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American Equity Investment Life Insurance Company • West Des Moines, IA 50266 • 888-647-1371 • www.american-equity.com | For Agent Information Only. Not For Use For Solicitation Or Advertising To The Public
1 M
Use this Presentation For Agents
Licensed with American Equity only.
We require you to Include Product
Brochures, Disclosure Statements and
Product Profiles with this Presentation.
American Equity Investment Life Insurance Company • West Des Moines, IA 50266 • 888-647-1371 • www.american-equity.com | For Agent Information Only. Not For Use For Solicitation Or Advertising To The Public
2 M
What’s New at American Equity
■Enhancements to guaranteed lifetime income
■ Introduction of a Volatility Control Index
Goals of Lifetime Income Rider Development
■Enhance guaranteed income potential
■Maintain pricing discipline
■Create unique design
■Solidify market leadership
Lifetime Income Benefit Rider Enhancements
■ Innovative gender based payout factors
■One year incremental payout factors
■Higher potential payout capacity
■Removed increasing payment option
Lifetime Income Benefit Payout Factors
Single Joint
Payout % Payout %
Age Female Male Joint
50 3.25% 3.55% 3.00%
51 3.35% 3.65% 3.10%
52 3.45% 3.75% 3.20%
53 3.55% 3.85% 3.30%
54 3.65% 3.95% 3.40%
55 3.75% 4.05% 3.50%
56 3.85% 4.15% 3.55%
57 3.95% 4.25% 3.60%
58 4.05% 4.35% 3.65%
59 4.15% 4.45% 3.70%
Single Joint
Payout % Payout %
Age Female Male Joint
70 5.25% 5.60% 4.50%
71 5.35% 5.75% 4.55%
72 5.45% 5.90% 4.60%
73 5.55% 6.05% 4.65%
74 5.65% 6.20% 4.70%
75 5.75% 6.30% 4.75%
76 5.85% 6.40% 4.80%
77 5.95% 6.50% 4.85%
78 6.05% 6.60% 4.90%
79 6.15% 6.70% 4.95%
80+ 6.25% 6.80% 5.00%
Single Joint
Payout % Payout %
Age Female Male Joint
60 4.25% 4.55% 3.75%
61 4.35% 4.65% 3.80%
62 4.45% 4.75% 3.85%
63 4.55% 4.85% 3.90%
64 4.65% 4.95% 3.95%
65 4.75% 5.05% 4.00%
66 4.85% 5.15% 4.10%
67 4.95% 5.25% 4.20%
68 5.05% 5.35% 4.30%
69 5.15% 5.45% 4.40%
*Montana residents will be issued on a Gender Neutral basis
American Equity Investment Life Insurance Company • West Des Moines, IA 50266 • 888-647-1371 • www.american-equity.com | For Agent Information Only. Not For Use For Solicitation Or Advertising To The Public
9 M
*Form number and availability may vary by state
Example: Enhanced Death Benefit Rider (13 R-LIBR-EDB.1)*
Assumptions
■ Age 65
■ $100,000 initial
premium
■ Bonus Gold (Index-1-07)*
■ No growth
■ 4.0% IAV rate during
deferral
■ 70bps fee
*Form number and availability may vary by state
Scenario #1
■Client wants to lock up some recent stock
market gains
■May need the money for income, but also have
other income sources
■Would like to pass this to their beneficiary
Scenario #1 Examples
*Benefit provided by Lifetime Income Benefit and Enhanced Death Benefit Rider (13 R-LIBR-EDB.1).
Form number and availability may vary by state.
End of
Year Age
Contract Value
Death Benefit IAV Enhanced Death Benefit
5 Years Lump Sum
5 70 $106,952 $133,832 $133,832 $120,392
10 75 $103,261 $162,827 $162,827 $133,044
15 80 $110,020 $198,104 $198,104 $154,062
20 85 $118,523 $241,024 $228,800 $173,662
20 85 $118,523 $241,024 $228,800 $173,662
Scenario #1 Summary
$173,662 Guaranteed lump sum death benefit
$228,800 paid over 5 years = $45,760 per year
Scenario #2
■Clients have sizeable IRA that makes up 30%
of total assets
■Clients want to defer until required to take
RMDs
■Clients are required to take RMDs and pass as
much to the beneficiary as possible
End of
Year Age
Cumulative
Total RMDs
Contract Value
Death Benefit IAV
Enhanced Death
Benefit
5 Years Lump
Sum
5 70 $0 $106,952 $133,832 $133,832 $120,392
10 75 $19,086 $84,443 $133,154 $133,154 $108,799
15 80 $37,491 $69,862 $125,937 $125,937 $97,900
20 85 $56,320 $55,861 $106,727 $106,727 $81,294
Scenario #2 Examples
$56,320 $106,727 $81,294
*Benefit provided by Lifetime Income Benefit and Enhanced Death Benefit Rider (13 R-LIBR-EDB.1).
Form number and availability may vary by state.
Scenario #2 Summary
Lump Sum Death Benefit
Total Contract Distribution
$85,136
$141,560
Wellbeing Rider (13 R-LIBR-W.1)* - Eligibility
■Lifetime Income Benefit Rider (LIBR) must
be in force
■Must provide proof that owner or spouse if
applicable is unable to perform 2 of 6 ADL’s
–Do not have to be confined to a facility
*Form number and availability may vary by state
Wellbeing Rider (13 R-LIBR-W.1)*
■Single life payout
–200% of benefit payout percentage
■Joint life payout
–150% of benefit payout percentage if one or
both qualify
■Waiting period
–2 years
■Maximum Benefit Period
–5 years
*Form number and availability may vary by state
Lifetime Income Benefit Rider
Choices for guaranteed lifetime income
■7% for 10 years 90 bps
■6.5% for 20 years 75 bps
■4.0% no fee
■Fees calculated on CV not IAV
■No MVA on any indexed annuities
■Six rider options remain the same
American Equity
Volatility Control Index
Criteria for Selection of Volatility Control Index
■Transparency
■Non-proprietary so it can not be manipulated
by carrier or manufacturer
■Trackable index
■Focus on principal protection, safety, and
guarantees of FIA’s first and foremost
S&P 500® Dividend Aristocrats® Index
■Launched May, 2005
■S&P 500 Companies
■Criteria - consistently increasing dividends every year for at least 25 consecutive years
■Both capital growth and dividend income characteristics
■Minimum of 40 companies that are equally weighted
■Company mix rebalanced quarterly
■Well diversified across all market sectors
Top Holdings as of 07.31.2014
■Family Dollar Stores, Inc.
■Abbott Laboratories
■Stanley Black & Decker
■Sherwin-Williams Co.
■Lowe’s Cos, Inc.
■Other Holdings:
–3M
–Coca-Cola Co.
–Exxon Mobil
–Johnson & Johnson
S&P 500® Dividend Aristocrats® Daily Risk Control 5% Index
■Launched August, 2010
■Offer increased stability and control of the
S&P Dividend Aristocrats
■Overlay mathematical algorithms adjust
parent index risk profile to control risk at 5%
■Ticker: SPXD5UN
■Website: S&P Dow Jones Indices
American Equity Volatility Control Index
■Annual Reset
■Asset fee 2.50% or 2.25%
– Bonus Gold is 2.25%
– Retirement Gold, Foundation Gold, Advantage
Gold and Benefit Gold are all 2.50%
■No cap or participation rate
■All products except Integrity, Heritage and
Traditions Gold
■New sales only initially
Performance
Hypothetical performance results may not be
indicative of future performance
How do you think the strategy will perform in
the future?
Diversification is key to success (or to avoid
failure) in all market conditions
Industry Observations
American Equity Some Competitors
Limit on upside potential Uncapped
Non proprietary Proprietary
Annual Reset 5 year term end points
Chooses not to illustrate Illustrates hypotheticals
Actual results Touts backtesting
Establish realistic client expectations Expectations may be difficult to attain
The Power of Annual Reset Design
■ Interest “credited” on each anniversary
■ Interest “credits” are “locked-in” and can
never be lost
■Annual resets sets a new index starting point
■Annual reset is beneficial during severe
index downturns
–You do not lose any value
–New starting point for future growth is lower
American Equity Investment Life Insurance Company • West Des Moines, IA 50266 • 888-647-1371 • www.american-equity.com | For Agent Information Only. Not For Use For Solicitation Or Advertising To The Public
32 M
American Equity Investment Life Insurance Company • West Des Moines, IA 50266 • 888-647-1371 • www.american-equity.com | For Agent Information Only. Not For Use For Solicitation Or Advertising To The Public
34 M
Which mistake does
your Client NOT want
to make?
American Equity Investment Life Insurance Company • West Des Moines, IA 50266 • 888-647-1371 • www.american-equity.com | For Agent Information Only. Not For Use For Solicitation Or Advertising To The Public
36 M