Solving the distribution dilemma
Ensuring additional income
Some of the challenges of those retiring today include increased longevity, which means it’s difficult to know how long your retirement savings will last. The Lifetime Income Rider eliminates this concern by providing income for life.
Even with planning, care in a nursing home can take a toll on one’s assets. The Lifetime Income Rider will increase the lifetime income amount by 50 percent if you become confined in a eligible nursing home. Specific qualifications for this increased benefit are detailed in the contract and this benefit is not available in all states.
With the flexibility of the Lifetime Income Rider you may either choose an individual or joint (includes your spouse) lifetime income option. Both options are based on attained age and provide guaranteed payout percentages while still allowing you to maintain control. You can stop and start income payments as you wish, as many times as you wish.
Lifetime Income Percentages Lifetime Income Start Age*
Single Lifetime Income Option
Joint Lifetime Income Option
50-54
3.0%
2.5%
55-59
3.5%
3.0%
60-64
4.0%
3.5%
65-69
4.5%
4.0%
70-74
5.0%
4.5%
75-79
5.5%
5.0%
80-84
6.0%
5.5%
85-89
6.5%
6.0%
90 above
7.0%
6.5%
*The age of the annuitant when lifetime income begins (or spouse if younger for a joint lifetime income option).
With Lifetime Income Rider n You can help the assets you accumulated provide the retirement income you need.
n You are able to maintain the flexibility and control of your deferred annuity contract even after you start receiving income.
n You can grow your retirement savings with a competitive fixed interest rate.
n You can protect the value of your savings during market turmoil.
n You can increase your retirement income to help cover the additional cost of a nursing home.
Kansas City Life – serving policyholders since 1895 A promise of financial security is only as good as the company that makes it. When Kansas City Life makes a promise, we stand behind it. Since 1895, we have assisted policyholders through world wars, the Great Depression and various periods of recession and inflation. Kansas City Life’s reputation is built on integrity, sound investment strategies and honest business practices. To us, integrity is not an outdated notion in today’s fast-paced world. It is the guiding force behind every decision we make. Every product we sell is backed by more than a century of quality services and financial security. The coverage described is for the Lifetime Income Rider offered by Kansas City Life Insurance Company (Home Office: Kansas City, Mo.). Coverage may not be available in all states. Rider form R222. Form number may differ by state.
Security Assured.
TM
Lifetime Income Rider Put your annuity
3520 Broadway Kansas City, MO 64111 816-753-7299 www.kclife.com 6781
K a n s a s C i t y L i f e I n s u r a n c e C o m pa n y
on the right path 5.12S
We’re all looking for a way to balance our retirement protection goals while still seeking enough accumulation to last a lifetime. That has become a far more complicated task than it was 30 years ago. These days, you need a lot of flexibility to handle what could be a long retirement – maybe even longer than your working years. Kansas City Life Insurance Company is offering you a solution with the Lifetime Income Rider for many of the challenges faced with retirement. Lifetime Income Rider • Allows you a guaranteed amount available from your fixed annuity when you need retirement income. • Helps you create the guaranteed income you want for retirement while avoiding market turbulence. • Offers the flexibility to increase your lifetime income for nursing home confinement*. • If Required Minimum Distributions (RMD) from a tax-qualified Lifetime Income Rider policy exceed your Lifetime Income Amount, the RMD could be paid without reducing future income from the rider. The benefits of the Lifetime Income Rider are added to all of the features of a deferred annuity so you have the flexibility to handle retirement in the way you planned.
Are your assets on a path that matches your future needs? A fixed annuity can offer you the ability to receive a lifetime income stream with guaranteed payments you cannot outlive. With the Kansas City Life optional Lifetime Income *Nursing Home Confinement Enhancement is not available in California, Connecticut, Florida and Maryland.
Rider, you will gain lifetime income protection throughout your retirement years and the potential to increase your lifetime income if confined to an eligible nursing home. Upon choosing the Lifetime Income Rider, you’ll receive a 7.2-percent annual bonus on the amount used to determine your income by deferring any withdrawals during the first 10 years of your contract. This amount – known as the Guaranteed Withdrawal Balance (GWB) – is not available as a lump sum withdrawal amount nor is it a death benefit. You can choose to continue deferring withdrawals at the end of 10 years. The bonus percentage is guaranteed to be at least 4 percent for years 11-20. The longer you wait to take withdrawals, the higher your guaranteed payout. GWB with $100,000 Initial Premium 7.2% Guaranteed Bonus for the First 10 Rider Years
Contract Years
Guaranteed Withdrawal Balance*
1
$107,200
2
$114,918
3
$123,193
4
$132,062
5
$141,571
6
$151,764
7
$162,691
8
$174,405
9
$186,962
10
$200,423
*The GWB accumulates regardless of interest credited. Hypothetical example assumes no withdrawals.
This hypothetical case study for Kansas City Life’s Lifetime Income Rider (LIR) show how clients who are seeking guaranteed lifetime income from a fixed annuity can also take advantage of the LIR bonus for deferring withdrawals. Larry is able to make a single deposit of $100,000 into a GrowthTrack fixed annuity. He defers withdrawals for 10 years in order to grow his Larry contract value. Because Larry 55 years old is able to delay withdrawals for those 10 years, the bonus is a guaranteed 7.2 percent that is credited to the contract’s Guaranteed Withdrawal Balance* (GWB) which determines his future lifetime income. The GWB will grow to $200,423 and based on an assumed crediting rate of 1.75 percent**, Larry’s contract value will be $114,098 at the end of 10 years. At age 65, Larry starts receiving his Lifetime Income Amount (LIA) equal to 4.5 percent of the GWB or $9,019. Then, at age 72, Larry is confined to an eligible nursing home. Because of the Nursing Home Confinement Enhancement*** of the LIR, the lifetime income available from the LIR increases to $13,528 – a 50 percent increase from what was received prior to the nursing home confinement.
*The Guaranteed Withdrawal Balance (GWB) is not available as a lump sum withdrawal amount nor is it a death benefit. ** Current interest crediting rates are subject to change. ***The Nursing Home Confinement Enhancement is not available in California, Connecticut, Florida and Maryland.
This hypothetical story shows how a consumer like Pam can create a customized retirement income solution with a Kansas City Life Single Premium Immediate Annuity to provide an immediate income while also using the Lifetime Income Rider on a fixed annuity to gain growth during the rider’s deferral period. At age 60, Pam has $250,000 to work with in her goal to create a sustainable lifetime income. She likes the 7.2 Pam percent growth of the Lifetime 60 years old Income Rider’s Guaranteed Withdrawal Balance* (GWB) when withdrawals are deferred but she also needs to receive income right away. She also knows she could get maximum income by using a Single Premium Immediate Annuity (SPIA) but still wants to have access to her contract value for emergencies. With her agent’s counsel, Pam decides to use $100,000 to purchase a 10-year specified period SPIA and $150,000 to purchase a GrowthTrack deferred annuity with the Lifetime Income Rider. This will provide lifetime income and flexibility. Pam’s initial annual income from the 10-year specified period SPIA equals $10,770**. After 10 years, Pam’s Lifetime Income Amount (LIA) at age 70 equals $15,032. At age 80, Pam is admitted to a nursing care facility. Because of the Lifetime Income Rider’s Nursing Home Confinement Enhancement**, Pam’s Lifetime Income Amount (LIA) increases to $22,548. The LIA can be stopped and started as needed.
$150,000 into GrowthTrack with LIR $100,000 into a 10-Year specified period SPIA
*The Guaranteed Withdrawal Balance (GWB) is not available as a lump sum withdrawal amount nor is it a death benefit. **Actual SPIA amount is based on an assumed interest crediting rate at time of purchase. Current interest crediting rates are subject to change. ***The Nursing Home Confinement Enhancement is not available in California, Connecticut, Florida and Maryland.