 7,208 68 6.75 153,901 5.00 7,695 69 6.75 164,289 5.00 8,214 70 6.75 175,379 5.50 9,646 71 6.75 187,217 5.50 10,297 72 6.75 199,854 5.50 10,992 73 6.75 213,344 5.50 11,734 74 6.75 227,745 5.50 12,526 75 6.75 243,117 6.00 14,587 76 6.75 259,528 6.00 15,572 77 6.75 277,046 6.00 16,623 78 6.75 295,746 6.00 17,745 79 6.75 315,709 6.00 18,943 80 6.75 337,020 6.00 20,221 81 6.75 359,769 6.00 21,586 82 6.75 384,053 6.00 23,043 83 384,053 6.00 23,043 84 384,053 6.00 23,043 85 384,053 6.00 23,043 86 384,053 6.00 23,043 87 384,053 6.00 23,043 88 384,053 6.00 23,043 89 384,053 6.00 23,043 90 384,053 6.00 23,043 91 384,053 6.00 23,043 92 384,053 6.00 23,043 created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 3 of 13
Ledger Comparison The Ledger Comparison shows the values for each rider selected and the cumulative payout value at 5 year intervals. Security Life (Advisor XL) Guaranteed Lifetime Withdrawal Rider Security Secure Annuity With 8.00% Premium Bonus Outlook Plus 5 With 9.00% Premium Bonus Freedom Rider With 4.00% Premium Bonus Roll-up 62 108,000 63 7.00 115,560 64 7.00 123,649 LifeTime Payment 65 7.00 132,305 5.50 7,277 66 125,028 7,277 67 117,751 7,277 68 110,474 7,277 69 103,198 7,277 5 Year Total 36,384 70 95,921 7,277 71 88,644 7,277 72 81,367 7,277 73 74,091 7,277 74 66,814 7,277 10 Year Total 72,768 75 59,537 7,277 76 52,260 7,277 77 44,984 7,277 78 37,707 7,277 79 30,430 7,277 15 Year Total 109,151 80 23,153 7,277 81 15,876 7,277 82 8,600 7,277 83 1,323 7,277 84 0 7,277 20 Year Total 145,535 85 0 7,277 86 0 7,277 87 0 7,277 88 0 7,277 89 0 7,277 25 Year Total 181,919 90 0 7,277 91 0 7,277 92 0 7,277 93 0 7,277 94 0 7,277 30 Year Total 218,303 Roll-up 62 114,000 63 4.00 118,560 64 4.00 123,302 LifeTime Payment 65 4.00 128,235 5.50 7,053 66 121,182 7,053 67 114,129 7,053 68 107,076 7,053 69 100,023 7,053 5 Year Total 35,265 70 92,970 7,053 71 85,917 7,053 72 78,864 7,053 73 71,811 7,053 74 64,758 7,053 10 Year Total 70,529 75 57,706 7,053 76 50,653 7,053 77 43,600 7,053 78 36,547 7,053 79 29,494 7,053 15 Year Total 105,794 80 22,441 7,053 81 15,388 7,053 82 8,335 7,053 83 1,282 7,053 84 0 7,053 20 Year Total 141,058 85 0 7,053 86 0 7,053 87 0 7,053 88 0 7,053 89 0 7,053 25 Year Total 176,323 90 0 7,053 91 0 7,053 92 0 7,053 93 0 7,053 94 0 7,053 30 Year Total 211,587 Roll-up 62 104,000 63 6.75 111,020 64 6.75 118,514 LifeTime Payment 65 6.75 126,514 5.00 6,326 66 126,514 6,326 67 126,514 6,326 68 126,514 6,326 69 126,514 6,326 5 Year Total 31,628 70 126,514 6,326 71 126,514 6,326 72 126,514 6,326 73 126,514 6,326 74 126,514 6,326 10 Year Total 63,257 75 126,514 6,326 76 126,514 6,326 77 126,514 6,326 78 126,514 6,326 79 126,514 6,326 15 Year Total 94,885 80 126,514 6,326 81 126,514 6,326 82 126,514 6,326 83 126,514 6,326 84 126,514 6,326 20 Year Total 126,514 85 126,514 6,326 86 126,514 6,326 87 126,514 6,326 88 126,514 6,326 89 126,514 6,326 25 Year Total 158,142 90 126,514 6,326 91 126,514 6,326 92 126,514 6,326 93 126,514 6,326 94 126,514 6,326 30 Year Total 189,770 created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 4 of 13
Annual Ledger The Annual Ledger shows the detail annual calculation revealing how the rider works reflecting all roll up rates, payout rates and fees. Guaranteed Lifetime Withdrawal Rider Security Life (Advisor XL) Security Secure Annuity Year Begin Year Interest Rider Fee End Year Roll-up Guaranteed Lifetime Amount Total Enhanced Total End Year w/out Rider 0 62 108,000 108,000 108,000 1 63 108,522 1.50 1,098 108,522 7.00 115,560 109,620 2 64 108,975 1.50 1,175 108,975 7.00 123,649 111,264 3 65 109,353 1.50 1,257 102,076 7.00 132,305 5.50 7,277 7,277 14,554 14,554 112,933 4 66 102,420 1.50 1,188 95,143 125,028 7,277 14,554 14,554 29,107 114,627 5 67 95,451 1.50 1,119 88,175 117,751 7,277 21,830 14,554 43,661 116,347 6 68 88,448 1.50 1,050 81,171 110,474 7,277 29,107 14,554 58,214 118,092 7 69 81,408 1.50 980 74,131 103,198 7,277 36,384 14,554 72,768 119,863 8 70 74,332 1.50 911 67,055 95,921 7,277 43,661 7,277 80,044 121,661 9 71 67,219 1.50 842 59,942 88,644 7,277 50,937 7,277 87,321 123,486 10 72 60,069 1.50 773 52,792 81,367 7,277 58,214 7,277 94,598 125,338 11 73 52,880 1.50 704 45,603 74,091 7,277 65,491 7,277 101,875 127,218 12 74 45,652 1.50 635 38,376 66,814 7,277 72,768 7,277 109,151 129,127 13 75 38,386 1.50 566 31,109 59,537 7,277 80,044 7,277 116,428 131,064 14 76 31,079 1.50 496 23,802 52,260 7,277 87,321 7,277 123,705 133,030 15 77 23,732 1.50 427 16,455 44,984 7,277 94,598 7,277 130,982 135,025 16 78 16,344 1.50 358 9,067 37,707 7,277 101,875 7,277 138,258 137,050 17 79 8,914 1.50 289 1,637 30,430 7,277 109,151 7,277 145,535 139,106 18 80 1,442 1.50 220 0 23,153 7,277 116,428 7,277 152,812 141,193 19 81 0 0 15,876 7,277 123,705 7,277 160,089 143,311 20 82 0 0 8,600 7,277 130,982 7,277 167,365 145,460 21 83 0 0 1,323 7,277 138,258 7,277 174,642 147,642 22 84 0 0 7,277 145,535 7,277 181,919 149,857 23 85 0 0 7,277 152,812 7,277 189,196 152,105 24 86 0 0 7,277 160,089 7,277 196,473 154,386 25 87 0 0 7,277 167,365 7,277 203,749 156,702 26 88 0 0 7,277 174,642 7,277 211,026 159,053 27 89 0 0 7,277 181,919 7,277 218,303 161,438 28 90 0 0 7,277 189,196 7,277 225,580 163,860 29 91 0 0 7,277 196,473 7,277 232,856 166,318 30 92 0 0 7,277 203,749 7,277 240,133 168,813 31 93 0 0 7,277 211,026 7,277 247,410 171,345 32 94 0 0 7,277 218,303 7,277 254,687 173,915 created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 5 of 13
Rider Description Guaranteed Lifetime Withdrawal Rider Security Life (Advisor XL) Security Secure Annuity The Security Secure Annuity issued by Security Life Insurance Company is designed to ease some of your financial concerns in retirement and offer you reassurance through a series of important features and guarantees: Guaranteed lifetime With your annuity, you can purchase an optional Guaranteed Lifetime Withdrawal Rider that guarantees you income for your lifetime and allows you to know the guaranteed minimum income you will have available under the Rider. It s important to know that taking out any excess withdrawals in any given year will reduce the guaranteed income you may withdraw under the Rider. Home Healthcare Doubler When you select the optional Guaranteed Lifetime Withdrawal Rider, if you become unable to perform at least two of the six basic activities of daily living, you can double the income you receive under the Rider for up to five years. This can help ease some of the concerns related to significant health issues as you age. There are conditions to this increase, including a two-year waiting period. Lifetime Lifetime Annual : Refers to the amount of income you may withdraw each year under the br> : Used to compute the Lifetime Annual and the charge for the Guaranteed Lifetime Withdrawal Rider. The is not an amount that is available for withdrawal or as a death benefit. Lifetime Withdrawal : The Lifetime Annual is calculated by multiplying the by a withdrawal percentage that is based on the age of the person receiving income. If the Lifetime Annual is to be paid on joint lives, the Lifetime Withdrawal is lower and is based on the youngest life covered. This withdrawal percentage is the Lifetime Withdrawal. Maximum Annual Withdrawal Pecentage: Single Joint 55 4.50% 4.00% 56 4.60% 4.10% 57 4.70% 4.20% 58 4.80% 4.30% 59 4.90% 4.40% 60 5.00% 4.50% 61 5.10% 4.60% 62 5.20% 4.70% Single Joint 63 5.30% 4.80% 64 5.40% 4.90% 65 5.50% 5.00% 66 5.60% 5.10% 67 5.70% 5.20% 68 5.80% 5.30% 69 5.90% 5.40% 70 6.00% 5.50% Single Joint 71 6.10% 5.60% 72 6.20% 5.70% 73 6.30% 5.80% 74 6.40% 5.90% 75 6.50% 6.00% 76 6.60% 6.10% 77 6.70% 6.20% 78 6.80% 6.30% Single Joint 79 6.90% 6.40% 80 7.00% 6.50% 81 7.10% 6.60% 82 7.20% 6.70% 83 7.30% 6.80% 84 7.40% 6.90% 85 7.50% 7.00% 86 7.60% 7.10% Single Joint 87 7.70% 7.20% 88 7.80% 7.30% 89 7.90% 7.40% 90 8.00% 7.50% At a glance, here are some of the important benefits of the optional Guaranteed Lifetime Withdrawal Rider: Guaranteed increase (roll-up) of 7.00% compounded annually in your for each year you delay taking income, up to age 85, to the end of the current 10 years or until age 85 year roll-up term, or to the date you begin taking income under the Rider, whichever comes first. The roll-up is applied only on contract anniversaries. The roll-up may be extended for an additional 10 years or until age 85 years, up to two times, for a total of 30 years, to age 85, or to the date you begin taking income under the Rider, whichever comes first. For each year you delay taking income, you will receive an additional 0.10% increase in your lifetime withdrawal rate, up to a maximum rate of 8.00% for single life and 7.50% for joint lives at age 90 or later. You will receive a predictable amount of income for the rest of your life as long as you don t take other withdrawals. You can also guarantee income for you and your spouse s lives. 7.00% Roll-up One of the features of the Guaranteed Lifetime Withdrawal Rider is the ability to delay taking income and build even more financial security for you and your family. When you delay taking income, the will increase by at least 7.00% each year during the roll-up term. On each contract anniversary prior to taking income under the Rider, your increases by a minimum of 7.00% no matter what happens to the market or your account value. You can continue to delay taking income with an option to renew the 7.00% roll-up at the end of each 10 years or until age 85-year roll-up term (up to two times), for a total of 30 years, or until you reach age 85, or until you begin taking lifetime income withdrawals, whichever comes first. This increase in your 7.00 is guaranteed, no matter what happens to your annuity s actual account value. created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 6 of 13
Rider Description Guaranteed Lifetime Withdrawal Rider Security Life (Advisor XL) Security Secure Annuity Automatically step-up your 7.00 Prior to the income start date, on each contract anniversary, if your contract s Account Value is greater than your 7.00 after the roll-up of 7.00%, then your 7.00 will increase to equal your Account Value. In this way, on your contract anniversary during the roll-up term, your 7.00 will always be the greater of the 7.00 after the 7.00%% roll-up or your Account Value. This is called an annual step-up. The annual step-up applies to the for each year you delay taking income up to age 85, to the end of the current 10-year roll-up term, or to the date you begin taking income under the Rider, whichever comes earliest. Once you begin taking your lifetime income, the 7.00%% roll-up stops. However, if your Account Value is higher than your on any contract anniversary, then your will step-up on the contract anniversary to the higher amount. Purchase Payments are not permitted once you begin taking lifetime income. Guaranteed predictable amount of income for the rest of your life When you purchase the Guaranteed Lifetime Withdrawal Rider with your Security Secure Annuity, you are guaranteeing a future income stream for the rest of your life. You will know the guaranteed minimum you will receive on a monthly, quarterly or annual basis so you can better prepare for tomorrow s needs. How much you receive depends on the amount you put into your contract, the age at which you begin taking income from the contract, and whether you want your income to last as long as you live or as long as both you and your spouse live. The longer you wait to take income, the higher the payout when you begin. This is also true of the joint life option. It s important to know that taking out excess withdrawals in any given year will reduce the Lifetime Annual you may withdraw from your contract by more than the dollar amount withdrawn. Home Healthcare Doubler If you become unable to perform at least two of the six basic activities of daily living, your Guaranteed Lifetime Withdrawal Rider. allows you to double the Lifetime Withdrawal for up to five years to help ease some of the burdens you may experience during this time. This important feature means you can take extra income for a time of need without affecting the amount of your Lifetime Annual after the five-year period. After the five-year period, the Lifetime Withdrawal used to calculate Lifetime Annual will revert back to the original rate. created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 7 of 13
Annual Ledger Outlook Plus 5 The Annual Ledger shows the detail annual calculation revealing how the rider works reflecting all roll up rates, payout rates and fees. Year Begin Year Interest Rider Fee End Year Roll-up Guaranteed Lifetime Amount Total End Year w/out Rider 0 62 109,000 114,000 109,000 1 63 109,746 1.50 889 109,746 4.00 118,560 110,635 2 64 110,467 1.50 925 110,467 4.00 123,302 112,295 3 65 111,162 1.50 962 104,110 4.00 128,235 5.50 7,053 7,053 113,979 4 66 104,762 1.50 909 97,709 121,182 7,053 14,106 115,689 5 67 98,319 1.50 856 91,266 114,129 7,053 21,159 117,424 6 68 91,832 1.50 803 84,779 107,076 7,053 28,212 119,185 7 69 85,301 1.50 750 78,248 100,023 7,053 35,265 120,973 8 70 78,724 1.50 697 71,671 92,970 7,053 42,317 122,788 9 71 72,102 1.50 644 65,049 85,917 7,053 49,370 124,630 10 72 65,433 1.50 591 58,381 78,864 7,053 56,423 126,499 11 73 58,718 1.50 539 51,665 71,811 7,053 63,476 128,396 12 74 51,954 1.50 486 44,901 64,758 7,053 70,529 130,322 13 75 45,142 1.50 433 38,089 57,706 7,053 77,582 132,277 14 76 38,280 1.50 380 31,228 50,653 7,053 84,635 134,261 15 77 31,369 1.50 327 24,316 43,600 7,053 91,688 136,275 16 78 24,407 1.50 274 17,354 36,547 7,053 98,741 138,319 17 79 17,393 1.50 221 10,340 29,494 7,053 105,794 140,394 18 80 10,327 1.50 168 3,274 22,441 7,053 112,846 142,500 19 81 3,208 1.50 115 0 15,388 7,053 119,899 144,638 20 82 0 0 8,335 7,053 126,952 146,807 21 83 0 0 1,282 7,053 134,005 149,009 22 84 0 0 7,053 141,058 151,244 23 85 0 0 7,053 148,111 153,513 24 86 0 0 7,053 155,164 155,816 25 87 0 0 7,053 162,217 158,153 26 88 0 0 7,053 169,270 160,525 27 89 0 0 7,053 176,323 162,933 28 90 0 0 7,053 183,375 165,377 29 91 0 0 7,053 190,428 167,858 30 92 0 0 7,053 197,481 170,376 31 93 0 0 7,053 204,534 172,931 32 94 0 0 7,053 211,587 175,525 created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 8 of 13
Rider Description Outlook Plus 5 Outlook Plus 5, is available to add as a rider to your equity indexed annuity only at the time of purchase. The Withdrawal Payment is the amount you choose to receive each year. The Maximum Guaranteed Annual Withdrawal Payment is guaranteed to be paid for your lifetime if no Additional Withdrawals are taken. Your age must be at least 60 before Withdrawal Payments may begin. You may begin taking Withdrawal Payments as early as the first Policy Anniversary or any Policy Anniversary you choose after that. The Withdrawal Payments taken under this rider are deducted from the annuity s Account Value and will not incur any withdrawal charges. There is an Annual Rider Charge for this benefit on each Policy Anniversary, beginning with the first. The Annual Rider Charge is determined on the Policy Date and is 0.75%. This rate is guaranteed not to change while this rider is in force unless Restart (as described below) is elected and will never exceed the maximum rate of 1.50%. There is a Rider Bonus added to the Period Withdrawal Payment. The Rider Bonus is the Rider Bonus of 5.00 of the rider multiplied by the premium received during the first Policy Year. The Rider Bonus is credited with interest at the same rate as the Account Value of the Policy. The Rider Bonus is available on a pro-rata basis based on the Rider Bonus Vesting Schedule. Additional Withdrawals, full surrender, or annuitization of the Policy. This means the Rider Bonus will not be available in all Policy Years. The Rider Bonus is fully included in the Account Value for purposes of the Death. The Outlook Plus 5, rider has two periods, the Period and the Withdrawal Period. Each period is described as follows. During the Period The Period Withdrawal Payment has a 4.00% interest rate that is guaranteed each year during the Period. The Period Withdrawal Payment initially equals the premium paid, plus the applicable premium bonus. Additional premiums paid and premium bonuses, if applicable, will be added to the Period Withdrawal Payment when they are received. Withdrawals made from the Account Value will reduce the Period Withdrawal Payment. As the Payment grows, so do your guaranteed Withdrawal Payments for life. Restart During the Period, you may Restart the 4.00% guaranteed interest rate anytime after the fifth Policy Year. At the time you Restart the Period, the following will happen: The 4.00% guaranteed interest rate on the Period Withdrawal Payment will be guaranteed from Restart; The Period Withdrawal Payment will be increased to the annuity s Account Value, if larger; and The Annual Rider Charge may change, but will not be higher than the maximum guaranteed charge of 1.50%. You must wait five years after each Restart before beginning a new Period. Withdrawals Withdrawals may be made at anytime as provided by the annuity. Withdrawals from your annuity will reduce the Period Withdrawal Payment by the same percentage reduction made to the annuity s Account Value. The Period ends when you begin taking Withdrawal Payments. At that time, the Withdrawal Period begins. During the Withdrawal Period The Withdrawal Payment amount you choose to receive is guaranteed to be paid for your lifetime if it does not exceed the Maximum Guaranteed Annual Withdrawal Payment. The Maximum Guaranteed Annual Withdrawal Payment will remain level unless there is a Step-Up in the Withdrawal Payment, or you take an Additional Withdrawal. You may receive your Withdrawal Payment annually, semi-annually, quarterly, or monthly. Each payment must be at least $100. Any election to start or stop Withdrawal Payments must be received at Insurance Company at least 20 days prior to the Policy Anniversary. When the Withdrawal Period begins: The Guaranteed Withdrawal Percentage is determined; The Withdrawal Payment is increased to the annuity s Account Value if it is larger; The Maximum Guaranteed Annual Withdrawal Payment is calculated; Any outstanding loan must be repaid; and No more loans or Systematic Withdrawals of Interest from the Account Value of the Policy may be taken. The Guaranteed Withdrawal Percentage is based on your age at the beginning of the Withdrawal Period. This percentage will not change during the Withdrawal Period. The Maximum Guaranteed Annual Withdrawal Payment equals the Withdrawal Payment multiplied by the Guaranteed Withdrawal Percentage. Maximum Annual Withdrawal Pecentage: Single Joint 60-64 5.00% 4.00% Single Joint 80-84 7.00% 6.00% created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 9 of 13
Rider Description Outlook Plus 5 65-69 5.50% 4.50% 70-74 6.00% 5.00% 75-79 6.50% 5.50% 85-89 7.50% 6.50% 90+ 8.00% 7.00% Example: Five years ago, you purchased an annuity with Outlook Plus 5 with $100,000 and have now decided to begin Withdrawal Payments. The Withdrawal Payment is now $121,665 after five years of 4% interest and your Guaranteed Withdrawal Percentage is 6.5%. At this time, your Maximum Guaranteed Annual Withdrawal Payment is $7,908 and your annuity s Account Value is $131,317. Therefore, the Withdrawal Payment is increased to the Account Value and your Maximum Guaranteed Annual Withdrawal Payment is $8,536. Step-Up On each Policy Anniversary during the Withdrawal Period, the Withdrawal Payment will be compared to the annuity s Account Value. If the Account Value is larger than the Withdrawal Payment, the Withdrawal Payment will Step-Up to the Account Value. Following the Step-Up, the Maximum Guaranteed Annual Withdrawal Payment is recalculated and increased, based on this higher Withdrawal Payment. These payments are guaranteed for your lifetime. Additional Withdrawals An Additional Withdrawal is any withdrawal that is not a Withdrawal Payment and may be made at anytime during the Withdrawal Period. An Additional Withdrawal will reduce the Withdrawal Payment by the same percentage that the annuity s Account Value is reduced, including any surrender charges that may apply. The Maximum Guaranteed Annual Withdrawal Payment will change to equal the Guaranteed Withdrawal Percentage multiplied by the Withdrawal Payment after the Additional Withdrawal. The new Maximum Guaranteed Annual Withdrawal Payment will become effective on the Policy Anniversary following the Additional Withdrawal. Rider Bonus Vesting Schedule For purposes of Additional Withdrawals, full surrenders, or annuitization, the Rider Bonus is available on a pro-rata basis based on the Rider Bonus Vesting Schedule shown below: Rider Bonus Vesting Schedule Policy Year Percentage 1-7 0% 8 25% 9 50% 10 and Later 100% Therefore, in accordance with the Rider Bonus Vesting Schedule above, if you take any Additional Withdrawals, fully surrender, or annuitize in years 1-7, no portion of the Rider Bonus will be available to you, and only a limited portion will be available in years 8 and 9. Beginning in Policy Year 10, the full Rider Bonus will be available. Required Minimum Distributions (RMDs) If the RMD payment is greater than the Maximum Guaranteed Annual Withdrawal Payment, the additional amount withdrawn to meet the RMD payment will not be considered an Additional Withdrawal. created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 10 of 13
Annual Ledger The Annual Ledger shows the detail annual calculation revealing how the rider works reflecting all roll up rates, payout rates and fees. Freedom Rider Year Begin Year Interest Rider Fee End Year Roll-up Guaranteed Lifetime Amount Total End Year w/out Rider 0 62 104,000 104,000 104,000 1 63 104,783 1.50 777 104,783 6.75 111,020 105,560 2 64 105,525 1.50 830 105,525 6.75 118,514 107,143 3 65 106,222 1.50 886 99,897 6.75 126,514 5.00 6,326 6,326 108,751 4 66 100,509 1.50 886 94,184 126,514 6,326 12,651 110,382 5 67 94,711 1.50 886 88,385 126,514 6,326 18,977 112,038 6 68 88,825 1.50 886 82,500 126,514 6,326 25,303 113,718 7 69 82,852 1.50 886 76,526 126,514 6,326 31,628 115,424 8 70 76,788 1.50 886 70,463 126,514 6,326 37,954 117,155 9 71 70,634 1.50 886 64,308 126,514 6,326 44,280 118,913 10 72 64,008 1.50 1,265 57,682 126,514 6,326 50,605 120,696 11 73 57,282 1.50 1,265 50,957 126,514 6,326 56,931 122,507 12 74 50,456 1.50 1,265 44,130 126,514 6,326 63,257 124,344 13 75 43,527 1.50 1,265 37,201 126,514 6,326 69,582 126,209 14 76 36,494 1.50 1,265 30,168 126,514 6,326 75,908 128,103 15 77 29,356 1.50 1,265 23,030 126,514 6,326 82,234 130,024 16 78 22,110 1.50 1,265 15,785 126,514 6,326 88,560 131,974 17 79 14,756 1.50 1,265 8,431 126,514 6,326 94,885 133,954 18 80 7,292 1.50 1,265 966 126,514 6,326 101,211 135,963 19 81 0 981 0 126,514 6,326 107,537 138,003 20 82 0 0 126,514 6,326 113,862 140,073 21 83 0 0 126,514 6,326 120,188 142,174 22 84 0 0 126,514 6,326 126,514 144,307 23 85 0 0 126,514 6,326 132,839 146,471 24 86 0 0 126,514 6,326 139,165 148,668 25 87 0 0 126,514 6,326 145,491 150,898 26 88 0 0 126,514 6,326 151,816 153,162 27 89 0 0 126,514 6,326 158,142 155,459 28 90 0 0 126,514 6,326 164,468 157,791 29 91 0 0 126,514 6,326 170,793 160,158 30 92 0 0 126,514 6,326 177,119 162,560 31 93 0 0 126,514 6,326 183,445 164,999 32 94 0 0 126,514 6,326 189,770 167,474 created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 11 of 13
Rider Description Freedom Rider The Freedom Rider is an optional guaranteed minimum withdrawal benefit rider (available at an additional charge) that must be elected at the time of application. Offered with a 6.75% annual roll-up feature. The roll-up amounts are current guaranteed rates. Fidelity and Guaranty Life reserves the right to lower each of these rates for future sales of Freedom RiderSM to not less than the minimum guaranteed rate of 3% annually. INCOME BASE The is the value used to determine the withdrawal benefits. The initial is equal to either the initial premium paid plus any vested premium bonus or the account value, depending on when the rider became effective. The Freedom Rider is made up of two periods, an Period and a Withdrawal Period. Period During the Period, the increases or rolls up for a 10-year period at an annualized 6.75% provided the annuitant does not elect to begin taking withdrawals. The Period and roll-up end when the client elects to begin receiving income payments, and the Withdrawal Period begins. During the Period, the Freedom Rider offers the unique benefit of restarting a new 10-year period, which extends the Period and continues the annualized 6.75% increase. Restart The ability to Restart a new 10 years roll-up period and continue the Period offers clients a tremendous amount of flexibility and control. For example, perhaps your client has planned on needing income payments after nine years. After a few years, it becomes apparent that he/she really does not need to begin receiving income for another 10 years. Electing a Restart would allow your client to continue to capitalize on the 6.75% roll-up feature, while still allowing access to the money should financial circumstances change again. A Restart must be elected on a contract anniversary and can occur after 10 years and prior to the end of 10 years years. The is increased to the account value, if greater, at the time of Restart, which may cause the Cost-of-Rider Charge to increase. A Restart does not start a new set of surrender charges, and only one Restart is permitted. If no Restart is elected during the first 10 years, the roll-up ends (although annual rider charges continue). Withdrawal Period The Withdrawal Period begins when the owner elects to begin taking Freedom Rider Withdrawal Payments. The Period ends and cannot be reinstated. No additional premium payments will be accepted once the Withdrawal Period has begun. The will increase to the account value (Step-up), if the account value is larger at the time of election. The Freedom Rider Withdrawal Payment The amount the owner chooses to withdraw each contract year during the Withdrawal Period. Payments cannot be elected until the first contract anniversary. Owner must be at least age 50 Payments may be annual, semiannual, quarterly, or monthly and must be $100 or greater Payments may be stopped and started at any time, as needed by the client Guaranteed Withdrawal Percentage stays the same, unless a Step-up occurs Freedom Rider payments exceeding contract surrender charge-free withdrawal limits may be subject to surrender charges. Guaranteed Withdrawal Payment The maximum amount that can be withdrawn each contract year (provided no Excess Withdrawals have been made) without negatively affecting the. This is the amount guaranteed to be paid for the annuitant s lifetime. Calculated by multiplying the by the Guaranteed Withdrawal Percentage, and is based on the age of the annuitant at the time income payments are elected. Established at the beginning of the Withdrawal Period and changes only at Step-up or in the case of an Excess Withdrawal. Guaranteed Withdrawal Percentage Determined at the beginning of the Withdrawal Period, and based on the annuitant s age at the time. The percentage is updated at the time of a Step-up and then based on the annuitant s age at that time. Spousal s (Joint Annuitants) The Freedom Rider offers the ability to determine income based upon the lives of two people who are legal spouses. In the case of joint annuitants, the Guaranteed Withdrawal Percentage is determined by the age of the younger of the two annuitants at the time income payments are elected. The Guaranteed Withdrawal Payment is guaranteed to be paid until the death of the second annuitant. Spousal Continuation In the case of a single annuitant, the legal spouse may step into the contract upon the owner s death: If in the Period, the benefits will be based on the successor owner, but charges will continue to be based on the first owner. If in the Withdrawal Period, Freedom Rider Withdrawal Payments will continue until the account value is reduced to zero. The Guaranteed Withdrawal Percentage will remain the percentage at the time of the first owner s death. Step-up A Step-up occurs when the is increased to the account value, if the account value is larger. A Step-up will occur automatically and is available each contract anniversary during the Withdrawal Period. The Guaranteed Withdrawal Payment is recalculated at the time of Step-up and will equal the newly Stepped-up multiplied by the new Guaranteed Withdrawal Percentage (based on the annuitant s age at the time of Step-up). On bonus annuities with a vesting schedule, the bonus will continue to vest even after income payments begin, which may result in a Step-up. Excess Withdrawal A withdrawal made that causes total withdrawals for the contract year to exceed the Guaranteed Withdrawal Payment amount. This will negatively affect the Guaranteed Withdrawal Payment amount. The annuitant has two options when this occurs: 1. Receive unpaid portion of the Freedom Rider Withdrawal Payments for the contract year as a part of the withdrawal with no further installment payments until the next contract year. 2. Receive the larger withdrawal amount and continue to receive remaining installments of the Freedom Rider Withdrawal Payments as scheduled. created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 12 of 13
Rider Description Freedom Rider Cost-of-Rider Charges The Freedom Rider is an optional benefit rider that can be added to Fidelity & Guaranty Life annuities for an additional annual charge. Annual charges are deducted from the account value through the and Withdrawal periods on each anniversary, beginning at the end of the first contract year. Charges are calculated as a percentage of the account value on the anniversary after the interest has been credited. Charges will be set at issue for the initial 10-year roll-up period. The guaranteed maximum charge for all rider versions is 1% of account value and is levied on the contract anniversary after interest is credited. Termination The Freedom Rider terminates and the rider charge ceases when any of the following occur: Contract terminates for any reason. Annuitization occurs. Client chooses to cancel the Freedom Rider (may be cancelled at any time). created by AnnuityWatch.com, Inc. and is based on our understanding of the product at the time and is Page 13 of 13