Total Value Annuity – TVBI Spread Change

Total Value Annuity has been a tremendous success due to your efforts, and we have worked to keep many of the features and benefits you and your clients appreciate, including:

  • 4% guaranteed annual roll-up on the Income Rider’s Income Benefit Base and the Death Benefit Rider’s Death Benefit Base, plus the Stacking Roll-up of any interest credited
  • Up to 10% Bonus on all first year Purchase Payments (varies by age, state and rider)
  • Unchanged, competitive commission payouts
  • The Transparent Value Blended Index Account and 5 Year Annuity Linked TVI Index Account remain UNCAPPED

Due to the current market environment, the following change to Total Value Annuity will be effective Monday, April 21, 2014: the annual spread will increase from 75 bps to 100 bps for the Transparent Value Blended Index Account Interest Crediting Option. This only applies to the TVBI Index.

The need for an increase in spread on the TVBI is due to an increase in the cost to buy the appropriate hedge from our investment bank partners. The amount charged by the investment banks depends on a number of market factors including interest rates, index volatility, and correlations between the index components.

To give you an idea of how the increase of the annual spread will minimally impact the backcasted results for the Transparent Value Blended Index Account, click here to download a PDF of the new 100% TVBI Accumulation Sales Idea.

There are no other product changes and the new rates, caps and spreads for TVA as of April 21, 2014 will be:

S&P 500® Annual Point to Point Cap: 3.25% (unchanged from current cap rate) Fixed Account: 1.50% (unchanged from current rate) 5 Year ALTVI: 50 bps annual spread (unchanged from current spread) TVBI: 100 bps annual spread (new as of April 21, 2014)

Also, starting Thursday, April 17, 2014 we will have updated marketing materials available via the fulfillment site and online via sbelitepartners.com. These include:

  •  Updated allocation outputs from the TVA Allocation Example tool. You can download or print any of the allocation examples with just a click and provide them to your clients, it’s that easy! Click here to go to the TVA Allocation Example tool on sbelitepartners.com.
  • Updated TVA Statement of Understanding

Any applications received at Security Benefit after close of business on Thursday, April 17, 2014 will have contracts issued under the new spread and the new Statement of Understanding, (click here to download a copy) dated April 21, 2014 will need to be signed by the client.  There will be no exceptions.

All applications received in good order prior to close of business on Thursday, April 17, 2014 and that meet the 60-day Rate Lock program (outlined below or click here to download a copy) for transfers from another carrier will receive the current 75 bps spread for the TVBI crediting option.

Remember, in order for your clients to take advantage of the current 75 bps spread for the Transparent Value Blended Index Account, all paperwork must be received at Security Benefit and In Good Order by close of business on Thursday, April 17, 2014 and meet the 60-day Rate Lock. After that time, the new spread will be in place for newly issued contracts.

Total Value Annuity is one of the top selling products in the industry, and Security Benefit remains committed to the continued growth and success of TVA and you.

Thank you for your continued confidence in Security Benefit and for your efforts already in 2014 that have made Total Value Annuity such a tremendous success.

Sincerely,

The Security Benefit Team

FOR PRODUCER USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 99-00473-44   2014/04/11

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