Sample Income Withdrawal Illustration for Market Shield Plus with Income Shield
This example illustrates a hypothetical income withdrawal schedule for a 59-year-old individual who purchased Market Shield Plus and Income Shield with an initial single premium of $100,000. This example assumes a 5% Premium Bonus, a 10% Benefit Base Bonus, and that funds have been allocated to the Annual Point-to-Point Index with 35% Participation Rate. The client has elected to begin Income Withdrawals in year 2 (at age 60), which assumes a 4.25% withdrawal amount.
The benefit base is credited 6.5% annually until you begin taking Income Withdrawals, or until contract year 10 (whichever occurs first).
The maximum Income Withdrawal Amount is determined on the date of the first Income Withdrawal. As long as the client does not take any excess withdrawals, the maximum Income Withdrawal Amount will never decline even if the Account Value is depleted.
During periods of market growth, the Account Value may be greater than the Benefit Base on a Contract Anniversary. When this happens, the Benefit Base will be set equal to the Account Value, and the maximum Income Withdrawal Amount will be recalculated. The maximum Income Withdrawal Amount is then reset to be the greater of the recalculated value and the value before the recalculation. In the above example, the maximum Income Withdrawal Amount increases in each of years 3, 4, 5, and 6. In subsequent years, when market growth is insufficient to result in a larger maximum Income Withdrawal Amount, then the resulting maximum Income Withdrawal Amount remains level. Again, this assumes that no excess withdrawals are taken in any Contract year.
For comparison, the same Income Withdrawal schedule as shown above is calculated during the 10 worst years out of the last 20 consecutive years (1999-2008). Note how the annual Income Withdrawal Amount never decreases, even during years of market decline.
Sample Illustration for Market Shield Plus only (without Income Shield)
This example illustrates hypothetical interest credited for a 59-year-old individual who purchased Market Shield Plus with an initial single premium of $100,000. This example assumes a 5% Premium Bonus and that funds have been allocated to the Annual Point-to-Point Index with 35% Participation Rate. This example also assumes no partial withdrawals have been made.
Market Shield Plus allows the Account Value to earn interest based on market growth, while simultaneously offering protection during periods of decline. Earnings will never be less than 0%. Note how the Account Value remains unchanged in years of 0% growth.
Funds in Market Shield Plus also grow on a tax-deferred basis, which means taxes won’t be paid on earnings until withdrawals are taken. After the first contract year, up to 10% of the Account Value may be withdrawn each year penalty free year.
Market Shield Plus can also be annuitized, which can provide guaranteed pension-like income for retirement. A variety of payout options are available, including monthly income for life, monthly income for a specific period of time, and joint monthly income for spouses for as long as the survivor lives.
Market Shield Plus is a single premium deferred annuity with fixed and index-linked options underwritten by Federal Life Insurance Company (Mutual). This brochure is not a contract. Refer to the policy for complete terms and conditions. Federal tax penalties may be imposed upon certain transactions. Review your personal tax situation and your use of annuities with your attorney or tax advisor.
These examples are for illustration purposes only. Past performance does not guarantee future performance.
The IRS may impose a 10% tax penalty if you are under age 59 ½ at the time of withdrawal.Please refer to contract for complete terms and conditions.