For those with time to save for retirement, a deferred annuity offers an excellent alternative. The Sage Choice Single Premium Deferred Annuity builds from a single initial premium and earns a competitive fixed rate of interest that accumulates on a tax-deferred basis.
- 6-Year Single Premium Deferred Annuity
- Available from Age 15 days to 90 years (applies to both Owner and Annuitant)
- $2,000 Minimum Premium (Qualified and Non-Qualified)
- Guaranteed Minimum Interest Rate: 2% for the first 10 years and 3% thereafter
- Free-Look Period: 30 days
- Death Benefit: Accumulation Value on the date of the owner’s death. Surrender charges do not apply. Sagicor Life Insurance is also an inexpensive way to leave a death benefit to beneficiaries.
- Maturity Age: 100
- Annuity Payments: Allowed after the first contract year, annuity payments can be taken either as income payments for life or as income payments for a specific period of years. If the annuity payments begin prior to the end surrender charge period, surrender charges may depend on the payment option selected.
Interest Crediting
Due to ever-changing market conditions, the initial interest rate that will be credited to your annuity is determined at the time of purchase.
Once determined, your initial interest rate is then guaranteed by Sagicor for 12 months. Each year thereafter, following your contract’s anniversary, you will receive an annual statement showing the interest rate to be credited for the next 12 months.
This interest rate will never be less than the guaranteed minimum fixed interest rate stated in your contract.
The initial interest rate for the first year will be provided prior to your purchase and should be considered carefully as part of your decision-making process.
Features & Benefits
THE POWER OF TAX DEFERRAL
Since your earnings will not be subject to income tax until they are withdrawn by you, the value of your contract is not being reduced by taxes. This means the money that would have gone to pay taxes can remain invested and continue to earn interest.
Because of tax deferral, your money has greater potential for growth than it would in a similar, nontax deferred investment.
PENALTY FREE WITHDRAWALS
Beginning in year 1, you may withdraw up to 10% of the last contract anniversary accumulation, surrender charge free (The minimum withdrawal is $500). However, withdrawals may be subject to regular income tax and, if made prior to age 59 1/2 may be subject to a 10% IRS penalty.
Sagicor does not render legal or tax advice. If legal or tax advice is required, the services of a qualified, competent professional should be sought.
Bailout Feature
Part of the penalty-free withdrawal provision is known as the “Bailout Feature,” which provides you with an opportunity to receive 100% of the contract’s value without penalty should, after the first contract year, Sagicor declare a fixed interest rate that is more than 1% below the contract’s initial fixed interest rate.
To exercise the “Bailout Feature” of the penalty-free withdrawal provision, the contract owner must notify Sagicor, in writing, within 30 days of receiving notice of the interest rate change. The “Bailout Feature” is only available the first time that a declared fixed interest rate is more than 1% below the contract’s initial fixed interest rate. Thereafter, the “Bailout Feature” is no longer available to the contract owner.
MARKET VALUE ADJUSTMENT (MVA)
A Market Value Adjustment will apply, only during the surrender charge period, to any partial withdrawals in excess of the maximum free partial withdrawal amount and at the time the contract is surrendered.
Depending on the direction interest rates move, the MVA may increase or decrease benefits payable under the contract.
However, in no event will the MVA reduce the cash surrender value below the guaranteed cash surrender value.
An MVA will not apply if a payment option is elected that provides annuity payments for five years or longer, to pay a death benefit, or if the confinement/terminal illness waiver of surrender charge requirements are met.
CONFINEMENT/TERMINAL ILLNESS WAIVER OF SURRENDER CHARGE
If the owner of the contract is confined to a licensed Nursing Home or Confined Care Facility, as defined in the contract, for 90 consecutive days or more or is diagnosed by a licensed physician as having a terminal illness with a life expectancy of 6 months or less, the contract accumulation value will be available without a surrender charge or MVA.
This feature is provided at no extra cost.
SURRENDER CHARGES
The Sage Choice is not subject to any upfront sales charge. However, during the first 6 years that you own your contract, there is a penalty called a surrender charge that will be incurred for withdrawals in excess of the maximum free percentage.
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.
