Protective Income Builder Indexed Annuity with the Guaranteed Income Benefit may help you create a plan that offers guaranteed growth potential and steady income designed to last a lifetime — no matter what the market does or how long you live.
Understand the Need for Guaranteed Income
It’s a natural tendency for people to underestimate how retirement risks might affect their finances in the future. However, the risks associated with longer life spans, rising health care costs, or even changes in the market can easily derail your plans and leave you with an unexpected income gap. Here’s how some of today’s most significant risks could deplete your retirement income.
- Running out of Money
- Rising Healthcare Costs
- Stock Market Volatility
No one wants to run out of money in retirement, but that’s what could happen if you don’t have a guaranteed income plan to help protect your assets. Your later years could be spent cutting corners to reduce expenses, returning to the workforce if you’re healthy enough, or finding other ways to make ends meet. That’s why you need guaranteed income that can stand the test of time, regardless of life’s changes or how the market performs.
Related Reading: How Much Do I Need To Retire?
Manage Retirement Risks with a Guaranteed Income Plan
Even in the face of retirement risks like market volatility and running out of money, Protective Life’s Income Builder Indexed Annuity with the Guaranteed Income Benefit is a retirement planning solution that may help you:
- Grow assets for future needs
- Create a guaranteed income stream for life
- Develop a flexible plan that’s conducive to change
Grow Your Assets for Future Needs
When you purchase a Protective Income Builder Indexed Annuity, you have the opportunity to create an allocation strategy to safely grow contract value for future expenses.
Create a Guaranteed Income Stream for Life
With Protective Income Builder Indexed Annuity, your growth potential isn’t limited to the value of your contract. This solution also includes the Guaranteed Income Benefit, a protected lifetime income benefit that’s designed to create a guaranteed lifetime income stream. At the beginning of your contract, a protected balance known as the “benefit base” is automatically created as part of the Guaranteed Income Benefit. This amount is used to determine your projected lifetime income withdrawal payments. It is not the same as your contract value or death benefit.
Understand Your Benefit Base
The benefit base is equal to your initial purchase payment. It increases by the amount of any additional purchase payments made before the benefit election date and is adjusted for withdrawals. It is important to understand that your benefit base will decrease if withdrawals are taken before Guaranteed Income Benefit withdrawals begin. Your benefit base will also decrease after protected lifetime income benefit withdrawals are taken, if they exceed the amount provided by the Guaranteed Income Benefit. These withdrawals reduce the benefit base in the same proportion that the withdrawal (and any associated withdrawal charge, and market value adjustment) reduces the contract value.
Build Your Benefit Base with Guaranteed Growth
Growing your benefit base over time can lead to more income in the future. The longer you wait to begin taking withdrawals, the higher your income amount in retirement may be.
Develop a Flexible Plan That’s Conducive to Change
Whether you’re preparing for or living in retirement, you know that life is bound to change. The Guaranteed Income Benefit includes a variety of options to help you develop a flexible plan that adjusts with your needs. When you’re ready, you can decide how and when to receive payments with the choice of two options that will generate lifetime income: a level income option and a rising income option. Each option bases your annual income amount on the value of the benefit base at that time but works a little differently:
Level Income Option
The level income option guarantees you a specific annual income payment for life. This option starts out with a higher income amount than the rising income option but since your income does not change over time, it provides lower income amounts later in life than the rising income option.
Rising Income Option
The rising income option guarantees your annual income payments will rise each year until your contract value reaches zero or until you reach age 95, whichever occurs first. This option starts with a lower income amount than the level option but since your income payments will rise each year, this option provides higher income amounts later in life than the level income option.
Request a life annuity quote to compare between Level and Rising Income.
Other Benefits You Should Consider
Protective Income Builder Indexed Annuity also offers other features to help you plan for and live in retirement. Review this information to learn more about how this annuity offers additional access to your money and protection for your loved ones.
Access to Your Money
Protective Income Builder is intended to be used as a long-term retirement planning solution. But we know sometimes life happens and certain scenarios may require you to access your money. The following information explains your access options and things to consider before taking a withdrawal from your contract.
You can withdraw 10% of your initial purchase payment during the first contract year with no withdrawal charge or market value adjustment. After the first year, you can withdraw 10% of the contract value as of the prior contract anniversary annually, less any withdrawals in that contract year. Keep in mind that the interest earned based on indexed strategies is not credited until the last day of the contract year.
Thus, withdrawals from indexed crediting strategies (regardless if they are subject to withdrawal charges, and market value adjustment) do not earn interest for the contract year they are taken.
You should also know that your contract value after each withdrawal must be at least $10,000. However, this minimum requirement doesn’t apply to the Guaranteed Income Benefit withdrawals.
Keep in mind that penalty-free withdrawals will reduce your benefit base in the same proportion that they reduce your contract value if they are taken at either of the following:
- Before your benefit election date or
- After your benefit election date, if the withdrawal exceeds the annual amount provided by the Guaranteed Income Benefit.
A withdrawal charge may apply if you withdraw money from your contract during the first seven years. The charge is a percentage of the amount withdrawn that exceeds any available penalty-free amount. After the seventh contract anniversary you will have full access to your investment and any earnings without a withdrawal charge.
Market Value Adjustment
In addition to the withdrawal charges, a market value adjustment (MVA) is applied to withdrawals that exceed the allowable penalty-free amount. The MVA can either increase or decrease or have no effect on the amount deducted from the contract value to satisfy your withdrawal request. It does not impact your minimum surrender value and doesn’t apply after the withdrawal charge period ends. If you surrender your contract, you will receive the greater surrender value or the minimum surrender value.
Minimum Surrender Value
A minimum surrender value is guaranteed when the contract is terminated due to full surrender, death, or annuitization. This amount is calculated by:
- Taking 87.5% of aggregate purchase payments accumulated at the contract’s non-forfeiture rate, which cannot be less than 1% or more than 3%, and
- Subtracting any prior aggregate withdrawals accumulated at the non-forfeiture rate
Nursing Facility/Terminal Illness Waiver
You can access your money to help when certain circumstances occur. We will waive the withdrawal charge and MVA after the first contract anniversary if you or your spouse is either:
- Confined to a qualified medical care facility for at least 30 consecutive days
- Diagnosed with a terminally ill condition expected to result in death within 12 months
This waiver may not be available in all states, and state variations may apply.
You can access your money to help with the financial burdens of unemployment. We will waive the withdrawal charge and MVA if you or your spouse should become unemployed. In order to qualify, you or your spouse must meet the following requirements:
- Employed full time on the contract issue date
- Unemployed for a period of at least 60 consecutive calendar days prior to claiming the waiver
- Unemployed on the date when the full surrender or partial withdrawal is requested
This waiver may not be available in all states, and state variations may apply.
Income with Annuitization
What is annuity income? If you choose to annuitize your contract for retirement income payments, the following options are available for both single and joint life expectancy:
- Lifetime income
- Specific term (certain period)
- Lifetime income with a specific term (certain period)
- Lifetime income with a cash refund
- Lifetime income with an installment refund (principal refund)
Annuity income payments must begin before any owner or annuitant reaches age 95. Generally, you cannot alter the amount or frequency of your annuity payments, or surrender your contract, once the annuity payments have begun.
Protection for Loved Ones
To help protect your legacy, Protective Income Builder includes a death benefit at no additional cost. Should you pass away before starting your annuity income payments, as of the date Protective Life receives the proof of death, your beneficiaries will receive the greater of the following:
- Contract value or
- Minimum surrender value
Protective Life Insurance is also an inexpensive way to leave a death benefit to beneficiaries.