AssetShield 5 is a fixed index annuity designed to help protect hard-earned dollars from index fluctuations while offering interest growth opportunities based on increases in an index.
About American Equity Annuities
American Equity Financial Strength
Understanding Fixed Index Annuities
What is a Fixed Index Annuity?
A fixed index annuity is a contract backed by the financial strength and claims-paying ability of the issuing company.
This guarantees contract owners a retirement vehicle designed to protect assets while allowing for growth opportunities.
It does this through a combination of powerful benefits:
- Principal Protection
- Guaranteed Income
- Tax-Deferred Growth
- Liquidity
- May Avoid Probate
How a Fixed Index Annuity Works
The retirement product is purchased with an insurance provider that, in turn, guarantees principal protection, tax-deferred growth on assets, and a reliable income stream.
Throughout the course of the contract, the fixed index annuity can earn additional interest credits based, in part, on index increases.
As an insurance product, the fixed index annuity is not directly tied to any index.
So, there are none of the exposure risks associated with direct stock or share ownership.
The annuity cannot lose money due to index volatility, and the interest credited will never be less than zero.
Money Access Options and Features
Premium Allocations
The initial premium payment can be allocated, in any combination, to either the fixed interest or any of the index strategies.
Payments received after the initial premium automatically go into the fixed interest strategy.
The Contract Values may be reallocated on the contract anniversary between strategies subject to these minimums:
- The minimum allocation for each value is $1,000.
- The minimum transfer to select a new value is 10% of the Contract Value.
Surrender Values and Charges
The annuity’s Surrender Value will never be less than 87.5% of the premium received, less any withdrawals, accumulated at the minimum guaranteed interest rate.
If a Partial Withdrawal above the Free Withdrawal or a Surrender is taken during the Surrender Charge period, a deduction will be taken out according to the Surrender Charge schedule.
Rate Integrity Rider
This rider allows for a waiver of Surrender Charges upon the termination of the annuity contract.
During the waiver election period, American Equity will waive Surrender Charges if we declare a Cap or Participation Rate for any crediting strategy included in the Rate Integrity Rider that is less than or equal to the Surrender Charge waiver rate.
The Surrender Charge waiver rate for each crediting strategy is determined at the date of purchase.
Market Value Adjustment (MVA)
This product contains a Market Value Adjustment (MVA) Rider.
An MVA may increase or decrease the amount of withdrawal in excess of the Free Withdrawal amount or the Surrender Value.
The MVA does not apply to Free Withdrawals, any Death Benefit, the MGSV, or any distributions occurring after the Surrender Charge period has ended.
In general, as the MVA Index increases, Cash Surrender Values decrease. As the MVA Index decreases, Cash Surrender Values increase.
Free Withdrawals
This is an opportunity each year (after the first contract year) to take Free Withdrawals up to 10% of the Contract Value.
Waiver of Surrender Charge Riders
Nursing Care Rider
Included automatically for owners under age 75 at issue.
After the first contract year, a one-time withdrawal of up to 100% of the contract value is allowed if the owner is confined to a qualified nursing care facility for a minimum of 90 days.
Confinement must begin after the contract issue date, and written proof is required from both the qualified nursing care facility and recommending physician.
Any payment made under this rider will not be subject to withdrawal charges, surrender charges, or MVAs.
Terminal Illness Rider
Included automatically for owners under age 75 at issue.
After the first contract year, a one-time withdrawal of up to 100% of the contract value is allowed if the owner is diagnosed with a terminal illness.
The diagnosis must occur after the contract issue date, and written proof with supporting documentation is required from a qualified physician.
Any payment made under this rider will not be subject to withdrawal charges, surrender charges, or MVAs.
Death Benefit
Death Benefit proceeds are paid to the surviving joint owner.
If there is no surviving joint owner, the Death Benefit is paid to the named beneficiary(ies) with no Surrender Charges. Generally paid in the lump-sum, other payment options are also available.
Life Insurance is also an inexpensive way to leave a death benefit for beneficiaries, tax-free.
