American General Life Insurance Company Expands Presence in Index Annuity Market with the Launch of the Power Index Plus(SM) Annuity
November 1, 2013 by BUSINESS WIRE
Following April’s Launch of a New Index Annuity in the Brokerage General Agency Channel, American General Launches a New Product for Financial Institutions and Independent Broker-Dealers
HOUSTON, Oct 30, 2013 (BUSINESS WIRE) — American General Life Insurance Company (American General) announced the launch of its newest index annuity, Power Index Plus(SM). This latest income solution offers a powerful combination for retirement: principal protection, growth potential and lifetime income. Its current rates may help clients earn potentially more interest in today’s rate environment. In addition, Power Index Plus offers an optional guaranteed living benefit rider that can help clients double their retirement income potential in 10 contract years, when no withdrawals are taken. This new product is especially designed to be distributed by financial institutions and independent broker-dealers, but it will also be available to brokerage general agencies.
Power Index Plus allows individuals to grow their retirement income without the risk of market loss. Power Index Plus offers three interest-crediting strategies – a 1-year fixed interest account, an annual point-to-point index interest account, and a monthly point-to-point additive index interest account. The index interest accounts provide clients with the opportunity to earn interest based in part on the performance of the S&P 500(R) index without dividends. When the market is down, the annuity contract is guaranteed never to lose value due to market fluctuations.
“American General is committed to developing innovative solutions that help meet the ever-evolving needs of today’s consumers,” said Mike Treske, Executive Vice President and Chief Distribution Officer, Retirement Income Solutions, AIG Financial Distributors. “With today’s low interest rates, many consumers want a fixed income alternative that can help protect their principal, while providing some growth potential to help meet rising retirement costs and longer life expectancies. Power Index Plus gives them the opportunity to do just that.”
“By launching Power Index Plus in banks and independent broker-dealers, we’re reaching new clients and providing them with another valuable option to help grow and protect their retirement assets,” said Treske. “We’re also providing our partners and agents with a powerful new index annuity that can help them expand their index annuity business.”
Clients who want lifetime income can elect Lifetime Income Plus, an optional guaranteed living benefit rider available with the Power Index Plus annuity. “This rider is designed for individuals who are concerned about outliving their retirement income, and really sets us apart from the competition,” said Rob Scheinerman, Chief Product Officer, AIG Life and Retirement. “It provides these individuals with the potential to double their retirement income in 10 years, while also guaranteeing their income for life.”
To receive these guaranteed benefits, withdrawals must be taken according to the terms of the rider. Please note that lifetime income is also available through annuitization under the base contract.
With Lifetime Income Plus, the Income Base–the amount on which lifetime withdrawals are based–is guaranteed to double to 200% of all premiums paid in the first 30 days of the contract, as long as no withdrawals are taken before the 10th contract anniversary. The rider also guarantees that the Income Base will increase by 7% each year that withdrawals are not taken in the first 10 contract years. Contract owners can take out guaranteed withdrawals of up to 6% per year for life depending on when withdrawals begin and on how many individuals are covered. Keep in mind that the Income Base is not a part of the contract value.
“We believe that now, more than ever, people are looking for the protection and income potential index annuities offer,” said Scheinerman. “That’s why we continue to expand our suite of index annuity products. We have created a powerful living benefit rider for index annuities that offers clients the potential to double their retirement income after 10 contract years, and we are absolutely committed to creating even more index annuity solutions that can help clients grow their retirement savings without downside market risk.”
Power Index Plus will be issued by American General Life Insurance Company (AGL) in 49 states.
Annuities are issued by American General Life Insurance Company (AGL), 2727-A Allen Parkway, Houston, Texas 77019. Power Index Plus Modified Single Premium Deferred Fixed Index Annuity, Contract Number AG-800 (12/12); Market Value Adjustment (MVA) Rider, Form Number AGE-8000 (12/12); Lifetime Income Plus Guaranteed Living Benefit Rider, Form Number AGE-8002 (12/12); Annual Point-to-Point Index Interest Account Rider, Form Number AGE-8003 (12/12); Monthly Point-to-Point Additive Index Interest Account Rider, Form Number AGE-8005 (12/12); Terminal Illness Rider, Form Number AGE-8007 (12/12); Extended Care Rider, Form Number AGE-8008 (12/12); and Activities of Daily Living Rider, Form Number AGE-8009 (12/12).
The underwriting risks, financial and contractual obligations and support functions associated with products issued by American General Life Insurance Company (AGL) are its responsibility. AGL does not solicit business in the state of New York. The annuity may not be available in all states.
Index annuities are not a direct investment in the stock market. They are long-term insurance products with guarantees backed by the claims-paying ability of the issuing insurance company. They provide the potential for interest to be credited based in part on the performance of the specified index, without the risk of loss of premium due to market downturns or fluctuations. Index annuities may not be suitable or appropriate for all individuals.
Withdrawals may be subject to federal and/or state income taxes. An additional 10% federal tax may apply if individuals make withdrawals or surrender their annuity before age 59-1/2. Beginning January 1, 2013, annuity income will be subject to an additional tax of 3.8% under specific factual situations. Individuals should consult their tax advisor regarding their specific situation.
Lifetime Income Plus is optional and available at contract issue in the Power Index Plus Annuity for an annual fee of 0.95% of the Income Base. Restrictions and limitations apply. Contract and optional living benefit guarantees are backed by the claims-paying ability of AGL.
The Income Base is the amount on which lifetime withdrawals and the rider fee are based; it is not used in the calculation of the contract value or any other benefits under the contract, and cannot be withdrawn partially or in a lump sum. The Income Base is initially equal to the first eligible premium; it is adjusted for excess withdrawals and is increased each time an eligible premium is made. On each contract anniversary for up to 10 years, the Income Base is guaranteed to grow by a 7% income credit, as long as no withdrawals have been taken for that year. On the 10th contract anniversary, the Income Base may be increased to the Minimum Income Base (200% of eligible premiums) if no withdrawals have been taken from the contract.
The Maximum Annual Withdrawal Amount (MAWA) is a percentage of the Income Base and varies from 3.75% to 6% depending on whether one or two people are covered and their age at the time of the first withdrawal on or after age 60. Withdrawals taken prior to age 60 or in excess of the MAWA are considered excess withdrawals and will reduce future income. Please see the Owner Acknowledgment and Disclosure Statement for additional information.
American General Life Companies, www.americangeneral.com, is the marketing name for a group of affiliated domestic life insurers, including American General Life Insurance Company (AGL). American General Life Companies insurers offer a broad spectrum of life insurance, fixed annuities and accident & health products to serve the financial and estate planning needs of its customers throughout the United States.
AIG Life and Retirement is one of the largest and strongest life insurance and retirement services organizations in the United States. The organization traces its origins to 1850 and today, AIG Life and Retirement companies are among the largest issuers of annuities and life insurance in the United States as well as leading providers of defined contribution plans in the education and healthcare markets. Through its American General, AGLA, VALIC, Western National, SunAmerica, FSC Securities, Royal Alliance, SagePoint Financial and Woodbury Financial brands, it offers a diverse family of life insurance, investment and retirement savings products. AIG Life and Retirement serves over 18 million customers and its products are sold by over 300,000 financial professionals. For more information, please visit www.aig.com/lifeandretirement.
The S&P 500 Index is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by American General Life Insurance Company and affiliates. Standard & Poor’s(R), S&P(R), and S&P 500(R) are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones(R) is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by American General Life Insurance Company and affiliates. American General Life Insurance Company and affiliates’ products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of purchasing such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.
Not FDIC or NCUA/NCUSIF Insured May Lose Value * No Bank or Credit Union Guarantee Not a Deposit * Not Insured by any Federal Government Agency
SOURCE: American General Life Insurance Company
