Creative Edge June 2009


More Lifetime Income with a BPA Select Annuity™


Annuities are insurance products. Whether fixed, variable, immediate, or indexed, annuities can provide various insurance options to protect principal and income, guarantee a lifetime income, and provide substantial death benefits. In market-collapsed times like these, annuity insurance is a good thing to have. Even the financial press, much of which is jaded and biased, grudgingly admits the value of annuity insurance1.


Recent annuity product development has focused on delivering a wider array of client benefits in a single annuity. While retaining the ability to earn higher interest than many fixed products, indexed annuities are providing greater liquidity, income and long term care benefits than ever before. Further, today’s variable annuities can now protect income through lifetime income riders, and immediate annuities are currently offering more liquidity and flexibility than in the past. One very compelling annuity is the BPASelect Annuity™ from American Investors Life Insurance Company.


The BPASelect Annuity™ combines the best of fixed indexed annuity benefits with features usually found only in variable annuities. Make no mistake however; it is a fixed indexed annuity, and thus, an insurance product. Built around the Balanced Allocation Strategy™, the BPASelect Annuity™ allocates premium between a long-term, S&P 500® point-to-point indexed interest strategy and a fixed interest rate strategy. The client chooses the most desirable asset allocation between indexed and fixed; 50% - 50%; 60% - 40%; or 70% - 30%2. The interest calculation period is 4, 5, or 6 years, depending upon whether the 12-year, 10-year, or 6-year version is selected.


The Balanced Allocation Strategy® features unlimited interest earning potential because there is no traditional cap on the indexed interest allocation. Your Creative Marketing Sales Consultant will provide you with hypothetical historical interest information on request. With a longer interest calculation period, the annuity can offer greater interest earning potential. The client trades the protection and familiarity of the annual reset design for a longer-term higher potential interest result. As a result, the BPASelect™ is an attractive product when combined with either (or both) a fixed annuity or a variable annuity. This lock-in feature of the BPASelect Annuity™ also allows the client to lock-in gains on the assets allocated to the S&P 500® Index3 and makes that locked-in value the end-of-period indexed value. This patent-pending lock-in automatically calculates interest on any amounts withdrawn during the interest calculation period regardless of subsequent changes to the index value. Any death benefit that would be payable also creates an immediate interest calculation, as of the end of term. This unique indexed interest lock-in means no interest is lost because amounts are withdrawn or payable before the next interest calculation. This flexibility is usually found only in an annual reset annuity.


The BPASelect™ offers a Guaranteed Lifetime Withdrawal Benefit (GLWB – the single most significant feature driving variable annuity sales today) with the largest annual roll-up currently available – 8%. The BPASelect Income Advantage™ GLWB permits indexed annuity owners to lock-in a lifetime withdrawal amount, potentially paid for the annuity owner’s lifetime – even if the client lives so long that the annuity value is exhausted. Keep in mind though, the income base is not the same as the Accumulated Value of the base annuity contract, and it is never available for lump sum withdrawal; it is only used for calculating amounts available under rider provisions. Additionally, rider withdrawals stop the accumulation in the income base. If confined to a qualified care facility and the client meets the GLWB rider conditions, the lifetime income amount will double. The GLWB rider is optional for an annual fee of 75 basis points (0.75%). If the interest credit at the end of calculation period (4, 5, or 6 years) is zero this fee is waived.


Calculating the GLWB lifetime withdrawal amount is based on the larger of the annuity account value or the premium (plus any bonus) compounded at 8% annually. The 8% roll up on the annuity income value guarantees a high lifetime income amount – exactly what clients want and need. After the GLWB lifetime income begins, if the account value exceeds the income value due to indexed interest growth, the lifetime income value will increase accordingly. Since the BPASelect Annuity™ provides greater interest-earning potential; there is the real possibility of increased GLWB annual income over a lifetime. A historical analysis of the interest-earning power of the BPASelect Annuity™ by the Annexus Group shows the account value exceeding the income value 30% of the time.


The BPASelect Annuity™ has all the usual flexibility of a fixed indexed annuity. There are 5%, 6%, or 10% premium bonus options available for an annual fee. This premium bonus, credited to the account value at issue, vests progressively over the duration of the withdrawal charge term. The BPASelect Annuity™, however, has early withdrawal charges that apply when an annual withdrawal is taken that exceeds 10% of the account value.


The BPASelect Annuity™ also offers an optional guaranteed minimum death benefit called the Family Endowment Rider™ (FER). The FER, available for a small annual fee, guarantees the death benefit will not be less than the premium increased at 5% annually (4% rider on the BPASelect 6). Since withdrawals reduce the death benefit dollar for dollar (which is better for the consumer than a proportional benefit reduction), a 5% withdrawal means the death benefit is guaranteed to equal the initial premium, regardless of account value. Ask your CreativeOne Sales Consultant for an illustration of this unique benefit.


For clients concerned about principal protected from market risk and guaranteed lifetime income, the BPASelect Annuity™ is a very compelling choice. The unique Balanced Allocation Strategy® provides higher potential interest earning power and the 8% GLWB roll-up guarantees the highest lifetime income, an income that can increase with market index performance. Call your Annuity Sales Consultant for a brief discussion and sales kit.



Jason Rockman, Vice President, Advanced Marketing
CreativeOne wholesales indexed annuities through more than 50 different Broker Dealers. Jason is the head of the Broker Dealer Distribution at Creative Marketing and assists these firms as they begin to offer indexed annuities to their producers. Jason is committed to educating Registered Representatives about indexed annuities and how they fit in a client’s portfolio. Jason started his career as an investment representative prior to joining AmerUS Group as Regional Marketing Representative. This position led him to CreativeOne Financial Services, where he became the compliance officer and OSJ for the investment program of the largest Kansas savings bank. Jason currently holds his series 7, 24, 66 as well as his life and health insurance license.





1Some Annuities Can Offer a Safe Haven During Tough Economic Times www.boston.com 4.9.09
2Up to four different blends may be available at any time. Blends are subject to change.
3S & P 500® is a trademark of the McGraw-Hill Companies.
4Getting Smart about Annuities Online.wsj.com April 19, 2009

DISCLOSURE: The BPABonus Annuity™ Rider [forms PBDBR12HB (09/06), PBDBR12LB (09/06) or state variation], the Family Endowment Rider™ [form DBR-BPA (03/06) or state variation] and the BPASelect Bonus Annuity™ [rider forms PBDBR6 (10/07), PBDBR10 (10/07), PBDBR12HB (Rev. 10/07), PBDBR12LB (Rev. 10/07) or state variation], optional riders for which a charge is deducted; and the BalancePlus Annuity™ [forms BPA8 (03/06) and BPA12 (03/06) or state variation], the BPASelect Annuity™ [forms BPASEL6 (10/07), BPASEL10 (10/07) and BPASEL12 (10/07) or state variation] are fixed indexed annuities issued by American Investors Life Insurance Company, Inc., Topeka, KS, an Aviva company. Product features, limitations, and availability vary by State; see the Product Disclosure for details.


To receive the premium bonus the owner must elect the BPABonus Annuity™/BPASelect Bonus Annuity™ Rider, an optional benefit for which a charge is deducted. Availability varies by State. The cost for this rider is automatically deducted from the interest in your contract and is guaranteed to never exceed (1.20% for 10-year and 0.75% for 6-year) of the contract’s Accumulation Value per year. Additional limitations may apply. Withdrawals in excess of the contract’s free withdrawal amount will incur a recapture provision equal to the amount of the bonus attributable to the excess withdrawal. If you lock-in interest earnings before the end of a Term, the total interest for the Term will be calculated and a proportional amount will be credited to your contract at that time. The remaining interest will be credited as a guaranteed interest rate over the remainder of the Term (or the date you terminate your contract, if earlier). The proportional amount of interest will be equal to the total calculated interest for the Term multiplied by the percentage of the Term that has expired. If elected, the Family Endowment Rider™ [form DBR-BPA (03/06) or state variation], an optional benefit for which a charge is deducted, provides a guaranteed death benefit floor upon the death of the annuitant equal to the premium accumulated at an interest rate of up to 5% compounded through age 90 on the 12-year contract; 4% on the 8-year contract (age 85 on the Bonus contracts). After age 85/90, the rider benefit will not grow any further but will continue to be in place. Product features, limitations, and availability vary by State; please refer to the Family Endowment Rider insert for details.


Confinement or terminal illness waivers available after contract is in-force for one year and are diagnosed with a terminal illness or confined to a qualified care facility for a minimum of 60 consecutive days. Availability varies by State; additional limitations may apply. Annuities are products of the insurance industry; guarantees are backed by the claims-paying ability of the issuing company. Annuities contain limitations including potential withdrawal charges and fees, which may affect contract values. Bonus annuities may charge higher fees as compared to similar annuities that don’t offer a premium bonus feature.



For Agent Use Only. Not for use with the general public.10262 – 2009/4/21 | 14249 112039