FIXED INDEXED ANNUITIES TALKING POINTS

Understanding and Benefiting from

FIXED INDEXED ANNUITIES TALKING POINTS

TALKING POINTS ? Page 2 What Do Fixed Indexed Annuities Offer?

Some advantages to the Fixed Indexed Annuity: Safety of your principal Interest is typically locked-in each term No risk of loss if you hold the contract to term and no withdrawals are taken during the

withdrawal charge period A guaranteed minimum contract value Your choice of interest crediting strategies: index-linked or a guaranteed interest option Tax deferred growth (Annuities vs. CDs, for example) Penalty-free and lifetime income options

Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. The Internal Revenue Code already provides tax deferral to IRAs, so there is no additional tax benefit obtained by funding an IRA with an annuity; consider the other benefits provided by an annuity, such as lifetime income and a death benefit.

TALKING POINTS ? Page 3 How Do You Earn Interest?

Many fixed indexed annuities have multiple interest-crediting strategies; you may select a strategy in advance for each interest crediting period (a term is typically one year)

Track a market index Determine a percentage change based on the selected strategy An adjustment such as a participation rate, cap rate or fee may apply Credit interest at the end of the period (usually each contract year) ? In annual reset

annuities, credited interest can never be taken away due to direct market fluctuation or market performance Any interest compounds in the next crediting period

Fixed indexed annuities are not stock market investments and do not directly participate in any stock or equity investments. Market indexes do not include dividends paid on the underlying stocks, and therefore do not reflect the total return of the underlying stocks; neither an Index nor any market-indexed annuity is comparable to a direct investment in the equity markets. Clients who purchase indexed annuities are not directly investing in a stock market index. Positive index adjustments may be limited to a monthly maximum (called a "cap") or a participation rate, meaning only a portion of the gain is credited to the contract.

TALKING POINTS ? Page 4 Other Important Benefits

A downturn in the market index does not result in a reduction in your account/premium Caps, fees and participation rates can never cause the annuity to receive a negative

interest credit Get up to a 10% withdrawal without surrender charges There are death benefit advantages as well as several tax-favored income strategies

Taxable amounts withdrawn prior to age 59? may be subject to a 10% IRS Penalty. Withdrawals in excess of the 10% fee amount may be subject to withdrawal charges and a market value adjustment that would reduce the value of your annuity. In addition, withdrawals are not credited with index interest for that term.

TALKING POINTS ? Page 5 Choose the Risk/Reward Profile of Your Money (Chart)

CDs, Mutual Funds, Bonds, etc. ; each have risk/reward profiles and trade-offs

CDs have a lot of safety guaranteed, but often lower interest

Mutual funds have the POTENTIAL for a high return, but carry some risk for negative returns

A fixed annuity has less risk to value than VAs, stocks and bonds but more potential interest credits than CDs

Don't expect interest to rival stocks over the long term and don't expect the F.D.I.C. insurance of CDs, however, you will never lose principal (if held to term), and the annuity is backed by the strength of the issuing insurance company

Most fixed indexed annuities guarantee that the interest rate credited will never be less than zero

Fixed indexed annuities are not stock market investments and do not directly participate in any stock or equity investments. Market indexes do not include dividends paid on the underlying stocks, and therefore do not reflect the total return of the underlying stocks; neither an Index nor any market-indexed annuity is comparable to a direct investment in the equity markets. Clients who purchase indexed annuities are not directly investing in a stock market index. Annuities are products of the insurance industry; not guaranteed by any bank or the FDIC.

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