Give Strategy

Case Study

Challenge: Client wants to build a financial legacy while retaining accessibility options.

Case Profile:

  • Client age 50
  • Has money they do not intend to use in life
  • Finds tax-deferred equity investing appealing
  • Wants the ability to access the money or receive payouts if necessary

Capture performance to help grow a legacy

The Give Strategy uses a ForeRetirement™ III variable annuity to help clients leverage ForeRetirement’s growth potential and create a more significant legacy. By purchasing ForeRetirement variable annuity and electing the optional Maximum Daily Value II (MDV II) death benefit for an additional charge, clients can lock in each new daily high of contract value as a death benefit value for beneficiaries.

While the standard death benefit included with all contracts equals the contract value at death, the optional MDV II will lock-in investment gains for beneficiaries every day that your client's contract value hits a new high. Even if the contract value falls due to underperformance or fees, the death benefit value will remain at the highest point.

With a variable annuity, clients retain the ability to receive payouts should their situations change in retirement. MDV II can be added to any contract, with or without a withdrawal benefit, and is available for election through age 75.

MDV II provides a unique long-term death benefit that pays beneficiaries the greater of:

  • The contract value
  • Maximum daily value (adjusted for premium payments and proportionately for withdrawals), which is the highest attained contract value on any day prior to the eighty-first birthday of the oldest owner. (Based on the age of the annuitant if the owner is a non-natural entity.)

The ROP II alternative: Protect your legacy against market volatility

Since individual legacy objectives can vary, ForeRetirement variable annuities include a Return of Premium II (ROP II) option. This benefit offers lower-cost legacy protection without the ability to lock-in growth as a death benefit. Available through age 80, ROP II protects death benefit proceeds against losses due to possible poor performance of the investment options.

ROP II guarantees that beneficiaries will receive the greater of:

  • The contract value, or
  • Premium payments (adjusted proportionately for withdrawals)

Marketing Resources

Sample Illustration:
Legacy Strategy with Maximum Daily Value II (Give)



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All products and optional benefits are subject to state and firm approval and variations.

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. A standard death benefit is included in the base product. 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.

All death benefits terminate upon age 95 and will expire sooner if you initiate an annuity payout option (annuitize). With Legacy Lock III, the death benefit value protected from withdrawals (Enhanced Return of Premium portion) terminates at age 90, and a traditional Return of Premium benefit is provided to age 95, reduced proportionately for all withdrawals. Please see the prospectus for details.

The ForeRetirement Variable Annuity is available in multiple share classes, which each have different fees and charges as described in the prospectus. Financial professionals’ commissions may also differ depending upon the share class selected. You should discuss which share class is right for your clients based on the available options. Important share class considerations include, but are not limited to, investment holding period and investment flexibility.

MDV II death benefit costs 0.45%. The charge cannot exceed 1.50%.

ROP II death benefit costs 0.15%. The charge cannot exceed 0.75%.

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.

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, the optional benefits within ForeRetirement may not be suitable.

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.

Marketing materials may not be available for use in all states, including but not limited to, Georgia, and Mississippi. Not construed as an offer for solicitation until your state has approved the product and the referenced marketing materials.

Sale of a variable annuity requires the use of the appropriate prospectus, available through your wholesaler. The prospectus contains detailed information including investment objectives, risks, and charges and expenses. Please have your clients read the prospectus carefully before they invest or send money.

Variable annuities are issued by Forethought Life Insurance Company and are underwritten and distributed by Forethought Distributors, LLC.


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