Key Product Features:
FG Retirement Pro®: Modified Single Premium Deferred Annuity
- Guarantees a lifetime income stream without the need to annuitize
- Unique, first of its kind interest crediting potential directly to the benefit base
- A vesting premium bonus that we apply immediately to the benefit base and, over time, that vests to the account value
- Unique feature that may provide long term account value growth potential called "Breakthrough"
- Opportunity for liquidity for life's unexpected events, such as need for home health care, diagnosis of a terminal illness or nursing home confinement
- Provides an enhanced benefit feature at no additional charge
How Does FG Retirement Pro® Work?
A benefit base is established for your policy from day one. If the benefit base grows, your guaranteed withdrawal payments will also grow. The benefit base is not cash; it is a separately tracked value used to calculate the guaranteed withdrawal payments only. The benefit base is not a value that can be surrendered or withdrawn. The benefit base is adjusted proportionately for any withdrawals you may take. It is initially equal to the initial premium plus premium bonus. The benefit base potentially grows based on three index-interest benefit base crediting options linked to the S&P 500® Index subject to cap and participation rates. FG Retirement Pro® also offers a benefit base fixed interest crediting option.
- One-year S & P 500® annual point-to-point with a cap
- One-year S & P 500® monthly point-to-point with a cap
- One-year S & P 500® monthly average with a cap
- Fixed interest crediting option
The account value equals your premium plus any vested premium bonus, plus interest thereon, less withdrawals of any type, including surrender charges and market value adjustment thereon. Your account value will grow based on the fixed interest method. Each policy year, we declare the fixed interest rate for the account value that is subject to a minimum guaranteed rate. This annuity includes a feature that may provide long term account value growth potential through a unique, first of its kind feature called "Breakthrough". Please see below and review the applicable product brochure and statement of understanding for additional information on the Breakthrough feature.
Your annuity offers a vesting premium bonus that is calculated as 7% of all premium received in the first policy year. The bonus amount, plus any interest earned on that amount, vests over a period of 12 years based on the premium bonus vesting schedule. State variations apply.
The Premium Bonus Vesting Schedule
|End of Policy Year||Standard||NV, OK, TX, UT,
& FL Ages 65+
On each policy anniversary, the benefit base is compared to the breakthrough value. If the breakthrough value is met or exceeded by the benefit base value on a policy anniversary, then on the following policy anniversaries, breakthrough interest credits, if any, will be added to the account value and any unvested premium bonus. Breakthrough interest credits, if any, will be added until the earlier of the maturity date or the point at which the account value equals zero. The breakthrough value is equal to 160% of premium plus premium bonus and is determined on the first policy anniversary. Breakthrough interest credits equal the interest rate at which the benefit base grew minus the interest rate under the fixed interest method for that policy year multiplied by the account value.
You may begin taking guaranteed withdrawal payments annually, semiannually, quarterly or monthly at any time after the first policy year and having attained age 50. You may take up to the guaranteed withdrawal payment amount, which is the maximum amount that can be withdrawn each policy year without negatively affecting your guaranteed withdrawal payment. This is the amount guaranteed to be paid for your lifetime, even if your annuity's account value falls to zero (provided no excess withdrawals are taken). The amount of the guaranteed withdrawal payment is determined at the election of withdrawal payments.
Your guaranteed withdrawal payment amount is calculated by multiplying your benefit base by the guaranteed withdrawal percentage for your age, and is based on your age at the time you elect to receive income payments.
Partial Free Withdrawals and Option for Systematic Withdrawals
Each contract year (after the first contract year), you may withdraw, surrender charge free, 10% of your vested account value as of the prior anniversary, less any free withdrawals taken during the current contract year. Before guaranteed withdrawal payments begin, you may take up to four unscheduled withdrawals per year ($500 minimum), or you may take regular systematic withdrawals on a monthly, quarterly, semi-annual or annual basis ($100 minimum). During the surrender charge period, any withdrawals that exceed the annual 10% free partial withdrawal amount will be subject to surrender charges and market value adjustment. Interest will not be credited to any amounts withdrawn. If your annuity was issued in connection with a tax-qualified plan, you may be required to take minimum distributions by April 1st of the year following attainment of age 701/2.
Additional Liquidity Riders
Your policy includes riders (addendums to your policy) to provide you with full access to your account value without penalty as long as certain conditions are met. Riders may not be available in all states. Please refer to the applicable statement of understanding or consumer brochure for additional details and availability in your state. State variations may apply. There are no additional fees or charges for these riders.
- Home Health Care Rider If the annuitant requires Home Health Care Services by a licensed Home Health Care provider as a result of being impaired in performing two out of six activities of daily living as outlined in your contract, and such care begins at least one year after the annuity’s effective date, the surrender charges and market value adjustment will be waived on withdrawals made while the annuitant is impaired.
- Nursing Home Benefit Rider If you are confined to a licensed nursing home for more than 60 days, and your confinement begins at least one year after the annuity’s effective date, the surrender charges and market value adjustment will be waived on withdrawals made during the period of your confinement.
- Terminal Illness Benefit Rider If a licensed physician certifies that you have been diagnosed with an illness or condition that causes your life expectancy to be one year or less, and the diagnosis takes place at least one year after the annuity’s effective date, surrender charges and market value adjustment will be waived during this period of terminal illness.
You must begin receiving annuity payments on the maturity date. The maturity date is fixed at contract issue and is no later than the contract anniversary following the annuitant’s (or the oldest annuitant’s if a second annuitant is named) 100th birthday.
During the first 12 policy years the surrender charge schedule is in effect. All withdrawals in the first year are subject to surrender charges and market value adjustment. Thereafter, withdrawals that exceed the annual 10% free withdrawal amount will be subject to surrender charges and market value adjustment. Any amount withdrawn in the first year and in later years the amount above the free withdrawal amount will be multiplied by the applicable percentages below, which determines the surrender charge. State variations apply.
FG Retirement Pro® surrender charge schedule
|End of Policy Year||Standard||NV, OK, TX, UT,
& FL Ages 65+
Market Value Adjustment
A Market Value Adjustment (MVA) is an adjustment made during the time the surrender charge schedule is in effect to the portion of the account value withdrawn that exceeds the free withdrawal amount. The MVA is based on a formula that takes into account changes in yields on Treasury Constant Maturity Series between the date of issue and the date of the withdrawal. Generally, if treasury yields have risen since you have purchased your annuity, the MVA will decrease your surrender value. If treasury yields have fallen, the MVA will increase your surrender value. See statement of understanding for additional details.
An excess withdrawal is an amount withdrawn over the guaranteed withdrawal payment, or the enhanced guaranteed withdrawal payment, if applicable, available that policy year. The benefit base and the guaranteed withdrawal payment will be reduced in proportion to the reduction in the account value due to the excess withdrawal.
The guaranteed withdrawal payment amount will be recalculated following an excess withdrawal. Depending on the amount of the withdrawal, surrender charges and market value adjustment may apply.
Never Less Than ZeroAlthough benefit base interest is linked to the performance of the S&P 500® Index, you will never be credited less than 0%, despite a decrease in the S&P 500® Index. This helps preserve the benefit base you may have already accumulated through previous interest credits.
Minimum Benefit ValueThe minimum benefit value equals premium plus premium bonus growing at the Minimum Benefit Value Interest Rate, for up to 12 years or until the withdrawal period begins. The minimum benefit value is used only to determine the guaranteed withdrawal payment if the minimum benefit value is greater than the benefit base or the account value at the time of guaranteed withdrawal payment election.
Minimum Guaranteed Surrender Value (MGSV)Your annuity contains a protective floor. The minimum guaranteed surrender value on a full surrender is 87.5% of premium, plus daily interest accruing at the MGSV accumulation interest rate. That rate is between 1% and 3%, and is set at issue and fixed for the life of the policy. The MGSV is reduced by prior withdrawals. Upon surrender you will be paid the greater of the MGSV or the account value less any applicable surrender charges and market value adjustment. State variations may apply.
This product allows you to transfer wealth to the next generation with two death benefit options or provides an option for spousal continuation in the event you die prior to annuitizing or electing GMWB payment under the contract. The Death Benefit for this product is the greater of the account value plus any unvested Premium Bonus and any interest thereon or the minimum guaranteed surrender value.
Subject to certain limitations and conditions, this product has an Enhanced Death Benefit feature that may be elected by the beneficiary in lieu of the Death Benefit described above. The Enhanced Death Benefit is payable in equal installments for a defined number of years.
If the surviving spouse of the deceased owner (or the deceased annuitant if the owner is a non-natural person) becomes the sole owner and the sole annuitant and elects to continue the policy, the GMWB provisions will also continue and the following will apply:
- If the policy is in the accumulation period at the time of the spousal continuation, the policy will continue in the accumulation period. If the policy then later enters the withdrawal period, the guaranteed withdrawal payments will be based on the life of the surviving spouse.
- If the policy was in the withdrawal period at or prior to the time of spousal continuation, the surviving spouse will continue to receive withdrawal payments if they were based, in part, on the life of the surviving spouse. If the withdrawal payments were based solely on the life of the deceased spouse then the GMWB provisions will terminate and the base annuity death benefit provision will apply.
Spousal continuation can only apply once. It cannot apply a second time if the surviving spouse continues the policy, remarries and then dies.
Your full premium is available to earn interest from the effective date of your annuity. Surrender charges and market value adjustment apply for the duration of the surrender charge schedule on full or partial surrenders.
The annuity is tax-deferred, which means you don’t pay taxes on the interest it earns until the money is paid to you. When you take payouts or make a withdrawal, you pay ordinary income taxes on the earned interest. Withdrawals are treated as coming from earnings first and then as a return of your premium. Payments under an annuity payment plan are treated as coming partially from earnings and partially as return of premium. You may pay a federal income tax penalty on earnings you withdraw before age 591/2.
If your state imposes a premium tax, it may be deducted from the money you receive. You may exchange one tax-deferred annuity for another without paying taxes on the earnings when you make the exchange.
Buying an annuity within an IRA doesn’t give you any extra tax benefit. The annuity is tax-deferred, which means you generally don’t pay taxes on the money until it is paid to you. Payments under an annuity payment plan are generally entirely taxable under most IRA plans. Choose the annuity based on its other features and benefits as well as its risks and costs, not its tax benefits.
Internal Revenue Code provides that if a non-natural person holds the annuity and such person is not holding as an agent for a natural person, the contract shall not be treated as an annuity contract for income tax purposes.
Information provided regarding tax or estate planning should not be considered tax or legal advice. Please consult your tax professional or attorney regarding your unique situation.
- This annuity is designed for people who are do not anticipate needing to access their annuity beyond the free amount for at least the duration of the surrender charge schedule.
- We may change your annuity contract from time to time to follow federal or state laws and regulations. If we do, we’ll tell you about the changes in writing.
- You have a set number of days (at least 10) to look at the annuity after you buy it. If you decide during that time that you don’t want it, you can return the annuity and get your premium back. Read the cover page of your annuity contract as soon as you receive it to understand how many days you have to decide if you want to keep it.
- At least once each year, we will send you a report of the current annuity values.
- We pay the agent, broker, or firm for selling the annuity to you. Compensation is not deducted from your premium. However, the compensation we pay impacts contract pricing including surrender charges, interest rates, caps, participation rates and spread.
- Required Minimum Distributions – Certain tax qualified annuities are subject to required minimum distributions which generally require that distributions begin no later than April 1st of the year following your attainment of age 70½ and that amounts be paid to you over a period not longer than your life expectancy.
- Your annuity values are guaranteed by Fidelity & Guaranty Life. As a legal reserve company, Fidelity & Guaranty Life is required by state regulation to maintain reserves equal to or greater than guaranteed surrender values.