Income & Legacy Strategy

Case Study

Challenge: Client has dual objectives for their money. They want to:

  • Live off it, with guaranteed income for their retirement
  • Give it, with the ability to pass value to beneficiaries without their income detracting from their legacy

Case Profile:

  • Client age 50-75
  • Has one pool of money to meet both their income and legacy objectives
  • Finds tax-deferred equity investing appealing
  • Wants guaranteed income with growth potential
  • Desires protection of their investment for beneficiaries
  • Does not plan to access money for one-time needs

With ForeRetirement variable annuity and the optional Daily Lock Income Benefit℠ to “Live”:

  • Daily market-based step-up opportunities to age 90.
  • Your client’s income can increase through the greater of (1) a 6% annual deferral bonus applied to the Withdrawal Base, or (2) daily contract value highs if they exceed the deferral bonus — market step-ups may continue to age 90 when your client’s contract value exceeds their Withdrawal Base.
  • 6% deferral bonus is credited each year it exceeds daily contract value highs. Available for up to 10 years, or until first withdrawal, if sooner.
  • 3 age bands for withdrawals, 5% at 65. (4%, 59½-64; 6%, 85+), reduces by 0.50% for joint, percentage based on the age of the younger spouse.


Add the optional Legacy Lock℠ death benefit to “Give”:

  • Guarantees initial investment as death benefit, even while withdrawing for income within the limits of the Daily Lock Income Benefit.
  • Offers a one-time step-up at the time your client begins taking income. The step-up will increase the death benefit to equal the contract value if it has grown, based on the contract value before the income payout.

 

Legacy Lock is only available if purchased alongside either Daily Lock Income Benefit or Annual Lock Income Benefit within the ForeRetirement variable annuity. You may need to choose between an unreduced death benefit and continued withdrawals if the contract value is reduced to be less than or equal to one guaranteed withdrawal. Should the contract value be less than or equal to one guaranteed withdrawal, the death benefit reverts to traditional return of premium and is reduced by withdrawals. If applicable, the Legacy Lock step-up would also no longer apply.

Optional benefits are available at an additional cost and investment restrictions apply.

 

Marketing Resources

 

Client Guide

 

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Sample Illustration

 

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"Live & Give" Seminar

 

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Legacy Lock is only available if purchased alongside either Daily Lock Income Benefit or Annual Lock Income Benefit within the ForeRetirement variable annuity. You may need to choose between an unreduced death benefit and continued withdrawals if the contract value is reduced to be less than or equal to one guaranteed withdrawal. Should the contract value be less than or equal to one guaranteed withdrawal, the death benefit reverts to traditional return of premium and is reduced by withdrawals. If applicable, the Legacy Lock step-up would also no longer apply.

All guarantees are based on the claims-paying ability of Forethought Life Insurance Company and assume compliance with the benefit rules.

Products and optional features are subject to state and firm availability. State variations may apply.

Variable annuities offer tax-deferral, professionally managed investment options and flexible payouts. Values will fluctuate with investment performance, and the annuity may gain or lose value. Charges and fees will also reduce its value. Optional benefits are not available for purchase outside of a variable annuity and may be elected at an additional cost. Suitability and willingness to purchase the variable annuity must be considered prior to the potential benefits of any optional features.

Taxable distributions (including certain deemed distributions) are subject to ordinary income taxes, and if made prior to age 59½, may also be subject to a 10% federal income tax penalty. Distributions received from a non-qualified contract before the Annuity Commencement Date are taxable to the extent of the income on the contract. 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 will reduce the death benefit and any optional guaranteed amounts in an amount more than the actual withdrawal.

This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your tax or legal counsel for advice.

Variable annuities are sold by prospectus. The prospectus contains investment objectives, risks, fees, charges, expenses, and other information regarding the variable annuity contract and the underlying investments, which should be considered carefully before investing. Instruct your clients to read the prospectus, which can be obtained by calling 866-645-2449, before investing money.

“Forethought” is Forethought Life Insurance Company and affiliates, subsidiaries of Global Atlantic Financial Group Limited.

The ForeRetirement flexible-premium variable annuity suite is issued by Forethought Life Insurance Company and underwritten and distributed by Forethought Distributors, LLC.

FOR BROKER/DEALER USE ONLY. NOT FOR USE WITH THE PUBLIC.

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