Midland National’s Income Vantage 1 Fixed Indexed Annuity is a 10-year retirement savings plan annuity designed to provide you guaranteed lifetime income with growth potential from index accounts linked to the stock market.
Key benefits of MNL IncomeVantage
Lock-in interest credits
One advantage of fixed index annuities is a reset feature, which applies to this annuity no matter which crediting method you choose.
With the annual reset, any interest credits are added to your index accounts on each contract anniversary.
For the Two-year Point-to-Point option, this reset happens at the end of each two-year term.
Once credits are added, they’re locked in.
That means they can’t be taken away due to negative index performance.
Also, at that point, it’s added to your accumulation value, giving you the advantage of compounding interest in subsequent years.
By resetting your starting index value at the same time, this feature can help minimize your risk when the index experiences a severe downturn.
Without it, you’d have to wait for the index value to climb up to its original level before any interest credit could be realized.
Tax deferral improves growth potential.
Your money grows on a tax-deferred basis, meaning more of it is working for you. Growing your money tax-deferred means you don’t owe taxes until you access your money, allowing more time for growth potential.
Work with your tax advisor to find out how this might work for you.
Under current law, annuities grow tax-deferred.
An annuity is not required for tax deferral in qualified plans.
Annuities may be subject to taxation during the income or withdrawal phase.
Provide a lasting legacy
Your beneficiaries will get the remaining accumulation value of your annuity as a death benefit – either in an immediate lump sum or in installments. And, because annuities may avoid the costs and delays of probate, they may not have to wait.
Midland National Life Insurance is also an inexpensive way to leave a death benefit to beneficiaries.
Take advantage of flexible payout options.
Whether you need to start drawing income soon after purchasing your annuity or you’d prefer to wait and build your lifetime income potential, there’s an option for you.
Guaranteed lifetime withdrawal benefit (GLWB)
If you use this benefit, you can create an income stream you can’t outlive.
The guaranteed lifetime withdrawal benefit feature, which you’ll sometimes see abbreviated as GLWB, is included for no additional fee.
When you elect, it sets a payment amount that you may withdraw every year – even if those payments add up to be more than what you paid into the annuity and the growth you were credited.
Lifetime payment amounts
After the first contract anniversary that is on or after your 50th birthday, when you’re ready to start lifetime income, you can choose monthly, quarterly, semi-annual or annual payments and have them start lower and automatically increase each year or remain level.
Payments can be started and stopped at any time.
Any excess withdrawals that you may choose to take from your annuity’s accumulation value will reduce your future lifetime payments by a proportional amount.
Thereafter, on each contract anniversary, your lifetime payment amount may increase based on the lifetime payment percentage that applies to the annuitant’s current age, lifetime payment amount option elected, and current GLWB value.
This may positively impact future lifetime payment amounts.
Future payments will not decrease so long as you don’t withdraw more than the available lifetime payment amount in any contract year.
Lifetime payment amount options
Your lifetime payment percentage is determined by the attained age of the annuitant and the lifetime payment amount option elected. For joint annuitants, your lifetime payment percent is based on the attained age of the youngest annuitant.
- Level lifetime payments: This option provides a level payment amount for either the rest of your lifetime or the joint lifetime of you and your spouse.
- Increasing lifetime payments: This option starts at a lower initial payment amount than the level payment option but has the possibility of increasing each year, based on an average of the interest credited to your fixed and index accounts. Again, this option can apply for either the rest of your life or use the joint lifetime of you and your spouse.
Options for accessing your money
How withdrawals impact how your annuity grows
If you take withdrawals beyond those allowed penalty-free, you won’t experience the full benefits of this annuity.
In addition to reducing your accumulation value, your GLWB value will be reduced for any withdrawals taken either before or after lifetime payments begin.
Withdrawals other than lifetime payments and required minimum distributions (RMDs) will cause your GLWB value to be reduced by the same percentage withdrawn from your contract, which may represent a larger dollar amount than withdrawn.
Withdrawals can be taken to satisfy required minimum distributions without triggering surrender charges* but will still reduce the GLWB value by the dollar amount withdrawn.
Excess withdrawals may be subject to surrender charges and market value adjustments (if applicable) and will ultimately impact your future lifetime payments.
What if you need your money sooner than you planned?
Like most annuities, you’ll be limited in when and how much you can withdraw from your annuity penalty-free.
However, Midland National IncomeVantage 14 does allow you access to a portion of your money each year.
Taking out more money than what’s available penalty-free will incur a surrender charge.
A market value adjustment may also apply.
Withdrawals may be treated by the government as ordinary income.
If taken prior to age 59 1/2, a withdrawal could also be subject to a 10% IRS penalty.
Withdrawals will reduce your accumulation value accordingly.
How and when you can take penalty-free withdrawals
After the first contract anniversary, you may choose to take a penalty-free withdrawal (also known as a penalty-free partial surrender) of up to 5% of the accumulation value each year.
If you withdraw more than that, a surrender charge and market value adjustment may apply.
After the surrender charge period, surrender charges and a market value adjustment will no longer apply.
The IRS currently requires you to begin drawing down your savings in certain tax-deferred retirement accounts upon reaching age 72. These are called required minimum distributions (RMDs). By current company practice, we’ll waive surrender charges and market value adjustments on any portion of an IRS-required minimum distribution that goes beyond what’s available to you penalty-free.
Your payout options
You may decide to begin receiving income payments from your annuity at the end of the first contract year based on the surrender value.
These optional payouts are available in deferred annuities like Midland National IncomeVantage 14 but are not required.
Once a payout option is elected, however, it can’t be changed, and all other rights and benefits under the annuity end.
If you chose to put in money that was already taxed, your annuity would be considered a non-qualified plan.
A portion of each income payout from a nonqualified plan would be considered a return of premium.
That amount would not be taxable, but any credited gains would be.
In all states except Florida, by current company practice*, you may receive an income from the accumulation value after the first contract year (without surrender charges or market value adjustment) if you choose a life income option.
You can also receive an income based on the accumulation value if your annuity has been in-force for at least five years, and you elect to receive payments over at least a five-year period.
Nursing home confinement waiver adds flexibility.
After the first contract anniversary, should the annuitant become confined to a qualified nursing home facility for at least 90 consecutive days, we will increase the penalty-free withdrawal by 10% of the accumulation value each year while the annuitant is confined.
This waiver is only available for issue ages 75 and younger and is automatically included with your annuity at no additional charge.
If joint annuitants are named on the annuity, a waiver will apply to the first annuitant who qualifies for the benefit.