an optional lifetime income rider - advisorrick.com income edge plus rider.pdf · rider withdrawals...
TRANSCRIPT
55439 (Rev.8/10)
IncomeEdgePlusAnOptionalLifetimeIncomeRider
IncomeEdgePlus
Willtheassetsyou’veaccumulatedlastthroughyourretirement?
NowtheycanwiththeIncomeEdgePlus,anOptionalLifetimeIncomeRider,fromAvivaLifeandAnnuityCompany.IncomeEdgePlusisaleadingsolutiontoprovideguaranteedlifetimeincomethatcomeswith......
Growth & Securitythroughguarantees;
Income foryourlifetime;
Controltostartandstoptheincomeasyouwish;
PLUS....
Additional incomeduringqualifying*Confinementperiods;**
Wellness for life® servicesfromMayoClinicHealthSolutions.**
*Please see the Income Edge Plus disclosure for full Confinement details and requirements.** Availability may vary by state. See disclosure for details.
How can Income Edge Plus benefit you? IncomeEdgePlusisanoptionallifetimeincomeRiderthatcanbeaddedtoyourAvivaFixedIndexedDeferredAnnuityforanannualcharge.ThisRidergivesyoutwowaystotakeincomeinadditiontotheFreeWithdrawalsprovidedbyyourAnnuityContract:
You can elect Income Withdrawals which pay a guaranteed income percentage for a select period of time, or You can elect Lifetime Income Withdrawals You canelect Lifetime Income Withdrawals which you are guaranteed to never outlive.
TheseIncomeWithdrawalsprovideflexibilityandchoicesthatputyouincontrolofdeterminingwhenandhowmuchretirementincomeyoureceive!
OnceyouselectIncomeEdgePlus,therewillbetwoaccountvaluesusedtodeterminetheWithdrawalamountsavailableundertheRider.
ThefirstistheAdjusted Accumulated Value whichismadeupofyourInitialPremiumandanyPremiumBonus(ifapplicable)plusanyInterestCreditsearnedintheinterestcreditingstrategiesyouchoose.
Thesecondisthe Income Account ValuewhichismadeupofyourInitialPremiumandanyPremiumBonus(ifapplicable)accumulatedatthe7.2%guaranteedgrowthforthefirst10yearsoftheContractpriortoRiderWithdrawals.
IncomeEdgePlusalsoprovidesafeaturethatcanincreaseyourincomewithdrawalpercentageintheeventyouareconfinedtoaqualifiedcarefacility.TheConfinementpageinthisbrochureoffersmorein-depthinformationaboutthisfeatureandtherequirementsforeligibility.
Inadditiontothefeaturesdiscussedabove,IncomeEdgePlusgivesyouaccesstoWellnessforlife®servicesfromMayoClinicHealthSolutions.
Manypeoplearelivinginoneoftwokeyphasesinlife:theAccumulation PeriodortheDistribution Period.Eachphasehasitsownuniquesetoffinancialobjectives(seefollowingpagesfordescriptions).
Individualsarelivinghealthier,moreactiveandlongerlivesthaneverbefore,whichmeansitistimetochangethewaywelookatretirement.IncomeEdgePluscanhelpyouplananincomethatlaststhroughoutyourretirement.Itsbenefitsgiveyoutheedgebyhelpingyoupreparetodayforallofyourtomorrows.
JerryandPamhavebeendiligentthroughouttheirworkingyearstoprotectandaccumulatetheirassets.Now,astheybothnearretirement,theybegintoevaluatehowbesttobegindistributingthatwealthinawaythatprovidesincomethatwilllastaslongastheirretirement.
Takeforexample, Jerry & Pam’s story . . .
*This is a hypothetical story.
Names:Jerry and Pam
Ages:60
CurrentStatus:Both still working
InitialFixedIndexedDeferredAnnuityPremium:$100,000
IncomeEdgePlus02
ContractYearsofIncomeDeferral IncomeAccountValue*1 $107,2002 $114,9183 $123,1934 $132,0625 $141,5716 $151,7647 $162,6918 $174,4059 $186,96210 $200,423
Accumulation Period: 7.2% Guaranteed GrowthDuringtheAccumulationPeriodyouarelookingtobuildfinancialsecurityforyouandyourfamily.Inaddition,youareworkingtogrowyourassetsandaccumulatelongtermwealthinpreparationforretirement.
AkeyaspectofIncomeEdgePlusistheguaranteedgrowthoftheIncomeAccountValueduringtheAccumulationPeriod.PriortoanyWithdrawalsunderIncomeEdgePlus,theIncomeAccountValueisguaranteedtogrow7.2%annuallyforthefirst10ContractYears.
Restart FeatureOnorafterthe5thContractAnniversary,ifnoWithdrawalsunderIncomeEdgePlushavebeentaken,youhavetheoptiontoRestarttheAccumulationPeriod.Thiswillestablishanew10-yearAccumulationPeriodduringwhichyour
IncomeAccountValueisguaranteedtogrowat7.2%annually.AtthetimeofRestart,iftheAdjustedAccumulatedValueisgreaterthantheIncomeAccountValue,theIncomeAccountValuewillbeincreasedtomatchtheAdjustedAccumulatedValueatthattimeandthe7.2%guaranteewillaccumulateonthenew,higheramountforanother10-yearperiod.Youmustwaitatleast5contractyearsbetweenrestarts,butthereisnolimittothenumberoftimesyoucanrestart.ThecostofIncomeEdgePlusmaybeincreasedbasedonthecurrentchargeatthetimeyouelecttorestart(seetheRestartExampleonthenextpage).
*Income Account Value accumulates regardless of index interest credited. This hypothetical example assumes no Rider or Base Annuity Withdrawals and no restart of the Accumulation Period. Rider Withdrawals stop the guaranteed growth in the Income Account Value.
ThelongeryouwaittotakeWithdrawalsunderIncomeEdgePlus,thehigheryourguaranteedpayout.Becausethe7.2%hasalongertimetoaccumulateinterest,resultinginahigherIncomeAccountValue.Seethechartbelow.
Income Account Value - $100,000 Initial Premium7.2%GuaranteedInterestfortheFirst10ContractYears
IncomeEdgePlus03
JerryandPamknowthattherearemanyrisksassociatedwithretirement—suchasrisinghealthcarecosts,increasinglongevityandunexpectedlifeevents.Buttheyalsoknowthattheyneedtogrowtheirassetsinpreparationforwhentheyplantostopworkinginfiveyears.
So, they purchase an Aviva Fixed Indexed Deferred Annuity with $100,000and also purchase Income Edge Plus.
ContractYearsofIncomeDeferral
[email protected]%GuaranteedGrowth
NoWait $100,0001 $107,2002 $114,9183 $123,1934 $132,0625 $140,5146 $151,7647 $162,6118 $174,4059 $186,96210 $200,423
$157,93110-Afterrestart $200,423
11 $214,85412 $230,32313 $246,90614 $264,68415 $283,74116 $304,17017 $326,07018 $349,54719 $374,71520 $401,694
In this example there are no Withdrawals. The hypothetical Income Account Values used in this chart were provided to further explain how the Restart feature could potentially affect Contract values.
5
10
$141,571
OncetheRestartiselected,the7.2%guaranteedgrowthwillcontinueforanew10yearperiod,unlessRiderWithdrawalsareelectedpriortotheendofthe10-yearperiod.
Assumingnoriderwithdrawalshavebeentaken,contractownershavetheoptiontorestarttheAccumulationPeriodonorafterthe5thContractAnniversary.
$200,423
Restart Example
Restart Accumulation Years
IncomeEdgePlus04
AttainedAgeatTimeofElection
SingleAnnuitantIncomePercentage
JointAnnuitantsIncomePercentage*
JerryandPam’sExample
50-54 3.5% 3.0%55-59 4.0% 3.5%60-64 4.5% 4.0%65-69 5.0% 4.5% $155,428x5.0%70-74 5.5% 5.0% =$7771.4075-79 6.0% 5.5%80-84 6.5% 6.0%85-89 7.0% 6.5%90+ 7.5% 7.0%
Distribution Period: Guaranteed Income & ControlDuringtheDistributionPeriodyouarelookingtoprovideforafinanciallyindependentandcomfortableretirement,securetheassetsyou’veaccumulatedandminimizerisk,whilemaintainingthesamestandardoflivingthatyouenjoyedduringtheAccumulationPeriod.IncomeEdgePlusgivesyoutwooptionsfortakingRider Withdrawals—the Income Withdrawal andthe Lifetime Income Withdrawal.TheseoptionsbothprovideguaranteedpayoutpercentageswhilestillallowingyoutomaintaincontrolofyourAnnuity.Youcanstartandstopincomepaymentsasyouwish,asmanytimesasyouwish.StartingIncomeEdgePlusWithdrawalswillstopthe7.2%guaranteedgrowthintheIncomeAccountValue.Income WithdrawalTheIncomeWithdrawalisavailableimmediatelyuponissueandallowsyoutoreceiveapercentageofyourIncomeAccountValueorAdjustedAccumulatedValue(whicheverisgreater)annuallyuntilthevaluereacheszero.ThepercentisbasedonyourageatthetimeyouchoosetostartRiderWithdrawals.ThemaximumannualIncomeWithdrawallimitsforeachagerangeareasfollows:
$200,423x5.0%=
$10,021.15 annually
*Based on the age of the younger Annuitant. Joint Annuitants must be spouses. Taxable amounts withdrawn prior to age 591/2 may be subject to a 10% IRS penalty tax.
Maximum Lifetime Income Withdrawal Percentages
ThehypotheticalamountinthisexamplewastakenfromtheIncomeAccountValuechartonpage2(assumed7.2%guaranteedgrowthfor10years,noWithdrawals,norestarts.)
Age IncomeWithdrawalLimit40-84 6.5%
85-89 7.0%
90+ 7.5%
BecausethepayoutpercentsarehigherthanwithLifetimeIncomeWithdrawals,thisoptionisattractiveforthosewhomaynotneedtheirAnnuityforlifetimeincome,butwouldlikeaguaranteedpaymentamountforacertainnumberofyears.
Lifetime Income WithdrawalThisWithdrawaloptionisavailableimmediatelyuponissue(mustbeage50orolder)andallowsyoutoreceiveguaranteedincomeforlifeonamonthly,quarterlyorannualbasis.YourIncomeEdgePlusLifetimeIncomeWithdrawalsarebasedonapercentageofyourIncomeAccountValueorAdjustedAccumulatedValue(whicheverisgreater)shownintheMaximumLifetimeIncomeWithdrawalPercentageschartbelow.
PriortothefirstelectedIncomeEdgePlusWithdrawaltheincomepercentageincreaseswhenyouenteranewagebracket.OnceyouelectanIncomeEdgePlusWithdrawal,yourincomepercentageislockedinforyourlife.PaymentamountsareguaranteedtoneverdecreaseaslongasyoudonotelectexcessWithdrawals;however,theamountcouldincreasebasedontheautomaticStep-Upfeaturedescribedlaterinthisbrochure.
IncomeEdgePlus05
Usingthehypotheticalexampleonthepreviouspage,JerryandPam’sannualLifetimeIncomeWithdrawalpaymentis$10,021.15.IfJerrybecomesconfinedandmeetstheConfinementrequirementsatthetimeofascheduledRiderWithdrawal,theycanelecttheincomedoublertotheLifetimeIncomeWithdrawalpercentageasshownbelow:
These Withdrawals will not be considered in excess of the Free Withdrawal amount and therefore are not subject to a Withdrawal Charge or Market Value Adjustment. The increased income payment during the Confinement period will cause future Income Withdrawals to be reduced by the same amount that the Contract’s Accumulated Value is reduced as a result of the increased income payment.
If Lifetime Income Withdrawals were started prior to Confinement, the original Rider Withdrawal will be in place once Confinement eligibility requirements are no longer met. Using the increased income percentage payout example above, the Lifetime Income Withdrawal is guaranteed to go back to $10,021.15 once the increased income payments stop.
JointAnnuitants’IncomePercentage
IncomeDoubler
5.0% 5.0x2=10.0%5.0% 5.0%x2=10.0%
$200,423x10.0%=$20,042.30
JerryandPam’sExample
Distribution Period: Confinement Feature Income Doubler* IncomeEdgePlusprovidesafeaturethatcandoubletheRiderWithdrawalPercentageduringatimeofConfinementformedicalcare,becausethismaybethetimeyouneedadditionalincomethemost.
Income Withdrawal MultiplierAfterthefirstContractYear,IncomeEdgePlusprovidesafeaturethatmayincreaseyourRiderWithdrawalpercentageintheeventyouareconfinedtoaqualifiedcarefacility.IfyoumeetalltheConfinementrequirements(seetheCertificateofDisclosureforfulldetails)andelecttotriggerthisfeature,yourriderincomeamountwillbedoubled.
Eligibility RequirementsToreceivethisbenefit,youmustbeconfinedtoaqualifiedcarefacilityfor180daysina250dayperiod.AlthoughthequalifyingConfinementPeriodcanbeginduringthefirstContractYear,theincreasedRiderWithdrawalpercentageisnotavailableuntilthesecondContractYear.Inaddition,youmustbeconfinedatthetimeoftheIncomeWithdrawaltoreceivetheincomedoubler.Oncetheconfinementperiodends,theRiderWith-drawalpercentagewilladjustbacktotheoriginalincomepercentage.PleaseseetheIncomeEdgePlusCertificateofDisclosureforfullConfinementeligibilityrequirements.
Ahypotheticalexampleofhowthisfeatureworksisshownattheright.
TenyearsafterJerryandPampurchasedIncomeEdgePlus,theydecidetobegintakingIncomeWithdrawals.AlthoughtheycouldhavestartedtakingWithdrawalsimmediatelyuponissue,theyunderstoodthatthelongertheywaitedtobegintakingIncomeEdgePlusWithdrawals,themorethecontractvalueswouldgrowandthehighertheirannualWithdrawalpercentagewouldbe.TheydecidedtowaittotakeWithdrawalsuntilage70.
Now, after 10 contract years, you’ll see that their Income Account Value is $200,423.00, their Income Edge Plus Withdrawal percentage has increased to 5.0%, and their first Income Edge Plus Withdrawal amount is $10,021.15 of guaranteed annual income for the rest of their lives (see Maximum Lifetime Income Withdrawal Percentages chart on page 4).
IncomeEdgePlus06
* Availability may vary by state. See disclosure for details.
Distribution Period: Creating a LegacyDuringthisphaseyouarealsolookingtoprovideforthetransitionanddistributionofyourassetsandwealthtoyourbeneficiaries.
Income Edge Plus Spousal Continuation
SpousalBeneficiaryIftheOwner’sspouseisthesoleprimaryBeneficiaryandelectstocontinuetheContract,thebenefitsofIncomeEdgePlusalsocontinue,providingbothofthefollowingconditionsaremet:
Surviving spouse’s attained age on the date of death is at least equal to the minimum issue age requirement for this Rider (age 40); andThe spouse becomes the sole Annuitant and sole Owner of the Contract.
IfthespousalbeneficiaryassumestheContractbeforeanyIncomeWithdrawalshavebeentaken,theRidersimplycontinuesintheAccumulationPeriod.SpousalcontinuationdoesnotrestarttheWithdrawalChargescheduleforthebaseAnnuityContract.IfRiderWithdrawalswerestartedpriortothetimeofspousalcontinuation,thespousecan:
Elect to receive Income Withdrawals until the Income Account Value is equal to zero, at which time the Withdrawals will stop and the Contract will terminate; orContinue to receive Lifetime Income Withdrawals if the surviving spouse is a Joint Owner on the date of death of the first Owner.
Non-SpousalBeneficiaryIncomeEdgePluswillterminateuponthedateofdeathoftheOwnerandanyremainingAccumulatedValuewillbepaidinalumpsumtothebeneficiaries.
Automatic Step-UpOneachContractAnniversaryfollowingyourfirstelectedIncomeEdgePlusWithdrawal,youareeligibleforaStep-Up.TheannualRiderWithdrawalamountwillbeautomaticallyincreased(stepped-up)ifyourAdjustedAccumulatedValueexceedsthepriorhighestIncomeAccountValueatthetimeyoubegantakingWithdrawalsunderIncomeEdgePlus.You must notify the Company if you do not want the amount of your Rider Withdrawals automatically increased.
Excess WithdrawalsWithdrawalsinexcessofthemaximumIncomeWithdrawalorLifetimeIncomeWithdrawalpercentageswillcausefutureWithdrawalstobereducedonaproratabasis.Additionally,WithdrawalsinexcessoftheallowedpercentagesaresubjecttoapplicableWithdrawalChargesandMarketValueAdjustmentsassociatedwiththeBaseContract.TheMVAisnotapplicableinallstates.
IRS Required Minimum Distributions (Qualified annuities or IRAs)ForQualifiedannuitiesorIRAs,theIRSrequiresindividualstowithdrawaminimumamountannuallyfromtheirretirementaccountstartingatage701/2.ThiswithdrawaliscalledaRequiredMinimumDistribution(RMD).IncomeEdgePlusisRMD“friendly,”meaningifyourRMDamountexceedsyourannualRiderWithdrawalamount,youcanstilltaketheRMDamountandtheExcessWithdrawalwillnotbesubjecttoapplicablechargesoradjustments.RMDswillbeconsideredpartoftheavailableWithdrawalundertheAnnuityContract.
IncomeEdgePlus07
AvivahasaffiliatedwithMayoClinictoprovideyouwiththefollowingexclusivebenefitsinanefforttohelpyouunderstandtheimportanceofahealthylifestyle
Ask Mayo ClinicWheneveryouoryourfamilyhaveahealth-relatedquestion,theanswercouldbejustatoll-freecallaway.Callthe“AskMayoClinicNurseLine”anytimearound-the-clocktospeakwithanexperiencedregisterednursethatdrawsontheresourcesofMayoClinictoansweryourquestions.
Quarterly Mayo Clinic NewsletterEverythreemonths,you’llreceivetheMayoClinicEmbodyHealthnewsletterwithimportantinformationonwellnessandhealthyliving.
Wellnessservicesprovidedby
Wellness for Life® BenefitsRetirementisatimetoenjoyfamily,friendsandalsotheassetsyou’veworkedsohardtobuild.IncomeEdgePlusgivesyoutheabilitytoturnthoseassetsintoincomethatisguaranteedtolastaslongasyourretirement.ThisuniqueRideroffersanadditionalbenefittohelpwithsomethingelsethatisimportantduringretirement-yourhealth.
JerryandPam’sstoryisnotunlikemostpeoplenearingretirement—theywanttominimizerisk,accumulatewealthanddistributethatwealthinordertoprovideforatransitionoftheirassets.
Their purchase of an Aviva Fixed Indexed Deferred Annuity with Income Edge Plus was an important part of their retirement planning. It helped provide them with the growth, security, access and control they needed to handle their needs today, while also giving them income options for their tomorrows. Plus, they have unique benefits from Mayo Clinic Health Solutions that can help them lead longer, healthier lifestyles.
ItisanticipatedthatWellnessforLife®serviceswillbeprovidedbyMayoClinicHealthSolutionsforthelifeoftheProgram.Itispossiblethattheproviderand/ormenuofWellnessServicesmaychangeorbeenhancedatsomefuturedate.Availabilitymayvarybystate.WellnessforLife®benefitsandservicesarenotavailableinallstates.
IncomeEdgePlus08
Income Edge Plus Details
IncomeEdgePlusmustbepurchasedatContractissue.ItcanbecancelledanytimeduringthefirstContractYearorafterthefifthContractYear.
CostThereisanannualchargeforIncomeEdgePlusbeginningimmediatelyatissue.ThischargeiscalculatedusingtheIncomeAccountValueasofthepriorAnnuityContractAnniversary;andisdeductedmonthlyfromtheContract’sAccumulatedValue.ThecostforthisRiderisguaranteedforthelifeoftheRider.However,iftheOwnerelectstorestarttheAccumulationPeriod,theannualRidercostmaybeincreasedtotherateineffectonthedateoftherestart.Thechargeisguaranteedtoneverbegreaterthanthemaximumrateof1.0%.
IncomeEdgePlusisofferedwithAvivaannuitiesandcannotbeelectedwithoutpurchasingtheAnnuityContract.RefertotheContractandIncomeEdgePlusCertificateofDisclosureforcompletedetails.
PremiumAllocationYoumayelecttoaddadditionalPremiumstoyourContractatanytime,evenafterstartingRiderWithdrawals.AdditionalPremiumsmadeontheContractAnniversarydatemaybeallocatedtoanycombinationoftheFixedStrategyandtheIndexedInterestCreditingstrategies.AnyadditionalPremiumsnotmadenotonaContractAnniversarydateareautomaticallyallocatedtotheFixedStrategyandmaybereallocatedtoindexedstrategiesonthefollowingContractAnniversary.
IfadditionalPremiumsaremadeafterstartingRiderWithdrawals,theadditionalPremiumisaddedtoyourAdjustedAccumulatedValue.BecausethepercentageofyourWithdrawalisbasedonyourIncomeAccountValue,yourWithdrawalamountwillnotchangeatthattime.However,ifduetotheadditionalPremiumyourAdjustedAccumulatedValuethenexceedsyourpriorhighestIncomeAccountValueonyournextContractAnniversary,yourIncomeAccountValuewillstepupautomaticallywhichwillthenincreaseyourIncomeWithdrawalamount.
IncomeEdgePlus09
Thisbrochurecontainshighlightsonly.PleaserefertotheIncomeEdgePlusContractforafullexplanationofthisRiderandanychargesorlimitations.NeitherAvivanoritsrepresentativesofferlegal,tax,accountingorinvestmentadvice;pleaseconsultaprofessionalspecializingintheseareas.IncomeEdgePlus[formAIRW(02/08)orstatevariation],anoptionalRiderforwhichanannualpremiumischarged,isissuedbyAvivaLifeandAnnuityCompany,WestDesMoines,IA.Productfeatures,limitationsandavailabilityvarybystate.
Annuitiesareinsuranceproductsbackedbytheclaims-payingabilityoftheissuingcompany;theyarenotFDICinsured;arenotobligationsordepositsof,andarenotguaranteedorunderwrittenbyanybank,savingsandloanorcreditunionoritsaffiliates;areunrelatedtoandnotaconditionoftheprovisionortermofanybankingserviceoractivity.Taxableamountswithdrawnpriortoage591/2maybesubjecttoa10%IRSpenaltyinadditiontoordinaryincometax.
JerryandPam’sstoryrepresentsthatofmanypeopleapproachingretirementnationwidewhocanresteasiertodayiftheyhaveplannedwellfortomorrow.
*This is a hypothetical story.
IncomeEdgePlus10
Wearehonoredthatyou’veputyourtrustinAviva.Wewon’tletyoudown.
Asyoureadthis,thousandsofAvivaassociatesarefocusedonourthree-lettermissionstatement:
You
We’remakingbusinessandinvestmentdecisionsthatwillensurewecanmeetourobligationstoyouandyourlovedones.
We’redevelopingnewwaystoprovidebetterservicetoyou.
We’rechallengingourselvestoreinventthewaywelookatlifeinsuranceandannuities,sowecancontinuetomeetthefinancialneedsofachangingworld—yourworld.
Mostofall,we’redrawingontheexperienceofourparentcompany,Avivaplc,withtheirmorethan300-yearlegacy.Astheoldestcontinuouslyoperatinginsurancegroupintheworld,Avivahasenduredandthrivedthroughcenturiesofwarandpeace,boomsandrecessionsandconstantchange.Thehighsandlowshavetaughtustobepreparedsoyoucancountonus,especiallyduringtimesofuncertainty.
Youcancountonustobeherewhenyouneedus.
55439 (Rev.8/10)
Products issued byAvivaLifeandAnnuityCompany
7700MillsCivicParkwayWestDesMoines,IA50266-3862
www.avivausa.com