Strategic Choice Annuity 7
Growth Potential While Managing Risk
Standard Insurance Company
What Is A Deferred Annuity?
A deferred annuity contract is chiefly a vehicle for accumulating savings and eventually distributing the value —
either as a payment stream or as a one-time, lump-sum payment. All varieties of deferred annuities have one thing
in common: the increase in account value is not taxed until those gains are withdrawn (or paid out). This is also
known as tax-deferred growth.
Annuity contracts in the U.S. are defined by the Internal Revenue Code. They have features of life insurance
products, but are only allowed to be sold by insurance companies. And because insurance companies are regulated
by state insurance departments, some contracts, features, and options may not be available or may not be exactly
the same in all states.
Annuities are intended as long-term savings vehicles. The Strategic Choice Annuity is a product of Standard
Insurance Company. It may not be available in some states and may at times be referenced as an equity-indexed
annuity or fixed-indexed annuity. The annuity is not guaranteed by any bank or credit union and is not insured
by the FDIC or any other governmental agency. The purchase of an annuity is not a provision or condition of any
bank or credit union activity. Some annuities may go down in value.
The guarantees of the annuity are based on the financial strength and claims-paying ability of Standard Insurance
Company. An annuity should not be purchased as a short-term investment. As an investor you are cautioned to
carefully review an index annuity for its features, costs, risks and methods of calculating the variables.
Policies: ICC15-SPDA-IA3, SPDA-IA3.
Riders: ICC15-R-PTP, ICC11-R-MVA, ICC11-R-DB, ICC15-R-ANN, ICC15-R-TCB, ICC15-R-NHB, ICC11-R-ANNDW, ICC15-R-POF, ICC13-RGMAB, ICC10-R-ERTSA, ICC10-R-NERTSA, ICC10-R-QPP, ICC11-R-IRA, ICC11-R-Roth IRA, ICC11-R-SEPP, R-ANN, R-DB, R-MVA, R-POF,
R-PTP, R-TCB, R-NHB, R-ANNDW, R-GMAB, R-ERTSA, R-NERTSA, R-QPP, R-SEPP-IA
SI 17749 (7/16)
The Standard
Strategic Choice Annuity 7
Growth Potential While Managing Risk
If you gravitate towards deferred annuities because of their guarantees,
the Strategic Choice Annuity 7 (SCA) may be an ideal single-premium
deferred annuity for you. The SCA is an excellent choice for the investor
who is interested in the growth potential of an index, with the assurance
of a Guaranteed Minimum Accumulation Benefit.
How This Annuity Works
The Strategic Choice Annuity offers upside potential with the ability to
receive interest based on the performance of an index. The Standard tracks
the performance of the J.P. Morgan U.S. Sector Rotator 5 Index (Annuity
Series), “The Index,” for the SCA. The Index is a proprietary, multi-asset
index that seeks to obtain consistent returns by dynamically* adjusting
investment allocations among well-performing U.S. market sectors based
on market conditions.
The Strategic Choice Annuity is initially comprised of two different
accounts: The Fixed Interest Account and the Index Interest Account.
Fixed Interest Account
The amount of premium allocated to the Fixed Interest Account is credited
daily with a fixed interest rate. The initial fixed interest crediting rate is
guaranteed for the first contract year. After the initial guarantee period,
the renewal rates will be based upon the current economic and interest
rate environment.
Initial Index Interest Account
The Initial Index Interest Account is a point-to-point account with a 7-year
index term, a participation rate, and a spread rate.
At the end of the 7-year index term, the premium allocated to the Initial
Index Interest Account is credited with interest based on the growth of the
J.P. Morgan U.S. Sector Rotator 5 Index (Annuity Series) over the 7-year
period, multiplied by the participation rate, less a spread rate.
Interest Credited to the Initial Index Interest
Account at the End of the 7-year Period:
Index Return
x
Over 7 Years
Participation
Rate
Spread
− (Rate
x 7) =
Interest
Credited
This formula allows owners of this annuity to benefit from increases in The
Index, with the assurance that if The Index declines over the 7-year index term,
the interest credit will not be negative. Thus, the SCA is designed for individuals
looking for an annuity that will share in The Index gains, but not the losses.
*
As defined on page 5 of this Brochure. For a more detailed description, see A Guide to J.P.
Morgan U.S. Sector Rotator 5 Index (Annuity Series).
Strategic Choice Annuity 7
A few key terms to understand about the Initial Index
Interest Account:
Index Return: The percentage
of change in The Index over the
7-year index term.
Participation Rate: The
participation rate determines
how much of the increase in The
Index will be used to calculate
the interest earned on the
amount allocated to the Initial
Index Interest Account. The
Participation Rate is set at the
time your annuity is issued.
Spread Rate: Your annuity may,
or may not have a Spread Rate.
If a Spread Rate is declared,
it will be stated as an annual
percentage rate. As such it
will be multiplied by 7 when
deducted. The Spread Rate is
also set at the time your annuity
is issued.
3
J.P. Morgan U.S. Sector Rotator 5 Index (Annuity Series)
The J.P. Morgan U.S. Sector Rotator 5 Index (Annuity Series) was created to
track a group of U.S. market sectors, comprised of U.S. stocks, as well as a
bond fund, with allocations selected on a monthly basis. The Index aims to
manage risk and reduce the potential for large index declines by allocating
weights to selected market sectors based in part on volatility, a measure
of risk. If needed, The Index allocations can add up to less than 100% for
stabilization purposes.
Each month, The Index evaluates each of the ten U.S. market sector funds
based on their past month’s return. The Index dynamically rebalances
allocations to the five U.S. market sectors with the strongest positive
performance. If there are fewer than five sectors with a positive return, The
Index may add an allocation to a bond fund.
For more information about The Index please consult our Guide to
J.P. Morgan U.S. Sector Rotator 5 Index (Annuity Series).
Guaranteed Minimum Accumulation Benefit
At the beginning of the index term that follows the end of the 7-year
Surrender-Charge Period, your annuity fund value is assured to reach the
guaranteed minimum accumulation value of 107% of the original premium,
net any withdrawals (including applicable charges). This ensures that even
in an extended down market, your annuity fund will have earned at least a
guaranteed minimum interest growth.
After the end of the original 7-year term, if your annuity fund value is
less than the guaranteed minimum accumulation value, then a one-time
adjustment, known as the Guaranteed Minimum Accumulation Benefit,
will be made to your annuity fund value to raise it up to the guaranteed
minimum accumulation value.
SCA Hypothetical Performance Over 7 Years1
$130,000
1
$125,000
$120,000
$115,000
$110,000
2
3
$105,000
$100,000
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Performance
Scenario
Beginning Account
Value
Annual Index Return
Over 7 years
Interest Credited
Variables
Account Value
End of Year 7
1
$100,000
3.00%
120% Participation Rate
and 0% Spread Rate
$127,585
2
$100,000
2.00%
100% Participation Rate
and 0.75% Spread Rate
$109,619
3
$100,000
-2.00%
105% Participation Rate
and 0% Spread Rate
$107,000
Above are three hypothetical performance scenarios that illustrate how The
Index could perform over the SCA’s 7-year Surrender-Charge Period. In a
7-year period when The Index change is negative, the Guaranteed Minimum
Accumulation Benefit ensures a guaranteed minimum accumulation value of
107%.
Key Elements of The Index:
Targeted Exposure: Selecting the five best-performing
U.S. market sectors out of the ten possible.
Guaranteed minimum accumulation
value o
f 107% at the end of Year 7.
1 Hypothetical chart and graph assuming
$100,000 purchase payment, with
100% of premium allocated to the
Initial Index Interest Account, no
withdrawals, and a 7-year surrender
charge schedule. This is for illustrative
purposes only; actual results will vary
for other index returns and crediting
variables.
Dynamic Allocation: Adjusting monthly to select market
sectors with the strongest performance.
Risk Management: Allocating weights to selected market
sectors based on volatility, a measure of risk.
Strategic Choice Annuity 7
5
What Happens After the 7-year Index Term?
After the initial 7-year index term ends, the owner of a Strategic Choice
Annuity will be able to allocate funds between the Fixed Interest Account,
and a now available 1-year Index Interest Account. The 1-year Index Interest
Account is an annual point-to-point index interest account that will continue
to follow the performance of the J.P. Morgan U.S. Sector Rotator 5 Index
(Annuity Series).
Unlike the Initial Index Interest Account, this 1-year Index Interest Account
will have an index rate cap, a declared participation rate of 100%, and no
spread. The index rate cap determines the maximum interest rate the funds
allocated to the 1-year Index Interest Account will earn for each 1-year index
term. The account will never participate in any declines The Index may see,
only in the gains.
1-year Index Interest Account Example2
Let’s say at the end of the 7th year, your annuity has an account value of $107,000. You allocate 100% to the 1-year
Index Interest Account.
$113,000
1
$112,000
2
$111,000
$110,000
$109,000
$108,000
3
$107,000
Beginning
of Year 1
End of
Year 1
Performance
Scenario
Beginning Account
Value
Renewal Cap
Rate
Performance of The Index
at the End of the Term
Interest Credited to
Your Account
1
$107,000
5.00%
8.00%
5.00%
2
$107,000
5.00%
4.00%
4.00%
3
$107,000
5.00%
-2.00%
0.00%
2 Hypothetical chart and graph assuming $107,000 beginning account value, with 100% allocated to 1-year Index Interest Account, and no
withdrawals. This is for illustrative purposes only; actual results will vary for other index returns and crediting rates.
6
The Standard
Eligibility
A Strategic Choice Annuity 7 can be established for an owner and annuitant
age 80 or younger. The minimum premium amount is $15,000 and the
maximum is $1,000,000. Greater amounts may be considered but must
receive prior approval from The Standard. At least 30 percent of the initial
premium must be allocated to the Initial Index Interest Account.
Tax-Qualification Options
This annuity may be established as an IRA or as a SEP-IRA (Simplified
Employee Pension) to initiate or continue a tax-qualified retirement plan.
There are no additional tax advantages to purchasing an annuity as part of a
Qualified Plan other than those provided by the Qualified Plan itself.
Lump-sum premiums and complete, or partial, exchanges of non-qualified
funds may also be accepted into this annuity.
Advantages of Tax Deferral
Taxes will be due only when withdrawals or distributions are made from
the annuity. This will generally be during retirement, when most people
find themselves in a lower tax bracket. As a result, interest accumulates on
principal, earnings and on money that would have otherwise been paid in
income taxes.
Time to Reflect on the Purchase
From the date the annuity contract is delivered, an owner has 30 days to
consider the purchase. If the transaction is terminated during those 30
days, Standard Insurance Company will return all premium, minus any
withdrawals taken.
Surrender-Charge Period
Deferred annuities are designed as long-term retirement savings. So,
although all or a portion of the funds may be withdrawn at any time, early
withdrawals are discouraged and can be subject to surrender charges.
Expressed as a percentage of the annuity’s value, these charges diminish
to zero over time. At the end of the seventh contract year, your Strategic
Choice Annuity will no longer be subject to surrender charges.
A withdrawal in...
results in a...
Year 1
7% surrender charge
Year 2
6% surrender charge
Year 3
5% surrender charge
Year 4
4% surrender charge
Year 5
3% surrender charge
Year 6
2% surrender charge
Year 7
1% surrender charge
Year 8+
0% surrender charge
Strategic Choice Annuity 7
7
Market Value Adjustment
During the 7-year Surrender-Charge Period, a Market Value Adjustment
(MVA) will be applied to withdrawals or surrenders. In a withdrawal scenario
where the surrender charge is waived, the MVA will also be waived.
This adjustment is based upon changes in corporate bond yields and may
increase or decrease the annuity’s surrender value. In general, if interest
rates have risen since the annuity was purchased, the adjustment will
decrease the surrender value. If interest rates have fallen, the adjustment
will increase the surrender value.
Minimum Value Guarantee
During the Surrender-Charge Period and throughout the life of the contract,
minimum values of the annuity are guaranteed by law. Requirements ensure
that the owner will never receive less than applicable minimum contract
values over the life of the contract. The annuity contract surrender value is
guaranteed to equal, or exceed, the contractual minimum values as defined
in the contract.
A formula is applied to ensure the surrender value meets, or exceeds,
these contractual minimum values — even if market value adjustments and
surrender charges have been incurred during the MVA period.
At all times, the owner is guaranteed to receive an annuity value that meets,
or exceeds, minimum required values.
Accessing Funds
While surrenders and withdrawals are discouraged during the SurrenderCharge Period, there are times when access to funds is appropriate.
Knowing this, we have created withdrawal options available that are not
subject to a surrender charge or MVA. There may be a 10 percent earlywithdrawal penalty for surrenders that occur prior to age 59½. Please
consult a tax professional for guidance.
10 Percent Annual Withdrawals
After the first contract year, annual withdrawals of up to 10 percent of the
annuity value may be made without incurring a surrender charge.
Required Minimum Distributions
If the contract is tax-qualified, you may receive IRS Required Minimum
Distributions without a surrender charge.
If you are planning to access funds using the 10 percent withdrawal
privilege or to satisfy your annual Required Minimum Distribution during the
Surrender-Charge Period, it is best to allocate an amount equal to or slightly
greater than the anticipated total of these types of planned withdrawals
to the Fixed Interest Account. This will ensure your funds earn interest up
until the withdrawal is made. Amounts withdrawn from the Initial Index
Interest Account prior to the end of the 7-year index term will not
participate in any increases in The Index.
Life-Changing Scenarios
Terminal Condition
The owner may make withdrawals without a surrender charge after the first
contract year if the owner is diagnosed with a terminal condition. (This may
not be available in all states.)
Nursing Home Confinement
The owner may make withdrawals without a surrender charge after the
first contract year if the owner is confined in a nursing home for 30 or more
consecutive days. (This may not be available in all states.)
Annuitization
At any time, the annuity may be converted to a payout annuity with The
Standard. Surrender charges will be waived if the payout elected is either for
the owner’s lifetime or a payment period of at least five years.
Partial Index Crediting
If initiated mid-index
term, and if the index has
experienced gains, a partial
index credit will be applied
when exercising the nursing
home, terminal condition
waivers, annuitization or the
distribution of death benefits
due to the death of the
owner.
Death Benefits
Upon the death of the owner, the full annuity value is immediately payable as
death benefits to the named beneficiary. Upon the death of an annuitant, the
owner may elect a withdrawal within 180 days of such death and surrender
charges will be waived.
Strategic Choice Annuity 7
9
A Guaranteed Income for Life
Annuitization is precisely why many people buy an
annuity — to insure against outliving an income. By
annuitizing a deferred annuity, a change is made from
accumulating savings to generating a guaranteed
income stream.
While annuitization may occur at any time for most
products in the majority of states, most will consider
this option in the transition from the accumulation to the
income stage of retirement. It’s an option that:
• Provides a guaranteed income stream;
Joint and Survivor Life Income With Installment
Refund
A guaranteed income for as long as both annuitants
live. The total payments will never be less than the
total of the funds paid to purchase this option. If both
annuitants die before receiving at least that amount,
payments continue to the beneficiary until the full
amount is repaid (or may be converted to a lump-sum
payment).
Joint and Survivor Life Income With Certain
Period
Income Options
A guaranteed income for as long as both annuitants
live. When either annuitant dies, payments will continue
at 100 percent of the payments received when both
were living. If both annuitants die prior to the end of
the period specified (5, 10, 15 or 20 years), payments
continue to the beneficiary until the end of the period (or
may be converted to a lump-sum payment).
Life Income
Joint and Contingent Survivor Life Income
A guaranteed income for as long as the annuitant lives.
Payments will cease upon the death of the annuitant.
A guaranteed income for as long as both annuitants
live. If the primary annuitant dies first, payments will
continue at 50 percent of the payments received when
both were living. If the contingent annuitant dies first,
payments will continue at 100 percent of the payments
received when both were living. Payments will cease
upon death of both annuitants.
• Can set payments to meet the IRS Required Minimum
Distribution; and
• Allows payment of taxes on smaller, regular payments
instead of a lump sum.
Life Income With Installment Refund
A guaranteed income for as long as the annuitant lives.
The total payments will never be less than the total of
the funds paid to purchase this option. If the annuitant
dies before receiving at least that amount, payments
continue to the beneficiary until the full amount is repaid
(or may be converted to a lump-sum payment).
Life Income With Certain Period
A guaranteed income for as long as the annuitant lives.
If the annuitant dies prior to the end of the period
specified (5, 10, 15 or 20 years), payments continue to
the beneficiary until the end of the period (or may be
converted to a lump-sum payment).
Certain Period
A guaranteed income for a time period chosen (5, 10,
15 or 20 years). At any time, benefits may be converted
to a lump-sum payment. If the annuitant dies prior to
the end of the period specified, payments continue to
the beneficiary until the end of the period (or may be
converted to a lump-sum payment).
Joint and Survivor Life Income
A guaranteed income for as long as both annuitants
live. When either annuitant dies, payments will continue
at 50 percent, 66²/³ percent, 75 percent or 100 percent
of the payments received when both were living.
Payments will cease upon death of both annuitants.
SI 8852 (10/08)
The Standard
The J.P. Morgan U.S. Sector Rotator 5 Index (Annuity Series) (“JPMorgan Index”) has been licensed to Standard Insurance Company (“The
Standard”) for its benefit. Neither The Standard nor Strategic Choice Annuity 7 (the “Annuity Product”) is sponsored, operated, endorsed,
sold or promoted by J.P. Morgan Securities LLC (“JPMS”) or any of its affiliates (together and individually, “JPMorgan”). JPMorgan makes no
representation and no warranty, express or implied, to purchasers of the Annuity Product (or any person taking exposure to it) or any member
of the public in any other circumstances (each a “Purchaser”): (a) regarding the advisability of investing in or purchasing securities or other
financial or insurance products generally or in the Annuity Product particularly; or (b) the suitability or appropriateness of an exposure to the
JPMorgan Index in seeking to achieve any particular objective. It is for those taking an exposure to the Annuity Product and/or the JPMorgan
Index to satisfy themselves of these matters and such persons should seek appropriate professional advice before making any investment
or purchasing insurance. JPMorgan is not responsible for and does not have any obligation or liability in connection with the issuance,
administration, marketing or trading of the Annuity Product. The publication of the JPMorgan Index and the referencing of any asset or other
factor of any kind in the JPMorgan Index do not constitute any form of investment recommendation or advice in respect of any such asset or
other factor by JPMorgan and no person should rely upon it as such. JPMorgan does not act as an investment adviser or investment manager
in respect of the JPMorgan Index or the Annuity Product and does not accept any fiduciary duties in relation to the JPMorgan Index, The
Standard, the Annuity Product or any Purchaser.
The JPMorgan Index has been designed and is compiled, calculated, maintained and sponsored by or on behalf of JPMorgan without regard
to The Standard, the Annuity Product or any Purchaser. The ability of The Standard to make use of the JPMorgan Index may be terminated on
short notice and it is the responsibility of The Standard to provide for the consequences of that in the design of the Annuity Product. JPMorgan
does not accept any legal obligation to take the needs of any person who may invest in an Annuity Product into account in designing,
compiling, calculating, maintaining or sponsoring the JPMorgan Index or in any decision to cease doing so.
JPMorgan does not give any representation, warranty or undertaking, of any type (whether express or implied, statutory or otherwise) in
relation to the JPMorgan Index, as to condition, satisfactory quality, performance or fitness for purpose or as to the results to be achieved
by an investment in the Annuity Product or any data included in or omissions from the JPMorgan Index, or the use of the JPMorgan Index in
connection with the Annuity Product or the veracity, currency, completeness or accuracy of the information on which the JPMorgan Index is
based (and without limitation, JPMorgan accepts no liability to any Purchaser for any errors or omissions in that information or the results of
any interruption to it and JPMorgan shall be under no obligation to advise any person of any such error, omission or interruption). To the extent
any such representation, warranty or undertaking could be deemed to have been given by JPMorgan, it is excluded save to the extent that
such exclusion is prohibited by law. To the fullest extent permitted by law, JPMorgan shall have no liability or responsibility to any person or
entity (including, without limitation, to any Purchasers) for any losses, damages, costs, charges, expenses or other liabilities howsoever arising,
including, without limitation, liability for any special, punitive, indirect or consequential damages (including loss of business or loss of profit,
loss of time and loss of goodwill), even if notified of the possibility of the same, arising in connection with the design, compilation, calculation,
maintenance or sponsoring of the JPMorgan Index or in connection with the Annuity Product.
The JPMorgan Index is the exclusive property of JPMorgan. JPMorgan is under no obligation to continue compiling, calculating, maintaining or
sponsoring the JPMorgan Index and may delegate or transfer to a third party some or all of its functions in relation to the JPMorgan Index.
JPMorgan may independently issue or sponsor other indices or products that are similar to and may compete with the JPMorgan Index and the
Annuity Product. JPMorgan may also transact in assets referenced in the JPMorgan Index (or in financial instruments such as derivatives that
reference those assets). It is possible that these activities could have an effect (positive or negative) on the value of the JPMorgan Index and
the Annuity Product.
The Annuity Product is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any
express or implicit guarantee or assurance either with regard to the results of using the JPMorgan Index and/or index trade mark or the index
level at any time or in any other respect. The index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure
that the JPMorgan Index is calculated correctly. Irrespective of its obligations towards JPMorgan, Solactive AG has no obligation to point
out errors in the JPMorgan Index to third parties including but not limited to Purchasers, The Standard and/or financial intermediaries of the
Annuity Product. Neither publication of the JPMorgan Index by Solactive AG nor the licensing of the JPMorgan Index or index trade mark for
the purpose of use in connection with the Annuity Product constitutes a recommendation by Solactive AG to invest capital in said Annuity
Product nor does it in any way represent an assurance or opinion of Solactive AG with regard to any purchase of this Annuity Product.
Each of the above paragraphs is severable. If the contents of any such paragraph is held to be or becomes invalid or unenforceable in any
respect in any jurisdiction, it shall have no effect in that respect, but without prejudice to the remainder of this notice.
SI 17751 (7/16)
11
Annuities are intended as long-term savings vehicles. The Strategic
Choice Annuity is a product of Standard Insurance Company. It may
not be available in some states and may at times be referenced as an
equity-indexed annuity. The annuity is not guaranteed by any bank or
credit union and is not insured by the FDIC or any other governmental
agency. The purchase of an annuity is not a provision or condition
of any bank or credit union activity. Some annuities may go down in
value.
The guarantees of the annuity are based on the financial strength and
claims-paying ability of Standard Insurance Company. An annuity
should not be purchased as a short-term investment. As an investor
you are cautioned to carefully review an index annuity for its features,
costs, risks and methods of calculating the variables.
The Standard is a marketing name for StanCorp Financial Group, Inc.
and subsidiaries. Insurance products are offered by Standard
Insurance Company of 1100 SW Sixth Avenue, Portland, Oregon, in
all states except New York, where insurance products are offered by
The Standard Life Insurance Company of New York of 360 Hamilton
Avenue, Suite 210, White Plains, New York. Products not available in
all states. Product features vary by state and company, and are
solely the responsibility of each subsidiary. Each company is solely
responsible for its own financial condition. Standard Insurance
Company is licensed to solicit insurance business in all states except
New York. The Standard Life Insurance Company of New York is
licensed to solicit insurance business in only the state of New York.
Standard Insurance Company
1100 SW 6th Avenue
Portland, OR 97204
www.standard.com
Strategic Choice Annuity 7
SI 17750 (7/16)