How the EstateShield™10 Fixed Index Annuity Works
The EstateShield 10 (EstateShield 9 in CA) is designed for anyone facing a choice between retirement income and a legacy, or ensuring an income stream that cannot be outlived while securing benefits for those who outlive your retirement.
In addition to the fundamental benefits all American Equity products provide, like principal protection, tax-deferred growth and guaranteed income, the EstateShield 10 has multiple tools for building income reserves, and generating rising income by allocating funds to 8 interest crediting options and one-and two-year crediting strategies that are linked to three different indices.Plus, enhanced death benefits allow beneficiaries a choice in how payments are received.
Allocation Strategies
• Fixed Interest Strategy: A fixed interest rate is set at contract issue and guaranteed for a set period of time.
• Fixed Index Strategy: Interest growth opportunities linked to index performance without being directly invested in stocks or bonds to help keep your money protected.
Indexed Crediting Strategies
• Monthly Point to Point: Interest credits calculated based on monthly changes in the index from point to point in a contract year, and credited annually based on changes in price.
• Annual Point to Point: Each contract anniversary, the index price is compared to the year's previous and credited based on changes in price.
• 2-Year Point to Point: On the contract anniversary at the end of end a two-year term, the index price is compared to the price at the beginning of the term Index Options.
Index Options
Index-linked crediting strategies participate in increases from allocations to a selection of fives indices. As an insurance product, no funds are directly invested in a stock or index. The return will never be less than zero due to a decline in the index.
BlackRock® Adaptive US Equity 5% Index: (Ticker: BAUSE5X) This index is designed to deliver exposure to BlackRock’s iShares® Core S&P 500® ETF, three fixed income U.S. Treasury iShares® ETFs and a cash component, while adaptively rebalancing daily based on macro conditions.
S&P 500®: (Ticker: SPX) Consists of 500 leading U.S. stocks and is a common benchmark of the stock market. The S&P 500 Index is widely regarded as the best single gauge of large-cap U.S. equities.
S&P 500® Dividend Aristocrats® Daily Risk Control 5% Excess Return Index: (Ticker: SPXD5UE) Volatility control index that consists of the S&P 500 members that have consistently increased dividends every year for at least 25-consecutive years. This index crediting strategy is designed to provide added stability by limiting risk exposure and measuring the market performance on a daily basis using the most consistent, dividend-producing companies on the S&P 500 Index. Additionally, the Excess Return is the total return of the risk control index minus a risk-free rate. A security that is perceived to be risk-free may be considered to carry some degree of risk; however, the statistical probability of default is so minute that it is generally/commonly believed to be risk-free. The yield on U.S Treasury securities is considered an example of a risk-free return, such as a three-month Treasury Bill.
Benefits Account Value
To strengthen the retirement income base, generate rising lifetime income payments, and secure guaranteed legacy options, the EstateShield 10 has two built-in features designed to grow the Benefits Account Value (BAV), which is used to calculate lifetime income payments and/or the enhanced death benefit:
• BAV Bonus: All premiums received within the first year of the BAV bonus are applied immediately and credited to the BAV.
• BAV Multiplier: The BAV grows for the life of the contract by multiplying the preceding year’s increases in the contract value by a BAV Multiplier of 150%. Once lifetime income payments begin, the annual income payment amount will increase by an amount equal to the current annual income payment multiplied by the BAV Multiplier.
Lifetime Income Benefit Rider with Wellbeing Benefit
A Lifetime Income Benefit Rider with Wellbeing Benefits is available at no fee. This allows for enhanced income payments by up to 150% to 200%, for up to five years, if the contract owner becomes unable to perform two of six activities of daily living.Lifetime income payments can begin after a minimum of a 10-year accumulation period. There are no limitations on how long money can grow as long as the contract is active.
Enhanced Death Benefit Options
EstateShield 10 enhanced death benefit options are available at no fee. The enhanced death benefit can be used in place of the base death benefit, and provides beneficiaries the ability to choose their benefit payment:
Lump sum: The BAV amount on the date of death is applied as a 75% payout percentage, and distributed in one payment.
Multiple payments: The BAV amount on the date of death is applied as a 100% payout percentage, and distributed in a series of equal payments over five years.
Rates are set at issue and are subject to change.
Benefits Account Value is only used to calculate income payments and/or the enhanced death benefit amount. It is not part of the underlying Contract Value and is not available for partial withdrawal or in a lump sum.
The BlackRock® Adaptive U.S. Equity 5% (the “Index”) is a product of BlackRock Index Services, LLC and has been licensed for use by American Equity Investment Life Insurance Company (“American Equity”) as a component of EstateShield 10 (the “Product”). BlackRock®, [Index]™ and the corresponding logos are registered and unregistered trademarks of BlackRock. The Product is not sponsored, endorsed, sold or promoted by BlackRock Index Services, LLC, BlackRock, Inc., or any of its affiliates or any of their respective third party licensors (including the Index calculation agent, as applicable) (collectively, “BlackRock”). BlackRock has no obligation or liability in connection with the administration or marketing of Product. BlackRock makes no representation or warranty, express or implied, to the owners of the Product or any member of the public regarding the advisability of investing the Product or the ability of the Index to track general market performance. BlackRock does not guarantee the adequacy, accuracy, timeliness, and/or completeness of the Index or any data or communication related thereto nor does it have any liability for any errors, omissions or interruptions of the Index.
The S&P 500® and/or Dow Jones®" is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by American Equity Investment Life Insurance Company (“AEL”). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). These trademarks have been licensed to SPDJI and sublicensed for certain purposes by AEL. AEL's products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and such parties make no representations regarding the advisability of investing in such product(s) and have no liability for any errors, omissions, or interruptions of the S&P and/or Dow Jones.
This material is for informational purposes only, and is not a recommendation to buy, sell, hold or rollover any asset. It does not take into account the specific financial circumstances, investment objectives, risk tolerance, or need of any specific person. In providing this information American Equity Investment Life Insurance Company is not acting as your fiduciary as defined by the Department of Labor. American Equity does not offer legal, investment or tax advice or make recommendations regarding insurance or investment products. Please consult a qualified professional.