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Frequently Asked Questions
The Ameritas No-Load Variable Annuity policy is designed to help you invest on a tax-deferred basis to meet your long-term financial goals, especially to supplement income during retirement. The policy provides two methods for providing a guaranteed stream of income: annuitization and the Guaranteed Lifetime Withdrawal Benefit (GLWB) rider.
Q: What is annuitization?
A: When the policy is annuitized, the policy values are allocated to our general account and payments are fixed based on a fixed rate of interest.
Q: What is the GLWB rider?
A: The purpose of the rider is to provide a guaranteed series of annualized withdrawals from the contract, regardless of the policy value, without annuitizing. Withdrawals continue for your lifetime or that of the last surviving Covered Person(s). Your policy values remain invested in variable subaccounts and you choose from one of the four investment level asset allocation models offered by Ameritas.
Q: Who are the Covered Person(s)?
A: Covered Person(s) mean:
- The owner(s) of the policy or;
- The annuitant(s) if the owner of the policy is a non-natural person, such as a trust or;
- The spouse(s) at the time the joint spousal option is selected.
Q: How does the GLWB rider work?
A: There are four distinct phases to the rider which are described below:
- Inactive Phase
- No charges for the rider are deducted from the policy value.
- No restrictions are imposed on withdrawals other than those provided by the base policy.
- No restrictions are imposed on asset allocations other than those provided by the base policy.
- You choose when and if to end the Inactive Phase and enter the Accumulation or Withdrawal Phases.
- Accumulation Phase
- You choose when to activate the rider and enter the Accumulation Phase.
- Once the rider is activated, the value of the policy will be tracked to calculate the future base for taking withdrawals.
- You will have downside protection and growth potential, provided you pay the rider charge
- Restrictions are imposed on withdrawals.
- You choose from one of four asset allocation models.
- There will be a Rider Charge deducted from the policy value each month
- You choose when to end the Accumulation Phase and enter the Withdrawal Phase.
Withdrawal Phase
- You choose when to enter the Withdrawal Phase from either the Inactive Phase or the Accumulation Phase.
- On the date a client enters the Withdrawal Phase, the Benefit Base is calculated.
- You can start taking withdrawals up to the Lifetime Withdrawal Benefit Amount (LWBA), which is calculated as a percentage of the Benefit Base and varies by age.
- There are restrictions imposed on withdrawals greater than the LWBA, and withdrawals greater than the LWBA will reduce the Benefit Base.
- You must choose from one of the four asset allocation models Ameritas provides.
- The Rider Charge will continue to be deducted from the policy value.
Guaranteed Phase
- The Lifetime Withdrawal Benefit Amount payments continue to be made, although the policy value has been reduced to zero. The Guaranteed Phase is described fully in the prospectus.
Q: Which phase is the annuity policy in at issue?
A: If you are age 50 and over, you can elect to have your policy issued in the Inactive, Accumulation or Withdrawal Phase. If you are under age 50 or make no election on the application, the policy is automatically issued in the Inactive Phase and there is no rider charge. Once the rider is activated, the policy can go directly into either the Accumulation or Withdrawal Phases and rider charges begin.
Q: How much is the GLWB rider charge?
A: There will be a Rider charge deducted monthly from the policy value. C harges for the GLWB begin only after it is activated. The annual charges are:
- 0.95% current and guaranteed for the single life option and
- 1.10% current and guaranteed for the joint spousal option.
Q: Are there investment option restrictions?
A: When the GLWB rider is activated, you have the choice of one of four asset allocation models: Capital Growth, Moderate, Balanced or Conservative.
Q: Do I have to activate the GLWB rider by a certain date or ever?
A: No. Activation of the rider is not required. The rider can be activated at any time while you own the policy as long as you are over age 50.
Q: Can I terminate the GLWB rider?
A: Yes. You can terminate the GLWB rider at any time with written notice. Note it cannot be added back to the policy after it is terminated and there is no charge for the rider if it is in the Inactive Phase.
Q: What happens at death?
A: If the GLWB is in the Withdrawal Phase and upon the death of the last Covered Person(s), the beneficiary can select to receive either the Death Benefit as provided by the policy and riders, or the distribution of the Remaining Balance accomplished through the payment of the LWBA, until the Remaining Balance is zero. If the last surviving Covered Person(s) dies and the policy value is zero as of the date of death, any Remaining Balance will be distributed to the Beneficiary through the payment of the LWBA until the Remaining Balance is zero. (Note that there is no guaranteed that a policy will have a Remaining Balance on the death of the last Covered Person(s)).
Q: I already own an Ameritas No-Load Variable Annuity. Can I add the rider to my existing annuity policy?
A: The GLWB Rider is available on all policies issued after November 5, 2007 or after the state has approved the rider, whichever is later. You can exchange your current policy for a new Ameritas No-Load Variable Annuity by completing a new application and appropriate transfer and replacement forms. Replacement might not be right for everyone. Please contact us so that we can help you evaluate your particular situation and determine if replacement is suitable for you.
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