TaxVantage® MYGA
Underwritten by Fidelity Security Life Insurance Company®, Kansas City, MO.
Plan Types: Non-Qualified, IRA, or Roth IRA
Issue Age: 18-80 (Owner and Annuitant)
Product Features
Single Premium Deferred Annuity
Single Purchase Payment: $2,500 to $1,000,000
- Higher amounts require prior home office approval
Renewal: Subsequent renewal periods are not limited to initial term elected at time of application. May elect any guarantee period available upon renewal.
Contract Value: The Contract Value is equal to the single premium paid minus any partial withdrawals, applicable surrender penalties and market value adjustments fees*, if any, plus interest credited.
* Market value adjustment fees (MVA) not applicable in AK, MN, MO, and VA.
Rejection Questions
To determine qualification, the client must confirm the following are true:
- I will disclose all required information.
- I have an agent’s recommendation to purchase this annuity.
- I am not living in a nursing home.
- My income covers my living expenses (even medical expenses).
Interest Rates
Current Interest Rate Sheet
Rate changes and timing of those changes will be established by Fidelity Security Life Insurance Company®.
Rate Lock Guidelines
For Cash with Application: The contribution and application must be received in good order by the home office prior to the effective date established for any crediting rate change.
For 1035 Exchanges / qualified transfers: All paperwork (application, transfer forms, replacement forms, etc.) must be received in good order by the home office prior to the effective date of any crediting rate change. Premium must then be received from transferring custodian / account(s) within 60 days after the crediting rate change effective date. Funds received in the home office after the rate lock window expires will receive current crediting rates in effect at time the funds are received.
Term and Surrender Charges
Surrender charges are applied on all withdrawals other than those applicable under riders*, if selected. See Special Benefit Riders below.
* Surrender Charge does not apply to the following Riders, if selected:
IRC Section 72t Withdrawal: R-03034
IRC Section 72q Withdrawal: R-03035
Death Benefit: R-03036
Required Minimum Distribution Withdrawal: R-03037
Accumulated Interest Withdrawal: R-03038
10% Free Partial Surrender: R-03039
Terminal Medical Condition / Nursing Home: R-03040
Terms available: 3-year, 5-year, or 7-year †. State variations may occur. See specific state where application is taken for details.
† 7-year term not available in CT, ID, MN, and NV.
Surrender Schedules
Review disclosure form for specific state in which surrender schedule applies. 7-year term not available in CT, ID, MN and NV. State specific schedules apply to: AK, CT, FL, ID, KY, MD, MN, NV and SC.
Standard Schedules
The charts below apply to the following states: AL, AK, AZ, CO, D.C., GA, HI, MA, MI, MS, MT, NH, NM, ND, OH, RI, SD, TX, VT, WI, and WY.
| 3-YEAR TERM SURRENDER CHARGES |
| Number of Complete Contract Years in the Current Contract Guarantee Period |
% Charge |
| 0 |
9% |
| 1 |
8% |
| 2 |
7% |
| 5-YEAR TERM SURRENDER CHARGES |
| Number of Complete Contract Years in the Current Contract Guarantee Period |
% Charge |
| 0 |
9% |
| 1 |
8% |
| 2 |
7% |
| 3 |
6% |
| 4 |
5% |
| 7-YEAR TERM SURRENDER CHARGES |
| Number of Complete Contract Years in the Current Contract Guarantee Period |
% Charge |
| 0 |
9% |
| 1 |
8% |
| 2 |
7% |
| 3 |
6% |
| 4 |
5% |
| 5 |
5% |
| 6 & thereafter |
5% |
Attained Age Surrender Schedule
The following Surrender Charges will apply to 3-Year, 5-Year & 7-Year terms after the owner has reached:
| Attained Age |
% Charge |
| 90-93 |
5% |
| 94 |
4% |
| 95 |
3% |
| 96 |
2% |
| 97 |
1% |
| 98-100 |
0 |
Alternate Schedules
The charts below apply to the following states: AR, IL, IA, KS, MO, NE, NC, OK, TN, VA, and WV.
| 3-YEAR TERM SURRENDER CHARGES |
| Number of Contract Years in the Current Contract Guarantee Period |
% Charge |
| 1 |
9% |
| 2 |
8% |
| 3 |
7% |
| 5-YEAR TERM SURRENDER CHARGES |
| Number of Contract Years in the Current Contract Guarantee Period |
% Charge |
| 1 |
9% |
| 2 |
8% |
| 3 |
7% |
| 4 |
6% |
| 5 |
5% |
| 7-YEAR TERM SURRENDER CHARGES |
| Number of Contract Years in the Current Contract Guarantee Period |
% Charge |
| 1 |
9% |
| 2 |
8% |
| 3 |
7% |
| 4 |
6% |
| 5 |
5% |
| 6 |
5% |
| 7 |
5% |
Attained Age Surrender Schedule
The following Surrender Charges will apply to 3-Year, 5-Year & 7-Year terms after the owner has reached:
| Attained Age |
% Charge |
| 90-93 |
5% |
| 94 |
4% |
| 95 |
3% |
| 96 |
2% |
| 97 |
1% |
| 98-100 |
0 |
State Specific Schedules
State specific schedules apply to: AK, CT, FL, ID, KY, MD, MN, NV, and SC.
End of Guarantee Period
During the 30 days preceding the end of the Guarantee Period, the Owner may elect one of the following options:
- Continue the Contract for another Guarantee Period; the new Guarantee Period may be any Guarantee Period currently being offered by the Company. A new contract will be issued and mailed for the newly elected period.
- Apply the Contract Value to an Annuitization Option
- Take a partial withdrawal with no surrender charges and apply the remaining balance to another Guarantee Period
- Surrender the Contract with no surrender charges
- If the Owner does not elect any of the above options, the Contract will automatically continue for another Guarantee Period of the same duration as the expiring Guarantee Period.
Market Value Adjustment
A Market Value Adjustment (MVA) is an adjustment during the surrender period that protects the company from losses that occur when early surrenders, (withdrawals) are taken. This allows the company to offer a higher crediting rate. The MVA only applies to withdrawals above any penalty-free withdrawal amount. MVAs depend on the changes in the external index between the start of the surrender period and the end of the surrender period. MVAs decrease the surrender value when interest rates rise and raise the surrender value when they fall/drop. It isn’t always possible to receive a positive MVA. The MVA will not reduce below the minimum surrender value.
The MVA is calculated by multiplying the amount of a withdrawal that is above the available penalty-free withdrawal amount before any surrender charges.
There is no MVA in the event of the annuitant’s death.
MVA is included in all states except AK, MN, MO, and VA.
How MVA is calculated
MVA = [( A + 1 ) / (1 + B )] N/12
“A” is the Constant Maturity Treasury Rate (CMT) Rate published by the Federal Reserve, with maturity equal to the number of years in the Guarantee Period, rounded up to the nearest year for which a rate is available, as of the Business Day prior to the beginning of the current Guarantee Period less 0.25%.
“B” is the CMT Rate published by the Federal Reserve, with maturity equal to the number of years remaining in the Guarantee Period, rounded up to the nearest year for which a rate is available, as of the Business Day prior to the calculation of the MVA.
“N” is number of complete months from the date of full or partial surrender to the end of the current Guarantee Period.
The MVA can cause an increase or a decrease in the Cash Surrender Value, but will never cause the Cash Surrender Value to be less than the Minimum Guaranteed Surrender Value which is:
- 87.5% of the single purchase payment
- Less any partial surrenders
- Less any applicable premium taxes or other applicable taxes deducted from the Contract
- Plus accumulated Minimum Guaranteed Interest
Following is a hypothetical example for an annuity policy with an MVA, assuming:
- 5-year MYGA
- $20,000 surrender immediately after 2nd anniversary
- Surrender Charge Schedule for year 3: 7.0%
- 5-year Treasury rate on issue date: 4.75%
- Contractual adjustment of treasury rate: 0.25%
Scenario A – Rates Increase
- Surrender charge = $1,400 ($20,000 * 7.0%)
- 3-year Treasury as of withdrawal: 5.00%
- MVA = [(1.0475-.0025)/(1.05)]^3 = .9858
- Cash Surrender Value = $18,335.55 ([$20,000 - $1,400] * .9858)
Scenario B – Rates Decrease
- Surrender charge = $1,400 ($20,000 * 7.0%)
- 3-year Treasury as of withdrawal: 4.00%
- MVA = [(1.048-.0025)/(1.04)]^3 = 1.0145
- Cash Surrender Value = $18,869.56 ([$20,000 - $1,400] * 1.0145)
Special Benefit Riders
The MYGA is customizable with Special Benefit Riders. The base product has highest credited rate. Addition of Special Benefit Riders will reduce the Guarantee Period crediting rate.
10% Free Partial Surrender (R-03039)
- The Company will waive any Surrender Charge for one partial surrender made on or after the beginning of the first full Contract Year, and for one partial surrender made each Contract Year thereafter where each partial surrender is equal to or less than 10% of the Contract Value at the time of the partial surrender, subject to the Minimum Partial Surrender and the Minimum Contract Value After Partial Surrender as shown in the Contract Schedule.
- Rate Reduction if selected: 0.15%
Terminal Medical Condition / Nursing Home (R-03040)
- Terminal Medical Condition: The Company will waive any Surrender Charge for a full or partial surrender of the Contract if on or after the first Contract Anniversary the Owner is diagnosed by a Physician with a Terminal Medical Condition. The Owner must provide a written statement signed by a Physician which provides the Physician’s diagnosis of the Owner’s Terminal Medical Condition and states that, with reasonable medical certainty, the Owner is diagnosed with a Terminal Medical Condition which will result in death within 9 months or less from the date the statement is signed. The Company reserves the right to require a second opinion at the Company’s expense from a Physician of the Company’s choice.
- Nursing Home: The Company will waive any Surrender Charge for a full or partial surrender of the Contract if on or after the first Contract Anniversary the Owner is hospitalized or confined to a Nursing Home for at least 90 consecutive days. The Owner must provide a written statement signed by a Physician which certifies the Owner has been continuously confined for at least 90 consecutive days.
- MVA is not waived for this option.
- Rate Reduction if selected: 0.15%
Death Benefit (R-03036)
- In the event of the death of the Owner during the Accumulation Period, the Beneficiary may elect any of the options shown in the Contract or a lump sum payment of the Contract Value. If a lump sum payment is requested, the amount will be paid within seven days of receipt of proof of death and the election, unless the Deferral of Payments from the Contract provision is in effect.
- If this feature is not selected, a lump sum payment is not available.
- Rate Reduction if selected: 0.30%
IRC Section 72t Withdrawal (R-03034)(IRA & Roth IRA) / IRC Section 72q Withdrawal (R-03035)(Non-Qualified)
- The Company will waive any Surrender Charge for an Owner underage 59½ if the withdrawal is taken in compliance with Internal Revenue Code (IRC) §72(t) or §72(q) for substantially equal periodic payments requirements.
- Rate Reduction if selected: 0.05%
Accumulated Interest Withdrawal (R-03038)
- During the Surrender Charge period, the accumulated interest may be withdrawn without any withdrawal charges or MVA being applied. The withdrawal amount must be $100 or greater.
- Rate Reduction if selected: 0.08%
Required Minimum Distribution Withdrawal (R-03037)(IRA Only)
- If a Required Minimum Distribution (RMD) is withdrawn from the Contract, the Company will waive any Surrender Charge for such withdrawal up to the amount of the Required Minimum Distribution (RMD), as calculated under the Internal Revenue Code (IRC).
- Rate Reduction if selected: 0.15%
Frequently Asked Questions
What plans are available in the FSL MYGA annuity?
IRA, Roth IRA and Non-Qualified plans are available with 3-year, 5-year or 7-year terms.
- Plans available in all states except CA, DE, NJ, NY, OR, PA and WA.
- 7-year term not available in CT, ID, MN and NV
What are the issue ages?
Ages 18-80
Is there a minimum contribution to establish an FSL MYGA?
Yes, $2,500
Does FSL MYGA allow penalty free early withdrawals?
Yes, with selection of one of the following riders:
- 10% Free Partial Surrender Rider R-03039, Fee - 0.15%
- Accumulated Interest Withdrawal R-03038, Fee - 0.08%
- Required minimum Distribution R-03037, Fee - 0.15%
* Minimum withdrawal $500; minimum account balance after partial withdrawal $2,500
Once the term period has expired, what are the client’s options?
The client will receive notification of a 30-day window in which they can: 1) renew at any of the terms available at the then-offered current interest rate(s); or 2) exercise a partial surrender of the contract and renew the remaining account balance at the then-offered current interest rate(s); or 3) fully surrender the contract without any surrender charges.
Are collateral assignments allowed?
Yes, but only non-qualified annuities may be used as collateral for a loan. Please advise your client to consult with a tax advisor.
Will FSL MYGA issue a non-qualified annuity to another party other than the annuitant?
Yes, however, the annuitant must be a natural person. If a trust is the owner, a copy of the front page and signature page of the trust is required.
When does crediting of interest begin?
Crediting of interest commences upon the effective date of the contract after the money is received.
How long is the “free look” period?
FSL annuities have a free look period of thirty (30) days.
Are there any hidden costs or fees?
There are no hidden costs or fees assessed against account owners.
- All initial premium is contributed to the account with no fee taken out
- The liquidity riders selected pre-contract issue will reduce the crediting rate. See liquidity riders below:
- IRC Section 72t Withdrawal
- IRC Section 72q Withdrawal
- Required Minimum Distribution Withdrawal
- Accumulated Interest Withdrawal
- 10% Free Partial Surrender
- Terminal Medical Condition / Nursing Home
What annuitization options does FSL’s MYGA Annuity offer?
- Life Annuity: A monthly income payable during the lifetime of the Annuitant and terminating with the last payment preceding the Annuitant’s death.
- Life Annuity with a Guaranteed Period: A monthly income payable during the lifetime of the Annuitant with the guarantee that if, at the death of the Annuitant, payments have been made for less than a stated certain period, which may be 5, 10, 15 or 20 years, as elected, but not greater than the Annuitant’s life expectancy, the monthly income will be continued during the remainder of the elected period.
- Survivorship Annuity: A monthly income payable during the joint lifetime of the Annuitant and another named individual and thereafter during the lifetime of the survivor, ceasing with the last income payment due prior to the death of the survivor.
- Option 4: Any other option that is mutually agreed upon between the Owner and the Company will be available.
Where do I send the application and initial premium?
Fidelity Security Life Insurance Company
Attention: Annuity New Business
3130 Broadway
Kansas City, MO 64111-2406
P.O. Box 418131
Kansas City, MO 64141-8131
How often are account statements provided to customers?
FSL mails to annuity policyholders annual account statements after each policy anniversary.
As the producer (agent), when will I be paid a commission?
FSL MYGA pays commission weekly.
Application No. A-01266
Contract Form No. M-2024
Endorsement No. R-03034, R-03035, R-03036, R-03037, R-03038, R-03039, R-03040, R-03041, R-03042
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