Ace Benefits Group - Indexed Annuities

Indexed Annuities

An indexed annuity is designed to be a long-term retirement planning tool with many features to help clients achieve the standard of

living

they want during retirement. Various income options are available at the annuity commencement date.

An indexed annuity offers the potential for increased interest earnings, up to a cap, based on the performance of the S&P 500 Index

(excluding dividend income) each policy year. The insurance carrier determines the interest to be credited, if any, to the equity

indexed

account by comparing the index value on the current anniversary to the index value on the prior anniversary or the policy issue

date (for the

policy’s first anniversary) as follows (special rules apply to anniversary dates that fall on holidays or weekends):

The index change is determined by subtracting the prior anniversary’s index value from the current anniversary’s index value and
then dividing the difference by the prior anniversary’s index value.
If the results are a positive index change, the percentage change in growth will be used to determine index interest. If the
positive percentage index change is greater than the current cap, however, the current cap percentage is used to determine the
interest rate credited to the account value.
If the index change is negative, no loss of principal is incurred during the deferral period and the value of the equity indexed
account does not change.
Interest credited annually may fluctuate along with market and other economic conditions. Past performance does not guarantee
future results. A prolonged downturn in the stock market, the payment of premium tax, and/or fees and charges could ultimately
lead to a loss in principal.

Lock in Gains with the Annual Reset Feature

The annual reset method credits interest based on positive movement of the index up to an annually declared cap. If the index

decreases,

no interest is credited. This method locks in the interest earned in positive years while protecting principal and

accumulated interest from

any years with negative returns.

Cap

The cap is set in advance for each policy year and may change from year to year. The cap is the maximum percentage that can be

used to

determine the interest credited in the equity indexed account for that policy year. The initial cap is shown in the policy. In most

states, there

is no maximum or minimum on the cap.

Cap Bailout Rate

This policy has a bailout provision. If the company declared cap for a policy year is less than the cap bailout rate specified at policy

issue,

then the owner may surrender or take a partial withdrawal from the policy during the first 30 days of that policy year with no

company-

imposed surrender charges. During this window, the owner will also have the option of transferring money to the guaranteed

interest

account. The cap bailout rate is shown in the policy.

Indexed Annuities