The Oxford Life Select 7 Fixed Indexed Annuity is a 7-year retirement savings plan designed to help:
- Protect your principal
- Provide for the opportunity for growth based on the positive movement of the S&P 500 Index
- Generate guaranteed lifetime retirement income
Benefits and Features
Protected Principal
This product offers you the opportunity to participate in any positive movement in the change in the S&P 500 Index, excluding dividends, without having to be invested in the market and being exposed to the risk of losing principal.
If the change in the S&P 500 index is negative, your principal will not be impacted by this change.
Tax-Deferral
Tax-deferred growth allows your money to grow faster, thanks to triple compounding. Money placed in an annuity provides for:
- Interest on your principal
- Interest on your interest
- Interest on your tax savings
Because your interest is free from current income tax, that interest can continue to compound instead of being reduced by tax payments on that interest.
Related Reading: Can I retire at 55 with $2 million?
Death Benefit
Oxford Life Insurance Company will pay out, as the Death Benefit, the Accumulation Value to your beneficiary upon the death of the Owner. Your beneficiary may choose to receive the payments in either a lump sum or a series of income payments.
Oxford Life Insurance is another option if you’re wanting to leave a death benefit to your beneficiaries, tax-free.
3 Account Crediting Strategies
The Fixed Account Strategy
Under the fixed account strategy, amounts credited to your Accumulation Value are based on a stated interest rate declared each policy anniversary. That rate is guaranteed for one year and will not be less than the guaranteed minimum interest rate stated in your Policy. The interest earnings are credited daily.
The Monthly Average Strategy
The monthly averaging strategy will credit interest to your Accumulation Value by measuring the index change by comparing the average of the monthly closing S&P 500 values during the term to the closing S&P 500 value on the first day of that term, subject to a Cap Rate.
The Cap Rate is the upper limit of amounts that will be credited from the change in the S&P 500 Index. The Cap Rate will be declared on each Policy Anniversary.
Each Policy Year, the annual reset feature provides for a new starting point to measure the change in the S&P 500 Index values, excluding dividends.
The Annual Point-to-Point Strategy
The annual point-to-point strategy will credit interest to your Accumulation Value by measuring the index change by comparing the closing value of the S&P 500 during the term to the closing value of the S&P 500 value on the first day of that term, subject to a Cap Rate.
The Cap Rate is the upper limit of amounts that will be credited from the change in the S&P 500 Index. The Cap Rate will be declared on each Policy Anniversary.
Each Policy Year the annual reset feature provides for a new starting point to measure the change in the S&P 500 Index values, excluding dividends.
Liquidity Features
Withdrawing Money
It is comforting to have the ability to access your money since you can never predict the future. After the first year, the Oxford Life Select 7 Indexed Annuity allows for annual, penalty-free withdrawals of up to 10% of your Accumulation Value as of the end of the previous Policy Year.
Surrender Charges
For amounts greater than the 10% penalty-free withdrawal amount during a policy year, there will be a surrender/withdrawal charge applied during the first ten years. The surrender/withdrawal charge is 10% in the first policy year and then reduces by 1% each policy year thereafter.
Market Value Adjustment
The Oxford Life Silver Select annuity includes a Market Value Adjustment, which generally allows Oxford Life to credit rates higher than on those products without an interest adjustment.
This adjustment may increase or decrease your surrender value, depending on the change in interest rates since your annuity purchase.
Due to the mechanics of a Market Value Adjustment feature, the cash surrender value generally increases as interest rates fall.
Likewise, when interest rates have increased over a period of time, the surrender value generally declines.
The Market Value Adjustment is applied only during the surrender/withdrawal charge period and only on amounts that exceed the penalty-free withdrawal amount.
Market Value Adjustments on any portion of IRS-Required Minimum Distributions (RMD) in excess of the penalty-free withdrawal amount are waived.
Waiver of Surrender/Withdrawal Charges
Terminal Illness Benefit
If you are first diagnosed as terminally ill more than one year after the policy date, you may surrender/withdraw this policy for its Account Value without reduction for any surrender/withdrawal charge.
Home Health Care Benefit
If you are first diagnosed as chronically ill more than one year after the policy date, are receiving home health care, and have been for the previous 90 days, you may request surrender/withdrawals from this policy without reduction for any surrender/withdrawal charge.
Nursing Home Benefit
If you are first diagnosed as chronically ill more than one year after the policy date, are confined to a nursing home, and have been for the previous 90 days, you may request surrender/withdrawals from this policy without reduction for any surrender/withdrawal charge.
Guaranteed Income For Life
How you can benefit from the GLWB
In exchange for an annual cost, the Guaranteed Lifetime Withdrawal Benefit (GLWB) offers a flexible alternative that will provide a steady income stream that you cannot outlive. This benefit was designed for people age 50 to 80 who are interested in guaranteed income during their retirement while allowing for some liquidity.
Income Account Value
The Income Account Value is used in determining your GLWB payment amount.
Prior to withdrawals, under the GLWB or base Policy, the Income Account Value equals 100%of your initial premium.
This amount then grows at a guaranteed rate of 7.55% for the first 10 Policy Years.
Any withdrawals or surrenders will reduce both the Accumulation Value and the Income Account Value proportionately.
The Income Account Value is only used as the base for calculating your Guaranteed Lifetime Withdrawal Benefit payments.
The Income Account Value is not available for Death Benefits or other withdrawals from the policy.
Guaranteed Lifetime Withdrawal Benefit Payments
When you initially elect to begin GLWB payments, your annual payment will be based on your current Income Account Value multiplied by a percentage based on your attained age.
GLWB payments can be started and stopped at any time and you can decide how frequently you receive your GLWB payments: monthly, quarterly, semi-annually, or annually.
If an IRS mandated Required Minimum Distribution (RMD) is required, you will be able to take the greater of the GLWB payment or the RMD without surrender charges.
Guaranteed Lifetime Withdrawal Benefit Payout Factors
A GLWB payout factor percentage is used to calculate your annual GLWB payment.
When you initially elect to begin GLWB payments, your annual payment will be based on your Income Account Value multiplied by the payout factor percentage based on your attained age.
Prior to electing your GLWB, your payout factor percentage will increase each year you age.
In the case of Joint Spousal Owners, the age of the younger Owner will be used to determine the Joint Life Payout Factor percentage.
Once you start withdrawals, your payout factor percentage is locked in for your life.
Use an annuity income calculator to help solve your retirement income needs.
Annual Payment Increase
On each Policy Anniversary following your election to begin GLWB payments, we will multiply the original GLWB payout factor by the current Accumulation Value of your annuity.
If the resulting calculation equals an annual payment higher than you are currently receiving, you will receive this higher payment going forward. You must notify us if you do not want us to increase the amount of your payment.
Excess Withdrawals
Withdrawals in excess of the GLWB will cause future GLWB payments to be reduced by the same proportion that the Accumulation Value is reduced by the excess withdrawals.
GLWB payments will stop if excess withdrawals, withdrawal charges, or Market Value Adjustments reduce the Accumulation Value to zero.
Spousal Continuation
If the owner’s spouse is the sole primary beneficiary and elects to continue the Policy, the benefits of the GLWB will also continue, provided the spouse becomes the sole annuitant and sole owner of the Policy.
If the spousal beneficiary assumes the Policy before any GLWB withdrawals have been taken, the benefit simply continues in the accumulation period.
Spousal continuation does not restart the withdrawal charge schedule.
If a GLWB has been taken by the time of the spousal continuation, the spouse can elect to receive a GLWB until the Income Account Value is equal to zero, at which time the withdrawals stop and the Policy will terminate, or continue to receive a GLWB for the surviving spouse’s remaining lifetime, if the owner elected a joint lifetime payout.
