What annuitization options does FSL offer?

Life Annuity
Annuity payable to the Annuitant for as long as he/she lives.

Certain Annuity
Annuity payable for 5 through 20 years certain. Upon death of the Annuitant prior to the end of the certain period, any payments for the balance of such period will be paid to his/her beneficiary.

Certain and Life Annuity
Annuity payable to Annuitant for as long as he/she lives with a guarantee of payments for 5, 10, 15, or 20 years.

Survivorship Annuity
Annuity payable to Annuitant for as long as he/she lives. Upon his/her death, payment will continue at 100%, 75%, or 50% to the contingent (second) Annuitant.

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Can my client roll their current retirement plan into an FSL annuity?

See Chart

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What are the issue ages?

TaxVantage Consolidator®: 18-75 (in Iowa, 18-74)
TaxVantage®: 18-70

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Is there a minimum initial deposit?

Yes, the first deposit must be at least:
$10,000 for the TaxVantage Consolidator®
$5,000 for the TaxVantage® SPDA
$10.00 for the TaxVantage® FPDA

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Does FSL allow penalty free early withdrawals?

The TaxVantage® FPDA allows an owner to withdraw up to ten (10) percent of the account value within the first year and during subsequent years of the contract without incurring surrender charges. However, such withdrawals are subject to Internal Revenue Code restrictions, excise taxes and penalties applicable to qualified plans and regulations governing IRAs, Roth IRAs and Non-Qualified annuities. Further, the right of withdrawal is non-cumulative.

The TaxVantage® SPDA allows an owner to withdraw up to ten (10) percent of the account value after completion of five years of ownership. Ten (10) percent may be withdrawn each subsequent year thereafter. However, such withdrawals are subject to Internal Revenue Code restrictions, excise taxes and penalties applicable to qualified plans and regulations governing IRAs, Roth IRAs and Non-Qualified annuities. Further, the right of withdrawal is non-cumulative.

The TaxVantage Consolidator® does not allow early withdrawals without imposition of surrender charges.

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Under what circumstances will FSL waive surrender charges?

If the annuity is in a qualified plan (e.g., 403(b), 457 or 401(k) plan), there is no surrender charge for distribution upon separation of service and if the annuity is being rolled over to another FSL annuity product.

If the annuity is in a 403(b) plan, then upon attainment of age 59-and-a-half.

If the annuity is in a 403(b) or 457 plan, then upon retirement.

If the annuity is in a 403(b) or 457 plan, there is no surrender charge for Transfer/Rollover to a state defined benefit (pension) plan for the purpose of purchasing additional years of service credit.

If the annuity is in a Traditional IRA there are no surrender charges for Required Minimum Distribution disbursements.

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Does FSL offer annuities for SEP and SIMPLE Plans?

None of FSL's current annuity offerings can be used for SEP and SIMPLE Plans.

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Once the surrender period has expired, does a new surrender period ever begin?

No, upon completion of the surrender period, no new surrender period will ever be imposed for the life of the contract.

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How does first-year crediting rate work?

When money is first deposited into the TaxVantage® FPDA and the TaxVantage Consolidator®, it is guaranteed to receive a fixed rate of interest until the first policy anniversary date, at which time that first deposit may go to a different (portfolio) rate, but will never go below the minimum guaranteed rate.

FSL reserves the right to change its crediting interest rates so that deposits (following the initial deposit) received during the first year of the contract may receive a different crediting rate from the initial deposit crediting rate. This allows FSL to adjust its first-year crediting rate (up or down) depending on economic conditions. At the first policy anniversary date, all first year money will go to a portfolio rate which is never below the minimum guaranteed rate and can also remain the same as the first year crediting rate.

Money deposited into the TaxVantage® SPDA will be credited at the same rate until the first policy anniversary date, at which time the deposit may go to a different crediting rate, but will never go below the minimum guaranteed rate.

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Are collateral assignments allowed?

Yes, but only non-qualified annuities may be used as collateral for a loan. A collateral assignment is when the ownership rights in a contract or account are transferred from one person to another to serve as collateral for a debt. This transfer is usually made with the provision that the ownership rights revert to the original owner when the debt is repaid. Please advise your client to consult with a tax advisor. The form for a collateral assignment is on this website.

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Will FSL issue a non-qualified annuity to another party other than the annuitant?

Yes, FSL will issue a non-qualified annuity to a trust. In every instance the annuitant must be a natural person.

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When does crediting of interest begin?

Crediting of interest commences upon receipt and deposit of premium and interest accrues daily. If money has been received, but the paperwork is not yet in good order, then the premium is deposited into a suspense account and interest is credited at the contract rate.

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How long is the “free look” period?

All FSL annuities have a free look period of thirty (30) days. If the customer decides against owning the account within the free look period, all premium received will be returned in full to the customer without interest credited.

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As the producer (agent), when will I be paid a commission?

FSL pays commission on the 15th of every month. The premium must be received at FSL by the 25th of the prior month to allow time for processing.

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Are there any hidden costs or fees?

There are no hidden costs or fees assessed against account owners.

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Are there any bailout provisions?

There are no bailout provisions on any FSL annuity products.

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Where do I send the application and initial premium deposit?

Fidelity Security Life Insurance Company – Annuity New Business
3130 Broadway
Kansas City, MO 64111-2406

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How often are account statements provided to customers?

FSL mails to annuity policyholders account statements semi-annually, late January and late July each year. Account owners may contact FSL directly by phone to learn their account values. At this juncture, on-line reporting of account values is not available.

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How does the Company Completion Benefit work?

1. The Owner will incur a Disability

   Disability means as the result of an injury or sickness:

   1. during the first 24 months of Disability, the Owner is unable to perform the material and substantial duties of the Owner’s occupation: and
   2. after 24 months of Disability, the Owner is unable to perform the material and substantial duties of any occupation for which the Owner is or becomes qualified by reason of training, education or experience.

   The Owner must be under the care of a physician unless the physician certifies that the Owner does not need the regular care of a physician for such disabling condition. The loss of a professional or occupational license for any reason does not, in itself, constitute a Disability

   Disability Effective Date means the first day on which Disability is determined to exist.

   Normal Retirement Date means the normal date of retirement as specified in any pension, profit sharing, deferred compensation or other retirement plan document applicable to the Owner. If more than one such date is applicable to the Owner, the Normal Retirement Date will be the earliest of such dates.

2. {One year} or {nine months} (depending on jurisdiction) will have elapsed between the Contract’s Issue Date and the Owner’s Disability Effective Date;
3. the Owner will comply in all respects with the requirements for proof of disability;
4. Depending on the jurisdiction
   1. the Owner will have made contributions to the Annuity Contract in the tax year immediately preceding the tax year containing the Owner’s Disability Effective Date; or
   2. prior to the Owner’s Disability Effective Date, contributions will have been made by or on behalf of the Owner for not less than 9 of the 12 months immediately preceding the Owner’s Disability Effective Date
5. the Disability of the Owner will have continued without interruption for not less than 180 consecutive days; and
6. the Owner’s Disability Effective Date will not be beyond the earlier of the Owner’s Normal Retirement Date or age 65.

Exclusions: No benefit will be available under this Endorsement for any disability resulting from:

1. mental or emotional disorders, alcoholism or drugs, unless prescribed by a physician;
2. war or any act of war (declared or undeclared);
3. Participation in a felony, Riot or insurrection. For purposes of this exclusion, “Participation” means to take an active part in common with others; “Riot” means any use or threat to use force or violence or disturbance by three or more persons without authority of law;
4. service in the armed forces or units auxiliary thereto;
5. suicide, attempted suicide or intentionally self-inflicted injury, while sane or insane (in Colorado or Missouri, while sane);
6. aviation, except as a fare-paying passenger on a scheduled commercial flight; or
7. cosmetic surgery, except that cosmetic surgery will not include reconstructive surgery when such service is incidental to the trauma, infection or other diseases of the involved part.

Recurrent Disability: If, following a period of Disability for which benefits were payable, the Owner will resume the Owner’s regular occupation and performs all the important duties thereof for a continuous period of 180 days or more, any subsequent Disability resulting from or contributed to by the same cause or causes will be considered as a new period of Disability and indemnified in accordance with the applicable provisions of this Endorsement, but if said period during which the Owner resumes the Owner’s regular occupation will be less than 180 consecutive days, such subsequent Disability, provided the Contract is in force, will be deemed a continuation of the same Disability and the Company will provide benefits for the intervening months.

Proof of Disability:

1. Form and Nature of Proof: The Owner will provide any and all information required by the Company in order to establish proof of the existence of Disability. The Owner will complete and submit to the Company all reasonable and necessary forms the Company may request to be submitted, including a written certification at the expense of the Owner from a licensed physician, which verifies the existence of Disability and establishes the Disability Effective Date. The Company also reserves the right to require the Owner to be examined by a licensed physician of its choice and at its expense to verify the initial existence of Disability.
2. Notice and Filing of Proof: Written notice of claim must be given to the Company by the Owner within 60 days after the 180-day period of continuous Disability. Thereafter, all of the Company’s requirements for proof of loss must be satisfied within 60 days after receipt by the Owner of the Company’s proof of loss requirements.
3. Proof of Continuing Disability: When, and as often as it may reasonably require during the pendency of a claim hereunder, the Company, at its own expense, will have the right and opportunity to have a licensed physician of its choice examine the Owner whose injury or sickness is the basis of the claim.

BENEFITS

Company Completion Benefits: Subject to the terms and conditions of this Endorsement, the Company will credit the Account as noted in the Individual Accounting section with the Benefit Amount. The Benefit Amount is provided for the exclusive benefit of the Annuitant and the Beneficiary.

Determination of Benefit Amount:

1. Subject to the terms and conditions of this Endorsement, the Company will credit the Account a monthly Benefit Amount, determined in accordance with this Section.
2. The monthly Benefit Amount will be derived by dividing a. by b. where:
   1. is the total amount of contributions made on behalf of the Annuitant under the Contract during the {three taxable years} {36 months} immediately preceding the Owner’s Disability Effective Date, less the total contributions withdrawn by or for the Owner during that period; and
   2. is the number of {years} {months} immediately preceding the Owner’s Disability Effective Date and counting back to the {year} {month} in which the first contribution was made, or {three taxable years} {36 months}, whichever is the lesser.
3. In deriving the monthly Benefit Amount in accordance with the preceding paragraph, the following contributions will be excluded in determining the total contributions made by or on behalf of the Owner:
   1. contributions made for employment service rendered by the Owner prior to the Contract’s Issue Date;
   2. contributions transferred to the Contract from another company’s annuity contract or custodial account; and
   3. {any lump sum.}
4. Notwithstanding anything to the contrary in this Endorsement, if the Company has credited the Account, and the Company subsequently determines that the Owner was not disabled in accordance with the definition of Disability, or was otherwise not entitled to such Benefit Amount for one or more months during which the Benefit Amount was credited, then the Company will deduct from the Account all amounts credited to the Account, including any corresponding interest credited on such amounts, during any and all months in which the Owner was not eligible to receive such benefits.

Failure to Provide Continuing Proof: A monthly Benefit Amount will not be credited by the Company for the Owner under this Endorsement during any such period of time in which the Owner refuses to be examined by a licensed physician when reasonably requested by the Company, or refuses to provide the Company with information which the Company believes is necessary to establish continuing qualification.

INDIVIDUAL ACCOUNTING

Establishment of Accounts: The Company will establish and maintain an Account for each Annuitant. At any point in time, the value of the Account will equal the aggregate monthly Benefit Amounts credited to it, plus interest as described below. The first Benefit Amount credited by the Company for an Annuitant will be credited on or about the first day of that month which follows the month in which the 180-day requirement for establishment of the Owner’s Disability Effective Date is satisfied, and will equal the total of seven monthly Benefit Amounts. Thereafter, the Company will credit Benefit Amounts monthly until the earliest of:

1. the Owner’s Normal Retirement Date;
2. termination of the Owner’s Disability;
3. the Owner’s attainment of age 65;
4. the commencement of annuitization benefit payments; or
5. the Owner’s death.

Distribution: The value of the Account will be applied to the purchase of a life annuity (no period certain) on the first to occur of the Owner’s Normal Retirement Date or attainment of age 65.

The Account is not available until the Owner’s Normal Retirement Date or age 65, whichever occurs first. However, in the event of the Owner’s death prior to the application of the Owner’s Account value under this section to the purchase of a life annuity (no period certain), the Account value will be paid in a single sum to the Beneficiary.

Interest: Interest will be compounded and credited daily at an effective rate equal to that of the Contract to which this Endorsement is attached from the date the Account has been established. The interest rate credited is subject to the Minimum Guaranteed Interest Rate stated in the Contract to which this Endorsement is attached. Interest will continue to be credited to the Account until the Account is no longer maintained by the Company.

TERMINATION

Company’s Right to Terminate Endorsement: The Company reserves the right to terminate this Endorsement at any time by providing at least 30 days prior written notice to the Owner.

No Prejudice to Certain Owners: Notwithstanding the termination of this Endorsement by the Company, this Endorsement will remain in effect for certain Owners in accordance with the following:

1. For an Owner who is currently Disabled and for whom one or more monthly Benefit Amounts have been credited by the Company immediately prior to the effective date of such termination, the Company will continue to credit such amounts until the earliest of:
   1. the Owner’s Normal Retirement Date;
   2. termination of the Owner’s Disability;
   3. the Owner’s attainment of age 65;
   4. the commencement of annuitization benefit payments; or;
   5. the Owner’s death.

   Thereafter, no further Benefit Amounts will be credited under this Endorsement.

2. For an Owner who is not currently Disabled but for whom an Account is maintained by reason of a prior Disability, the Account will continue to be maintained, but the Company will be forever relieved from crediting Benefit Amounts subsequent to termination.

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