Equitrust ChoiceFour Fixed Annuity is a fixed annuity offering choices to balance accumulation and liquidity needs.
Choices
ChoiceFour from EquiTrust Life Insurance Company is a tax-deferred annuity featuring competitive one-year renewable interest rates, access to your money, and protection of your principal.
It is built on the understanding that competitive returns and minimal taxation are important factors in reaching retirement goals.
You choose the time horizon that best fits your liquidity needs and a strategy that suits your interest rate outlook.
ChoiceFour is a single premium deferred annuity with a twist – you can make additional premium payments anytime during the first contract year.
Plus, you have a variety of choices to customize your contract to suit your objectives.
ChoiceFour is really four products in one.
You choose the product for you:
1. BASE CONTRACT
The “Base Contract” features a one-year fixed rate that is reset annually.
All premiums paid in the first contract year will receive the same interest rate as the initial premium.
The interest rate in subsequent years may change on each contract anniversary – subject to the Minimum Guaranteed1 Interest Rate.
Upon partial withdrawal or surrender, you are subject to a surrender charge on the accumulation value, in effect for nine years and declining annually: 12, 11, 10, 9, 8, 7, 6, 4, and 2 percent.
If you need access to money from your contract, you may withdraw interest earned in the prior 12 months and do so without surrender charges.
2. MARKET VALUE ADJUSTMENT OPTION
If you’re confident that you will not need access to your money early, you may choose the Market Value Adjustment (MVA) Option.
This option gives you an immediate 1.50 percent premium bonus, applied to all premiums received in the first contract year.
The Market Value Adjustment Option affects early surrenders of the contract in excess of the free withdrawal provision.
The MVA may increase or decrease the accumulation value surrendered when interest rates move up or down relative to rates at the time of your annuity purchase.
At the end of the surrender charge period, your cash surrender value will equal the full accumulation value.
3. LIQUIDITY OPTION
If you have a financial time horizon shorter than nine years, you may choose the shortened surrender charge schedule available with the Liquidity Option.
This will reduce your surrender charge schedule to six years, declining annually: 12, 11, 10, 9, 8, and 7 percent.
The cost of the Liquidity Option is reflected in an interest rate slightly lower than the rate available with the Base Contract.
In addition, the Liquidity Option allows you greater access to your money.
You may withdraw up to 10 percent of the accumulation value annually without surrender charge, beginning in the second contract year.
Although withdrawals of greater than 10 percent can be made, a surrender charge will be applied to amounts exceeding the 10 percent maximum.
Keep in mind that any withdrawals may be subject to federal income tax, and you may incur a 10 percent IRS penalty tax on withdrawals taken prior to age 59 1/2.
4. COMBINATION OF BOTH OPTIONS
This option combines the benefits of both.
If you prefer a shorter surrender charge schedule, yearly access to 10 percent of your accumulation value without a surrender charge or MVA, as well as a 1.50 percent premium bonus in exchange for the Market Value Adjustment and a slightly lower interest rate, then both Options may be right for you.
Getting Started
ChoiceFour is available for issue ages 0-85. You pay no initial front-end sales charges or annual maintenance fees; 100 percent of your premium goes to work for you right away.
Other Features
ANNUITIZATION OPTIONS
Several annuitization payment options are available, including payment for life, payment of a designated amount, or payment for a certain period of time.
You determine the schedule that best fits your financial circumstances – a period as short as 5 years or for as long as the annuitant is alive.
THE VALUE OF TAX DEFERRAL
Currently, all interest income earned on an annuity accumulates on a tax-deferred basis.
No income taxes are payable until you receive a payment from your contract.
If you are under age 59 1/2 at the time of withdrawal, an additional 10 percent IRS penalty may be imposed.
Tax deferral is currently available only to individuals and joint owners, not to corporations or other non-individuals.
MINIMUM GUARANTEE
You are guaranteed, upon surrender, to receive no less than 100 percent of your premiums, excluding any premium bonus if applicable, less any partial withdrawals, plus interest earned at a rate of no lower than 1% and no higher than 3%, less surrender charges.
NURSING HOME WAIVER RIDER
For additional peace of mind, your contract includes a Nursing Home Waiver Rider at no extra cost.
Available at issue through age 80.
If you are confined to a nursing home or hospital for 90 days or more, your contract accumulation value will be available without surrender charges or MVA beginning in the second contract year and during your confinement.
TERMINAL ILLNESS RIDER
If the owner is diagnosed with a terminal illness, surrender charges will be waived for a withdrawal of up to 75% of the accumulation value. This Rider has no extra cost.
BENEFITS UPON DEATH OF OWNER
If the owner of the annuity dies, the full accumulation value is paid to the beneficiary, without surrender charges or MVA. Upon the death of an owner, the beneficiary may choose to have the death benefit paid immediately or applied to a payment option.
Equitrust Life Insurance is also an inexpensive way to leave a death benefit to beneficiaries.
FREE-LOOK PERIOD
After your ChoiceFour contract is issued, you have a specified number of days to review it; see your contract for complete details.
If you are not completely satisfied with the terms, you may return the contract and receive 100 percent of your premiums paid, less any prior withdrawals.
Retirement Income Planning
If you’re spending the interest from a CD or a fixed annuity to supplement your retirement income, consider a deferred annuity with a lifetime income rider. These annuities would offer a guaranteed income for life (even if the annuity ran out of money), removing the concern of making your money last in retirement and running out of money.
Some lifetime income riders offer a retirement income that increases to keep up with inflation, help pay for long-term care expenses, and offer an enhanced death benefit to help your beneficiaries.
