Simplicity. Flexibility. Tax Deferral.

Transcription

1 Commonwealth Annuity Horizon Variable Annuity INVESTING WITH COMMONWEALTH ANNUITY Commonwealth Annuity offers annuities help fund r retirement plan. These annuities offer a wide variety of investment and pat options help create the retirement plan that is right for r needs. An purchased for a tax-qualified retirement account does not provide any additional tax-deferred treatment of earnings beyond the treatment that is already provided by the tax-qualified plan itself. For such plans, the should be purchased for other features and benefits. The tax and legal information presented here is a summary of Commonwealth Annuity s understanding of current federal tax laws and is not exhaustive. We suggest consult r atrney, accountant or tax advisor for information regarding r particular situation. Neither Commonwealth Annuity nor any of its agencies may give legal or tax advice. This contains certain fees and charges including mortality and expense risk charges, administrative charges, and a fee. Guarantees are based on the claims-paying ability of the insurer. Annuity s do not represent deposits or obligations of any banking institution nor are they insured by the Federal Deposit Insurance Corporation or guaranteed by any Federal government agency. Horizon may not be available in all states. Certain provisions may not be available or may vary by state. Commonwealth Annuity Horizon Variable Annuity is a flexible premium deferred issued by Commonwealth Annuity and Life Insurance Company, 13 Turnpike Road, Suite 10, Southborough, MA Securities distributed by Epoch Securities Inc. member FINRA/ SIPC. Commonwealth Annuity and Life Insurance Company is an affiliate of Goldman Sachs Asset Management. This brochure does not constitute an offer buythis. Before purchasing a, carefully consider the and the underlying funds investment objectives, risks, charges and expenses. Both the prospectus and the underlying fund prospectuses contain information relating investment objectives, risks, charges and expenses, as well as other important information. The prospectuses are available r licensed adviser or the insurance company or by calling You should read them carefully before purchasing a. Underlying securities distributed by Epoch Securities, Inc. (member FINRA/SIPC). Copyright 011 Commonwealth Annuity. Commonwealth Annuity and Life Insurance Company Service Center Mailing Address: P.O. Box Topeka, Kansas Home Office: 13 Turnpike Road, Suite 10 Southborough, MA commonwealth.com Simplicity. Flexibility. Tax Deferral. CWA HOR-CON-09 (06/11)

2 Horizon Variable Annuity Focus on the essentials. You ve worked hard build a rewarding retirement and maybe even pass along some of r assets the next generation. But with people living longer day, it s natural have concerns about outliving r savings. Commonwealth Annuity Horizon is a low-cost, surrender charge free that provides retirement invesrs a cost -effi cient, tax-deferred investment vehicle with lifetime income options. With no-fee withdrawals and an extended age of 99, Horizon gives the fl exibility decide when it s time access r assets. Lower costs let take r savings further. Horizon features a low annual charge of 0.75%. By focusing on the essentials and eliminating costly features may not need like an enhanced death benefit Horizon provides the opportunity for improved investment performance over time. Maximum lifetime age of 99. Available through age 90, with no mandary pats until age 99, Horizon allows enjoy a longer period of tax deferral than most s. It s also a convenient way pass assets along r beneficiaries, tax-deferred. No withdrawal fees. Unlike most annuities, Horizon has no surrender charge schedule. That means re always free access r assets, without surrender charges. 1 Lifetime income options. Choose guaranteed income for life or a period of 10 years for one person or two. Well known investment options. Horizon offers a range of investment options multiple fund managers. Our investment options include domestic, international, industry-specific and fixed income funds the world s most recognized fund families and trusted money managers 3. Sometimes, get what want in life, need focus on the essentials. The same can be said for r retirement assets. If simplicity, flexibility and tax deferral are priorities for r retirement strategy, r advisor can help decide if Commonwealth Annuity Horizon is right for. 1 Withdrawals are subject income tax. Withdrawals prior age 59 1/ are subject an additional 10% tax penalty. Guarantees are based on the claims paying ability of the insurance company. 3 Only available on qualified funds.

3 Client Profile: 55-year old looking for a simple, low-cost for tax-deferred retirement investments Understanding Variable Annuities. Horizon Variable Annuity client profi les. Making r retirement dreams a reality requires thoughtful planning. For many people, the assurance of guaranteed income combined with the potential for tax-deferred growth makes annuities an integral A low-cost, component surrender of their charge retirement free strategy. With may so many be the variations solution available need day, get the most understanding r retirement the basics assets. of The right annuities, including their can costs, help risks and enjoy a longer potential period of tax benefi deferral, ts can while help maximizing better r evaluate retirement r income options. potential and maintaining liquidity. The client profi les below show how invesrs in various stages of life might use Commonwealth Annuity Horizon do just that. Variable annuities are designed help fund retirement and are meant serve as long-term investments. In the simplest form, a is a between and an insurance company where, in return for r contribution(s), the company agrees make a series of payments over time. Client Profile: 85-year old with expectation live past age 90 Variable annuities have two distinct phases the accumulation phase and the pat phase. The accumulation phase Ethlyn, begins age with 85, has r been first widowed contribution either for several years. a She one-time is healthy lump and sum has or no a major series medical of contributions issues. over time. During The an pat annual phase review, begins her advisor once notes opt that she begin is approaching receiving payments the or date annuitize r for. her, age 90, at which point the enhanced death benefit will terminate and her will convert a pat. Ethlyn is concerned that she may TAX-DEFERRED reach GROWTH the date leading distributions she does not yet want or need. She explains Your account grows that she on a would tax-deferred like basis. continue Compared the tax deferral a taxable benefits investment, she has this with offers her the current potential produce and better also results provide over the time. opportunity for her children stretch out the taxable distributions they will receive after her death as her beneficiaries. INVESTING YOUR ASSETS After carefully With a reviewing her current decide how situation the assets and long-term in r account goals, Ethlyn are invested, and her choosing advisor agree the search various investment options offered under r. The value of r depends on both for a new that better suits her needs. Together, they select Horizon, the low-cost the performance of the investment options choose, the costs of r plan, and the payments Commonwealth Annuity. With an age of 99, Horizon offers Ethlyn considerable breathing make. You can make transfers between investment options without incurring charges. Limitations on room before the frequency she is required and dollar annuitize amount and of transfers allows her can children vary stretch out their. taxable distributions over time. In addition, Horizon s.75% mortality and expense risk charge is significantly lower than the 1.40% mortality and expense ACCESS risk charge TO of YOUR her current FUNDS, offering the potential for increased performance over time, a benefit both Ethlyn Most and her children. annuities Because have a surrender Horizon has period, no surrender a minimum period, length Ethlyn of time usually is free withdraw several her years money at any time, during without which additional agree fees or keep penalties. r assets invested before taking withdrawals. If withdraw before the surrender period expires, may face surrender charges. Recognizing that not all invesrs are After describing willing the give up access features their assets Ethlyn, for the an extended advisor period, suggests some s that they day set eliminate up a meeting the surrender In this charge way, period they can entirely. be certain that her family is aware of her decision and understands her rationale with her children. before she purchases the new. Mary, age 55, is still working and plans retire in approximately ten years. She is recently divorced and has no children. Mary feels she needs a way increase the performance of her in order meet her retirement income goals. Mary s current policy contains a number of relatively expensive features that she no longer needs, including an excess death benefit. After reviewing her current situation and future goals, she and her advisor determine that exchanging a lower cost, less feature-intensive would provide the potential opportunity for increased investment performance over time, while still adequately addressing her needs. They select Horizon, a low-cost Commonwealth Annuity that eliminates the excess RECEIVING death benefit PAYMENTS and reduces her annual mortality and expense risk charge 1.40% Depending 0.75%. Based on r on, her current life can expectancy decide whether of 83 years, r Mary has payments another 8 years accumulate the benefits last of for these a set reduced period or costs. indefinitely. Because While Horizon has no annuities surrender have charge traditionally schedule, it offers Mary the flexibility required withdraw invesrs her money begin sooner taking than withdrawals planned without by age 90, surrender with people charges. living longer day, some s now offer the option delay until a later age. Client Profile: 65-year old getting ready take retirement income EVALUATING YOUR OPTIONS Charges and fees can vary Bill significantly and his wife, Sue one both age 65 have sold their business and are preparing retire. another and can have considerable They have impact contributed on the performance their full-featured of r deferred investment. Typical expenses include withdrawal/surrender charges, mortality and for several years. In recent years, their accounts have been impacted by sluggish equity markets, expense risk charges, administrative fees and underlying fund expenses. causing them fall short of their initial retirement income projections. Because the As r needs change, certain surrender features period included of their in current a particular has expired, may no they are free shop for a. better In addition, suited another their needs as 65-year may offer old compa- retirees. They decide meet with their longer be appropriate for rable features advisor with lower discuss expenses. their If options already for turning have a their accounts in or the are strongest possible income stream. considering investing in one, it s a good idea periodically review the associated fees After and charges reviewing as well their as, the the features advisor points make out sure that they a are few in of line its with key components no longer fit their r requirements needs. and goals. In addition, the s 1.40% mortality and expense risk charge is significantly higher than some of the new low-cost s. The advisor explains that because Bill and Sue are When healthy evaluating and plan r convert their options, a it s guaranteed important income consider stream the in 10 years, generating higher account strength values may of the make issuing sense company if they no and longer the need choice the of death investment benefit options associated with their current. offered ensure get the most r retirement assets. The advisor recommends that they switch a lower cost, less feature-intensive. He suggests Horizon, Your a low-cost advisor can help Commonwealth decide if a Annuity. Horizon s makes sense mortality and expense risk charge is for. 46% lower than that of their current. With a smaller percentage of their contributions going wards insurance expenses, Bill and Sue will have the potential receive a greater return on their investment over the long-term depending upon the investment experience of their chosen investment options. This change gives them the boost they are looking for in their future projected monthly income generated these assets, and becomes even more compelling as that figure is projected out over both of their life expectancies. Guarantees are based on the claims paying ability of the insurance company.

4 The facts about Horizon Variable Annuity. Commonwealth Annuity Horizon is a low-cost, simplifi ed that offers the fl exibility of surrender charge free withdrawals and extended tax deferral. By focusing on the essentials and eliminating costly extra features, Horizon may provide opportunity for improved investment performance over time. AVAILABILITY Includes non-qualified and qualified plans: IRA (Traditional), Roth IRA, 401(k), 403(b), 457(b)gov, 457(b)non-gov Maximum issue age of the Older Annuitant is 90. When choosing an fund r qualified plan, keep in mind that tax deferral can be achieved through other investment vehicles funding the plan. Commonwealth Annuity Horizon offers several options and features that may be appropriate for r situation. DOLLAR COST AVERAGING (DCA) This option transfers an equal portion of r DCA account on a regular basis in r chosen subaccounts (investment options). This allows take advantage of fluctuating market prices by making scheduled investments. Over time, this feature can reduce the average price of r subaccount units. There is no minimum transfer amount. Dollar cost averaging does not ensure a profit. You should consider r ability continue investing during periods of low price levels. CONTRIBUTIONS Single and periodic payment(s) Payroll deductions for qualified plans Pre-authorized withdrawals checking account available for non-qualified annuities and IRAs PURCHASE PAYMENTS INITIAL SUBSEQUENT Qualified: $50 $50 Non-Qualified: $5,000 $50 TRANSFERS Before r date, while r is in the accumulation phase, can transfer assets between the various subaccounts. There is no minimum dollar amount required for transfers. Transfers are generally limited a maximum of 1 per year, but may differ based on individual fund requirements. ANNUITY PAYOUT OPTIONS All annuitizations are fixed pat options and may not begin later than; (1) the 99th birthday of the older annuitant or () 10 years after is issued. Guaranteed income for a specified period of 10 years Guaranteed income for life Guaranteed income for life with 10 year period certain Guaranteed for life and joint annuitant s life Guaranteed income for life and joint annuitant s life with 10 year period certain WITHDRAWALS You can withdraw value, less applicable premium taxes, at any time. 1 CONTRACT CHARGES AND FEES Mortality and Expense Risk Charge: 0.60% Administration Fee: 0.15% Surrender Charges: None Annual Contract Fee: $30 (if value is less than $50,000) Transfer Charges: None Commutation Charge: None Premium Taxes: Range 0% 3.5%, may be assessed on purchase payments, death benefits, partial withdrawals, surrender, and/or annuitization Investment Management Fees: Charged in addition the fees listed above. Please refer the prospectus for a complete listing by underlying fund. DEATH BENEFITS Death Benefit is equal accumulated value. (See prospectus for details) AUTOMATIC ASSET REBALANCING OPTION This feature allows establish a desired investment mix and have r assets aumatically adjusted on a monthly, quarterly, semi-annual, or annual basis. It is not available concurrently with Dollar Cost Averaging. INVESTMENT OPTIONS To help build a diversified portfolio during the accumulation phase, Horizon offers a range of equity and fixed income investment options. 1 Withdrawals are subject income tax. Withdrawals prior age 59 1/ are subject an additional 10% tax penalty. Guarantees are based on the claims paying ability of the insurance company.

5 Client Profile: 55-year old looking for a simple, low-cost for tax-deferred retirement investments Understanding Variable Annuities. Horizon Variable Annuity client Making profi r retirement les. dreams a reality requires thoughtful planning. For many people, the assurance of guaranteed income combined with the potential for tax-deferred growth makes annuities an integral A low-cost, component surrender of their charge retirement free strategy. With may so many be the variations solution available need day, get the most understanding r retirement the basics assets. of The right annuities, including their can costs, help risks and enjoy a longer potential period of tax benefi deferral, ts can while help maximizing better r evaluate retirement r income options. potential and maintaining liquidity. The client profi les below show how invesrs in various stages of life might use Commonwealth Annuity Horizon do just that. Variable annuities are designed help fund retirement and are meant serve as long-term investments. In the simplest form, a is a between and an insurance company where, in return for r contribution(s), the company agrees make a series of payments over time. Client Profile: 85-year old with expectation live past age 90 Variable annuities have two distinct phases the accumulation phase and the pat phase. The accumulation phase Ethlyn, begins age with 85, has r been first widowed contribution either for several years. a one-time She is healthy lump and sum has or no a major series medical of contributions over issues. time. During The an pat annual phase review, begins her advisor once notes opt that she begin is approaching receiving payments the or date annuitize r for. her, age 90, at which point the enhanced death benefit will terminate and her will convert a pat. Ethlyn is concerned that she may TAX-DEFERRED reach GROWTH the date leading distributions she does not yet want or need. She explains Your account grows that she on a would tax-deferred like basis. continue Compared the tax deferral a taxable benefits investment, she has this with offers her the current potential produce and better also results provide over the time. opportunity for her children stretch out the taxable distributions they will receive after her death as her beneficiaries. INVESTING YOUR ASSETS After carefully With a reviewing her current decide how situation the assets and in long-term r account goals, Ethlyn are invested, and her choosing advisor agree the search various investment options offered under r. The value of r depends on both for a new that better suits her needs. Together, they select Horizon, the low-cost the performance of the investment options choose, the costs of r plan, and the payments Commonwealth Annuity. With an age of 99, Horizon offers Ethlyn considerable breathing make. You can make transfers between investment options without incurring charges. Limitations on room before the frequency she is required and dollar annuitize amount and of transfers allows her can children vary stretch out their. taxable distributions over time. In addition, Horizon s.75% mortality and expense risk charge is significantly lower than the 1.40% mortality and expense ACCESS risk charge TO of YOUR her current FUNDS, offering the potential for increased performance over time, a benefit both Ethlyn Most and her children. annuities Because have a surrender Horizon has period, no surrender a minimum period, length Ethlyn of time usually is free withdraw several her years money at any time, during without which additional agree fees or keep penalties. r assets invested before taking withdrawals. If withdraw before the surrender period expires, may face surrender charges. Recognizing that not all invesrs are After describing willing the give up access features their assets Ethlyn, for the an extended advisor period, some suggests s that they day set eliminate up a meeting the surrender In this charge way, period they can entirely. be certain that her family is aware of her decision and understands her rationale with her children. before she purchases the new. They select Horizon, a low-cost Commonwealth Annuity that eliminates the excess RECEIVING death benefit PAYMENTS and reduces her annual mortality and expense risk charge 1.40% Depending 0.75%. Based on r on her, current life can expectancy decide whether of 83 years, r Mary has payments another 8 years accumulate the benefits last of for these a set reduced period or costs. indefinitely. Because While Horizon has no annuities surrender have charge traditionally schedule, it offers Mary the flexibility required withdraw invesrs her money begin sooner taking than withdrawals planned without by age 90, surrender with people charges. living longer day, some s now offer the option delay until a later age. Client Profile: 65-year old getting ready take retirement income EVALUATING YOUR OPTIONS Charges and fees can vary Bill significantly and his wife, Sue one both age 65 have sold their business and are preparing retire. another and can have considerable They have impact contributed on the performance their full-featured of r deferred investment. Typical expenses include withdrawal/surrender charges, mortality and for several years. In recent years, their accounts have been impacted by sluggish equity markets, expense risk charges, administrative fees and underlying fund expenses. causing them fall short of their initial retirement income projections. Because the As r needs change, certain surrender features period included of their in current a particular has expired, may no they are free shop for a. better In addition, suited another their needs as 65-year may offer old retirees. compa- They decide meet with their longer be appropriate for rable features advisor with lower discuss expenses. their If options already for turning have a their accounts in or the are strongest possible income stream. considering investing in one, it s a good idea periodically review the associated fees After and charges reviewing as well their as, the the features advisor points make out sure that they a are few in of line its with key components no longer fit their r requirements needs. and goals. In addition, the s 1.40% mortality and expense risk charge is significantly higher than some of the new low-cost s. The advisor explains that because Bill and Sue are When healthy evaluating and plan r convert their options, a it s guaranteed important income consider stream the in 10 years, generating higher account values strength may of make the issuing sense company if they no and longer the need choice the of death investment benefit options associated with their current. offered ensure get the most r retirement assets. The advisor recommends that they switch a lower cost, less feature-intensive. He suggests Horizon, Your a low-cost advisor can help Commonwealth decide if a Annuity. Horizon s makes sense mortality and expense risk charge is for. 46% lower than that of their current. With a smaller percentage of their contributions going wards insurance expenses, Bill and Sue will have the potential receive a greater return on their investment over the long-term depending upon the investment experience of their chosen investment options. This change gives them the boost they are looking for in their future projected monthly income generated these assets, and becomes even more compelling as that figure is projected out over both of their life expectancies. Guarantees are based on the claims paying ability of the insurance company. Mary, age 55, is still working and plans retire in approximately ten years. She is recently divorced and has no children. Mary feels she needs a way increase the performance of her in order meet her retirement income goals. Mary s current policy contains a number of relatively expensive features that she no longer needs, including an excess death benefit. After reviewing her current situation and future goals, she and her advisor determine that exchanging a lower cost, less feature-intensive would provide the potential opportunity for increased investment performance over time, while still adequately addressing her needs.

6 Horizon Variable Annuity Focus on the essentials. We all have dreams for retirement. Whether re enjoying rs now or it s still a few You ve worked hard build years a rewarding down the retirement road, deserve and maybe get even the pass along some of r assets the next generation. But most with people r living assets. longer The day, low-cost, it s natural surrendercharge free Commonwealth Annuity Horizon have concerns about outliving r savings. Commonwealth Annuity Horizon is a low-cost, surrender charge free that may be the solution need provides retirement invesrs as a cost seek -effi cient, maximize tax-deferred r retirement investment income vehicle with lifetime income options. With no-fee withdrawals and potential. an extended With no withdrawal age of charges 99, Horizon and an gives the fl exibility decide when it s time access r extended assets. age of 99, Horizon gives the freedom decide when it s the right time Lower costs let take r access savings r assets. further. It s Horizon also a convenient features a low way annual charge of 0.75%. By focusing on the essentials pass and assets eliminating along costly r features benefi ciaries, may taxdeferred. the opportunity for improved investment performance over not need like an enhanced death benefit Horizon provides time. Maximum lifetime age of 99. Available through age 90, with no mandary pats until age Getting Started 99, Horizon allows enjoy a longer period of tax deferral than most s. It s also a convenient way If pass Horizon assets along sounds like r the beneficiaries, right fit for tax-deferred., here s how get started: No withdrawal fees. Unlike most annuities, Horizon has no surrender charge schedule. That means re always 1. free Review access the enclosed r assets, materials. without surrender charges. 1 Lifetime income options.. Choose Complete guaranteed the application income with for r life or a period of 10 years for one person or two. advisor. Well known investment 3. options. Select r Horizon investment offers options. a range of investment options multiple fund managers. Our investment options include domestic, international, industry-specific and fixed income funds the world s most recognized fund families and trusted money managers 3. The Commonwealth Annuity Sometimes, get what commitment want in life, need focus on the essentials. The same can be said for r retirement assets. If simplicity, We flexibility are Commonwealth and tax deferral Annuity are and priorities Life Insurance for r retirement strategy, r advisor can help decide if Commonwealth Annuity Horizon is right for. Company, a wholly-owned subsidiary of The Goldman Sachs Group. We offer a unique combination of insurance industry expertise with 1 Withdrawals are subject income tax. Withdrawals the prior capital age markets 59 1/ are subject resources an additional of 10% one tax of penalty. the world s Guarantees are based on the claims paying ability leading of the insurance company. institutions. We deliver cusmized 3 Only available on qualified funds. reinsurance solutions for insurance companies and sound s for individual invesrs. We also offer the comprehensive range of investment options need for a diversified portfolio. Talk r advisor day and learn how we can help develop a personalized plan ward a more comfortable retirement.