Accumulation Phase
Inflation and Downside Market Protection
When your client chooses to activate the rider and enter the Accumulation Phase, the policy begins a 10-year period during which the Premium Accumulation Value will be credited a guaranteed 5% annual compounded rate of return (0% in policy years in which a withdrawal is taken). At the beginning of the Accumulation Phase, the Premium Accumulation Value is defined as the initial premium if the rider activation date is the same as the policy date, or the policy value as of the rider activation date if this date is later than the policy date.
Guaranteed Accumulation for Retirement Income
For example, assuming an initial $100,000 investment, the Premium Accumulation Value (assuming no withdrawals) would still grow guaranteed to $162,889 even if the net investment returns were negative.
The following hypothetical table is intended to show the effect of the 5% compounded annual rate of return over a 10 year period where the gross market returned is assumed to be 0% on an initial investment of $100,000. The net return, policy value and surrender value reflect the maximum M&E of 0.80% and an investment expense of 0.65%. This is not intended to predict or project investment returns. Actual investment returns will vary.
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Annual Reset With the annual reset feature, your clients can
On each policy anniversary during the Accumulation Phase, the Premium Accumulation Value will be reset to the Policy Value if it is greater. A reset locks in any gains and starts a new 10-year period, increasing the time a guaranteed 5% annual compounded rate of return is provided on the rider's Premium Accumulation Value, assuming no withdrawals. If there is a reset at any time in the Accumulation Phase, a new 10-year period begins. |
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Withdrawal Flexibility One withdrawal per year is allowed during the Accumulation Phase. This withdrawal flexibility:
A withdrawal will reduce the Premium Accumulation Value and Maximum Anniversary Policy Value proportionately by the amount of the withdrawal to the policy value. In addition, there is no 5% accumulation of the Premium Accumulation Value in the year a withdrawal is made. The 5% accumulation of the Premium Accumulation Value will be available starting the next year provided no withdrawals are taken in that year. Taxes are not owed on earnings until withdrawn, usually at retirement. For Individual Retirement Accounts (IRAs) the premium is also tax-deferred until withdrawn. -------------------------------------------------------------------------------- The GLWB rider is not approved in NY and available on new issues only. Guarantees are based upon the claims-paying ability of the issuing company and do not apply to the investment performance or account value of the underlying variable portfolios. Any gains withdrawn are taxed as ordinary income and may result in federal tax penalties if taken before age 59 1/2.
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