MLIC s Single Premium Deferred Annuity Policy form ICC (11-10))

Transcription

1 MOTORISTS LIFE ANNUITY AGENT TRAINING PROGRAM Please complete the following program to become more familiar with MLIC s annuity portfolio of products. Take the quiz at the end to test your knowledge. When you are done, please complete the last page and return it to MLIC. MLIC s Single Premium Deferred Annuity Policy form ICC (11-10)) Motorists Life SPDA Value Plus is our deferred annuity contract with a one time, single premium. The premium accumulates interest on a tax-deferred basis until the annuitant begins to make withdrawals. The annuitant decides when and how to take the distribution, whether in a lump sum, over a set period of time, or for a lifetime. What are the issue ages for this policy? 0-80 What are the deposit amounts accepted for the SPDA Value Plus policy?* Minimum deposit = $ 5,000 Maximum deposit = $ 500,000** ** for larger amounts, please contact Motorists Life Marketing What are the interest rates associated with the policy? MLIC s SPDA contains a policy minimum guarantee which will be reviewed annually for new business, subject to a variable 1% to 3% floor. SPDAs written in 2011 receive a 2% guarantee. Check with the home office for current rate. What are the policy surrender charges? The SPDA has a 6 year graded surrender charge that is waived upon death. These charges do not apply when a lifetime annuity payout option is chosen. Surrender Charges Policy year Percent of Value Withdrawn 1 & 2 8% 3 7% 4 6% 5 5% 6 4% 7 on 0 How are partial withdrawals treated? As of the second policy year, up to 10 percent of the fund balance may be withdrawn annually, free of company charges. Withdrawals exceeding 10 percent will be subject to pro-rata surrender charges. Minimum withdrawal amount = $ 250 Minimum balance remaining = $ 2,000 Any withdrawals made prior to age 59 ½ may be subject to federal taxes and penalties.

2 Can the owner take interest only withdrawals? The owner may choose, at any time, to receive the earned interest on a monthly basis. The only method by which the interest will be paid is monthly, through automatic deposit into a checking or savings account. Please note: Monthly interest is considered part of the free withdrawal amount. * for policies in WV, 1 percent will be deducted from the deposit at issue (assessed by the state of WV). SPDA Application Application packets for the SPDA by state are available on our agent website under New Business/Applications. The packets include all compliance forms needed by state along with the application (i.e. suitability form, replacement, disclosures). MLIC s Single Premium Immediate Annuity (SPIA) (policy form MLA ) Our SPIA is appropriate for MLIC SPDA policyholders who decide to annuitize or new clients with a lump sum for deposit wanting immediate distribution through timed payouts. What are the issue ages for our SPIA policy? 0-90 What are the deposit amounts acceptable? Minimum deposit = $ 2,000 Maximum deposit = $ 500,000** What is the minimum payout amount? Minimum periodic payout = $ 25 What are the payout options and how do they work? LIFE ONLY: Pays a fixed income to the payee for his or her lifetime. Upon death, no further payments are made. There is no survivorship option. Life only provides the highest payout of all the options available. LIFE WITH PERIOD CERTAIN: Pays a fixed income to the payee for his or her lifetime with a specified number of years guaranteed. If the payee dies before the end of the specified period, a beneficiary will receive the payments for the remainder of the period. Period Options Available: 10 year or 20 year JOINT LIFE WITH ONE-HALF SURVIVOR: Pays a fixed income that reduces by one-half upon the death of the payee. The reduced payment continues until the death of the survivor beneficiary.

3 JOINT AND EQUAL WITH PERIOD CERTAIN: Pays a fixed income to two payees until both are deceased. Payments will continue to a beneficiary if both payees die prior to the period certain (10 or 20 years). What are the Payment Frequencies? Payments may be made monthly by electronic fund deposit or quarterly, semiannually, or annually. How do you set up an SPIA or Supplementary Contract? From an SPDA (to a Supp Contract): Complete the surrender form ML (1-07), W4P to include tax withholding Information (on agent website under Forms/Policy Service); and submit proof of date of birth (driver license or birth certificate). We will also need the SPDA/FPDA policy returned unless it is a partial surrender. New SPIA: Complete the annuity application packet available on the agent web site (application with state required forms replacement, suitability ) and specify payout, include W4P and submit proof of date of birth. MLIC s Flexible Premium Deferred Annuity (FPDA) Policy form ICC (11-10) Motorists Life s FPDA is our deferred annuity with flexibility in premium payment amount and timing of payments. The premiums accumulate interest on a taxdeferred basis until the annuitant begins to make withdrawals. The annuitant decides when and how to take the distribution, whether in a lump sum, over a set period of time, or for a lifetime. What are the deposit amounts accepted for MLIC s FPDA?* Minimum deposit (Non-qualified & Qualified) = $300 annual Maximum deposit Non-qualified - $ 500,000** Qualified annual - Under age 50 = lesser of $5,000 or taxable comp for 2011 Age 50 + = lesser of $6,000 or taxable comp for 2011 This limit may be split between a traditional IRA and a Roth IRA. The maximum deductible contribution to a traditional or Roth IRA may be reduced depending on the policyowner s modified adjusted gross income. * for policies in WV, 1 percent will be deducted from the deposit at issue (assessed by the state of WV). ** for larger amounts, please contact Motorists Life Marketing What are the issue ages for this policy? Non-qualified = 0 85 Qualified = 18 65

4 What are the interest rates associated with our FPDA policy? MLIC s FPDA contains a policy minimum guarantee which will be reviewed annually for new business, subject to a variable 1% to 3% floor. FPDAs written in 2011 receive a 2% guarantee. Check with the home office for current rate. What are the policy surrender charges? The FPDA has a five-year graded surrender charge that is waived in the event of death. These charges do not apply when a lifetime annuity payout option is chosen. Surrender Charges Policy year Percent of Value Withdrawn 1 9% 2 8% 3 6% 4 4% 5 2% 6 0 How are partial surrenders treated? A portion of the accumulated value may be withdrawn, provided the withdrawal amount is at least $500 and there is a $3,000 remaining balance after the withdrawal. A surrender charge will be assessed if the partial withdrawal occurs during the first five years. Any withdrawals made prior to age 59 ½ may be subject to federal taxes and penalties. What are the Payment Frequencies? Payments may be made monthly, quarterly, semi-annually, or annually. FPDA Application Application packets for the FPDA by state are available on our agent website under New Business/Applications. The packets include all compliance forms needed by state along with the application (i.e. suitability form, replacement).

5 MLIC Annuity Review Please complete to ensure your understanding of our annuity portfolio. 1) MLIC s SPDA is issued to age: ) Sheryl Dennis purchased an MLIC FPDA in It has grown to $ 15,500. She decides to surrender it in What will he surrender charge be? $ 620 $ 310 $ 155 no surrender charge 3) Which of the following SPIA payout options provides the highest payout: Life Only Life with Period Certain Joint life with One-Half Survivor Joint and Equal with Period Certain 4) Mr. Smith set up an MLIC SPDA in He decides to surrender his policy is Assuming the policy value has grown to $ 27,500, what would be his surrender charge? $ 550 $ 825 $1,375 $2,200 5) Our SPIA is issued to age: ) Mary Jones has an MLIC SPDA and wants to take a partial withdrawal from her policy. She has $ 10,000 of fund value in her account. What is the maximum amount she may withdraw without being subject to a charge? $250 $ 500 $ 1,000 $1,500 7) Jack Wentz selected the Life Only option with his SPIA. Ten years later, he passed away. Who will the remainder of his payments go to: His surviving wife His son There is no survivorship option

6 8) Sally Rogers has an MLIC SPDA. She decides she wants to receive interest-only withdrawals. She will receive the interest: by check on a quarterly basis through automatic deposit on a quarterly basis by check monthly through electronic fund deposit monthly 9) Susan Black wants to set up an FPDA on a qualified basis. She is 45 years old. The maximum amount she can deposit on an annual basis is: $ 3,000 $ 5,000 $ 6,000 $ 10,000 10) Mike Warner chose the SPIA Life with Period Certain payout for 10 years ($ 500 fixed income). After 6 years of payout, Mike passed away. What will his beneficiary receive? $ 500 for her lifetime $ 500 for four more years No payout $ 250 for her lifetime $ 250 for four more years 11) MLIC s FPDA annual minimum deposit is: $ 200 $ 300 $ 500 $ 5,000 Answer Chart: None 3. Life Only 4. $ 1, $ 1, No survivorship option 8. electronic fund deposit monthly 9. $ 5, $ 500 for 4 years 11. $ 300

7 AGENT ANNUITY CE COMPLIANCE Please complete the appropriate section and sign the statement below and either fax it to Motorists Life Marketing at , it to or mail it to: Motorists Life 471 East Broad St. Columbus OH Attn: Life Marketing Please complete section A & B if you sell annuities. (A) I have completed the Motorists Life Annuity Training program and understand MLIC s annuity product line. (B) States of IA, IL, IN, KY, NE*, OH, WI, WV, SC I do sell fixed annuities and have completed an approved four hour CE annuity course. Please find my certification of completion attached. You must complete (A) and (B) in order for newly appointed agents to submit MLIC annuity business. * by January 19, Please complete section C if you do not sell annuities. (C) I do not sell fixed annuities and have no plans to in the future Agent Name (Print) Agent Signature Date Agency Code Individual Producer Code (5 digit) (3 digit)