WHO: Sentinel Security Life Atlantic Coast Life You WHAT: Guaranteed Income Annuity
CARRIER PARTNERS: P A R T N E R S Sentinel Security Life Atlantic Coast Life Founded in 1948 • Founded in 1925 • Based out of Salt Lake City, UT • Based out of Charleston, SC • Specializes in Life Insurance and Annuities. • AM Best Rating of B++ and is on track to get their A rating in • the year 2019 AM Best Rating of B++ and is on track to get their A • rating in the year 2019
COMPLEX PRODUCTS IN DOL LANDSCAPE $ Bonus DB Rider
WHY LIBOR? LIBOR, the London inter-bank lending rate, is considered to be one of the most important interest rates in finance, upon which trillions of financial contracts rest . What is LIBOR? A global benchmark interest rate used to set a range of • financial deals worth an estimated: $450,000,000,000,000 Why is it so important? As well as helping to decide the price of other • transactions, it is also used as a measure of trust in the financial system and reflects the confidence banks have in each other's financial health. How is it set? Banks don't just lend money to one another whenever they like. • There is a system. Every day a group of leading banks submits the interest rates at which they are willing to lend to other finance houses. They suggest rates in 10 currencies covering 15 different lengths of loan, ranging from overnight to 12 months. The most important rate is the three-month dollar LIBOR . The rates submitted • are what the banks estimate they would pay other banks to borrow dollars for three months if they borrowed money on the day the rate is being set. Then an average is calculated. This is a simple example of how it works. LIBOR is the ANTI-BOND vehicle
The fed funds rate is the interest rate banks charge each other to lend Federal Reserve Funds overnight. These funds maintain the federal reserve requirement . That’s what the nation’s central bank requires they keep on hand each night. The Federal Reserve uses the fed funds rate as a tool to control U.S. economic growth. That makes it the most important interest rate in the world. Below is a graph of how LIBOR has historically followed the Federal Funds Rate. For the last three years Federal Fund Rates have gone up. 2015 - +.25 2016 - +.25 2017 - +.75
The Federal Open Market Committee (FOMC) that meets eight times a year, sets the fed funds rate, and uses open market operations to influence the supply of money to meet the target rate. “Below is a projection from the meeting they held December 13, 2017” Federal Funds & LIBOR with Future Projections 3.50 3.20 3.00 2.89 2.50 2.00 1.50 1.00 0.50 0.00 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018 1/1/2019 1/1/2020 1/1/2021 FEDFUNDS LIBOR
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INCOME MAX RIDER 8% Income Bonus Key Factors ▪ Issue Ages 40-85 (age 50 for ▪ Based on your input, the Rider Guaranteed Minimum income) Lifetime Income Amounts Greater of 1% or Uncapped ▪ Crediting on 3-month 7.25% Rollup for 10 years LIBOR with 55% Par 7.25% Rollup for 10 years ▪ (10 year reset available) Competitive Payout Factors ▪ Home Health Care Doubler ▪ Falls Under 84/24 ▪ 10% of Premium Free ▪ Withdrawals Fee of 1.25% years 1-5 & 1.6% ▪ years 6-10 Commission - 7.00% Ages 0-75; ▪ 5% Ages 76-85
PAYOUT FACTORS Lifetime Withdrawal Rates
INCOME RIDER CALCULATOR EXAMPLE Calculator Summary: Results Summary: Initial Purchase Payment: $1,000,000 Solved For: Rider Guaranteed Lifetime Income Withdrawal Frequency: Annually Coverage Type: Single Issue Age of Owner: 60 Income End of Year: 10 State of Application: AZ Your Guaranteed Lifetime Withdrawal Benefit based on the Input criteria you entered is $115,258. This amount is payable for the Owner’s lifetime. Please refer to the Guaranteed Income Annuity product brochure for additional details. This product calculator explains how the Roll-up feature works for the Guaranteed Income Annuity Guaranteed Lifetime Withdrawal Benefit Income Rider. The amount shown on the following page represents the Minimum Guaranteed Lifetime Income provided under the rider. The additional pages of this illustration calculator further explain the benefits of the Guaranteed Lifetime Withdrawal Benefit Rider. Please review this summary carefully, including all Disclosure pages.
INCOME RIDER CALCULATOR EXAMPLE
HEAT SHEET – Single Payouts The chart below shows us what age 50-70 single payouts with 1-20 year deferrals are in comparison to the best products on the market. These percentages represent the difference in guaranteed income the GIA provides against leading competitors. MORE INCOME THAN COMPETITION SAME INCOME AS COMPETITION LESS INCOME THAN COMPETITION
HEAT SHEET – Joint Payouts The chart below shows us what age 50-70 joint payouts with 1-20 year deferrals are in comparison to the best products on the market. These percentages represent the difference in guaranteed income the GIA provides against leading competitors. MORE INCOME THAN COMPETITION SAME INCOME AS COMPETITION LESS INCOME THAN COMPETITION
FAQ’S FOR THE INCOME RIDER BENEFIT Question: Does it give an 8% income bonus at age 85? Answer: Yes. Question: : If I have a surrender charge and need this product to cover it, will the 8% Income Bonus cover a portion of those charges? Answer: Yes. Question: : Can I take income after 30 days of opening this contract? Answer: Yes, you can.
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