The BalancedAllocation Annuity is a single premium indexed deferred annuity that has been developed specifically to be an integral part of a sound, long-term retirement plan and to help turn your vision of retirement into a reality by offering:
- The guarantees and security you need for your retirement savings;
- The opportunity for long-term accumulation of your principal;
- Flexibility to access your retirement savings, and;
- The opportunity to create a guaranteed lifetime income.
Strong Guarantees and Tax Deferral
You can have confidence in knowing the retirement savings allocated to the BalancedAllocation Annuity are safe and secure.
A crucial aspect of any sound long-term financial plan is to make sure your retirement savings are available when you need them.
Fixed annuity products—like the BalancedAllocation Annuity—can be an excellent choice to meet this goal because fixed annuities, by design, offer a level of safety, security, and guarantees which can make them a cornerstone of a comprehensive financial plan.
To that end, the BalancedAllocation Annuity offers you a series of guarantees to help you meet your long-term retirement goals and objectives.
With the BalancedAllocation Annuity, your annuity is guaranteed to never lose principal (the single premium you pay into your Contract), provided the Contract is not surrendered during the Withdrawal Charge period and no early Withdrawals are taken in excess of your Contract’s Free Withdrawal amount.
Withdrawals in excess of the Free Withdrawal amount will incur a Withdrawal Charge and any applicable Market Value Adjustment (MVA), which could cause you to receive less than your original principal.
The MVA is not applicable in all states;
Minimum Guaranteed Contract Value
The BalancedAllocation Annuity offers you the security of a Minimum Guaranteed Contract Value that ensures—regardless of market conditions—that you will receive a minimum interest crediting rate on a percentage of your premium while the Contract is in effect.
Excess Interest Guarantee
Your Minimum Guaranteed Contract Value is enhanced by a feature called Excess Interest.
“Excess Interest” is simply the difference between the growth in your Accumulation Value and the Minimum Guaranteed Contract Value.
Here’s how it works:
If, at the end of your Contract Withdrawal Charge period, the interest credited to your Accumulation Value is greater than the interest credited to the Minimum Guaranteed Contract Value, then your Minimum Guaranteed Contract Value will be increased by that difference in interest credits.
From that point forward, this new Minimum Guaranteed Contract Value will earn interest at the minimum interest crediting rate.
Again, this provides you with an added level of security against market volatility because—regardless of market conditions— the value of your Contract can never fall below this new Minimum Guaranteed Contract Value.
If there is any Excess Interest, it will be credited at the end of the Withdrawal Charge period and at the end of every two-year interest crediting Term thereafter.
The BalancedAllocation Annuity provides annuitization options that offer you the ability to create guaranteed lifetime income, ensuring that your retirement savings will last as long as your retirement.
The amount of the payments will be based on the annuitization option you choose and the current annuitization interest rates at the time of your selection.
In no case will the interest rate used to calculate the payments be less than an effective annual interest rate of 1.50 percent.
A Balanced Approach to Crediting Interest To Your Contract
The BalancedAllocation Annuity provides the safety of a traditional fixed annuity and also offers you the opportunity to choose how the interest credited to your annuity is determined.
At application, the patented Balanced Allocation Strategy allows you to choose from different options.
These options determine your interest using a formula combining three elements – an index allocation and a declared rate allocation, and any applicable charges.
The index element is linked to the performance of a market index or a blend of indices.
The declared rate element is applied to an interest rate set by Aviva Life and Annuity Company.
The appreciation from the index and declared rate elements are added together less any applicable charges (sometimes referred to as ‘spreads’) to determine the amount of interest that is credited to your Contract.
In the event there are no interest earnings for the Term, there will be no charges.
This patented Balanced Allocation Strategy offers you the potential for better long-term accumulation, particularly in periods of low-interest rates.
The Balanced Allocation Strategy provides your retirement savings the opportunity for long-term accumulation without the downside risks associated with investing directly in the stock market.
Advantages of a Balanced Approach
The Balanced Allocation Strategy was specifically developed to keep your retirement savings safe from market downturns while enhancing the opportunity for long-term accumulation.
The BalancedAllocation Annuity keeps your retirement savings secure by guaranteeing that your premium and the interest that is credited to your Contract can never be lost to market downturns.
At the same time, there are no limits or “caps” placed on the upside earnings potential of the Balanced Allocation Strategy.
Ultimately, this provides you with the opportunity to realize above-average long-term accumulation compared to other common financial products (i.e. savings accounts, bank CDs, etc.) particularly in times of low-interest rates.
All this plus the peace of mind that comes from knowing your annuity is fully backed by the financial strength of Aviva Life and Annuity Company.
Convenience and Flexibilty
The BalancedAllocation Annuity provides you with the flexibility to track your annuity Contract values during the life of your Contract.
One key to making important decisions about your long-term retirement savings is having access to important information when you need it.
To that end, the BalancedAllocation Annuity offers significant advantages not commonly found in fixed indexed annuity products.
In a patent-pending first for fixed indexed annuities, the Balanced Allocation Strategy allows for the tracking of Contract values daily, which means interest earnings are calculated and credited upon any triggering event.
The Contract’s triggering events include:
- a Death Benefit,
- terminal illness or confinement,
- Required Minimum Distribution or free partial withdrawal.
Otherwise, interest is credited and calculated at the end of each Term.
You can track these daily values on the Aviva website on the Annuities page under Access Your Account.
They will also be on your statement.
Access your money in case of life’s emergencies.
If your needs should change unexpectedly, it’s reassuring to know that you have access to the money in your annuity.
You may withdraw 5% of your Accumulation Value during the first 12 months of your Contract and 10% of your Accumulation Value each 12-month period thereafter without incurring a Withdrawal Charge or Market Value Adjustment.
In the event you need access to more than the Free Withdrawal amount, you are always entitled to access any amount you deem necessary up to the full surrender value.
Any amount withdrawn in excess of the Free Withdrawal amount is subject to a Withdrawal Charge and a Market Value Adjustment (MVA).
The MVA may adjust the withdrawal amount payable—up or down—depending upon the interest rate conditions at the time of distribution.
Accessing Your Money
For your convenience, Checkbook Withdrawals are available.
You may order a draft book and write up to two drafts per Contract Year.
Each draft must be a minimum of $500 and must be made payable to you or your financial institution.
Any amount withdrawn in excess of the Free Withdrawal amount is subject to a Withdrawal Charge and Market Value Adjustment (MVA).
You also have the ability to have Withdrawals automatically deposited into your bank account on a monthly, quarterly, semiannual, or annual basis.
Substantially Equal Periodic Payments
If you need to access the money in your annuity prior to reaching age 59½, there is usually a 10 percent tax penalty imposed by the IRS.
However, the IRS does allow certain exceptions to this penalty, including “Substantially Equal Periodic Payments” under Section 72(q) for non-qualified money or Section 72(t) for qualified or IRA money.
Required Minimum Distributions
If your Contract is covered under Internal Revenue Code Sections 401, 403, 408, 408A, 457 and current IRS rules regarding minimum distributions, the IRS requires that you withdraw a minimum amount each year after turning age 70½—this is referred to as a Required Minimum Distribution or RMD.
Your RMD will never be subject to Withdrawal Charges, even if it is more than the Free Withdrawal amount in your Contract.
You have the opportunity on the Contract’s Annuity Date to elect a guaranteed stream of income that will last as long as your retirement.
There are a variety of “payout” options to meet your needs.
After the first Contract Year, and at the Company’s discretion, you have the option to exchange your Contract for a single premium immediate annuity without incurring Withdrawal Charges or Market Value Adjustments.
Consult your insurance producer or tax advisor for complete details and limitations.
This feature is not available in all states.
Confinement and Terminal Illness Waivers
After your Contract has been in effect for one year, if you are diagnosed with a terminal illness, or in the event that illness or serious accident necessitates a stay in a Qualified Care Facility for a minimum of 60 consecutive days, you can withdraw up to 100 percent of your annuity’s value free of any Withdrawal Charges or Market Value Adjustments.
Additional limitations may apply.
Guarantee and Protect the Legacy you Leave Your Beneficiaries
Should you, as the Annuitant, pass away before you begin receiving payouts from your annuity, the full value of your annuity will be payable to your named beneficiary(ies).
The Death Benefit will be equal to the greater of your Contract’s Cash Surrender Value or the Balanced Allocation Value which is the Accumulation Value, plus interest not yet credited for the Term.
The Death Benefit will never be an amount less than that required to comply with any applicable laws of the state in which your Contract is issued.
Neither Withdrawal Charges nor a Market Value Adjustment will be applied to the Death Benefit paid. Furthermore, this direct payment to your Beneficiary generally avoids the expense and delays of probate.
Under certain circumstances, spousal beneficiaries may be able to continue the Contract as their own and continue to benefit from tax-deferred accumulation.
Family Endowment Rider
The Family Endowment Rider can help you generate retirement income.
If one of your goals is to leave a legacy for your loved ones, you may elect to add the patent-pending Family Endowment Rider to your Contract.
The Family Endowment Rider is referred to in your Contract as the Enhanced Death Benefit Rider.
The Family Endowment Rider can help protect your interest against market volatility and potentially increase the overall value of the annuity for your Beneficiaries.
The Family Endowment Rider guarantees an Enhanced Death Benefit for your Contract.
If you purchase the Rider, the Death Benefit paid to your beneficiary(ies) will be the higher of the Contract’s Death Benefit or the Enhanced Death Benefit amount.
The Rider benefit amount shall be equal to your premium accumulated at an effective annual interest rate of 3 percent until the maximum age or the date the Contract is terminated, whichever occurs first.
There is also a 4% Family Endowment Rider for BAA 8 and BAA 12 policies that do not include the BalancedAllocation Income Advantage.
After the maximum age, the Rider benefit will not continue to grow but will remain a benefit of your Contract.
There is a charge for this Rider.
The patented BalancedAllocation Income Advantage is an Optional Lifetime Income rider available on BalancedAllocation Annuities for an additional charge.
It is designed for those retiring who may need the income now and for those planning retirement who might need income later, and those who are concerned about the impact that longevity and market volatility might have on their retirement income.
The BalancedAllocation Income Advantage rider provides the security of a minimum Guaranteed Income Base.
This benefit ensures your foundation for future income security by guaranteeing that your Income Base will accumulate at 6.5% each year regardless of market conditions during the Accumulation Period.
The accumulation stops at the earlier of 18 years (assuming you elect the 8-year extension) or when Lifetime Income Withdrawals begin.
Therefore, if you do not elect Rider Withdrawals and keep the Contract in effect for 18 years and elect the 8-year extension, your Income Base will grow to over 300% of the initial Income Base.
The Income Base is not the same as the Accumulation Value of the base annuity contract, and it is never available for lump sum withdrawal; it is only used for calculating lifetime income withdrawal amounts available under Rider provisions.
Lifetime Income Withdrawals stop the guaranteed accumulation in the Income Base.
Lifetime Income Withdrawals begin when you decide.
Once started, the Lifetime Income Withdrawal amount is guaranteed for your lifetime and, if you choose, also for your spouse’s lifetime.
You can also stop and restart the Lifetime Income Withdrawals if your life circumstances change.
Life Insurance Alternative
If you’re seeking to enhance a death benefit for estate planning purposes, also shop and compare life insurance quotes too. It’s rare we don’t find a solution. Life Insurance is tax-free for beneficiaries while annuities are tax-deferred for beneficiaries.