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The Inside Track on Income-Rider Fee Structures

For income-rider shoppers, the primary focus is often the guaranteed income amount – comprised of the rollup rate and payout percentages.

But there's another important component which impacts the annuity's Accumulation Value – the income rider fee percentage, and how it's calculated.

Income rider fees are calculated on either the annuity's Accumulation Value or Benefit Base. For those calculated on the Benefit Base, the fee percentage is typically lower.

And everyone likes a lower annual fee percentage.

But which IBR-fee format wins?
• a 1% annual fee on the faster-growing Benefit Base...
• or 1.25% on the steadier Accumulation Value?

Example
$100,000 Index Annuity Premium, Accumulation Value Growth Rate of 2.0% and Rider Benefit-Base Growth: 7%, Plus 7% Bonus

After 10 years

Total Fee Paid Based on 1.25% of Accumulation Value

$13,174

Total Fee Paid Based on 1.00% of Benefit Base:

$15,063

Accumulation Value-Based Fee Advantage:

$1,888


Conclusion:The Account-Value Tortoise Wins!
• The total fee cost of 1.25% based on the steadier Accumulation Value
   growth is less than the total fee cost of 1.00% based on the faster-growing
   Benefit Base.
• In this example, a 1.25% rider fee based on the Accumulation Value equals a
  0.88% rider fee based on the Benefit Base.

Annual fees for ALL EquiTrust income riders are based on
Accumulation Value.


Income MarcSeven Index Annuity
• Highly competitive flex-premium deferred annuity
• Income rider for guaranteed lifetime income
7% Benefit Base bonus, 7% rollup compounded for up to 7 years
• Chronic illness doubler
• Competitive income-withdrawal percentages
• 40-80 applicant ages
• Multi-asset and stock indices

Income MarcSeven Sales Resources
Agent Guide
Client Brochure
Dynamo Strategy Index Client Brochure
Illustrations
State Variations
App Builder
E-Applications

EquiTrust does not offer investment advice to any individual or agent and this material should not be construed as investment advice.
FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
 
 

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