5-Year Annuity

Contract Description

This is called the 5-Year Annuity because it has a 5 year surrender charge schedule. (See Below)  This is a new product for FBL and we are excited about the avenues of service it allows us to give our clients.  We have always provided a market level or higher interest rate on your money. 

Due to the large number of people staying active in the work force after retiring from their initial career, there hasn’t been a need to draw on their retirement funds until forced to at 70 ½ years old.  This product gives them a vehicle to maximize their return, protect their principal and avoid surrender charges due to forced disbursement.

Interest Rate Tiers

FBL currently offers 2 interest rate tiers for this product.

 

$2,000 to $9,999	1st Year Guaranteed Rate   4.00%
$10,000 to $100,000	1st Year Guaranteed Rate   4.25%

After the initial year, the renewal rate becomes effective.  The state has mandated a 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 2.0% 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 5 years have elapsed.  The purpose of these charges is 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        0%

 

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.