ForeFront TM Fixed Index Annuity Series Agent Training FOR AGENT USE ONLY NOT FOR USE WITH THE PUBLIC 2014 Forethought
Two products, one purpose - to meet the unique needs of each client The ForeFront TM fixed index annuity series is a single premium, fixed index annuity made in the USA by Forethought Life Insurance Company and designed with features to help Americans meet their retirement saving needs. Strategy Issue Ages Minimum Premium ForeFront Index Choice Premium Bonus GLWB EDB Optional Benefit Charge* ForeSaving 0-80 $5,000 -- -- -- -- ForeSpending 55-80 $10,000 -- YES -- 0.95% ForeSharing 55-80 $10,000 -- YES YES 0.95% What Your Clients Get Competitive Cap + No Fees Market Leading Cap + Guaranteed Income Guaranteed Income + Enhanced Death Benefit Strategy Issue Ages Minimum Premium ForeFront Index Bonus Premium Bonus** GLWB EDB Annual Charge* ForeSpending 55-80 $10,000 7% YES -- 0.95% What Your Clients Get Premium Bonus + Guaranteed Income Guarantees are based on the claims-paying ability of Forethought Life Insurance Company and subject to compliance with benefit rules. *Optional Benefit Charge is calculated as a percentage of Income Base and is deducted from the contract value at the beginning of each Contract Year. Annual Charge is calculated as a percentage of Income Base and is deducted from the contract value at the beginning of each Contract Year. **The 7% Premium Bonus vests over 10 years and is not available for withdrawals or on cash surrender. The premium bonus and associated accrued interest is subject to a Premium Bonus Recapture, which is charged if values are surrendered during the contract s surrender charge period. 2
The ForeFront fixed index annuity series is available for non-qualified, IRA and Roth IRA plans.* Minimum and Maximum Premium Limits $10,000 minimum premium ($5,000 minimum premium with ForeSaving strategy only) $1,000,000 maximum total premium as measured by total contribution per person for all Forethought annuities. Minimum Guaranteed Contract Withdrawal Value 87.5% of premiums paid, less withdrawals and rider charges, compounded at a rate between 1% and 3%. State variations may apply. *If you are investing in a fixed index annuity through a tax-advantaged retirement plan such as an IRA, you will receive no additional tax advantage from a fixed index annuity. Under these circumstances, you should only consider buying a fixed index annuity if it makes sense because of the annuity s other features, such as lifetime income payments and death benefit protection. 3
Interest Crediting Methods Clients have the option of allocating funds to any of interest crediting methods listed below. All interest crediting terms are one year long with interest credited daily for the fixed account and at the end of the term for the indexed methods. Funds may be reallocated to an available method at the end of each term. The minimum allocation to a method is $5,000. One-year S&P 500 Annual Point-to-Point with Cap One-year S&P 500 Monthly Point-to-Point with Cap One-year S&P 500 Monthly Average with Annual Cap One-year Fixed Account Interest credited for the indexed account methods is guaranteed not to be less than 0%. Interest credited for fixed account is guaranteed not to be less than 0.50%. The interest crediting methods listed above are available on all ForeFront fixed index annuity products. Fixed Rates and Caps are guaranteed for one year and reset at the beginning of each contract year and may vary by retirement strategy, selected at issue. Please refer to www.forethought.com/annuitytoolkit for the current rates. Guarantees are based on the claims-paying ability of Forethought Life Insurance Company and subject to compliance with benefit rules. 4
Withdrawal Privileges* Withdrawal Charges, Premium Bonus Recapture, and MVA will be waived for withdrawals up to the greatest of: 10% of the beginning-of-year contract value after the first contract year; except in any year where a full surrender occurs** Required Minimum Distributions (RMD) imposed by the IRS due to funds paid into this policy, if qualified. Systematic withdrawals may be specified by dollar amount or percentage of contract value with the Owner s choice of payout frequency. *All withdrawals in the first Contract Year are subject to commission chargeback. Withdrawals of taxable amounts are subject to ordinary income tax and may be subject to a 10% federal tax penalty if taken before age 59 ½. **State variations may apply. 5
Withdrawal Charges Contract Year 1 2 3 4 5 6 7 8 9 10 11+ All Ages 10% 10% 9% 9% 8% 7% 6% 5% 4% 2% 0% Premium Bonus Recapture Charges (Only applies to ForeFront Index Bonus) Contract Year 1 2 3 4 5 6 7 8 9 10 11+ Issue Ages 55-75 100% 100% 100% 100% 100% 100% 80% 60% 40% 20% 0% Issue Ages 76-80 90% 80% 80% 70% 70% 70% 70% 60% 40% 20% 0% Market Value Adjustment Market Value Adjustments are assessed only when withdrawal charges are assessed (state variations may apply). They can increase or decrease the withdrawal charges depending on whether interest rates have fallen or risen since the contract issue date. A free withdrawal followed by a complete surrender in the same Contract Year will result in the above charges being applied to both the amount previously taken as free and the remaining contract value withdrawn. State variations may apply. 6
70/10 States Certain states (referred to as 70/10 States) require reduced Withdrawal Charges and Premium Bonus Recapture Charges. As of July 22, 2013 the following states are considered 70/10: AK, CT, DE, MD, MN, NV, OH, OK, OR, SC, TX, UT, WA Please refer to www.forethought.com/annuitytoolkit for the most current State Availability. Withdrawal Charges Contract Year 1 2 3 4 5 6 7 8 9 10 11+ All Ages 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Premium Bonus Recapture Charges (Only applies to ForeFront Index Bonus) Contract Year 1 2 3 4 5 6 7 8 9 10+ All Ages 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Market Value Adjustment Market Value Adjustments are assessed only when withdrawal charges are assessed (state variations may apply). They can increase or decrease the withdrawal charges depending on whether interest rates have fallen or risen since the contract issue date. 7
Standard Death Benefit Upon death of the Owner, beneficiaries may receive the full contract value* without Withdrawal Charges, Premium Bonus Recapture Charges (Only applies to ForeFront Index Bonus) or MVA. Nursing Home Waiver** At any time on or after the first Contract Anniversary, if the Owner should become confined to an approved nursing facility for at least 60 consecutive days, Withdrawal Charges on any portion of the contract value withdrawn will be waived. Forethought must receive proof as identified in the waiver rider in order to qualify for this benefit. Terminal Illness Waiver At any time after the first Contract Year, if the Owner is diagnosed with a Terminal Illness with a life expectancy of less than 12 months, Withdrawal Charges will be waived on any portion of the contract value withdrawn. Forethought must receive proof as identified in the waiver rider in order to qualify for this benefit. * Contract value equals the Premium plus Premium Bonus (Only applies to ForeFront Index Bonus), plus accumulated interest, less optional benefit charges, less withdrawals (which include any Withdrawal Charges, Premium Bonus Recapture, and MVA charged on the withdrawal). **Referred to as the Confinement Waiver Rider in CT. Subject to state availability. 8
ForeSaving ForeSpending ForeSharing ForeSpending ForeFront Index Choice ForeFront Index Choice, when purchased without any optional benefit elections, offers your clients a ForeSaving strategy. Without any optional benefit elections, your clients will receive favorable fixed interest rates and interest crediting caps, thereby maximizing their potential to accrue greater interest to help build their savings. ForeSpending is a strategy that uses ForeFront Index Choice to help grow a guaranteed income stream for your clients retirement.* ForeSpending must be added at issue for an annual charge. ForeSharing is strategy that allows your clients to share the benefits of their ForeFront Index Choice with beneficiaries by providing a guaranteed income stream for them and an Enhanced Death Benefit for their beneficiaries.* ForeSharing must be added at issue for an annual charge. ForeFront Index Bonus ForeSpending uses ForeFront Index Bonus to help grow a guaranteed income stream for your clients retirement, and they receive a 7% premium bonus** to boost their contract value and help jumpstart their savings.* ForeSpending included at issue for an annual charge. *Guarantees are based on the claims-paying ability of Forethought Life Insurance Company and subject to compliance with benefit rules. **The 7% Premium Bonus vests over 10 years and is not available for withdrawals or on cash surrender. The premium bonus and associated accrued interest is subject to a Premium Bonus Recapture, which is charged if values are surrendered during the contract s surrender charge period. 9
When the ForeSpending or ForeSharing strategy is selected, a value in addition to the contract value is established called the Income Base. These two values are not the same. Income Base The Income Base is a value used to determine size of the Guaranteed Lifetime Income Benefit Amount available under the ForeSpending or ForeSharing strategy. It is not a cash value and is not available for withdrawal or cash surrender. Contract Value The contract value is the account value of the ForeFront Fixed Index Annuity Series. Withdrawals are made from this value and are subject to Withdrawal Charges, Premium Bonus Recapture Charges (only applies to ForeFront Index Bonus), and Market Value Adjustments (state variations apply). Withdrawals prior to activating income as well as withdrawals in excess of certain limits after activating income reduce the Income Base and Guaranteed Lifetime Income Amount proportionately. All withdrawals from the contract value reduce the contract value and the amount available in the Enhanced Death Benefit (only applies to ForeSharing). 10
Income Base (Only applies to ForeSpending and ForeSharing) The initial Income Base equals the Premium* and grows at a 5% compound rate at each Contract Anniversary. The Income Base is a value used to determine the size of the income payment available under the benefit. This is not a cash value and is not available for withdrawal or cash surrender. For Issue Ages 70-80, the Income Base grows until the earliest of: The tenth Contract Anniversary Age 85 (Oldest Owner for Joint Owners) The Income Start Date Optional Extended Income Base Growth For Issue Ages 55-69, the Owner may choose to extend growth of the Income Base until the earliest of: The twentieth Contract Anniversary Age 85 (Oldest Owner for Joint Owners) The Income Start Date In order to elect this option, the oldest Owner must be less than 80 at the end of the tenth Contract Year and must notify Forethought within 30-90 days prior to the tenth Contract Anniversary. The annual charge may increase to a maximum of 1.95% of the Income Base deducted from the contract value at the beginning of Contract Year 11. *Plus the 7% Premium Bonus available only with ForeFront Index Bonus fixed index annuity. 11
Annual Income (Only applies to ForeSpending and ForeSharing) The Guaranteed Lifetime Income Amount equals the greater of the Income Base or the contract value multiplied by the Income Benefit Factor based on attained age* on the income start date. ForeFront Index Bonus ForeSpending ForeFront Index Choice ForeSpending ForeFront Index Choice ForeSharing Single Life Joint Life* Single Life Joint Life* Single Life Income Option Income Option Income Option Income Option Income Option 60 4.00% 3.50% 4.50% 4.00% 4.00% 3.50% 65 4.50% 4.00% 5.00% 4.50% 4.50% 4.00% 70 5.00% 4.50% 5.50% 5.00% 5.00% 4.50% 75 5.50% 5.00% 6.00% 5.50% 5.50% 5.00% 80 6.00% 5.50% 6.50% 6.00% 6.00% 5.50% 85 6.50% 6.00% 7.00% 6.50% 6.50% 6.00% 90+ 7.50% 7.00% 8.00% 7.50% 7.50% 7.00% Attained Age on Income Start Date Income Benefit Factors increase by up to 0.1% for attained ages between 60 and 85, and by 0.2% for attained ages between 55 and 59 and between ages 85 and 90 * Joint Life rates based on age of the younger age on the income start date. Joint Life* Income Option Guarantees are based on the claims-paying ability of Forethought Life Insurance Company and subject to compliance with benefit rules. 12
Index Choice ForeSharing Enhanced Death Benefit The Enhanced Death Benefit is part of the ForeSharing strategy which must be elected at the time of annuity purchase. This option gives beneficiaries the choice to receive either the Standard Death Benefit or the Enhanced Death Benefit. The Enhanced Death Benefit must be received in equal monthly payments over five years.* Before the income start date, the Enhanced Death Benefit will be equal to the Income Base and subject to a cap of 250% of premium adjusted for withdrawals on a proportionate basis.** After the income start date, the Enhanced Death Benefit will be reduced for any withdrawals up to the guaranteed lifetime income amount on a dollar-for-dollar basis. Any withdrawals in excess of the guaranteed lifetime income amount will reduce the Enhanced Death Benefit proportionately to the reduction in contract value. *The Enhanced Death Benefit does not accrue interest. **The maximum Enhanced Death Benefit will be less than 250% of Premium for Issue Ages 70 and above due to growth limitations on the Income Base. Guarantees are based on the claims-paying ability of Forethought Life Insurance Company and subject to compliance with benefit rules. 13
Important Information ForeFront TM fixed index annuity series is issued by Forethought Life Insurance Company, is available in most states with Contract FA1201SPDAX-01, FA1201SPDAX-02, ICC11-FA1201SPDAX-01 and FA1201SPDAXL-02(certificate series GA1201SPDAX-02, as applicable). Read the Contract for complete details. Products and features are subject to state availability. Forethought is Forethought Financial Group, Inc. and its subsidiaries, including the issuing company of Forethought Life Insurance Company. Taxable distributions (including certain deemed distributions) are subject to ordinary income taxes, and if made prior to age 59 ½, may also be subject to a 10% federal income tax penalty. Payments from IRAs are taxable in accordance with the normal rules surrounding taxation of payments from an IRA. Early surrender charges may also apply. Withdrawals may will reduce the death benefit and any optional guaranteed amounts in an amount more than the actual withdrawal. Standard & Poor s, S&P, S&P 500, Standard & Poor s 500, and 500 are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Forethought Life Insurance Company. Forethought Life s Fixed Indexed Annuities are not sponsored, endorsed, sold, or promoted by Standard & Poor s and Standard & Poor s makes no representation regarding the advisability of purchasing the product. Past performance of the S&P 500 is no guarantee of future results. Any examples utilizing the S&P 500 Index are for illustrative purposes only. The S&P 500 Index is a price index and does not reflect dividends paid by the stocks underlying the index. FA7294(10-14) 100340 14