Marketing Memo
DATE:
November 29th, 2011
TO:
All American Equity NMO’s and Appointed Agents
FROM:
James Jones, Vice President – Marketing Services
RE:
Changes to Our Lifetime Income Benefit Riders
Important Information – Please Read Carefully!
Please note the following changes for applications received after December 12th, 2011:
To receive the Current 7% or 5% Income Account Value (IAV) Rates and Payout
Percentages, original applications must be accompanied by either cash or 1035/Direct
Transfer paperwork and must be received in our office by 4:45pm CST on Monday,
December 12th, 2011. No faxes will be accepted. Applications received in our office after
December 12th, 2011 will receive the new IAV Rates and Payout Percentages. New
disclosures may be required. NO EXCEPTIONS!
1. The IAV Periods will not change. For the LIBR-2010, the IAV Period is 10 years and the Reset
will be between the 5th and 10th Contract Anniversaries; with 20 year maximum. For the
F-LIBR-09, the IAV Period is an automatic 20 years with no Reset.
2. Remember - FEES MATTER! Our IAV Rate Fees will remain unchanged. The LIBR-2010
and F-LIBR-09 still calculate and deduct the fee from the Contract Value, not the Income
Account Value like other income riders on the market today! When comparing Lifetime Income
Benefit Riders, it is important to understand how fees are calculated. We believe that
American Equity is still the best choice for income!
3. Compound vs. Simple Interest – American Equity uses compound interest to compute the
IAV. Many Income Riders available on the market use Simple Interest. Don’t be mislead by
IAV Rates when comparing Income Riders, check to see how interest is calculated and
credited to the IAV.
4. American Equity continues to offer Level and Increasing Payment Options.
5. American Equity’s LIBR remains extremely competitive in the income planning marketplace.
The next page outlines the specific changes to our Income Riders:
∙ IAV RATE CHANGES:
LIBR-2010* w/Fee (Ages 50+)
LIBR-2010 w/ No Fee
F-LIBR-09* w/Fee (Ages 50+)
F-LIBR-09 w/ No Fee
CURRENT IAV RATE
7.00% (0.60% Fee)
5.00%
7.00% (0.30% Fee)
5.00%
NEW IAV RATE
6.50% (0.60% Fee)
4.50% (No Fee)
6.50% (0.30% Fee)
4.50% (No Fee)
∙ BENEFIT PAYOUT PERCENTAGE CHANGES (LEVEL PAYMENT OPTION)
Payee’s Minimum Age at
Election of LIB
50-54
55-59
60-64
65-69
70-74
75-79
80+
Single Life
Payout Percent
Joint Life
Payout Percent
OLD
4.0%
4.0%
5.0%
5.0%
6.0%
6.0%
7.0%
OLD
3.5%
3.5%
4.5%
4.5%
5.5%
5.5%
6.5%
NEW
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
NEW
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
∙ BENEFIT PAYOUT PERCENTAGE (3% INCREASING PAYMENT OPTION)
Payee’s Minimum Age at
Election of LIB
50-54
55-59
60-64
65-69
70-74
75-79
80+
Single Life
Payout Percent
Joint Life
Payout Percent
OLD
3.0%
3.0%
4.0%
4.0%
5.0%
5.0%
6.0%
OLD
2.5%
2.5%
3.5%
3.5%
4.5%
4.5%
5.5%
NEW
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
NEW
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
As always, we appreciate your continued business and support! Please visit our
website at www.american-equity.com or call our Marketing Department at
888-647-1371 for more information or to order supplies.
*Form number and availability vary by state. Changes not applicable to OR or DE at this time.
IAV Accumulation Option 4.5% is available for all issue ages for no fee. IAV Option 6.5% available for ages 50+. IAV only used to
calculate lifetime income payments. Not part of underlying base contract's contract value or available in a lump sum. Not included in
death benefit. Interest grows until the earlier of payments beginning or the end of the IAV period. Claims paying ability based on the
financial strength of American Equity. See brochure and disclosure for details.
LIBR & F-LIBR Changes
11/29/2011