Experience the Power of
Fixed Index Annuities
The “Yellow Pad” Presentation
Consider the advantages of a
Fixed Index Annuity
 Returns linked to an index
 Return of principal*
 Liquidity features
 Tax deferred growth
 Safety
* Subject to claims paying ability of issuing institution
The Strength of Tax Deferral
 Earnings accumulate tax deferred
 No income taxes are due until proceeds
are taken out
AND the Power of Triple Compounding
 Earn interest on your principal
 Earn interest on the interest
 Earn interest on the money you would
have paid in taxes
Help Protect Yourself
With the safety and growth
potential of a Fixed Index Annuity
If you lost
this much
It could take this long to rebuild your
nest egg assuming these potential annual returns
at a 3% return
at a 6% return
at a 8% return
10%
3.6 years
1.8 years
1.3 years
20%
7.5 years
3.7 years
2.9 years
30%
12 years
6 years
4.6 years
40%
17 years
8.6 years
6.6 years
50%
23.2 years
11.6 years
9 years
If you don’t have the recovery time that may be necessary, a Fixed
Indexed Annuity may make sense for a portion of your money
Popular Indices
(examples of companies in the index)
STANDARD & POOR’S
500
NASDAQ 100
DOW JONES
American Express
Cisco Systems
Home Depot
Anhueser-Busch
Dell Inc.
Honeywell
Coca Cola
Intel
General Electric
eBay Inc.
Microsoft
McDonalds
Walt Disney
Amazon.com
Wal-mart
3M Company
Expedia
Du Pont
Whirlpool Corp
Cephalon, Inc.
S&P 500® is a trademark of the McGrawHill Companies. Index annuities are not
sponsored, endorsed, sold or promoted by
Standard & Poor’s and Standard & Poor’s
makes no representation regarding the
advisability of purchasing index annuities
The Nasdaq-100® is a trademark of The
Nasdaq Stock Market, Inc. (which with
its affiliates are the Corporations) the
product (s) have not been passed on by
the corporations as to their legality or
suitability. The product (s) are not
issued, endorsed, sold, or promoted by
the corporations. THE CORPORATIONS
MAKE NO WARRANTIES AND BEAR NO
LIABILITY WITH RESPECT TO THE
PRODUCT (S).
Dow Jones is a service mark of Do Jones
& Company, Inc. Investment products
based on Dow Jones indexes are not
sponsored endorsed sold or promoted by
Dow Jones, and Dow Jones makes no
representation regarding the advisability
of investing in such product (s). Inclusion
of a company in the Dow Jones indexes
does not in any way reflect an opinion of
Dow Jones on the investment merits of
the company.
Measuring the Gain
Two common methods used
 Annual Point-to-Point – Annual Reset
 Monthly Point-to-Point – Annual Reset
Annual Point-to-Point
Examples:
Up Year
Down Year
 Beginning index value: 1000
 Beginning index value: 1000
 Ending index value on contract
anniversary: 1117
 Percentage of change: +11.70%
 Annual Cap: 4%
X Your Return is 4%
 Ending index value on
contract anniversary: 900
 Percentage of change: -10%
 Annual Cap: 4%
X Your Return is 0%
The annual cap varies depending upon the issuing insurance company.
The 4% annual cap quoted is for illustrative purposes only.
Monthly Average Point-to-Point
Examples:
Up Year – assumed monthly cap is 4%
Month
1
2
3
4
5
6
7
8
9
10
11
12
Monthly index
change (%)
2.3
-1.6
3.2
-2.3
3.4
5.1
3.8
4.3
2.4
1.9
-1
4.2
Monthly cap (%)
4
4
4
4
4
4
4
4
4
4
4
4
Capped monthly
change (%)
2.3
0
3.2
0
3.4
4
3.8
4
2.4
1.9
0
4
X Your return is 2.42%
Down Year – assumed monthly cap is 3%
Month
1
2
3
4
5
6
7
8
9
10
11
12
Monthly index
change (%)
2
-5.1
1
-3.2
-4
-1.2
4
1
0
-2.2
-5
1.3
Monthly cap (%)
4
4
4
4
4
4
4
4
4
4
4
4
Capped monthly
change (%)
2
0
1
0
0
0
4
1
0
0
0
1.3
X Your return is 0.78%
On each monthly anniversary the index gain or loss percentage is calculated from the previous monthly anniversary index
number. Percentage gains are recorded up to the cap, percentage losses are not recorded. At the policy anniversary, the
recorded changes are averaged together, and if positive, that is the interest credit for the year. If negative, there is
not interest credited for the year.
Monthly Sum Point-to-Point
Examples:
Up Year – assumed monthly cap is 2.5%
Month
1
2
3
4
5
6
7
8
9
10
11
12
Monthly index
change (%)
2.3
1.6
-3.2
-2.3
0.4
2.1
3.8
-3.3
2.4
1.9
-1
4.2
Monthly cap (%)
3
3
3
3
3
3
3
3
3
3
3
3
Capped monthly
change (%)
2.3
1.6
-3.2
-2.3
0.4
2.1
3
-3.3
2.4
1.9
-1
3
X Your return is 8.5%
Down Year – assumed monthly cap is 3%
Month
1
2
3
4
5
6
7
8
9
10
11
12
Monthly index
change (%)
2
-5.1
1
-3.2
-4
-1.2
4
1
0
-2.2
-5
1.3
Monthly cap (%)
3
3
3
3
3
3
3
3
3
3
3
3
Capped monthly
change (%)
2
-5.1
1
-3.2
-4
-1.2
3
1
0
-2.2
-5
1.3
X Your return is 0%
On each monthly anniversary the index gain or loss percentage is calculated from the previous monthly anniversary index
number. Percentage gains are recorded up to the cap, percentage losses are recorded with no cap. At the policy
anniversary, the recorded changes are added together, and if positive, that is the interest credit for the year. If
negative, there is not interest credited for the year.
The Power of Annual Reset
You may reduce your risk during the down years!
Annual Point-to-Point -Annual Reset
$100,000 PAYMENT
Market
Fluctuation
VALUE
S&P 500
Index Fund
Fixed Index
Annuity
$100,000
$100,000
Year 1
26.7%
$126,700
$108,000
Year 2
19.5%
$151,407
$116,640
Year 3
-12.7
$132,178
$116,640
Year 4
-10.5%
$118,300
$116,640
Year 5
-23.4%
$90,618
$116,640
Year 6
26.4%
$114,451
$125,971
Year 7
9.0%
$124,850
$136,049
Year 8
4.7%
$130,718
$142,443
Year 9
11.6%
$145,881
$153,839
Participation rate is defined as
how much of the increase in the
index will be used to calculate the
index-linked interest.
Annual Reset is defined as the
index-linked interest, if any, is
determined each year by comparing
the index value at the end of the
contract with the index value at the
start of the contract year. Interest
is added to your annuity each year
during the term.
100% Participation Rate 8% Cap No Fee
The annual cap varies depending upon the issuing insurance company.
The 8% annual cap quoted is for illustrative purposes only.
The Power of Annual Reset
You may reduce your risk during the down years!
Monthly Point-to-Point -Annual Reset
$100,000 PAYMENT
Market
Fluctuation
VALUE
S&P 500
Index Fund
Fixed Index
Annuity
$100,000
$100,000
Year 1
26.7%
$126,700
$109,184
Year 2
19.5%
$151,407
$117,141
Year 3
-12.7
$132,178
$117,141
Year 4
-10.5%
$118,300
$117,141
Year 5
-23.4%
$90,618
$117,141
Year 6
26.4%
$114,451
$134,059
Year 7
9.0%
$124,850
$143,005
Year 8
4.7%
$130,718
$143,005
Year 9
11.6%
$145,881
$159,312
Participation rate is defined as
how much of the increase in the
index will be used to calculate the
index-linked interest.
Annual Reset is defined as the
index-linked interest, if any, is
determined each year by comparing
the index value at the end of the
contract with the index value at the
start of the contract year. Interest
is added to your annuity each year
during the term.
100% Participation Rate 2.45% Monthly Cap No Fee
The monthly cap varies depending upon the issuing insurance company.
The 2.45% monthly cap quoted is for illustrative purposes only.
The Safety of Fixed Indexed Annuities
All fixed annuities are backed by the claims paying ability of the
insurance company offering them. The insurance companies are
subject to strict guidelines established by the National Association
of Insurance Commissioners and must strive to conservatively
invest the premium funds to provide a minimum return.
Additionally individual states may require insurance companies
doing business in their state to contribute to the Life and Health
Guarantee Association, which may help should an insurance company
fail to meet the obligations of their contract holders, up to the
guidelines published by the state.