Inside Scoop: Retirement Income Now or Later? Your Client Decides

1 Once benefits begin, the Lifetime Withdrawal Percentage is locked. Lifetime Annual Payments are not subject to withdrawal charges or Market Value Adjustment. The income benefit is included on the date of issue for an annual charge of 1.20% of the Withdrawal Base at the end of each contract year. The income benefit provides the guaranteed lifetime income called Lifetime Annual Payments (LAP) that are determined as a percentage of the Withdrawal Base at the time of income activation. The percentage is called the Lifetime Withdrawal Percentage (LWP), is based upon the age at income activation, and is locked in for life when the income begins. LWPs vary based on single or joint income. The Withdrawal Base and Deferral Bonus Base initially equal the premium amount. Deferral Bonus, called Income Boosts, are available to grow the Withdrawal Base. The first Deferral Bonus, equal to 20% of the premium amount, applies on day 1 of the contract. Prior to income activation, additional Deferral Bonuses equal to 7.5% of the premium amount, are provided at the beginning of years 2, 3, 4 and 5. If income activation is delayed until year 10, an additional Deferral Bonus is available which equals 150% of all interest credits earned in the first nine years of the contract. If a withdrawal is taken prior to the income activation your Withdrawal Base and Deferral Bonus Base will be reduced proportionately. Subsequent Deferral Bonuses will thereby be based on the current Deferral Bonus Base at each increase, not initial premium amount. Once income is activated, withdrawals in excess of LAP will reduce the LAP for future years in proportion to the reduction in contract value due to the part of the withdrawal that exceeds the LAP. The LAP is zero prior to the GLWB activation. It is important to note that the Withdrawal Base is separate from the contract value and is not available for cash surrender or as a death benefit.