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 either Daily 6 or Daily +4 optional withdrawal benefits to “Live”:

Daily market-based step-up opportunities to age 90.

With Daily 6, your client’s income can increase through the greater of:

  • A 6% annual Deferral Bonus applied to the Withdrawal Base, OR

  • Daily market step-ups if they exceed the Deferral Bonus. Market-based step-ups may continue until age 90, when your client’s contract value exceeds their Withdrawal Base.

With Daily +4, your client’s income can increase through:

  • A 4% annual Deferral Bonus applied to the Withdrawal Base, AND

  • Daily market step-ups. Market-based step-ups may continue until age 90, when your client’s contract value reaches a new High Water mark.

With either option:

  • Deferral bonus is available until the earlier of the tenth contract anniversary or the first withdrawal.
  • 3 age bands for withdrawals, 5% at 65. (4% at 59½-64; 6% at 85+), reduces by 0.50% for joint, percentage based on the age of the younger spouse.
  • Optional benefits are available at an additional cost and investment restrictions apply.

Add the optional Legacy LockTM II 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.

    Important Note: A variety of factors — including withdrawals, underperformance and fees — can reduce the contract value. When purchased alongside an optional living benefit, should the contract value be less than the greater of either one Lifetime Annual Payment or the minimum contract value, the death benefit reverts to traditional return of premium, and is reduced by all past and future withdrawals. The Legacy Lock II step-up would also no longer apply. You may need to choose between an unreduced death benefit and continued withdrawals should the contract value approach the required minimum. When not paired with an optional living benefit, you may need to discontinue withdrawals in order to maintain an unreduced benefit as any withdrawal that reduces the contract value below the minimum contract value will terminate the contract and death benefit.

    All death benefits terminate upon annuitization. Contracts must annuitize by age 90 or 10 years from purchase, whichever is greater. Please see the prospectus for more details.

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

Marketing Resources

 

Client Guide

 

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Live & Give Seminar

 

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Sample Illustration:
Income & Legacy
with Daily 6 (Live & Give)

 

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Sample Illustration:
Income & Legacy
with Daily +4 (Live & Give)

 

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Suite Product Guide

 

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ForeRetirement Marketing Materials

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CONTACT SALES DESK

Phone: (877) 454-4777

 

 

Daily 6/Daily +4 costs 1.25% annually. The charge cannot exceed 2.50%. These optional benefit charges may increase upon any contract anniversary. If an increase is declined, the withdrawal percentage will be decreased by 1% (ex.: 5% to 4%); however, market step-ups and Deferral Bonuses, if applicable will continue to be credited.

Investment requirements apply. Investment options are designed to reduce investment volatility within the portfolios. As a result, clients should anticipate that their contract value normally may not decline in value as much as the overall market in downturns. However, they should also anticipate that their contract value will not normally increase in value to the same extent as the equity or bond markets during market upswings, simultaneously mitigating insurance company risk under the guarantee. If clients are uncomfortable with the inclusion of these fund options in their investment, Daily withdrawal benefits may not be suitable. .

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 are long-term investments intended for retirement purposes that 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. A standard death benefit is included in the base product. 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.

All death benefits terminate upon annuitization. Contracts must annuitize by age 90. Please see the prospectus for details.

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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