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1 S E C U R I T Y B E N E F I T Foundations Annuity G U A R A N T E E D L I F E T I M E W I T H D R A W A L B E N E F I T R I D E R A V A I L A B L E O N L Y W I T H T H E 7 - Y E A R O P T I O N

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3 The Security Benefit Foundations Annuity Guaranteed Lifetime Withdrawal Benefit (GLWB) Rider Welcome! Most of us look forward to retirement. We want to know that when we retire we will have enough income to last a lifetime and how much money we can live on. A key risk facing retirees is longevity outliving our retirement savings. For a couple aged 65 there is a 50% chance one spouse will live to age 92, and a 25% chance one will live to age The optional Guaranteed Lifetime Withdrawal Benefit (GLWB) Rider 2 available with Security Benefit s Foundations Annuity, issued by Security Benefit Life Insurance Company, is designed to help address longevity risk. 63 Average Retirement Age for Americans How can I make sure I have enough money for retirement? 1 Annuity 2000 Mortality Table; Society of Actuaries. 2 The charge for the optional Guaranteed Lifetime Withdrawal Benefit (GLWB) Rider is 0.90% of the GLWB Benefit Base and will be deducted annually from the annuity s Account Value. The rider charge is guaranteed not to increase after a contract is issued. 1

4 Guaranteed Lifetime Income The GLWB Rider guarantees that you may withdraw from the Foundations Annuity a specified amount each year, called the Lifetime Annual Income. If you only withdraw the Lifetime Annual Income each year, this amount is guaranteed to be available each year for your lifetime even if your Account Value is zero. At the time you purchase the Foundations Annuity 7-year option and the GLWB Rider, you can determine the Lifetime Annual Income you can have available under the Rider. KEY CONCEPTS In order to understand how the lifetime income works, it s important to understand some key concepts: Lifetime Annual Income: Refers to the amount you may withdraw each year under the GLWB Rider. Benefit Base: Used to compute the Lifetime Annual Income and the charge for the GLWB Rider. The Benefit Base is not an amount that is available for withdrawal, annuitization, or as a death benefit. Lifetime Withdrawal Rate: The Lifetime Annual Income is calculated by multiplying the Benefit Base by a Lifetime Withdrawal Rate. The Lifetime Withdrawal Rate is based on your age at the time you begin taking Lifetime Annual Income. If you elect to receive Lifetime Annual Income for you and your spouse s lives, the Lifetime Withdrawal Rate is lower and is based on the youngest life covered. The Withdrawal Rate Schedule is shown on page 6. 2

5 THREE KEY FEATURES In the pages that follow, we ll look at three features of the GLWB Rider that determine the amount of your Lifetime Annual Income: A 1% bonus Upon purchasing the Foundations 7-year option, you will receive a 1% bonus amount that will be credited to all first-year Purchase Payments. 8.5% Benefit Base roll-up For the first 15 contract years, the Benefit Base is guaranteed to increase annually until you begin taking Lifetime Annual Income or you reach age 85, whichever comes first. The amount of the increase (using a simple calculation method) will be at least 8.5% of the Purchase Payments we receive, plus any bonus on first-year Purchase Payments, less any premium taxes and withdrawals. The annual Benefit Base roll-up is applied only on contract anniversaries. If on the contract anniversary the Account Value is higher than the Benefit Base after the roll-up is applied, then the Benefit Base will step-up to the Account Value. Lifetime Withdrawal Rate up to 7% For every year you delay taking the Lifetime Annual Income, the Lifetime Withdrawal Rate increases 0.10%, up to a maximum rate of 7% for single life and 6.5% for joint lives at age 80 or later. You will receive a predictable amount of income for the rest of your life, or you and your spouse s lives, as long as you only take withdrawals equal to the Lifetime Annual Income. In addition to all of these great features, this product is also RMD-friendly. That means that if the RMD amount is greater than the Lifetime Annual Income, the RMD can be taken without reducing the Benefit Base or Lifetime Annual Income amounts. This brochure highlights the features and guarantees of the Foundations Annuity GLWB Rider. For more specific information, see your annuity contract and visit with your financial professional. 3

6 A 1% BONUS Besides offering income guarantees, you receive a 1% bonus on all Purchase Payments made in the first contract year. The Bonus is applied to your Account Value and is therefore reflected in the Benefit Base. By applying the Bonus to the Benefit Base, the amount of your Lifetime Annual Income will be increased. The Benefit Base is not an amount that is available for withdrawal, annuitization, or as a death benefit. The chart at right shows the bonus amounts for the Foundations Annuity. Bonus annuities may include lower caps or interest rates, longer surrender periods, higher surrender charges or other restrictions that are not included in annuities that don t offer a bonus feature. The amount of charges or reduction in interest credits may exceed the amount of the bonus. Bonus (as a percentage of first-year Purchase Payments) Surrender Period Bonus % 1% Bonus Examples Foundations 7 7 years Initial Purchase Payment $300,000 Bonus Amount $3,000 Account Value upon Issue $303,000 Benefit Base upon Issue $303,000 4

7 8.5% BENEFIT BASE ROLL-UP One of the features of the GLWB Rider is that the longer you wait to take withdrawals from the Foundations Annuity, the greater the Lifetime Annual Income you can receive each year. For the first 15 contract years, the Benefit Base is guaranteed to increase annually until you begin taking Lifetime Annual Income or you reach age 85, whichever comes first. The amount of the increase will be at least 8.5% of the Purchase Payments we receive, plus any bonus on first-year Purchase Payments, less any premium taxes and withdrawals. This increase in your Benefit Base is guaranteed, no matter what happens to your Account Value. The annual Benefit Base roll-up is applied only on contract anniversaries. The chart below shows how the Benefit Base increases if you wait to take Lifetime Annual Income. 3 To illustrate the Benefit Base and the roll-up feature, we ll begin with the same initial Purchase Payment we used in the Bonus example on page 4. Benefit Base Increase Initial Purchase Payment 1% Bonus Benefit Base upon Contract Issue $300,000 $3,000 $303,000 Automatically step-up your Benefit Base On each contract anniversary, if your Account Value is greater than your Benefit Base after the roll-up if it applies, then your Benefit Base will increase to equal your Account Value. This is called the step-up. Value of the Benefit Base with Roll-up 4 Benefit Base (upon contract issue) $303,000 Year 5 Benefit Base $431,775 Year 10 Benefit Base $560,550 Year 15 Benefit Base $689,325 Year 0 3 This chart reflects the GLWB Benefit Base Value and not the actual Account Values of the annuity. The chart assumes no withdrawals. 4 The Benefit Base is not the same as your Account Value and is not available for withdrawal or annuitization or upon death. 5 5

8 LIFETIME WITHDRAWAL RATE UP TO 7% When you purchase the GLWB Rider with your Security Benefit Foundations 7-year Annuity, you can receive guaranteed income through withdrawals of the Lifetime Annual Income for the rest of your life. When Lifetime Annual Income begins, the Lifetime Withdrawal rate is locked in and never changes. You can also determine your yearly Lifetime Annual Income so you can better prepare for tomorrow s needs. How much you receive depends on the amount of and timing of your Purchase Payments, the age at which you begin taking Lifetime Annual Income, whether you want your income to last as long as you live or as long as both you and your spouse live, and whether you take any withdrawals in addition to the Lifetime Annual Income. The longer you wait to take any withdrawals, the higher your Lifetime Annual Income can be. 5 This is also true of the joint life option. 6 To the right is the Lifetime Withdrawal Rate schedule to help you predict how much income, as a percentage of your Benefit Base, you can plan on for the rest of your life. It s important to know that taking out withdrawals before beginning the Lifetime Annual Income and withdrawals in excess of the Lifetime Annual Income in any given year may reduce the Lifetime Annual Income you may withdraw from your contract by more than the dollar amount withdrawn. Lifetime Withdrawal Rate Schedule Age Single Life Joint Life % 3.5% % 3.6% % 3.7% % 3.8% % 3.9% % 4.0% % 4.1% % 4.2% % 4.3% % 4.4% % 4.5% % 4.6% % 4.7% % 4.8% % 4.9% % 5.0% % 5.1% % 5.2% % 5.3% % 5.4% % 5.5% % 5.6% % 5.7% % 5.8% % 5.9% % 6.0% % 6.1% % 6.2% % 6.3% % 6.4% % 6.5% 5 Withdrawals made prior to beginning Lifetime Annual Income and withdrawals that exceed the Lifetime Annual Income amount reduce the Benefit Base and the Lifetime Annual Income. These types of withdrawals reduce future benefits under this Rider by more than the dollar amount of the withdrawals. In addition, during the surrender charge period, withdrawals may also be subject to a market value adjustment (MVA) and a surrender charge if the withdrawal exceeds the free withdrawal amount under the annuity. 6 When you begin taking Lifetime Annual Income, the Lifetime Withdrawal Rate is locked in and never changes. The Roll-up to the Benefit Base also stops. The earliest age to take the lifetime withdrawal is age 50. The Lifetime Annual Income is figured by multiplying the Benefit Base by the Lifetime Withdrawal Rate that applies for your age or the age of the youngest person if income payments are made to you and a spouse. 6

9 INCOME EXAMPLE The GLWB Rider allows you to create a predictable income stream through the Lifetime Annual Income at a time of your choosing in retirement. You can create income immediately upon purchase of your annuity or you can wait to take Lifetime Annual Income. The longer you wait, the higher your Lifetime Annual Income can be. The following example shows how the features of the GLWB Rider work together. Bob and Betsy purchase their Security Benefit Foundations Annuity with the GLWB rider and a $300,000 premium when Bob is 55 and Betsy is 53. That means they will have the 7-year surrender period, and they get the 1% bonus. Because they have other income, they plan on taking income from this annuity when Bob reaches age 65. While Bob and Betsy wait to take Lifetime Annual Income, the Benefit Base increases annually by at least the 8.5% Roll-up. 7 Their Benefit Base is shown below. The chart shows the minimum Benefit Base that Bob and Betsy can count on, assuming they take no withdrawals prior to taking Lifetime Annual Income. Based on the 8.5% roll-up to the Benefit Base, when Bob reaches age 65, Bob and Betsy can decide whether they want to receive income for Bob s life and receive $30,830 or for Bob and Betsy s lives and receive $26,906. If they decide to wait another five years, the Lifetime Annual Income amount increases to $41,360 if they receive income from Bob s life and $36,534 if they receive income for Bob and Betsy s lives. Lifetime Income Example Bob s Age GLWB Benefit Base Lifetime Annual Income (Bob Only) Lifetime Annual Income (Bob & Betsy) 55 $303,000 $13,635 $11, $431,775 $21,589 $18, $560,550 $30,830 $26, $689,325 $41,360 $36, The annual Roll-up applies to the Benefit Base for each year you delay taking income up to age 85, to the end of the 15-year Benefit Base Roll-up term, or to the date you begin taking income under the Rider, whichever comes earliest. The reference to simple interest refers to the way the Benefit Base is calculated. It is not 8.5% simple interest credited to your account and is not an amount available for withdrawal or payable on death.

10 AT A GLANCE GLWB Rider information Rider Purchase The GLWB Rider can only be purchased at contract issue. It is only available with the Foundations 7-year option. Withdrawals It is important to note that withdrawals taken prior to taking Lifetime Annual Income, and withdrawals in excess of your guaranteed Lifetime Annual Income amount, may reduce your Issue Ages (oldest Owner or Annuitant) for the GLWB Rider. guaranteed Lifetime Annual Income by more than the dollar amount withdrawn. If you take withdrawals in excess of the 10% free withdrawal during the surrender charge period, your GLWB Rider Cancellation The contract Owner may cancel the GLWB Rider on any contract anniversary on or after the fifth contract anniversary. It may not be reinstated once it is canceled. withdrawal may also be subject to surrender charges and a market value adjustment. Once Lifetime Annual Income begins, withdrawals up to the Lifetime Annual Income amount are not subject to an MVA, surrender charge and a bonus recapture, even if they are over Benefit Base The Benefit Base is the amount used to compute the Lifetime Annual Income and rider charge. It is not an amount that may be withdrawn or annuitized and is not an amount payable at death. the 10% free-withdrawal limit. Contract withdrawals and Lifetime Annual Income are subject to ordinary income tax and, if made before age 59 1 /2, may incur a 10% IRS penalty tax. If you are required to take Required Minimum Distributions GLWB Rider Charges The annual charge is 0.90% of the GLWB Benefit Base and is deducted from the Account Value on the contract anniversary. The (RMDs) and the RMD amount is higher than the Lifetime Annual Income Amount, you can receive the RMD amount without reducing the Benefit Base or the Lifetime Annual Income amount. charge is also deducted upon payment of any amounts payable at death, a full surrender of the contract, or the Annuity Start Date if the entire Account Value is applied to an annuity option. The rider charge is guaranteed not to increase after a contract is issued. Lifetime Annual Income Continuation upon Death of the Owner At the time you select when you would like the Lifetime Annual Income to begin, you also select whether the GLWB Rider is for Additional Purchase Payments If you make additional Purchase Payments into your annuity, your GLWB Benefit Base will be equal to the current Benefit Base plus your additional Purchase Payments, less any premium taxes that apply. If you make additional Purchase Payments within the first year of your contract, then your GLWB Benefit Base will be equal to the current Benefit Base plus your additional Purchase Payments plus a bonus on the additional Purchase Payment amount, less any premium taxes that apply. you or for you and your spouse. (In the states that require it, you may select the GLWB Rider to be for you and your domestic or civil union partner.) For Lifetime Annual Income to continue for your spouse s lifetime, your spouse must be named as the designated beneficiary or the Joint Owner of your annuity. If someone other than your spouse is the designated beneficiary or Joint Owner of your annuity, under the federal tax laws, upon your death your annuity must terminate along with the GLWB Rider. In that event, Lifetime Annual Income is no longer payable and we will make a payment on your death. A domestic or civil union partner is not currently viewed as a spouse under the federal tax laws. 8

11 ABOUT SECURITY BENEFIT For more than 120 years, Security Benefit has been in the business of helping others. We do that today by fostering strong partnerships to provide insightful and customized retirement solutions for individuals nationwide through a broad network of independent financial professionals. Our only focus is retirement - helping you save for it and, most importantly, helping you enjoy it to its fullest potential. At Security Benefit, we are one of America s leading retirement companies by offering a compelling and customized suite of retirement savings and income products to help pre- and post-retirees achieve a secure retirement. We continue to deliver on our longstanding reputation for excellence. We re here to provide solutions that lead up to and carry you through your retirement years. All of this is built upon a solid financial foundation that means we believe we can deliver on our promises and your future. For more information about our financial strength and ratings, please visit SecurityBenefit.com. This brochure contains highlights only. Please refer to the annuity contract for a full explanation of the product and any charges or limitations. The Security Benefit Foundations Annuity (Form 5800 (11-10) and ICC (11-10)), a fixed indexed flexible premium deferred annuity contract, and the Guaranteed Lifetime Withdrawal Benefit Rider (Form 5821 (5-11) and ICC (5-11)), an optional rider available for purchase with the Security Benefit Foundations Annuity and for which a premium is charged, are issued by Security Benefit Life Insurance Company. Product features, limitations and availability may vary by state. Guarantees provided by annuities are subject to the financial strength of the issuing insurance company and: Annuities are not FDIC or NCUA/NCUSIF insured; are not obligations or deposits of, and are not guaranteed or underwritten by any bank, savings and loan, or credit union or its affiliates; are unrelated to and not a condition of the provision or term of any banking service or activity. S&P is a registered trademark of Standard & Poor s Financial Services LLC ( S&P ) and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ). These trademarks have been licensed for use by S&P Dow Jones Indices LLC. S&P and S&P 500 are trademarks of S&P and have been sublicensed for certain purposes by Security Benefit Life Insurance Company. The S&P 500 index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Security Benefit Life Insurance Company. The Security Benefit Foundations Annuity is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates make any representation regarding the advisability of purchasing such product. Fixed indexed annuities are not stock market investments and do not directly participate in any stock or equity investments. Market Indices do not include dividends paid on the underlying stocks, and therefore do not reflect the total return of the underlying stocks; neither an Index nor any market indexed annuity is comparable to a direct investment in the equity markets. Clients who purchase indexed annuities are not directly investing in a stock market index. Neither Security Benefit nor its representatives offer legal or tax advice. Please consult your personal attorney and/or advisor regarding any legal or tax matters. 9

12 Inside this brochure are three important concepts to help you build a stronger foundation: Understanding the retirement challenges you may face How to protect your savings How to create your retirement income solution Your path To and Through Retirement begins here. Looking for additional guidance? Talk to your Financial Advisor or call Security Benefit at SecurityBenefit.com ANNUITIES MUTUAL FUNDS RETIREMENT PLANS TO AND THROUGH RETIREMENT One Security Benefit Place Topeka, Kansas /08/11