Fixed Indexed Annuities

Fixed Indexed Annuities Indexed Annuities work with the S&P®. Participation rates and caps vary and, as reflected in the second example, a decline in...
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Fixed Indexed Annuities

Indexed Annuities work with the S&P®. Participation rates and caps vary and, as reflected in the second example, a decline in the S&P® could result in zero index credits on the annuity at the end of that policy year. FA-9

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

Fixed Indexed Annuities Question Ask yourself: “Is my money working as hard for me as I did to earn it?”

Bank Certificate of Deposit

Life Insurance

Checking/Savings Account

Existing Fixed Annuity

Bank Money Market Account

FA-10

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

How the Fixed Indexed Annuity works with the S&P® 500 Index + 0

S&P 500® Index Indexed Annuity



+ 0

– When the S&P® index rises, the value of the Fixed Indexed Annuity will increase annually by the applicable index credit, subject to any applicable participation and/or cap.

Indexed Annuity S&P 500® Index

When the S&P® index falls, the value of the Fixed Indexed Annuity is unaffected. Your annuity value may not increase at the end of that policy year, but it will not decrease no matter how much the market drops.

The above examples do not reflect the actual results of the S&P 500® for a particular period, but rather are intended to illustrate in general terms how the Fixed Indexed Annuities work with the S&P®. Participation rates and caps vary and, as reflected in the second example, a decline in the S&P® could result in zero index credits on the annuity at the end of that policy year. FA-11

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

Fixed Indexed Annuities: Protection of Principal When you lose money, you have to gain a HIGHER percentage than the percentage LOST to recover you losses. Percentage lost

Return required to recover losses (over one year)

10%

11%

20%

25%

30%

43%

40%

67%

50%

100%

Is there a better way to avoid such volatility?

FA-12

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

The Power of Zero: Protection of Principal You earn a portion of the gains, but absorb none of the losses. Year

Beginning of the Year S&P 500® Reading

End of the Year S&P 500® Reading

% Change in S&P 500® Reading

% Return on GrowthPoint®

EOY GrowthPoint® Account Value

2001

1320.28

1148.08

-13.04%

0.00%

$100,000

2002

1148.08

879.82

-23.37%

0.00%

$100,000

2003

879.82

1111.92

26.38%

3.60%

$103,600

2004

1111.92

1211.92

8.99%

3.60%

$107,330

2005

1211.92

1248.29

3.00%

3.00%

$110,551

2006

1248.29

1418.30

13.62%

3.60%

$114,530

2007

1418.30

1468.36

3.53%

3.53%

$118,573

2008

1468.36

903.25

-38.49%

0.00%

$118,573

2009

903.25

1115.10

23.45%

3.60%

$122,841

2010

1115.10

1257.64

12.78%

3.60%

$127,264

2011

1257.64

1257.60

0.00%

0.00%

$127,264

2012

1257.60

1426.19

13.41%

3.60%

$131,845

Minimum cap rate for the GrowthPoint® (LA-07G) product is 2%. The average cap rate 2010–2012 was 3.6%. Example of a hypothetical 1/1/2001 investment of $100,000 in the GrowthPoint® Fixed Deferred Indexed Annuity with a point to point indexing method and a 3.6% Cap* Note: Past performance of the S&P 500® is no guarantee of its future performance or of future values of this indexed annuity. The values shown are based on hypothetical assumptions and are not predictive of future values. FA-13

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

The Public Probate Process is Often Overlooked: Public Process (Probate) The Will

Private Process1

1. Probate 2. Safeguarding 3. Assembling Assets A. safe deposit box B. cash C. securities D. household & personal effects

E. real estate F. out-of-state property G. miscellaneous

Annuities or Life Insurance

4. Appraisal 5. Overall Review A. securities B. personal & household effects

C. real estate D. business

6. Claims 7. Taxes 8. Income Taxes

9. Inheritance Taxes

A. decedent’s B. estate’s C. gift tax

D. domicile E. federal estate taxes F. foreign states & countries

Beneficiary1

10. Distribution of Estate A. payment of legacies

B. establishment of trusts 11. Final Accounting 12. Litigation?

You should always consult a tax professional or legal advisor regarding your state regulations and your specific situation. 1

Beneficiary must be a named person. Listing estate as beneficiary does not avoid probate.

FA-14

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

Children/Charity: Is your money “beneficiary friendly”? Are the proceeds going to the person(s) you wish in the correct amounts? Per Capita

In equal shares to each member in a class

Per Stirpes

In equal shares to each member of specified class with the share of a deceased member divided proportionately among his or her named beneficiaries

You should always consult a tax professional or legal advisor regarding your state regulations and your specific situation. FA-15

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

Fixed Indexed Annuities: Important Points Bypass Probate In most cases, upon death, funds from your Annuity pass to a properly named beneficiary without being subject to the delays and costs of probate1 Protection from Creditors As permitted by law, certain Annuities receive special protection from attachment by creditors2 Surrender Schedule Withdrawal Charges may apply for full surrenders and withdrawals that exceed the Penalty Free Withdrawal provision. No Annual Fees3 There are no annual administrative fees deducted from your premium. 1

Always consult a tax and /or legal professional for advice regarding the laws of your state.

2

Always consult a legal advisor regarding your state laws and your specific situation.

3

Currently Bankers charges no administrative fees for its Premium Bonus Indexed Annuity and 5&5 Annuity.

FA-16

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

Top Ten Reasons: Fixed Annuities offer… Fixed Annuities offer: 1. No upfront sales charges and no annual fees1

6. A  guaranteed monthly income you cannot outlive similar to a pension when you annuitize

2. Minimum Guaranteed Cash Surrender Value from day one

7. Direct Rollovers for IRAs and other qualified plans means the tax-free transfers are handled by us and no paperwork for you to figure out

3. Annual access to your money: Free partial withdrawal amount provisions

8. Tax-deferred growth

4. Declining withdrawal charges that permanently end2

9. Beneficiary payments that avoid probate when you name a beneficiary that may in-turn save your heirs money and time

 o principal risk while participating in 5. N S&P 500® growth3

10. Special protection from attachment by creditors and annuity income for the benefit of a spouse may be exempt from Medicaid requirements4

1

For LA-06T, LA-03D & LA-07G

2

For LA-06T: Free withdrawal amount:10% Day 1 and up to 20% year 2 if no withdrawal in prior year

3

For LA-07G: As long as no surrenders or withdrawals are taken and subject to participation and cap rates

4

Always consult a tax and /or legal professional for advice regarding the laws of your state

FA-17

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

Your Choice: Three Types of Annuities 1. Fixed Indexed Annuity (LA-07G) • Portion of annual gain in S&P 500® • Protection of principal 2. Bonus Fixed Annuity (LA-06T) • Bonus interest rate for the first policy year • Protection of principal 3. 5&5 Fixed Interest Annuity (LA-03D) • No withdrawal charges after 5 years • Protection of principal

Subject to participation and cap rates. See policy for complete details. FA-18

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

Two Important Decisions: 1. Which Beneficiaries to Name

2. Which Assets to Transfer1

Spouse

Certificate of Deposit

Children

Excess in Checking/Savings Account

Grandchildren

Money Market Account

Church/Charity

IRA/401(k)/TSA/403(b)/457/Roth IRA

Trust

Existing Annuity Life Insurance Cash Values

1

Consult with a Financial Advisor if securities products are involved.

FA-19

© 2013 Bankers Life and Casualty Company. Chicago, IL. (6/13)

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