Index Annuity Withdrawal VA Complement

Index Annuity Withdrawal Benefits GMWB at a glance Case Study Index/Variable Annuity GMWB Comparison

Index Annuity Withdrawal Benefits At a Glance Provides a guaranteed lifetime withdrawal from GMWB value, without annuitizing Separate account – (not accumulated value) Provides an annual Roll-up regardless of index performance Will rarely see additional step ups due to index performance 5. Annual fee – generally ranges from .50% to .75% 6. Annual payments are guaranteed for life, even if the account value is decreased to $0

Withdrawal Benefits What’s Really Important? Bonus? Roll-up rate? GMWB value? These are all phantom numbers that can make a GMWB appear better than another. Q: What really is important? A: How much the client will receive, when they need the income!

Most Popular Index Withdrawal Benefits What Sells and What’s Really Important Example based on 60 year old male… Income need at 67… $200,000 deposit Roll-up Rate GMWB Value (After 7 Years) Withdrawal Rate Income Amount Bonus Carrier A 6% 7% Compounded $340,425 5% $17,021 10% Simple $340,000 5.2% Carrier B 0% $17,680

Index & Variable Annuity Withdrawal Benefits – What’s the Difference? Most index annuity withdrawal benefits will provide a higher guaranteed withdrawal. Variable annuities provide a much greater chance of outperforming the underlying withdrawal benefit guarantee. Opportunity vs. protection Index annuity and variable annuity withdrawal benefits can provide a solution to consumers looking for guaranteed income in retirement.

Withdrawal Benefits Where They Fit Someone looking for guaranteed income in the future Someone with a low risk tolerance Someone looking for “certainty” in retirement

Index & Variable Annuity Withdrawal Benefits Changing our thoughts from competition to complement

John, 60 Year Old Male $380,000 Q Assets $230,000 NQ Assets Anticipated income need at age 67 = $15,000/year Interested in guaranteed income What are John’s options? Variable Annuity Index Annuity Immediate Annuity CDs Stocks Bonds

Variable Annuity Hypothetical Guaranteed Withdrawal (does not consider step-ups) 60 Year Old Deposit of $200,000 5% Compounded Annually on GMWB Base 7 Year Deferral 5% Withdrawal GMWB Value of $281,420 Lifetime Income of $14,071

Index Annuity Hypothetical Guaranteed Withdrawal 60 Year Old Deposit of $200,000 10% Simple Interest Credited Annually on GMWB Base 7 Year Deferral 5.2% Withdrawal GMWB Value of $340,000 Lifetime Income of $17,680

Withdrawal Benefits Where They Fit 60 Year Old Deposit of $200,000 10% Simple Interest Credited Annually on GMWB Base 5% Compounded Annually on GMWB Base 5% Compounded Annually on GMWB Base 7 Year Deferral 7 Year Deferral 7 Year Deferral GMWB Value of $353,600 = Approx. 11.48% gross return per year assuming 3% fees. GMWB Value of $340,000 GMWB Value of $281,420 5.2% Withdrawal 5.2% Withdrawal 5.2% Withdrawal Lifetime Income of $17,680 Lifetime Income of $14,071 Lifetime Income of $17,680

Comparison Index Annuity Variable Annuity Pros: Higher guaranteed income (40% Higher) Protection against market downside Cons: No opportunity for withdrawal benefit step ups Limited market participation on account value Variable Annuity Pros: Potential for income step-ups from strong market performance Potential for greater account value Cons: Lower guaranteed income Limited downside protection

Complement Deposit of $200,000 $100,000 Index Annuity $100,000 Variable Annuity GMWB Base $170,000 GMWB Base $140,710 Income of $8,840/Year Total Income $15,875/Year Income of $7,035/Year

What Have We Accomplished? Index Annuity Higher guaranteed income Greater protection against market downside than owning just a variable annuity Variable Annuity Potential for income step-ups from strong market performance Potential for greater account value than owning just an index annuity Eliminates the need to rely solely on future market predictions Diversification

What are the Negatives? Reduced opportunity Reduced guarantees

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