The landscape for fixed indexed annuities changed for good with the defeat of SEC Rule 151A. One requirement of the annuity industry's victory is the national implementation of the 2010 NAIC Annuity Suitability law. As a result, annuity product designs will adapt to meet these changing regulatory and consumer needs. The first carrier to release an all-new post-151A annuity product line is our good friend, National Western Life Insurance Company (NWL).

The IMPACT Annuity Series

The NWL^® IMPACT 7 and NWL^® IMPACT 10 annuities accentuate carrier competitive strengths while addressing client and marketplace requirements. These new indexed annuities offer an excellent combination of bonus, surrender charge term, potent indexed interest strategies, and NWL's two guaranteed lifetime income withdrawal benefits (including the unique Income Outlook Plus 5). In today's challenging financial marketplace, NWL builds competitiveness by vesting the annuity premium bonus later in the term rather than immediately.

NWL^® IMPACT 7

Given the current lower interest rate environment, we hear an increase in calls for competitive indexed annuities with shorter surrender charges, less than 10 years specifically. The NWL^® IMPACT 7 Annuity has a seven-year surrender charge schedule. In the past, if you wanted a seven-year annuity, you did not get a bonus. If you found any bonus, it was small and came with a commission reduction. What if you could have a compelling 5% bonus and a competitive 6% "street level" commission with only a seven-year early surrender schedule? NWL accomplishes this by vesting the bonus over years six through 10. Though unvested at issue, the 5% bonus value will begin earning interest credits from the date of annuity issue. The combined account value plus vested bonus amount plus interest is available for penalty-free withdrawal and annuitization purposes. The full account value and bonus value are payable as death benefits.

NWL^® IMPACT 10

The indexed annuity product space is very competitive today, especially for annuities with surrender charges of exactly 10 years, and bonus annuities are still a feature on the majority of indexed annuities sold¹. With increased supervision of annuity and replacement suitability now here, products with 10-year durations will probably become even more popular. The NWL^® IMPACT 10 Annuity offers a 7% bonus, with a very competitive 7% street level commission. NWL maximizes annuity benefit competitiveness by vesting the bonus over years eight through 10. The 7% bonus amount begins earning interest credits from annuity issue. The account value, interest and vested bonus amount are available for penalty-free withdrawal. The full account and bonus value are payable as death benefits, and the full bonus is used for calculating any guaranteed lifetime withdrawal benefit.

Indexed Strategies with Potential

With interest rates currently very low, an indexed interest annuity with the potential to credit a much higher rate of interest should be in demand. One-year bank CD rates pay about 1% today². These new indexed annuities offer the client a fair chance to earn many years of equivalent CD interest in just one year. National Western Life offers these Annual Reset - Annual Ratchet interest strategies:
 

• Option A – Monthly Averaging with a Participation Rate and Asset Fee
• Option B – Fixed Interest Rate
• Option D – Monthly Index Cap Rate
• Option J – Annual Point-to-Point with Cap Rate

Notice that three of these strategies allow the client to earn a double-digit interest credit. Option A is uncapped and the Option D Monthly Cap strategy has generated double-digit, one-year returns in the past.

Guaranteed Lifetime Income Riders³

NWL offers two guaranteed lifetime withdrawal benefit riders (GLWBs). The original Income Outlook delivers a 5% annual roll-up and very competitive payout rates for one of the lowest GLWB fees available. The Income Outlook Plus 5 delivers a 5% premium bonus (in addition to any bonus on the base annuity) with a 5% annual roll-up on the income value. By adding the Income Outlook Plus 5 rider, the IMPACT 7 bonuses total 10% at issue and the IMPACT 10 bonuses total 12%. That is a huge jump-start to the account value accumulation and/or the guaranteed lifetime withdrawal payment, which takes into account the entire premium bonus. This will make NWL particularly competitive in GLWB payment scenarios where the client income-itizes the rider in earlier years.

NWL Financial Strength

National Western Life is among the few carriers to receive an upgrade from A.M. Best Company in 2009⁴. NWL is now rated "A" Excellent. NWL has a very high capital to asset ratio, and they experienced below average investment losses during the market collapse of 2008-2009. Financial strength is very important. For example, when the client is purchasing guaranteed lifetime income, it is crucial that the carrier last longer than the client does!

Indexed Annuities Post-SEC 151A

Indexed annuity sales were 50% of all fixed deferred annuity sales in the third quarter of 20105. That's right – 50%. With these products, principal and earned interest is protected, interest is tax-deferred, income amounts can be guaranteed for life, and higher-than-fixed-rate earnings are possible. Indexed interest is the alternative to fixed interest, so clients are buying this index interest potential by risking their fixed interest alternative. They give up what they know they can have in fixed interest for the opportunity to earn much more indexed interest. Given today's interest rates, clients are paying the lowest rates ever for indexed interest. Why not maximize the payoff possibilities by allocating premium to one or more of these indexed interest strategies? With better annuity products and benefits now available, such as those offered by the NWL IMPACT Annuity Series, your sales of annuity benefits can only grow further. Call your Creative Marketing Annuity Consultant for more information and a product kit.

FOR AGENT USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 11494 - 2011/1/11

This document has not been approved under the advertising laws of your state for dissemination to individual purchasers. NWL® IMPACT 7 Annuity (01-1160-10, 01-1161-10 and state variations) and NWL® IMPACT 10 Annuity (01-1162-10 and state variations) are flexible premium deferred fixed indexed annuities issued by National Western Life Insurance Company, Austin, Texas. Certain limitations and exclusions apply. Commissions based on a General Agent (Level 3) Contract. Bonus annuities may include higher surrender charges, longer surrender charge periods, lower caps, or other restrictions that are not included in similar annuities that do not offer a premium bonus feature.

1 Index Sales & Market Report, AnnuitySpecs.com, 3rd Quarter, 2010.

2 www.bankrate.com, January 10, 2011.

3 The Income Outlook rider (01-3128-07 and state variations) and Income Outlook Plus 5 rider (01-3128-09 and state variations) are not available in all states. See Policy for complete information and Policy benefits and limitations.

4 The A.M. Best rating of A (Excellent) is the 3rd highest out of 16 possible ratings, and was upgraded in June 2009. This independent agency rating is based on an analysis of financial results and an evaluation of management objectives and strategies.

5 Insured Retirement Institute, "Third Quarter Annuity Sales Remain Strong, Indexed Annuities Post Record Share of Overall Fixed Sales; VA Sales Continue to Outpace 2009 Levels." November 22, 2010.