What is an Interest Builder Annuity?
This annuity is a new money flexible premium deferred annuity that allows you to lock in a competitive interest rate and surrender charge schedule for each premium payment made. You can decide when to make premium payments to take advantage of changes in interest rates.
What Makes the Interest Builder Annuity Different than Other Annuities?
Each premium payment has its own credited interest rate declared by the Company. You’ll earn the rate in effect when your premium is received, and are guaranteed1 to receive this rate for 12 months. For each premium payment, each subsequent 12-month period will have its own rate declared by the Company, and this rate will also be guaranteed1 for the 12 following months. The credited interest rate for renewal periods may differ from a new deposit’s credited interest rate for the same time period.
How Can You Receive Income from this Annuity?
Supplemental Income2 – You may receive periodic payments – known as systematic withdrawals – from your annuity to supplement your income after you retire, while your balance continues to accumulate earnings tax-deferred. Withdrawals may be taxed as ordinary income.
Income for the future – Payment options give you flexibility in receiving income for the long term – even for life! The dollar amount of the payment depends on the balance in your contract and the payment option you select. If you die before all guaranteed1 payments are made, any remaining guaranteed amount will be paid to your beneficiaries.
What are some Features of the Interest Builder Annuity?
Flexible premium – You pay a minimum of $500, or at least $25 monthly (if you're on an automatic payment plan (EFT). Future payments can be made when and in the amounts you wish.
Guaranteed interest – The guaranteed1 minimum interest rate you earn is determined when the contract is issued, and will never change.
Access to your money2 – You may withdraw all or part of your annuity’s interest earned without a surrender charge. Money can also be withdrawn without charge, after the first policy year, due to total disability, terminal illness or nursing home confinement for at least three months. In addition, money can be withdrawn without a surrender charge to satisfy an IRS-required minimum distribution, or due to death.
No Fees – There are no annual fees or sales charges, so all of your money works for you immediately.
Tax-deferred growth3 – Your money accumulates interest on a tax-deferred basis, meaning you don’t pay taxes on your earnings until you begin taking withdrawals.4 More of your money earns interest and accumulates faster than in a taxable vehicle.
Financial protection for others – If you die before your annuity payout begins, your beneficiaries will receive the accumulated value of the annuity. Death proceeds are paid directly to your beneficiaries, so there should be fewer costs and delays in receiving the proceeds. Funds received may be subject to income tax.
What is the Surrender Charge?
Each premium payment has a six-year surrender charge period, which begins when the premium is paid. If you surrender your contract, the charge is a percentage of the premium payment only.
Year: 1 2 3 4 5 6 7+
Charge: 7% 6% 5% 4% 3% 2% 0
1The guarantees expressed in this brochure are based on the claims-paying ability of Farm Bureau Life Insurance Company.
2Withdrawals may be subject to penalties and fees, and will reduce the accumulated value and death benefit of the annuity. An IRS tax penalty may apply to withdrawals prior to age 59½.
3If you fund your qualified plan with the Interest Builder Annuity, the tax-deferral feature of this annuity is not necessary because a qualified plan already offers this feature. However, the guaranteed income payment options and death benefit available through the Interest Builder Annuity may enhance your qualified plan. Neither the Company nor its agents give tax, accounting or legal advice. Consult your professional advisers in these areas.
4Assuming appropriate ownership of the annuity.