Elevate Your LegacyTM
Family Endowment Rider® Max
Protect Your Legacy
Objective: Bill and Susan recently retired and want to protect their legacy while planning for RMDs.
Solution: Bill allocates $1 million of his retirement savings to BCA Elevate 12 with FER Max. From age 71 to 87, based on a hypothetical, non-guaranteed 5.87% annual interest rate, Bill takes $1,248,626 in RMDs. If Bill passes away at age 87, his beneficiary Susan would receive a death benefit of $1,985,568.
Todayʼs financial landscape looks different from a generation ago. If youʼve set aside a portion of your retirement savings as a legacy for loved ones, you may need a plan to help you address challenges such as:
- Persistent Low Interest Rates in traditional fixed income.
- Required Minimum Distributions (RMDs) from your Individual Retirement Accounts (IRAs).1
The Balanced Choice® Annuity Elevate fixed indexed annuity (BCA ElevateTM) can help you take control of your retirement. BCA Elevate offers growth potential based in part on the positive movement of an index while protecting your retirement savings from downside market risk.
An Optimized Legacy Plan
The Family Endowment Rider® Max with Premium Bonus (FER™ Max), an optional rider available with BCA Elevate for an additional charge, offers an Enhanced Death Benefit guaranteed to grow daily at a 2% compound annual rate plus 100% of any interest earnings every two years (1% if the Balanced Allocation Lifetime Income Rider® Fixed Growth Option (FGO™) or Stacked Growth Option Max (SGO® Max) is also elected) plus 100% of any interest earnings every two years.2 Beneficiaries receive the greatest of the Cash Surrender Value, Balanced Allocation Value or Enhanced Death Benefit value.
FER Max also offers two powerful benefits to help protect your legacy: All RMDs associated with this contract can be taken without additional charges, and withdrawals up to 5% of the accumulation value, including RMDs, reduce the Enhanced Death Benefit value on a dollar-for-dollar basis.2
Key Terms and Definitions
Fixed Indexed Annuities – A fixed indexed annuity is a contract issued by an insurance company. In exchange for your premium, the insurance company provides and opportunity for growth based in part on the performance of an underlying index while protecting your money from downside market risk. All guarantees are backed by the claims-paying ability of the issuing carrier. Fixed indexed annuities are not stock market investments and do not directly participate in any stock or equity investments or index. It is not possible to invest directly in an index. This contract has charges and limitations. For costs and complete details, please see the BCA Elevate product brochure and ask your financial professional.
Explanation of the Enhanced Death Benefit Rider and Rider Charge – The Family Endowment Rider guarantees an enhanced death benefit that pay a minimum amount on death equal to the initial premium plus accumulation at a daily interest rate that is equivalent to 2% annual compound interest plus 100% of any BCA Elevate Interest Earnings every two years. It also provides a one-time bonus which enhances the Accumulation Value. At death, your beneficiary or beneficiaries will receive the greatest of the contract’s Cash Surrender Value, Balanced Allocation Value or Enhanced Death Benefit value. The annual rider charge is calculated at the beginning of each contract year and is 0.85% (0.50% if the bonus is not elected) multiplied by the EDB Crediting Base. The charge is deducted monthly from the Accumulation Value and (in some states) from the Minimum Guaranteed Contract Value (MGCV). The annual rider charge applies until the earlier of the death benefit being payable or the Rider Charge Stop Date. The Rider Charge Stop Date is the later of 8 years or age 85.
Accumulation Value – The Accumulation Value is your premium plus any Interest Earnings. The Accumulation Value will be reduced by any applicable charges and withdrawals. Strategy and optional rider charges are calculated annually and deducted monthly from the Accumulation Value and, in some states, the MGCV. Charges such as Withdrawal Charges, Premium Bonus Vesting Adjustments and MVAs are deducted when they are calculated. For more information, please see the Certificate of Disclosure.
Market Value Adjustment (MVA) – The MVA applies to withdrawals greater than the Free Withdrawal Amount and may increase or decrease the amount you receive. For more information, please see the Additional Product Information. MVA does not apply in AK, CT, HI, MN, MO, NJ, OR, PA, UT WA.
Premium Bonus Vesting Adjustment – FER Max with Premium Bonus provides, for an annual rider charge, a 10% premium bonus (premium bonus percentage varies by product variation) that enhances the Accumulation Value as well as providing an Enhanced Death Benefit (for some product variations, the Premium Bonus may be referred to as a Step-up Bonus). While the premium bonus is added to the Accumulation Value, it is not added to the Enhanced Death Benefit. Withdrawals taken in excess of the Free Withdrawal Amount will incur a Premium Bonus Vesting Adjustment in addition to any applicable Withdrawal Charges and MVA. The Premium Bonus Vesting Adjustment is equal to the portion of the Accumulation Value withdrawn in excess of the Free Withdrawal amount which is attributable to the Premium Bonus, multiplied by (100% minus the Premium Bonus Vesting Percentage). Premium Bonus Vesting Percentages vary by product variation. Product variations with a Step-up Bonus do not apply a Premium Bonus Vesting Adjustment.
Tax Considerations – FER Max is not life insurance, and any benefit payable under the rider will be taxable. Any withdrawals taken may be subject to federal and state income tax. Withdrawals made before age 59½ may be subject to a 10% federal tax penalty. The information contained herein is based on our understanding of current tax law. The tax and legislative information may be subject to change and different interpretations. We recommend you consult wit your tax professional regarding your particular circumstance.
Termination – FER Max cannot be terminated once it has been purchased and attached to the BCA Elevate contract. The rider will terminate only upon the annuity date or upon payment of a death benefit under the provisions of the contract.
Withdrawals – Withdrawals of any time will reduce the Enhanced Death Benefit. The first 5% of the Accumulation Value withdrawn in any contract year will reduce the Enhanced Death Benefit on a dollar-for-dollar basis. Withdrawals in excess of 5% in any contract year will reduce the Enhanced Death Benefit proportionally. The Free Withdrawal Amount is 5% of the Accumulation Value in the first year and 10% of the Accumulation Value for all remaining years. Withdrawals in excess of the Free Withdrawal Amount will be subject to any applicable Withdrawal Charges, Premium Bonus Vesting Adjustments and Market Value Adjustments. For more information, please see the Certificate of Disclosure. The Withdrawal Charges are as follows for BCA Elevate 12 (for BCA Elevate 10 and BCA Elevate 8, please refer to the Certificate of Disclosure):
|Withdrawal Charge %||14.5||14||13.5||13||12||11||10||9||8||7||6||4|