ClassicMark 10 is a single premium deferred fixed indexed annuity. Much like life insurance exists to provide financial security upon loss of life, annuities are designed to safeguard financial freedom for the length of life. They do this by helping to safely accumulate wealth and provide a way to turn that wealth into a series of optional regular payments, typically available as income for life.
Additionally, annuities can offer multiple ways to access your money when you need it, penalty-free in many cases.
They can be used as part of a smart retirement strategy to protect and increase your money and generate an income stream that you cannot outlive.
They even can provide an effective way to leave a legacy to your beneficiaries.
All annuities are not created equal, so it’s important to understand the type of annuity you are considering.
What, Exactly, Does That Mean?
- Fixed Indexed Annuity—Provides protection from loss while giving you the choice of predictable fixed interest earnings and the opportunity for growth based on the performance of a market index.
- Single premium—You pay one lumpsum premium payment to purchase ClassicMark 10. There are no ongoing premium commitments.
- Deferred—Income is deferred until a later date, which allows your ClassicMark 10 annuity time to grow. Taxes on interest earned are also deferred until you access your money.
Safeguard Your Money
As you approach retirement, the return of your money often becomes just as important as the return on your money. That’s why ClassicMark 10 provides secure guarantees backed by the reliability of a highly rated insurer.
Guaranteed Minimum Value
To shield your retirement funds from market declines, ClassicMark 10 has a strong built-in minimum guarantee on the entirety of your premium.
This offers protection of your premium regardless of market conditions.
Upon full surrender, death, or annuitization, you are guaranteed to receive between 1% and 3% on 100% of your premium (less any withdrawals, surrender charges, and applicable premium tax).
Surrender charges apply to the Guaranteed Minimum Value only during the contract’s first 10 years (five years for issue ages 86–90 or, in Indiana, issue ages 85–90).
Your guaranteed minimum interest rate is set when the contract is issued.
ClassicMark 10 offers strong opportunities for growth, but you can rest assured knowing that even in the unlikely event of a sustained low market, your money is protected from loss.
Grow Your Wealth
One of the primary purposes of a fixed indexed annuity is to securely accumulate wealth that can last throughout retirement. ClassicMark 10 delivers with several ways to help you grow your nest egg.
Optional Upfront Premium Bonus
ClassicMark 10 PLUS offers an optional premium bonus to jump-start your earnings.
It becomes 100% vested on day one and available for withdrawals beginning 30 days after the contract date.
The bonus, calculated as a percentage of your premium, boosts your annuity’s growth right away.
The bonus amount begins earning interest immediately and is available to your beneficiaries should you die.
To learn more about the premium bonus option available to you, please refer to the accompanying product insert.
Interest Crediting Strategies
ClassicMark 10 offers a diverse range of interest crediting strategies that allow you to strategically choose how your money can grow.
These include a fixed rate strategy and multiple indexed strategies covering a broad range of indices.
To best help you achieve your financial goals, you may allocate a premium among any combination of the available strategies.
You may also transfer all or a portion of your money into another strategy at the end of each term or index period.
The minimum transfer amount is $50, and each strategy elected must have at least $50 remaining after transfer.
Indexed Strategies
These interest crediting strategies calculate earnings based on the performance of a specific market index.
Because interest credited will never be less than 0%, indexed strategies give you the opportunity to benefit from market gains without exposing your money to market risk.
ClassicMark 10 offers multiple indexed strategies covering varying markets.
To learn about the indexed strategies available to you, refer to the accompanying strategy brochure.
Fixed-Rate Strategy
This interest crediting strategy guarantees a competitive fixed rate of interest for a 12-month period.
Interest is credited daily rather than at the end of the term period, making the Fixed Rate Strategy a great selection if you anticipate taking withdrawals.
It is also an appropriate selection if you want a guaranteed crediting rate.
Tax Deferral
ClassicMark 10’s tax-deferred status allows your money to work harder for you. When taxes on gains in your contract are deferred until gains are withdrawn, you have increased the opportunity for accumulation through triple compounding. Your premium and bonus (if selected) earn interest, your interest earns interest, and the money you would have paid in taxes earns interest.
Related Reading: How much do I need to retire at 70?
Maintain Flexible Access
With ClassicMark 10, you are free to access your Accumulation Value, which includes your total premium bonus (if selected), as you see fit.
If you choose to withdraw funds from your annuity before the end of your contract, you may incur a penalty known as a surrender charge.
For details about surrender charges applicable to your specific ClassicMark 10 product, refer to the appropriate product insert.
If you need to access your money before the end of your contract, rest assured that ClassicMark 10 provides multiple hassle-free ways to do so without incurring surrender charges.
10% Penalty-Free Withdrawals
Beginning 30 days after the contract date, you may withdraw up to 10% of your Accumulation Value each contract year without incurring surrender charges.
The minimum withdrawal amount is $500.
The remaining amount in your annuity must be at least $2,000.
Required Minimum Distributions
If your annuity was issued in connection with a tax-qualified plan, the IRS may require you to take minimum distributions beginning at age 72.
Required minimum distribution amounts associated with this contract that are greater than the penalty-free amount may be withdrawn without surrender charges.
Confinement Waiver
Under ClassicMark 10’s Waiver of Surrender Charges Upon Nursing Home or Hospital Confinement Endorsement (Endorsement Series 4139), you may withdraw up to 100% of your Accumulation Value without incurring surrender charges if you become confined to a nursing home or hospital.
To be eligible, confinement must begin after the contract date and last for at least 90 consecutive days.
Your withdrawal request and proof of confinement must be provided no later than 30 days after discharge.
This waiver is not available in Massachusetts.
Annuitization
At any time, you may choose to annuitize your contract (convert your surrender value into regular payments).
Surrender charges are waived if the contract has been in force for at least five years.
Multiple payout options are available to choose from.
These include lifetime income options and a fixed period option that pays out for at least 60 months or the annuitant’s life expectancy if shorter.
It’s your money. Enjoy flexible access when you need it most.
Loans
If you have a 403(b)/TSA plan, you may take a loan of 0 or more from your Accumulation Value.
The loan balance will be credited with interest according to the index increases.
Loan amounts will be charged a fixed rate of interest.
This interest rate is determined at the time the loan is taken and is set for the life of the loan.
Refer to your contract for additional details.
Leave a Worry-Free Legacy
ClassicMark 10 provides two ways to pass a financial heritage to your loved ones, both of which are generally free from the hassles, publicity, and delays of probate.
Death Benefit
Should you die prior to annuitization, the annuity’s built-in death benefit will pay your chosen beneficiaries the greatest of the contract’s Accumulation Value, the Guaranteed Minimum Value, or Return of Premium less prior gross withdrawals.
The value used is decreased by any applicable premium taxes.
Heritage Maximizer
This optional enhanced death benefit rider increases the amount your beneficiary would normally receive by 30%.
Because no underwriting is required, it provides an easy way for you to maximize the legacy you leave to your beneficiaries.
The rider is available for an additional charge and can be elected when you purchase ClassicMark 10.
For important details about Heritage Maximizer and to learn how it works, refer to the accompanying insert.
If you die before the end of an index period, either death benefit will include any partial-year index credits.
This is important because it means that your beneficiaries will not miss out on index growth occurring after the previous contract anniversary.
Tip* If you’re wanting to reduce or avoid paying the taxes on an inherited annuity, consider using ClassicMark’s Heritage Maximizer 30% Bonus, which beneficiaries will receive to offset the tax burden or the spousal continuation provision.
Heritage Maximizer Optional Enhanced Death Benefit Rider
Rider Basics
- Rider Election: The Heritage Maximizer is available for a jointly owned contract if the owner and joint owner are spouses or for a single owned contract.
- Covered Life: A Covered Life is any owner that is a natural person. Except when a surviving spouse continues the rider (see “Spousal Continuation”), this Covered Life designation cannot change after the contract date.
- Age Limit: A Covered Life may not be older than 75 at contract issue.
- Waiting Period: The Heritage Maximizer benefit becomes eligible for payout three years after the rider effective date.
- Cancellation: The rider cannot be canceled after it’s elected.
How the Rider Works
Enhanced Death Benefit Amount
The amount payable upon the death of a Covered Life is the greatest of:
- Accumulation Value multiplied by 130% (referred to as the EDB Percentage), less any applicable premium tax.
- Return of Premium less prior gross withdrawals.
- Guaranteed Minimum Value.
Payable Benefits
After the three-year waiting period, if a Covered Life dies while the rider is in effect and before the contract is annuitized, the enhanced death benefit will be paid instead of the death benefit provided under the contract.
The date of benefits eligibility is referred to as the EDB Date.
Rider Fee
As a fee for the Heritage Maximizer, 0.30% of the annuity’s Accumulation Value is deducted annually at the end of each contract year, including the first.
This percentage, called the EDB Rider Fee Percentage, is set at issue and cannot change during the life of the contract.
Spousal Continuation
Assuming the Heritage Maximizer is still in effect, a surviving spouse who continues the contract following the joint owner’s death may continue the rider if:
- The surviving spouse was a joint owner or sole beneficiary of the contract prior to the death.
- The surviving spouse is not older than 75 on the date of contract continuation.
- The continuation is elected at the time the spouse elects to continue the contract.
- The continuation of the contract was not previously exercised by the spouse of an owner.
- The continuation request is made in good order.
Rider Termination
The rider will terminate when the first of these events occurs (once terminated, the rider cannot be reinstated):
- The enhanced death benefit is paid.
- The death benefit under the contract is paid upon the death of a joint owner who is not a Covered Life.
- The surviving spouse of a Covered Life does not continue the rider or does not meet spousal continuation requirements.
- The contract is surrendered or otherwise terminated.
- The entire contract is annuitized.
- An owner who is not the spouse of an owner is added or replaced.
- The contract is transferred or assigned (unless the assignment is used to effectuate a 1035 Exchange of the contract, in which case the rider will not be terminated until the contract is surrendered).
- An annuitant attains the maximum annuitization age provided by the contract.
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.
