use this presentation for agents licensed with american...

American Equity Investment Life Insurance Company • West Des Moines, IA 50266 • 888-647-1371 • www.american-equity.com | For Agent Information Only. Not For Use For Solicitation Or Advertising To The Public

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Use this Presentation For Agents

Licensed with American Equity only.

We require you to Include Product

Brochures, Disclosure Statements and

Product Profiles with this Presentation.


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What’s New at American Equity

■Enhancements to guaranteed lifetime income

■ Introduction of a Volatility Control Index

Goals of Lifetime Income Rider Development

■Enhance guaranteed income potential

■Maintain pricing discipline

■Create unique design

■Solidify market leadership

Lifetime Income Benefit Rider Enhancements

■ Innovative gender based payout factors

■One year incremental payout factors

■Higher potential payout capacity

■Removed increasing payment option

Lifetime Income Benefit Payout Factors

Single Joint

Payout % Payout %

Age Female Male Joint

50 3.25% 3.55% 3.00%

51 3.35% 3.65% 3.10%

52 3.45% 3.75% 3.20%

53 3.55% 3.85% 3.30%

54 3.65% 3.95% 3.40%

55 3.75% 4.05% 3.50%

56 3.85% 4.15% 3.55%

57 3.95% 4.25% 3.60%

58 4.05% 4.35% 3.65%

59 4.15% 4.45% 3.70%

Single Joint

Payout % Payout %


70 5.25% 5.60% 4.50%

71 5.35% 5.75% 4.55%

72 5.45% 5.90% 4.60%

73 5.55% 6.05% 4.65%

74 5.65% 6.20% 4.70%

75 5.75% 6.30% 4.75%

76 5.85% 6.40% 4.80%

77 5.95% 6.50% 4.85%

78 6.05% 6.60% 4.90%

79 6.15% 6.70% 4.95%

80+ 6.25% 6.80% 5.00%

Single Joint

Payout % Payout %


60 4.25% 4.55% 3.75%

61 4.35% 4.65% 3.80%

62 4.45% 4.75% 3.85%

63 4.55% 4.85% 3.90%

64 4.65% 4.95% 3.95%

65 4.75% 5.05% 4.00%

66 4.85% 5.15% 4.10%

67 4.95% 5.25% 4.20%

68 5.05% 5.35% 4.30%

69 5.15% 5.45% 4.40%

*Montana residents will be issued on a Gender Neutral basis


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*Form number and availability may vary by state

Example: Enhanced Death Benefit Rider (13 R-LIBR-EDB.1)*

Assumptions

■ Age 65

■ $100,000 initial

premium

■ Bonus Gold (Index-1-07)*

■ No growth

■ 4.0% IAV rate during

deferral

■ 70bps fee


Scenario #1

■Client wants to lock up some recent stock

market gains

■May need the money for income, but also have

other income sources

■Would like to pass this to their beneficiary

Scenario #1 Examples

*Benefit provided by Lifetime Income Benefit and Enhanced Death Benefit Rider (13 R-LIBR-EDB.1).

Form number and availability may vary by state.

End of

Year Age

Contract Value

Death Benefit IAV Enhanced Death Benefit

5 Years Lump Sum

5 70 $106,952 $133,832 $133,832 $120,392

10 75 $103,261 $162,827 $162,827 $133,044

15 80 $110,020 $198,104 $198,104 $154,062

20 85 $118,523 $241,024 $228,800 $173,662

20 85 $118,523 $241,024 $228,800 $173,662

Scenario #1 Summary

$173,662 Guaranteed lump sum death benefit

$228,800 paid over 5 years = $45,760 per year

Scenario #2

■Clients have sizeable IRA that makes up 30%

of total assets

■Clients want to defer until required to take

RMDs

■Clients are required to take RMDs and pass as

much to the beneficiary as possible

End of

Year Age

Cumulative

Total RMDs

Contract Value

Death Benefit IAV

Enhanced Death

Benefit

5 Years Lump

Sum

5 70 $0 $106,952 $133,832 $133,832 $120,392

10 75 $19,086 $84,443 $133,154 $133,154 $108,799

15 80 $37,491 $69,862 $125,937 $125,937 $97,900

20 85 $56,320 $55,861 $106,727 $106,727 $81,294

Scenario #2 Examples

$56,320 $106,727 $81,294

*Benefit provided by Lifetime Income Benefit and Enhanced Death Benefit Rider (13 R-LIBR-EDB.1).

Form number and availability may vary by state.

Scenario #2 Summary

Lump Sum Death Benefit

Total Contract Distribution

$85,136

$141,560

Wellbeing Rider (13 R-LIBR-W.1)* - Eligibility

■Lifetime Income Benefit Rider (LIBR) must

be in force

■Must provide proof that owner or spouse if

applicable is unable to perform 2 of 6 ADL’s

–Do not have to be confined to a facility


Wellbeing Rider (13 R-LIBR-W.1)*

■Single life payout

–200% of benefit payout percentage

■Joint life payout

–150% of benefit payout percentage if one or

both qualify

■Waiting period

–2 years

■Maximum Benefit Period

–5 years


Lifetime Income Benefit Rider

Choices for guaranteed lifetime income

■7% for 10 years 90 bps

■6.5% for 20 years 75 bps

■4.0% no fee

■Fees calculated on CV not IAV

■No MVA on any indexed annuities

■Six rider options remain the same

American Equity

Volatility Control Index

Criteria for Selection of Volatility Control Index

■Transparency

■Non-proprietary so it can not be manipulated

by carrier or manufacturer

■Trackable index

■Focus on principal protection, safety, and

guarantees of FIA’s first and foremost

S&P 500® Dividend Aristocrats® Index

■Launched May, 2005

■S&P 500 Companies

■Criteria - consistently increasing dividends every year for at least 25 consecutive years

■Both capital growth and dividend income characteristics

■Minimum of 40 companies that are equally weighted

■Company mix rebalanced quarterly

■Well diversified across all market sectors

Top Holdings as of 07.31.2014

■Family Dollar Stores, Inc.

■Abbott Laboratories

■Stanley Black & Decker

■Sherwin-Williams Co.

■Lowe’s Cos, Inc.

■Other Holdings:

–3M

–Coca-Cola Co.

–Exxon Mobil

–Johnson & Johnson

S&P 500® Dividend Aristocrats® Daily Risk Control 5% Index

■Launched August, 2010

■Offer increased stability and control of the

S&P Dividend Aristocrats

■Overlay mathematical algorithms adjust

parent index risk profile to control risk at 5%

■Ticker: SPXD5UN

■Website: S&P Dow Jones Indices

American Equity Volatility Control Index

■Annual Reset

■Asset fee 2.50% or 2.25%

– Bonus Gold is 2.25%

– Retirement Gold, Foundation Gold, Advantage

Gold and Benefit Gold are all 2.50%

■No cap or participation rate

■All products except Integrity, Heritage and

Traditions Gold

■New sales only initially

Performance

Hypothetical performance results may not be

indicative of future performance

How do you think the strategy will perform in

the future?

Diversification is key to success (or to avoid

failure) in all market conditions

Industry Observations

American Equity Some Competitors

Limit on upside potential Uncapped

Non proprietary Proprietary

Annual Reset 5 year term end points

Chooses not to illustrate Illustrates hypotheticals

Actual results Touts backtesting

Establish realistic client expectations Expectations may be difficult to attain

The Power of Annual Reset Design

■ Interest “credited” on each anniversary

■ Interest “credits” are “locked-in” and can

never be lost

■Annual resets sets a new index starting point

■Annual reset is beneficial during severe

index downturns

–You do not lose any value

–New starting point for future growth is lower


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Which mistake does

your Client NOT want

to make?


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