Withdrawal Phase
At any time after age 50, your client may choose to move to the Withdrawal Phase and begin guaranteed lifetime withdrawals. Your client can enter the Withdrawal Phase directly from the Inactive Phase or from the Accumulation Phase. The amount received, or the Lifetime Withdrawal Benefit Amount (LWBA), is a percentage of the Benefit Base. The percentage is determined by your client's attained age at the beginning of the Withdrawal Phase (attained age of the youngest spouse for joint spousal).
|
Age at Onset of Withdrawal Phase |
Lifetime Distribution Factor |
| 50-54 | 4.0% |
| 55-59 | 4.5% |
| 60-64 | 5.0% |
| 65-69 | 5.5% |
| 70-74 | 6.0% |
| 75-79 | 6.5% |
| 80+ | 7.0% |
Lifetime Withdrawal Benefit Amount (LWBA) Calculation
Benefit Base X Lifetime Distribution Factor = LWBAProvided no excess withdrawals are taken, the Lifetime Withdrawal Benefit Amount:
- Is Guaranteed Not To Decrease–even if the market is down, if returns are flat or if the policy value is reduced to zero. Your clients will receive their guaranteed withdrawals for life. Lifetime withdrawals may impact policy value, but the Benefit Base will never decrease.
- Can Increase - based on potential account value growth or additional deposits, even after withdrawals begin.
Withdrawals can be taken annually, quarterly, or by monthly EFT.
Benefit Base: Largest of Three Values
The Benefit Base is determined at the beginning of the Withdrawal Phase and is the largest of three values:
- Policy Value or
- Premium Accumulation Value or
- Maximum Anniversary Policy Value.
Step-Up of Benefit Base
On each policy anniversary during the Withdrawal Phase, the Policy Value will be compared to the Benefit Base. If the policy value is greater than the Benefit Base, the Benefit Base will automatically be increased to equal the Policy Value. The LWBA will be recalculated and your clients' guaranteed withdrawals will automatically increase.
Example
Let's consider an individual who decides to enter the Withdrawal Phase at age 65 and whose Benefit Base has reached $300,000.
Initial LWBA
$300,000 X 5.5% = $16,500 / 12 = $1375 Monthly Income
If at the end of the policy year, even after the policy value has been reduced by monthly systematic withdrawals and policy charges, the policy value due to market returns had reached $303,000, the policy owner would get an automatic Step Up in Benefit Base to $303,000 and the LWBA would be recalculated.
New LWBA
$303,000 X 5.5% = $16,665 / 12 $1388.75 Monthly Income
The recalculation happens automatically on the policy anniversary date. NO action is required by the policy owner. As a result the LWBA has the opportunity to increase but will never go down unless excess withdrawals are taken. Note that the Lifetime Distribution Factor, however, does not change.
If your clients choose to deposit additional premiums during the Withdrawal Phase, the policy value, Benefit Base, and the LWBA will all be increased.
The hypothetical examples on this page do not reflect the past or future performance of any investment portfolio. They assume no additional purchase payments, rider charges, mortality and expense risk charges, administrative charges or underlying portfolio expenses. Actual policy values may vary. A zero percent gross rate of return is included on the graphs for comparison purposes to show what would happen to the policy value in a flat market. Remember, the LWBA is based on the Benefit Base, not policy value.
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.
Ameritas No-Load Variable Annuity (Form 6150) and Guaranteed Lifetime Withdrawal Benefit Rider (form 4901) are issued by Ameritas Life Insurance Corp. and underwritten by affiliate Ameritas Investment Corp. Variable annuities are suitable for long-term investing, particularly for retirement, and are subject to investment risk, including possible loss of principal. Before investing, carefully consider the investment objectives, risks, charges, expenses, and other important information about the policy issuer and underlying investment options. This information can be found in the policy and investment option prospectuses available on this website or by calling 800-552-3553. Read the prospectuses carefully before investing.