West Virginia Code of State Rules › Agency 114 - Insurance Commission › Title 114 - LEGISLATIVE RULE INSURANCE COMMISSIONER › Series 114-11E - Annuity Disclosure › Appendix A - Annuity Illustration Example

Current through Register Vol. XLI, No. 28, July 12, 2024
Annuity Illustration Example
[The following illustration 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
Policvownerservice@ABCLife.com
or 555-555-5555)
Sex: Male
Initial Premium Payment: $100,000.00
Age at Issue: 54
Planned Annual Premium Payments: None
Annuitant: John Doe
Tax Status: Nonqualified
Oldest Age at Which Annuity Payments Can Begin: 95
Withdrawals: None Illustrated
Initial Interest Guarantee Period
5 Years
Initial Guaranteed Interest Crediting Rates
First Year (reflects first year only interest bonus credit of
						  0.75%):
4.15%
Remainder of Initial Interest Guarantee Period:
3.40%
Market Value Adjustment Period:
5 Years
Minimum Guaranteed Interest Rate after Initial Interest
						  Guarantee Period
*:
3%
* After the Initial Interest Guarantee Period, a new interest rate
				  will be declared annually. This rate cannot be lower than the Minimum Guaranteed
				  Interest Rate.
Annuity Income Options and Illustrated Monthly Income
				  Values
This annuity is designed to pay an income mat is guaranteed to
				  last as long as the Annuitant lives. When annuity income payments are to begin, the
				  income payment amounts will be determined by applying an annuity income rate to the
				  annuity Account Value.
Annuity income options include the following:
* Periodic payments for Annuitant's life
* Periodic payments for Annuitant's life with payments guaranteed
				  for a certain number of years
* Periodic payments for Annuitant's life with payments continuing
				  for the life of a survivor annuitant
Illustrated Annuity Income Option:
Monthly payments
				  for annuitant's life with payments guaranteed for 10-year period
Assumed Age When Payments Start:
70
Account Value
Monthly Annuity Income Rate/$ 1,000 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.
Values Based on Guaranteed Rates
Values Based on Assumption that Initial
						  Guaranteed Rates Continue
Contract Year/Age
Premium Payment
Interest Crediting Rate
Account Value
Case 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
$130,096
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%
$240,225
$240,225
31/85
0
3.00%
$256,749
$256,749
$256,749
3.40%
$335,643
$335,643
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
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 Guaranteed 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 Charge:
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.
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
				  purposes 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 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 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 shows MVA-adjusted Cash Surrender Values (CSVs)
				  During the first five years of the contract, as illustrated above ($100,000 single
				  premium, a 5-year MVA Period), under two same scenarios, as described below.
Graph #1
shows if the interest rate on the new
				  contracts is 3% LOWER than your Initial Guaranteed Interest Rate, the MVA will
				  increase the amount you receive. The other line shows the Cash Surrender Values if
				  the Initial Guaranteed Interest Rates continue (from Column (9) above).
Graph #2
shows if the interest rate on new contracts
				  is 3% HIGHER than your Initial Guaranteed Interest Rate, the MVA will decrease the
				  amount you receive, but not below the minimum set by law (Column (6) above), which
				  in this scenario limits the decrease for the first 2 years. The other line shows the
				  Cash Surrender Values if the Initial Guaranteed Interest Rates continue (from Column
				  (9) above).
These graphs and the same 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.
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