Growth Annuity Illustration Breakdown
📄 Growth Annuity Illustration Breakdown
Guaranteed vs. Non-Guaranteed Values + Setup + Allocation
🔒 Guaranteed Basis
- Assumes no index gains
- Shows contractual minimum values
-
Includes MGSV (Minimum Guaranteed Surrender Value):
➤ Typically 87.5% of premium, growing at 1–3%
🧠 Agent Script:
“No matter what happens in the market, this is the minimum value your contract guarantees at any point.”
📈 Non-Guaranteed (Hypothetical) Basis
- Based on historical average returns of selected indexes
- Uses current cap/par rates & spreads to show possible future value
- Strictly hypothetical, not guaranteed
🧠 Agent Script:
“This is a projection using the actual past performance of your selected indexes, but it’s not a prediction. It's a ‘what if’.”
✅ Step-by-Step Setup Instructions
🟦 Case Information Tab
- Select Agent of Record
- Enter Client Info: First/Last Name, DOB or Age, Gender
- Fill in a short Case Description
- Select State
💰 Payments Page
- Choose Tax Status (Qualified or Non-Qualified)
- Enter Lump Sum Amount (e.g., $100,000)
-
Allocate Premium (must = 100%)
Choose Withdrawal Options:
- Free Withdrawals
- Scheduled Withdrawals
- Percentage Withdrawals
- RMDs (check the box if needed)
🧠 📊 Understanding the Growth Illustration Pages
| 📌 Column | 🧾 What It Represents |
|---|---|
| Premium | Initial investment ($100,000) |
| Annual Withdrawal | Any money taken out (e.g., RMDs or scheduled) |
| Surrender Value | What the client gets if they cancel early |
| MGSV | Minimum guaranteed value at liquidation |
| Death Benefit | Paid to beneficiary if client dies |
🧠 Agent Script:
“At every point in time, this shows both what’s contractually locked in — and what’s possible if the markets perform like they have historically.”
📊 ➃ Asset Allocation / Indices / Strategy Section
🧭 What This Means:
You’re selecting how the premium will be divided across available index strategies.
🧠 Examples of Strategies:
- S&P 500 1-Year Point-to-Point with Cap
- Barclays Atlas 5 Index with Par Rate
- Fixed Account (declared rate)
- Multi-Index Blended Strategies (e.g., Morgan Stanley, Credit Suisse)
🧠 Agent Script:
“Think of each strategy like a different engine working for your money. You can split your premium across more than one — we’ll tailor it to match your risk tolerance and time horizon.”
📊 How to Allocate:
- Click into the Premium Allocation field
- Assign percentages to the available indices
- Make sure total = 100%
🧠 Tips for Agents:
- Show 2–3 different index strategies to diversify
- Add a Fixed Bucket if the client wants extra security
- Ask if client prefers caps (maximum growth) or uncapped strategies (par rates with more flexibility)
What Agents Should Know (and How to Explain It)
🆚 Growth Potential vs. Guarantees
| Growth Potential (Non-Guaranteed) | Contractual Guarantees |
|---|---|
| Hypothetical based on index history | Locked-in minimums (e.g., MGSV) |
| Uses current caps, par rates, or spreads | Usually 87.5% of premium, growing at 1–3% |
| Can change year to year | Never decreases once credited |
| Shows how your money could grow | Shows what’s contractually protected |
🧠 Agent Script:
“You have upside potential based on how the market performs, but you’re not risking losses because your contract guarantees a minimum value.”
💸 Withdrawal Strategies
| Option | Description |
|---|---|
| ✅ Free Withdrawals | Take out up to 10% annually without penalty |
| ⏰ Scheduled Withdrawals | Pre-set monthly or annual payments |
| 📉 By Percentage | Withdraw a fixed % of account annually |
| 📦 RMDs | Required for qualified plans after age 73 (check the box) |
🧠 Agent Script:
“We can build in flexible income — whether you want a little now, or just want to know it’s there when you retire.”
⚰️ Death Benefit & Surrender Value
| Term | Meaning |
|---|---|
| Death Benefit | What your beneficiaries receive if you pass away |
| Surrender Value | What you receive if you exit the contract early |
| MGSV | Minimum amount guaranteed to you or your heirs |
🧠 Agent Script:
“Even if you never touch this money, your family is protected. And if you need to exit early, there’s always a guaranteed base.”
🔄 Indexed vs. Fixed Strategies
| Indexed Strategy | Fixed Strategy |
|---|---|
| Tied to market index (e.g., S&P 500, Barclays) | Earns a declared rate (e.g., 3–4%) |
| May include caps, par rates, or spreads | Predictable — no market link |
| No loss of principal from market downturn | Stable but usually lower growth potential |
| Varies annually | Usually fixed for 1-year term |
🧠 Agent Script:
“Indexed options let you capture market upside without the risk of losses, while fixed gives you slow-and-steady growth — we can mix both.”
⚠️ Disclaimer:
The information presented here is for educational purposes only and does not constitute financial, legal, or compliance advice. Please consult with your IMO/FMO/marketer if you are unsure how to proceed or need guidance specific to your client or business model.