Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-129 - ANNUITY DISCLOSURE › Appendix A - Annunity Illustration Example

Current through Register Vol. 42, No. 9, June 28, 2024
[The following illustrat ion is an example only and does not
				reflect specific characteristics of any actual product for sale by any
				company]
ABC Life Insurance Company
Company Product Name
Flexible Premium Fixed Deferred Annuity with a Market Value
				Adjustment (MVA)
An Illustration Prepared for John Doe by John Agent on
				mm/dd/yyyy
(Contact us at PolicyOwnerService@ABCLife.com or 555-555-5555
				)
Sex: Male
Age at Issue: 54
Annuitant: John Doe
Oldest Age at Which Annuity Payments
Can Begin: 95
Initial Premium Payment: $100,000.00
Planned Annual Premium Payments: None
Tax Status: Nonqualified
Withdrawals: None Illustrated
Initial Interest Guarantee Period
5 years
Initial Guaranteed Interest Crediting
							 Rates
First Year (reflects first year only interest bonus
							 credit of 0.75%):
4.15%
Remainder of Initial Interest Guarantee
							 Period:
3.40%
Market Value Adjustment Period:
Minimum Guaranteed Interest Rate after Initial
							 Interest
Guarantee Period*:
5 years 3%
* After the Initial Interest Guarantee Period, a new interest
				rate will be declared annually. This rate cannot be lower than the Minimum
				Guaranteed Interest Rate.
Annuity Income Options and Illustrated Monthly Income
				Values
This annuity is designed to pay an income that is guaranteed to
				last as long as the Annuitant lives. When annuity income payments are to begin,
				the income payment amounts will be determined by applying an annuity income
				rate to the annuity Account Value.
Annuity income options include the
				following:
* Periodic payments for Annuitant's life
* Periodic payments for Annuitant's life with payments
				guaranteed for a certain number of years
* Periodic payments for Annuitant's life with payments
				continuing for the life of a survivor annuitant
Illustrated Annuity Income Option:
Monthly
				payments for annuitant's life with payments guaranteed for 10-year
				period.
Assumed Age When Payments Start:
70
Account Value
Monthly Annuity Income Rate/$1000 of Account
								Value *
Monthly Annuity Income
Based on Rates Guaranteed in the Contract
$164,798
$5.00
$823.99
Based on Rates Currently Offered by the
							 Company
$171,976
$6.50
$1,117.84
* If, at the time of annuitization, the annuity income rates
				currently offered by the company are higher than the annuity income rates
				guaranteed in the contract, the current rates will apply.
ABC Life Insurance Company
Company Product Name
Flexible Premium Fixed Deferred Annuity with a Market Value
				Adjustment (MVA)
An Illustration Prepared for John Doe by John Agent on
				mm/dd/yyyy
(Contact us at PolicyOwnerService@ABCLife.com or 555-555-5555
				)
Contract Year/Age
Premium Payment
Values Based on Guaranteed
						  Rates
Values Based on Assumption that Initial
						  Guaranteed Rates Continue
Interest Crediting Rate
Account Value
Cash Surrender Value Before MVA
Minimum Cash Surrender Value After MVA
Interest Crediting Rate
Account Value
Cash Surrender Value Before and After
						  MVA
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
1 / 55
$ 100,000
4.15%
$ 104,150
$ 95,818
$ 92,000
4.15%
$ 104,150
$ 95,818
2 / 56
0
3.40%
107,691
100,153
93,000
3.40%
107,691
100,153
3 / 57
0
3.40%
111,353
104,671
95,614
3.40%
111,353
104,671
4 / 58
0
3.40%
115,139
109,382
98,482
3.40%
115,139
109,382
5 / 59
0
3.40%
119,053
114,291
114,291
3.40%
119,053
114,291
6 / 60
0
3.00%
122,625
118,946
118,946
3.40%
123,101
119,408
7 / 61
0
3.00%
126,304
123,778
123,778
3.40%
127,287
124,741
8 / 62
0
3.00%
130,093
130,093
130,093
3.40%
131,614
131,614
9 / 63
0
3.00%
133,996
133,996
133,996
3.40%
136,089
136,089
10 / 64
0
3.00%
138,015
138,015
138,015
3.40%
140,716
140,716
11 / 65
0
3.00%
142,156
142,156
142,156
3.40%
145,501
145,501
16 / 70
0
3.00%
164,798
164,798
164,798
3.40%
171,976
171,976
21 / 75
0
3.00%
191,046
191,046
191,046
3.40%
203,268
203,268
26 / 80
0
3.00%
221,474
221,474
221,474
3.40%
240,255
240,255
31 / 85
0
3.00%
256,749
256,749
256,749
3.40%
283,972
283,972
36 / 90
0
3.00%
297,643
297,643
297,643
3.40%
335,643
335,643
41 / 95
0
3.00%
345,050
345,050
345,050
3.40%
396,717
396,717
For column descriptions, turn to next page
Column Descriptions
(1)
Ages
shown are measured from the Annuitant's
				age at issue
(2)
Premium Payments
are assumed to be made at the
				beginning of the Contract Year shown
Values Based on Guaranteed Rates
(3)
Interest Crediting Rates
shown are annual
				rates; however, interest is credited daily. During the Initial Interest
				Guarantee Period, values developed from the Initial Premium Payment are
				illustrated using the Initial Guaranteed Interest Rate(s) declared by the
				insurance company, which include an additional first year only interest bonus
				credit of 0.75%. The interest rates will be guaranteed for the Initial Interest
				Guarantee Period, subject to an MVA. After the Initial Interest Guarantee
				Period, a new renewal interest rate will be declared annually, but can never be
				less than the Minimum Guaranteed Interest Rate shown.
(4)
Account Value
is the amount you have at the
				end of each year if you leave your money in the contract until you start
				receiving annuity payments. It is also the amount available upon the
				Annuitant's death if it occurs before annuity payments begin. The death benefit
				is not affected by surrender charges or the MVA.
(5)
Cash Surrender Value Before MVA
is the amount
				available at the end of each year if you surrender the contract (after
				deduction of any Surrender Charge) but before the application of any MVA.
				Surrender charges are applied to the Account Value according to the schedule
				below until the surrender charge period ends, which may be after the Initial
				Interest Guarantee Period has ended.
Years Measured from Premium
							 Payment:
1
2
3
4
5
6
7
8+
Surrender Charges:
8%
7%
6%
5%
4%
3%
2%
0%
(6)
Minimum Cash Surrender Value After MVA
is the
				minimum amount available at the end of each year if you surrender your contract
				before the end of five years, no matter what the MVA is. The minimum is set by
				law. The amount you receive may be higher or lower than the cash surrender
				value due to the application of the MVA, but never lower than this minimum.
				Otherwise the MVA works as follows: If the interest rate available on new
				contracts offered by the company is LOWER than your Initial Guaranteed Interest
				Rate, the MVA will INCREASE the amount you receive. If the interest rate
				available on new contracts offered by the company is HIGHER than your initial
				guaranteed interest rate, the MVA will DECREASE the amount you receive. Page 4
				of this illustration provides additional information concerning the MVA.
Values Based on Assumption that Initial Guaranteed Rates
				Continue
(7)
Interest Crediting Rates
are the same as in
				Column (3) for the Initial Interest Guarantee Period. After the Initial
				Interest Guarantee Period, a new renewal interest rate will be declared
				annually. For the purpose of calculating the values in this column, it is
				assumed that the Initial Guaranteed Interest Rate (without the bonus) will
				continue as the new renewal interest rate in all years. The actual renewal
				interest rates are not subject to an MVA and will very likely NOT be the same
				as the illustrated renewal interest rates.
(8)
Account Value
is calculated the same way as
				column (4).
(9)
Cash Surrender Value Before and After MVA
is
				the Cash Surrender Value at the end of each year assuming that Initial
				Guaranteed Interest Rates continue, and that the continuing rates are the rates
				offered by the company on new contracts. In this case the MVA would be zero,
				and the Cash Surrender Values before and after the MVA would be the
				same.
Important Note:
This illustration assumes you will
				take
no
withdrawals from your annuity before you begin to receive
				periodic income payments.
Withdrawals will reduce both the annuity Account Value
				and the Cash Surrender Value.
You may make partial withdrawals of up to
				10% of your account value each contract year without paying surrender charges.
				Excess withdrawals (above 10%) and full withdrawals will be subject to
				surrender charges.
This illustration assumes the annuity's current interest
				crediting rates will not change. It is likely that they will change and actual
				values may be higher or lower than those in the illustration.
The values in this illustration are not guarantees or
				even estimates of the amounts you can expect from your annuity. For more
				information, read the annuity disclosure and annuity buyer's guide.
				MVA-adjusted Cash Surrender Values (CSVs) Under Sample Scenarios
The graphs below show MVA-adjusted Cash Surrender Values (CSVs)
				during the first five years of the contract, as illustrated on page 2 ($100,000
				single premium, a 5-year MVA Period) under two sample scenarios, as described
				below.
Graph #1
shows if the interest rate on new
				contracts is 3% LOWER than your Initial Guaranteed Interest Rate, the MVA will
				increase the amount you receive (green line). The pink line shows the Cash
				Surrender Values if the Initial Guaranteed Interest Rates continue (from Column
				(9) on Page 2).
Graph #2
shows if the interest rate on new
				contracts is 3% HIGHER than our Initial Guaranteed Interest Rate, the MVA will
				decrease the amount you receive, but not below the minimum set by law (Column
				(6) on Page 2), which in this scenario limits the decrease for the first 2
				years (yellow line). The pink line shows the Cash Surrender Values if the
				Initial Guaranteed Interest Rates continue (from Column (9) on Page 2).
These graphs and the sample guaranteed interest rates on new
				contracts used are for demonstration purposes only and are not intended to be a
				projection of how guaranteed interest rates on new contracts are likely to
				behave.
Click
				to view image