ING IncomeProtector Withdrawal Benefit Guaranteed Income for Life - - PowerPoint PPT Presentation

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Todd Kloewer Regional Vice President ING Fixed Annuities

ING IncomeProtector Withdrawal Benefit

Guaranteed Income for Life

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According to a study by the Fidelity Research Institute, the typical American household is on track to replace 58% of its income in retirement.1

Where is the other 42% going to come from?

1The Fidelity Research Institute, March 2007

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Traditional Guaranteed Sources of Income

Social Security

• 78 million baby boomers will turn 62 between 2008 and 2026
• It’s estimated that by 2017, Social Security benefit payments will

begin to exceed Social Security tax income.2

Pension Plans

• Only 37% of baby boomers about to enter retirement have a

traditional pension plan coming from their employer.3

• “About half of employers with defined-benefit pension plans have

frozen one or more of those plans, putting the retirement income of millions at risk.”4

2Social Security Administration, 2007 3Standard & Poor’s, 2008 4GAO: Half of companies froze pensions, USA Today, 7/25/2008.

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Life Expectancy

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Retirement Concerns

• In a recent survey, 67% of respondents retired prior to age 65.5
• At an annual inflation rate of 3%, expenses could more than double in

25 years.

• 70% of baby boomers surveyed say that they want to discuss income
• planning. Less than 40% actually have an income discussion with an

advisor.6

5Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc.,

2007 Retirement Confidence Survey

6Fidelity Advisor 2006 Survey of Investors at Retirement

7Metflife Mature Market Institute, June 2008

56% of Americans say the greatest risk facing them in retirement is outliving their assets.7

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The Need

• Steady income stream that you can’t outlive
• Flexibility to turn income on or off any time
• Potential for income to grow

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ING IncomeProtector Withdrawal Benefit

Optional living benefit that can be added at issue to any ING USA Annuity and Life Insurance Company (ING USA) fixed index annuity contract

• Guaranteed Income for Life
• Ability to turn income on or off anytime
• Guaranteed Growth during the first 10 years of Deferral Phase

Annuity income is defined as a series of periodic payments, a part of which may be return of your premium or principal, which is guaranteed by the issuing insurance company for a specified period of time or for the life of the annuitant.

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Key Features

• 7% Compounding Roll-Up during the first 10 years of the Deferral Phase
• Annual Ratchet during both the Deferral and Withdrawal Phase
• 100% Return of Rider Charges at Death.

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How it Works

Guaranteed Withdrawal Base

Equal to all of your premiums (and any premium bonus, if applicable) accumulated with the 7% Compounding Roll-Up (first 10 years of Deferral Phase) with an Annual Ratchet.

Maximum Annual Withdrawal (MAW)

Percentage of your guaranteed withdrawal base that you may withdraw each year under the rider

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The Deferral Phase

Illustration is based on hypothetical index performance and hypothetical index credits. This performance is not an indication of current or future results. This example assumes no withdrawals were made.

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Deferral Phase

Illustration is based on hypothetical index performance and hypothetical index credits. This performance is not an indication of current or future results. This example assumes no withdrawals were made.

$133,810 $133,799 $133,810 8.00% 7% Year 4 $125,056 $123,888 $125,056 6.00% 7% Year 3 $116,875 $116,875 $114,490 10.00% 7% Year 2 $107,000 $106,250 $107,000 6.25% 7% Year 1 New GWB Accumulation Value GWB with Roll-Up AV Increase (%) Roll-Up (%)

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The Deferral Phase

Illustration is based on hypothetical index performance and hypothetical index credits. This performance is not an indication of current or future results. This example assumes no withdrawals were made.

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The Withdrawal Phase

Illustration is based on hypothetical index performance and hypothetical index credits. This performance is not an indication of current or future results. This example assumes no withdrawals were made.

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Rider Charge Refund

ING will refund 100% of the rider charges if:

• Rider is terminated due to death
• Owner dies before age 95
• Accumulation Value is greater than zero
• An excess MAW has not been taken

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ING IPWB v1/v2 Comparison

ING IPWB v1 ING IPWB v2 Rollup during Deferral Phase 4.0% 7.0% Annual Ratchet Withdrawal Phase only Withdrawal and Deferral Phase Cost 35 bps 40 bps Return of Rider Charges at Death Yes Yes All Withdrawals End Deferral Yes No Withdrawal Waiting Period Yes - 1 year No

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Meet Bill

Bill is a 65-year old who has just placed $100,000 into the ING Secure Index Opportunities Plus Annuity and added the ING IncomeProtector Withdrawal Benefit. Let’s see what his guaranteed income would be depending on how long he defers payments.

Hypothetical illustration is based on $100,000 placed in the ING USA Secure Index Opportunities Plus annuity with a 5% premium bonus. This example assumes no withdrawals were made.

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Income Deferral

Hypothetical illustration is based on $100,000 placed in the ING USA Secure Index Opportunities Plus annuity with a 5% premium bonus. This example assumes no withdrawals were made.

Income Deferral Immediate 5 years 10 years Guaranteed Withdrawal Base $105,000 $147,268 $206,551 Maximum Annual Withdrawal (%) 5.5% 6.0% 6.5% Maximum Annual Withdrawal ($) $5,775 $8,836 $13,426

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Female, Age 65 Managed Assets: $1,000,000 Risk Tolerance: Low to Moderate Needs: Guaranteed Income Beginning Year 11 Protection of Assets Opportunity to Build Assets

Case Study

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Income Generation Scenario 1- Variable Annuity with a Guaranteed Minimum Withdrawal Benefit Rider (GMWB)

Utilize GMWB for Income Generation Allocate half of assets to satisfy income needs

$1,000,000 Assets

$500,000 Managed Assets $500,000 Income Generation $500,000 GMWB Annual: Income- $59,015* Expense- $51,812 (75 bps)

$59,015 of income generated at the start of year 11

* Assumes 7% growth, a 6% annual withdrawal factor beginning year 11, and a 75 bps rider fee each year.

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Income Generation Scenario 2- GMWB Compared to the ING IncomeProtector Withdrawal Benefit Rider

Utilize GMWB and ING IncomeProtector Withdrawal Benefit for Income Generation Allocate half of assets to satisfy income needs

$1,000,000 Assets

$500,000 Managed Assets $500,000 Income Generation $250,000 GMWB Annual*: Income- $29,507 Expense- $25,906 $250,000 IPWB Annual**: Income- $31,966 Expense- $13,816

$61,473 of income generated at the start of second year

*Based on 7% growth in years 1-10, a 6% annual withdrawal factor beginning year 11, and a 75 bps rider fee. ** Based on 7% growth in years 1-10, a 6.5% annual withdrawal factor beginning year 11 and a 40 bps rider fee.

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Comparison of Scenarios 1 and 2

+ 25% 25% 0% Assets- Protected** 0% 50% 50% Income- Protected** $39,722 $61,473 Scenario 2

• $12,090

$51,812 Cumulative Expense (through year 10) + $2,458 $59,015 Annual Income Difference Scenario 1

* $13,816 of the of the cumulative expense is attributed to the ING IncomeProtector Withdrawal Benefit which is refundable to the beneficiary under specific circumstances. ** The fixed Index annuity provides protection of assets from market risk while both the fixed index annuity and variable annuity with GMWB provide for protection of an income stream from market risk.

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Case Study - Summary

Did We Meet All Needs?

Guaranteed Income

Improved by over 4% with addition of ING IncomeProtector Withdrawal Benefit.

Reduced Expenses

Reduced by over 20% with addition of ING IncomeProtector Withdrawal Benefit

Protection of Assets

Fixed index annuity premium not subject to market risk.

Opportunity to Build Assets

With $500,000 allocated to a protected income stream and half of that money also protected from market risk, client may be able to tolerate additional risk necessary to build assets.

Return of Rider Charges

If your client does not take a withdrawal in excess of yearly rider provisions, does not exhaust their account value, and dies prior to attaining age 95, all IncomeProtector Withdrawal Benefit rider charges will be refunded to the beneficiaries as part of the death benefit.

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• Ongoing asset-based payments
• No reduction to upfront commission
• Payments continue for the life of the contract
• No Limits! No Catch!

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Guarantee Your Income

The following example assumes production of $1,000,000 and an accumulation value (AV) interest crediting rate of 6.0%. It also assumes that no additional premiums have been paid and that no surrenders, withdrawals or deaths have taken place.

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Elite Producer Plan

• Exclusive benefit available for top producing representatives
• Annual contribution based on ING Fixed Annuities sales
• Producer may defer up to 100% of their commissions

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The “Orange” Experience

• Top producers automatically enrolled
• “First Class” experience includes:

Expedited New Business processing Front of the line call center treatment

Makes it even easier to do business with ING USA!

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Marketing Support

Brochure Product Flier Income Pad Worksheet

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Contact ING Fixed Annuities Sales Desk today at 1-800-369-5301 to order your marketing materials today. ING IncomeProtector Withdrawal Benefit Guaranteed Income for Life

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Disclosure

• For Agent/Registered Representative Use Only. Not For Public Distribution. Annuity products are

issued by ING USA Annuity and Life Insurance Company (Des Moines, IA) and ReliaStar Life Insurance Company of New York (Woodbury, NY). Variable annuities are distributed by Directed Services, LLC (West Chester, PA). All companies are members of the ING family of companies.

• The company and its representatives cannot provide tax, legal or accounting advice. Clients should

consult their own attorney or tax advisor about their specific circumstances. Products/features not available in all states. Withdrawals may be subject to Federal/State income tax and, if taken prior to age 59 1/2, an additional 10% Federal penalty tax. IRAs and other qualified plans already provide tax deferral like that provided by an annuity. Additional features and benefits such as contract guarantees, death benefits and the ability to receive a lifetime income are contained within the annuity for a cost. Please be sure the features and costs of the annuity are right for clients when considering the purchase of the annuity.

• Please note that the likelihood of obtaining value from the ING IncomeProtector Withdrawal Benefit

rider decreases as issue ages increase. In order for owners issue age 75 and above to benefit from this rider, the interest credited to your accumulation value must be significantly less than expected based on historic averages.

• Depending on your issue age and the interest credited to your accumulation value, deferring your

payment stream may significantly reduce the likelihood of obtaining value from the ING IncomeProtector Withdrawal Benefit.

• Annuity income is defined as a series of periodic payments, a part of which may be return of your

premium or principal, which is guaranteed by the issuing insurance company for a specified period of time or for the life of the annuitant.

• ING Fixed Annuities is the marketing name for the issuing company.
• Contract Form Series: IU-RA-3059 (08/08), IU-RA-3060 (08/08)