Fixed Index Annuities

Fixed Index Annuities are long-term, Financial Vehicles generally purchased to satisfy a few important objectives such as asset accumulation, tax-deferred growth, to supplement retirement income and to pass funds to beneficiaries. However; emergencies do arise and access to your money is always a concern. It is important to us at Safety First that you are aware of the withdrawal features that may be available in a Fixed Index Annuity.

Lump Sum or Partial Distribution

You still have access to your accumulation value during the surrender charge period your annuity contract, but a surrender charge would be applied to all withdrawals that exceed the penalty-free withdrawal amount. The surrender charge is a percentage of you accumulation value. This percentage declines over the surrender charge period. The surrender charge period and associated surrender charges to allow the company invest your money on a long-term basis, and as a result credit higher yields than possible with shorter term vehicles.
Penalty-Free Withdrawals

Most annuities allow you to withdraw up to 10% of the total accumulated value each year during the surrender charge period without incurring any surrender charges. After surrender charge periods are over you can withdraw 100% of your money without penalty or leave all or part of your money to continue in the annuity penalty free. Surrender charges only apply during the contracts surrender charge period, which differ from annuity to annuity.


Income Option: Guaranteed lifetime Income Riders

Unlike annuitization, your annuity may offer an income option that allows you to receive a guarantee of income for life and still have access to the available cash value. These flexible options guarantee growth rates of 5% – 10% per year to the income value, which is separate from the Accumulation value. The result is guaranteed growth of your principal for the purpose of withdrawing a guaranteed income for life when you are ready to turn on the income stream. Unlike annuitization, you still have the ability to take part or all of you annuities remaining cash value (minus surrender charges if they apply)if you choose. This option may come at a cost, but usually approximately ½%.



Annuitization is yet another way to receive regular income payments from your contract. An election to annuitize your contract is irrevocable. If you elect to annuitize your contract, you will no longer be able to exercise any liquidity provision that may have previously been available. Annuitization is available but never required.


Death Benefit

Annuities offer the ability to name beneficiaries. Upon death of the annuitant or an owner, annuity companies pay the death benefit of you annuity to your beneficiary. Most annuities waive all charges and fees at death of the owner/annuitant and pay the full accumulation value to beneficiaries even though the annuity is still in the surrender charge period. Naming beneficiaries may minimize the expense, delays, and publicity of probate and can be incontestable if structured properly.


Extra Access for Nursing Home, Terminal Illness or unemployment Your annuity contract may provide additional withdrawal features in the event of Nursing Home Confinement, Terminal Illness, or Unemployment. This increases your penalty free withdrawal amount if you are still in the surrender charge period.