Flexible Premium Annuity

Contract Description

This is called a Flexible Annuity because it allows deposits after the initial deposit with a minimum of $10 per deposit.  It has a 10 year surrender charge schedule (See Chart Below) from the contract date.  This contract is also approved to be used as an Annuity Rider on any of our premium paying life insurance policies. 

The Flexible Annuity is versatile when used as a systematic savings device.  A large number of clients use this to accumulate future premiums on their current insurance policies.  This would alleviate the cash flow load that life insurance premiums can sometimes create upon retired individuals.  FBL’s portfolio for this product include small and large businesses which use it as their investment choice for their employees' retirement plan.  This contract is adjustable to the many needs of our clients.

Interest Rates

There is currently only one interest rate schedule for this product.  The initial guaranteed interest rate is 2.00% with a renewal rate of 2.00%.

After the initial year, the renewal rate becomes effective.  The state has a mandated guaranteed rate of 1.50%.  The current renewal rate that FBL has established is 2.00%.  Interest rates can change at anytime.  It will affect your annuity contract on the day of the month that your contract originated.  Example:  Your original investment date was 2/5/02, your initial guaranteed rate will expire on 2/5/03 and the renewal rate of 1.50% will become effective.  FBL changes the renewal rate to 3.5% on 11/10/03, which means that on 12/5/03 it will become effective on your contract. 

Surrender Charges

These are charges that will be withheld by Family Benefit Life from your account if you “Surrender” all or a portion of your contract before the 10 years have elapsed.  The purpose of these charges are to protect the insurance company against investors moving their investment after the initial higher interest rate period.  They are used industry wide.

This product has the following Surrender Charge schedule:

 

1st Year Charge     10%	2nd Year Charge           9%
3rd Year Charge     8%	4th Year Charge            7%
5th Year Charge     6%	6th Year Charge            5%
7th Year Charge     4%	8th Year Charge            3%
9th Year Charge     2%	10th Year Charge          1%

                                                                  

Tax Tips

A tax deferred investment is treated differently by the IRS than most other non-retirement investment vehicles.  If a withdrawal is made prior to the annuitant turning 59 1/2 , the IRS charges a 10% penalty of the taxable income.  For tax advice, please contact your personal tax advisor.