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 12 interest crediting options and one-and two-year crediting strategies that are linked to five different indices.Plus, enhanced death benefits allow beneficiaries a choice in how payments are received.
• 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 termIndex 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.
(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.
BofA Destinations Index™:
(Ticker: BOFADST5) Designed in collaboration with Bank of America, this exclusive-to-American Equity volatility control index aims to deliver stability and growth in changing market conditions.
SG Global Sentiment Index:
(Ticker: SGIXSENT) A global excess return index that uses six cross-asset capital market indicators to assess market sentiment and determine whether the market is in a growth, intermediate or shrinking phase. Once the market phase is determined, the index allocates assets across a predetermined global and diverse asset base including ETFs and domestic, European and Asian indices.
Credit Suisse Tech Edge Index:
The excess return index combines four U.S. tech- and biotech-focused ETFs and two fixed income components. It utilizes a cutting-edge target volatility control mechanism, powered by Salt Financial, to identify changing market conditions by using a combination of intraday and end-of-day data.
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 to choose their benefit payment:
Lump sum: The BAV amount on the date of death is applied a 75% payout percentage, and distributed in one payment.
Multiple payments: The BAV amount on the date of death is applied 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 BofA Destinations Index™ (the “Index”) has been created and is owned by BofA Securities, Inc. and its Affiliates (collectively, “BofAS”); the Index has been licensed to American Equity Investment Life Insurance Company (“American Equity”). Neither American Equity nor any fixed index annuity (the “Product”) is sponsored, operated, endorsed, sold or promoted by BofAS. BofAS has not passed on the legality or suitability or appropriateness of, or the accuracy or adequacy of descriptions and disclosures relating to, the Product, nor makes any representation or warranty, express or implied, to the owners of the Product or any member of the public regarding the Product or the advisability of purchasing the Product, particularly the ability of the Index to track performance of any market or strategy. It is the recommendation of BofAS that individuals consult with a financial professional prior to taking an exposure to the Product and/or the Index. BofAS’ only relationship to American Equity is the licensing of certain trademarks and trade names and the Index or components thereof.
The Index has been designed, determined, composed, calculated, maintained and sponsored by BofAS without regard to the Licensee or the Product or its holders. BofAS has no obligation to take the needs of the Licensee or the holders of the Product into consideration in designing, determining, composing, calculating, maintaining or sponsoring the Index or any decision to cease doing so.
BofAS is not responsible for and has not participated in the determination of the timing of, prices of, or quantities of the Product to be issued or in the determination or calculation of the equation by which the Product is to be priced, sold, purchased, or redeemed. BofAS has no obligation or liability in connection with the administration, marketing, or trading of the Product. Obligations to make payments under any Product are solely the obligation of American Equity pursuant to the terms of the contract between American Equity and a purchaser and are not the responsibility of BofAS. The selection of a BofAS index as a crediting option under the Product does not obligate American Equity or BofAS to invest annuity payments in the components of the Index or in other products linked to the Index.
BOFAS DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN AND BOFAS SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, UNAVAILABILITY, OR INTERRUPTIONS THEREIN. BOFAS MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, HOLDERS OF THE PRODUCT OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. BOFAS MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL BOFAS HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL, CONSEQUENTIAL DAMAGES, OR LOST PROFITS, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
“BofAS”, “BofA” and the “BofA Destinations Index” are trademarks of BofA Securities, Inc. or its Affiliates and have been licensed for use by American Equity.
The Credit Suisse Tech Edge Index (“the Index”) and “Credit Suisse” are service marks of Credit Suisse Group AG, Credit Suisse International, or one of their affiliates (collectively, “Credit Suisse”). Credit Suisse has no relationship to American Equity (the “Products Issuer”), other than certain hedging arrangements and the licensing of the Index and its service marks for use in connection with a fixed indexed annuity (the “Products”) offered by the Products Issuer and is not a party to any transaction contemplated hereby.
The rules of the Index may be amended by Credit Suisse International (the “Index Creator”). An amendment to the rules may result from, without limitation, a change to the construction or calculation rules for the Index or from the Index Creator determining that a change to the rules is required or desirable in order to update them or to address an error, omission or ambiguity. No assurance can be given that any such amendment would not affect parties to this document.
The end-of-day value of the Index is published subject to the provisions in the rules of the Index. Neither the Index Creator nor any of its affiliates is obliged to publish any information regarding the index other than as stipulated in the rules of these indices.
While volatility controls may result in less fluctuation in rates of return as compared to indices without volatility controls, they may also reduce the overall rate of return as compared to products not subject to volatility controls.
The Products are not in any way sponsored, endorsed, sold or promoted by Credit Suisse and Credit Suisse does not make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Index, the figure at which the said Index stands at any particular time on any particular day or otherwise, or the advisability of or results to be obtained by using, investing in, or trading the Products. Credit Suisse shall not be liable for the results obtained by using, investing in, or trading the Products. The Index is compiled, maintained and calculated by Credit Suisse. However, Credit Suisse shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and Credit Suisse shall not be under any obligation to advise any person of any error therein.
Credit Suisse has not published or approved this document and accepts no responsibility for its contents or use.
The Index is the exclusive property of and currently sponsored by the Index Creator. The Products are not in any way sponsored, endorsed or promoted by Credit Suisse. Credit Suisse has no obligation to take the needs of any person into consideration in composing, determining or calculating the Index (or causing the Index to be calculated). In addition, Credit Suisse makes no warranty or representation whatsoever, express or implied, as to the results to be obtained from the use of the Index and/or the level at which the Index stands at any particular time on any particular day or otherwise, and Credit Suisse shall not be liable, whether in negligence or otherwise, to any person for any errors or omissions in the Index or in the calculation of the Index or under any obligation to advise any person of any errors or omissions therein. Credit Suisse shall not be liable for the results obtained by using, investing in, or trading the Products.
Tax Disclaimer: CSSU does not provide any tax advice. Any tax statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding any penalties. Any such statement herein was written to support the marketing or promotion of the transaction(s) or matter(s) to which the statement relates. Each taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor. Notwithstanding anything to the contrary herein, each party (and each of their employees, representatives, or other agents) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of any transaction that may described or included within the information contained herein relating to such U.S. tax treatment and U.S. tax structure. For this purpose, the tax treatment of a transaction is the purported or claimed U.S. federal income tax treatment of the transaction, and the tax structure of a transaction is any fact that may be relevant to understanding the purported or claimed U.S. federal income tax treatment of any transaction.
ERISA: You understand that (i) neither CS nor any of its affiliates has or exercises investment discretion with respect to any assets on behalf of any employee benefit plans or individual retirement accounts (collectively, “Plans”) that may be involved with the purchase, holding, or redemption of a security, (ii) CS is not undertaking to provide impartial investment advice or give advice in a fiduciary capacity on behalf of such Plans within the meaning of the U.S. Department of Labor’s final regulation defining “investment advice” for purposes of the Employee Retirement Income Security Act of 1974, as amended and Section 4975 of the Internal Revenue Code of 1986, as amended, and (iii) the information or communication provided herein or otherwise to the Plans or a fiduciary on behalf of any of the Plans is intended to be, and should be construed as, general information, and it does not and will not take into account your legal, regulatory, tax, business, investment, financial, accounting or other needs or priorities with respect to any Plans.
This Product is not sponsored, endorsed, sold or promoted by Salt Financial Indices LLC (“SFI”) or any affiliate of SFI. Neither SFI nor any other party makes any representation or warranty, express or implied, to the owners of this Product or any member of the public regarding the advisability of investing in funds generally or in this Product particularly or the ability of the Index to track general stock market performance. SFI is the licensor of certain trademarks, service marks and trade names of SFI and of the Index which is determined, composed and calculated by SFI without regard to the issuer of this Product or this Product. SFI has no obligation to take the needs of the issuer of this Product or the owners of this Product into consideration in determining, composing or calculating the Index. SFI is not responsible for and has not participated in the determination of the timing of, prices at, or quantities of this Product to be issued or in the determination or calculation of the equation by which this Product is redeemable for cash. Neither SFI nor any other party has any obligation or liability to owners of this Product in connection with the administration, marketing or trading of this Product.
ALTHOUGH SFI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE CALCULATION OF THE INDEXES FROM SOURCES WHICH SFI CONSIDERS RELIABLE, NEITHER SFI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEXES OR ANY DATA INCLUDED THEREIN. NEITHER SFI NOR ANY OTHER PARTY MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, LICENSEE’S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUNDS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED THEREIN INCONNECTION WITH THE RIGHTS LICENSED HEREUNDER OR FOR ANY OTHER USE. NEITHER SFINOR ANY OTHER PARTY MAKES ANY EXPRESS OR IMPLIED WARRANTIES, AND SFIHEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL SFIOR ANY OTHER PARTY HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
The SG Global Sentiment Index (the “Index”) is the exclusive property of SG Americas Securities, LLC (SG Americas Securities, LLC, together with its affiliates, “Société Générale”). Société Générale has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC (“S&P”) to maintain and calculate the Index. “SG Americas Securities, LLC”, “SGAS”, “Société Générale”, “SG”, “Société Générale Indices”, “SGI”, and “SG Global Sentiment Index” (collectively, the “Société Générale Marks”) are trademarks or service marks of Société Générale. Société Générale has licensed use of the Société Générale Marks to American Equity Investment Life Insurance Company (“American Equity”) for use in a fixed indexed annuity offered by American Equity (the “Fixed Indexed Annuity”). Société Générale’s sole contractual relationship with American Equity is to license the Index and the Société Générale Marks to American Equity. None of Société Générale, S&P, or other third party licensor (collectively, the “Index Parties”) to Société Générale is acting, or has been authorized to act, as an agent of American Equity or has in any way sponsored, promoted, solicited, negotiated, endorsed, offered, sold, issued, supported, structured or priced any Fixed Indexed Annuity or provided investment advice to American Equity.
No Index Party has passed on the legality or suitability of, or the accuracy or adequacy of the descriptions and disclosures relating to, the Fixed Indexed Annuity, including those disclosures with respect to the Index. The Index Parties make no representation whatsoever, whether express or implied, as to the advisability of purchasing, selling or holding any product linked to the Index, including the Fixed Indexed Annuity, or the ability of the Index to meet its stated objectives, including meeting its target volatility. The Index Parties have no obligation to, and will not, take the needs of American Equity or any annuitant into consideration in determining, composing or calculating the Index. The selection of the Index as a crediting option under a Fixed Indexed Annuity does not obligate American Equity or Société Générale to invest annuity payments in the components of the Index.
THE INDEX PARTIES MAKE NO REPRESENTATION OR WARRANTY WHATSOEVER, WHETHER EXPRESS OR IMPLIED, AND HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES (INCLUDING, WITHOUT LIMITATION, THOSE OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE), WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN OR RELATING THERETO, AND IN PARTICULAR DISCLAIM ANY GUARANTEE OR WARRANTY EITHER AS TO THE QUALITY, ACCURACY, TIMELINESS AND/OR COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN, THE RESULTS OBTAINED FROM THE USE OF THE INDEX AND/OR THE CALCULATION OR COMPOSITION OF THE INDEX, OR CALCULATIONS MADE WITH RESPECT TO ANY FIXED INDEXED ANNUITY AT ANY PARTICULAR TIME ON ANY PARTICULAR DATE OR OTHERWISE. THE INDEX PARTIES SHALL NOT BE LIABLE (WHETHER IN NEGLIGENCE OR OTHERWISE) TO ANY PERSON FOR ANY ERROR OR OMISSION IN THE INDEX OR IN THE CALCULATION OF THE INDEX, AND THE INDEX PARTIES ARE UNDER NO OBLIGATION TO ADVISE ANY PERSON OF ANY ERROR THEREIN, OR FOR ANY INTERRUPTION IN THE CALCULATION OF THE INDEX. NO INDEX PARTY SHALL HAVE ANY LIABILITY TO ANY PARTY FOR ANY ACT OR FAILURE TO ACT BY THE INDEX PARTIES IN CONNECTION WITH THE DETERMINATION, ADJUSTMENT OR MAINTENANCE OF THE INDEX. WITHOUT LIMITING THE FOREGOING, IN NO EVENT SHALL AN INDEX PARTY HAVE ANY LIABILITY FOR ANY DIRECT DAMAGES, LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
No Index Party is a fiduciary or agent of any purchaser, seller or holder of a Fixed Indexed Annuity. None of Société Générale, S&P, or any third party licensor shall have any liability with respect to the Fixed Indexed Annuity in which an interest crediting option is based is on the Index, nor for any loss relating to the Fixed Indexed Annuity, whether arising directly or indirectly from the use of the Index, its methodology, any Société Générale Mark or otherwise. Obligations to make payments under the Fixed Indexed Annuities are solely the obligation of American Equity.
In calculating the performance of the Index, Société Générale deducts a maintenance fee of 0.50% per annum on the level of the Index, and fixed transaction and replication costs, each calculated and deducted on a daily basis. The transaction and replication costs cover, among other things, rebalancing and replication costs. The total amount of transaction and replication costs is not predictable and will depend on a number of factors, including the leverage of the Index, which may be as high as 200%, the performance of the indexes underlying the Index, market conditions and the changes in the market states, among other factors. The transaction and replication costs, which are increased by the Index’s leverage, and the maintenance fee will reduce the potential positive change in the Index and increase the potential negative change in the Index. While the volatility control applied by the Index may result in less fluctuation in rates of return as compared to indices without volatility controls, it may also reduce the overall rate of return as compared to products not subject to volatility controls.
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.