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Annuities 101
For Producer Use Only — Not for Dissemination to the Public.
For producer use only. Not for dissemination to the public.
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Agenda
 What is an annuity?
 Types of annuities
 How do I identify a prospect?
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | NOT FDIC/NCUA/NCUSIF INSURED | MAY LOSE VALUE | NOT A DEPOSIT | NO BANK OR CREDIT UNION GUARANTEE
For producer use only. Not for dissemination to the public.
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What is an Annuity?
Annuity
A contract between you and an insurance company, under which you
make a lump-sum payment or series of payments. In return, the
insurer agrees to make periodic payments to you beginning
immediately or at some future date.
For producer use only. Not for dissemination to the public.
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The “Who” and “What”
■ Contract between
● Insurance company
● Contract owner (your client)
■ Insurance company
● Accepts the client’s premium
● Issues an annuity contract to the contract owner
● Credits interest per the terms of contract
■ Until the contract owner
● Surrenders the contract or dies
● Withdraws all funds
● Converts into a stream of payments
For producer use only. Not for dissemination to the public.
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Why purchase an annuity?
■
■
■
■
Higher interest rate than other options
Tax deferred accumulation of assets
Pay no taxes until you withdraw the money
Ability to create a guaranteed income stream
For producer use only. Not for dissemination to the public.
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Types of Annuities
■ Deferred
● Accumulate money
● Defer paying taxes
● Years in future, may create income stream
■ Immediate Income
● Create income stream now
For producer use only. Not for dissemination to the public.
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Phases of a Deferred Annuity
Accumulation
Phase
Payout Phase
Deferred Annuity
For producer use only. Not for dissemination to the public.
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Accumulation Phase
Fixed Index:
Interest based
on performance
of an index or
indices
Traditional
Fixed: Pays
declared
interest rate
Variable: Owner
selects subaccounts, interest
based on account
performance.
Funds are paid
into the contract
by the owner
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Payout Phase
Payments can
be distributed
for annuitant’s
lifetime
Payments can
be distributed
over a period
of time
For producer use only. Not for dissemination to the public.
Longer of
Annuitant’s
Life or
Certain Period
Deferred
Annuity
Payment can be
based on
lifetime benefits
rider
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Common Features:
Traditional Fixed and Index
 Minimum guaranteed interest rate
 No contract fees or product charges (other than surrender
charges for early withdrawal)
 Maximum premium without company approval: $1,000,000.
 Issue Ages 0 – 90
 Minimum Guaranteed Withdrawal Value
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Common Features:
Traditional Fixed and Index (cont’d)
 Single premium and periodic flex payment options
 Fixed and indexed account choices
 Declining withdrawal charges over 3 - 14 years,
sometimes longer
 Partial withdrawals (usually 10% per year) without charges
 Market Value Adjustment
 Death benefits that waive all charges
For producer use only. Not for dissemination to the public.
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Fixed Annuities Have…
STYLE
Safety
S
Tax Deferral
T
Yield
Y
Liquidity
L
Estate Planning
E
For producer use only. Not for dissemination to the public.
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Immediate Income Annuity
Payments based on
age and interest
Rate at the time of
issue.
Converts a lump-sum
into guaranteed
stream of income
payments
Guaranteed for a
certain period of
time or for the lifetime of the owner.
Payments don’t
fluctuate,
regardless of
market changes.
For producer use only. Not for dissemination to the public.
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Identifying Prospects
Traditional
Fixed Annuity
Prospect
Fixed Index
Annuity
Prospect
Savings in CDs, MoneyMarkets, EE Series Bonds or
Traditional Fixed Annuities
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
Prefers to avoid taxes on interest growth in the near term.






CHARACTERISTICS OF CLIENT
Is concerned about market risk
Wants protection of their principal
Seeks guarantees, not huge risk takers, want to know
exactly how their money will grow and what they can
access when they take withdrawals.
Wants to try to improve on traditional fixed rates, looking
to have a higher return and more opportunity for
market growth.
Needs guaranteed income stream and has assets to
convert.
For producer use only. Not for dissemination to the public.
Income
Annuity
Prospect


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Uses Of Annuities
 Accumulate $$
 Create supplemental income
 Long term care expenses
 Estate planning
 Tax deferred CD alternative
 Emphasize the insurance features of annuities:
• death benefit
• lifetime income options
For producer use only. Not for dissemination to the public.
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Do You Recognize This Client?
■ 64 year old widower
■ No market experience
■ Looking for safe vehicle to place funds
received from deceased wife’s life
insurance
■ Wants these funds for his children
■ Doesn’t want a long-term commitment
■ Accustomed to CDs
Solution: Traditional Deferred Annuity
For producer use only. Not for dissemination to the public.
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Do You Recognize This Client?
■ 68 year old woman, retired
■ Moderate investment portfolio with
dominant amount of equity investments
■ Not in need of immediate income
■ Looking for diversification
■ Wants principal protection
Solution: Index Annuity
For producer use only. Not for dissemination to the public.
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Do You Recognize This Client?
■ 70 year old husband and
his 68 year old wife, retired
■ Current life insurance
owner
■ Accumulated Assets
■ Need more Income
Solution: Income Annuity
For producer use only. Not for dissemination to the public.
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How to Start
the Annuity Conversation
■ Beneficiary reviews
■ Prospecting letter
■ Client Appreciation events
For producer use only. Not for dissemination to the public.
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Fixed Annuity Products
Traditional Fixed Annuities:
Group Annuities:

AG HorizonPlus (bonus)
AG Immediate Annuity

AG HorizonAchieverSM
AG Gold Income Annuity

AG HorizonMYG® (bonus)
AG Group Flex Fixed Annuity
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AG HorizonSelect®
AG Group Flex Global Index Annuity

AG HorizonSecure

AG HorizonFlex® (bonus)
Fixed Index Annuities:

AG VisionMaximizer® (bonus)

AG VisionAdvantage®

AG HorizonIndex® (bonus)

AG Global Index® Annuity Series
Income or Immediate Annuities:

AG Platinum Income Annuity®
For producer use only. Not for dissemination to the public.
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New York Fixed Annuity Products
Traditional Fixed Annuities:


AG HorizonEmpireSecure®
AG HorizonFlex®
Fixed Index Annuities :


AG Global 6 Index® Annuity
AG Global 8 Index® Annuity
Income or Immediate Annuities:

AG Platinum Income Annuity®
Group Annuities:


AG Immediate Annuity
AG Gold Income Annuity
For producer use only. Not for dissemination to the public.
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Q&A
Thank You !
American General Annuity Marketing
888.438.6933, option 3
For Group Annuities Contact
800.538.6381
For producer use only. Not for dissemination to the public.
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Important Information About
Selling Index Products
Although index annuity products are considered to be fixed deferred annuities and
feature all the benefits that fixed products have to offer, it’s important that agents
properly position these products when selling them to clients. Index annuities are
currently exempt from federal and state securities registration requirements, and it’s
important to understand that the way in which a product is marketed can directly impact
the determination of whether it is considered to be a security. Therefore, all producers
should be aware of the following guidelines for marketing index annuity products.
 Index products should be properly positioned as an alternative to other fixed
deferred annuities
 They should not be marketed as a substitute for equity investments (such as
mutual funds)
 The marketing and sales process should speak to the guaranteed features of the
product without overemphasizing the possibility of high market-linked interest
credits or the aspect of linkage to equities
 The overall focus of any marketing, including any sales presentations, should be
the long-term retirement aspects, such as minimum guaranteed surrender values,
annuity payout options and the safety and stability of insurance products in
general.
For producer use only. Not for dissemination to the public.
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Disclaimers
Annuities issued by: American General Life Insurance Company (AGL) 2727-A Allen Parkway, Houston, Texas 77019 and The United States
Life Insurance Company in the City of New York (US Life), One World Financial Center, 200 Liberty St., New York, New York 10281. AG
Horizon Plus Annuity Form Number 040362, AG HorizonFlex Contract Number 04371, 04371N (New York), AG HorizonSecure Contract Number
05376, AG HorizonSelect Contract Number 05377, AG Global Bonus Index Contract Number 07109, AG Global 6 and Global 8 Index Contract
Number 07371 or 07371N (New York), AG Vision Advantage Contract Number 06401, AG VisionMaximizer Contract Number 05490, AG
HorizonIndex 04367.Extended Care Rider Form Number (if applicable) 04049, 03049, 03049N (New York). The underwriting risks, financial and
contractual obligations and support functions associated with products issued by AGL and US Life are the insurers own responsibility. AGL does
not solicit business in the state of New York. Annuities and riders are not available in all states. State variations may apply contracts forms and
applications and riders not available in all states.
Group Annuities issued by: American General Life Insurance Company of Delaware(AGLDE)-405 King Street, 4th Floor Wilmington, Delaware
19801 and the American General Life Assurance Company of New York (AI Life)- 70 Pine Street, NY, NY 10005.American General Immediate
Annuity Form Numbers 11EGAN403, 16EIAN0403, 21EGAN403, 24EGAN403; American General Gold Income Annuity Form Numbers
11EGAN699, 16EGAN699, 21EGAN200, 26EGAN200; American General Delayed Income Annuity 11LGVG020,16LGVINR0108, 16LGVIR0108,
16LGV0108; AG Group Flex Fixed Annuity Form Numbers 08110,08111, 08115,08116,08117,08118, 08114, 08111,04049C and 04049P and the
American General Group Flex Global Index Annuity Form Numbers 08113,08114, 08115,08116,08117,08118, 08114, 08111,04049C and 04049P
The underwriting risks, financial and contractual obligations and support functions associated with products issued by AGLDE and AILife are the
insurers own responsibility. AGLDE does not solicit business in the state of New York. Annuities and riders are not available in all states. State
variations may apply contracts forms and applications and riders not available in all states.
The information presented is general industry information and does not specifically describe any of our products; it is meant to be purely
educational.
American General Life Companies, www.americangeneral.com, is the marketing name for a group of affiliated domestic life insurers including AGL
and US Life.
Withdrawals may be subject to Federal and/or State income taxes. A 10% Federal penalty tax may apply if you make withdrawals or surrender your
annuity before age 59-1/2. Beginning January 1, 2013, annuity income may be subject to an additional tax of 3.8% under specific factual situations.
Consult your tax advisor regarding your specific situation.
Important: Prior to soliciting business, be certain that you are appropriately licensed and appointed with the insurer and that the product has been
approved for sale by the insurer in that state. If uncertain, contact your American General Life Companies representative for assistance.
© 2012 All rights reserved.
AGLC103650 REV04/12
For producer use only. Not for dissemination to the public.
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