1. Index Annuity Withdrawal
VA Complement

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

3. 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

4. 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!

5. 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

6. 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.

7. 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

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

9. 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

10. 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

11. 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

12. 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 % 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

13. 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

14. 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

15. 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

16. What are the Negatives?
Reduced opportunity
Reduced guarantees

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