Advantage IV is a variable annuity product issued by Commonwealth Annuity and Life Insurance (a Global Atlantic subsidiary) and that includes a 7-year surrender charge duration. The Advantage IV variable annuity features a fixed account that offers a minimum guaranteed interest rate of 1% throughout the life of the contract. Money can be transferred in and out of this fixed account (but the amounts that can be moved are limited). There’s a unique benefit that allows investors to access their money free of surrender charges after the first five years, or after hitting the age of 59½ years.
Advantage IV Annuity Facts
Issue Ages
0-79 years
Minimum and Maximum Payments
Minimum amount for qualified payments is $50. Minimum amount for non-qualified payments is $2,500. The maximum allowed payments through the life of the contract is $1,000,000.
Withdrawal Provisions
Each year, investors can withdrawal up to 10% of their contract value free of any charges. If more than 10% withdrawal is taken, then it’s subjected to the withdrawal charge schedule.
| Contract Year | 1 | 2 | 3 | 4 | 5 | 6 | 7+ |
| Charge (in %) | 6 | 5 | 4 | 3 | 2 | 1 | 0 |
Investment Options
With the Advantage IV annuity, Commonwealth Annuity offers a comprehensive line-up of over 60 investment options that cover a broad array asset classes and investment styles. Investors are able to choose based on their investment preferences.
No Withdrawal Charge Rider
This additional rider is available at an annual cost of 0.35% of your contract value, and is only applicable on qualified plans such as 403(b), 401(k), Simple IRA, SEP-IRA, etc.
Dollar Cost Averaging Option
Dollar Cost Averaging (DCA) allows investors make schedule investments and take advantage of fluctuating market prices. This feature might reduce the subaccount unit prices, but it does not guarantee a profit.
Extended Care Waiver
If before their 75th birthday the contract owner is hospitalized in a qualified healthcare facility for a period of time not less than 90 days, then withdrawal charges are waived. This waiver is only available after the second contract anniversary.
Disability Waiver
If the contract owner suffers from either physical or mental disability that’s expected to last for no less than 1 year, at any time before their 66th birthday, then withdrawal charges are waived. This waiver is only available after the 2nd contract year.
Death Benefit
The Advantage IV variable annuity from Commonwealth Annuity comes with a death benefit with an additional optional Step-Up rider. Before the age of 75, the standard death benefit gives either the full contract value or 100% of your purchase payments to your beneficiaries.
Step-Up Death Benefit Rider
This is an optional rider available at an annual fee of 0.20% of your separate account value. This rider facilitates a death benefit that’s the greater of the contract value or the highest contract value before the annuitant’s 81st birthday.
Annuity Pros
- Tax sheltered annuity – this is a tax-sheltered annuity that offers investors a good chance to defer taxes while saving for retirement.
- Convenient contributions – if you’re still working, your contributions to this annuity can be made directly from your paycheck. This way, you don’t have to bother yourself with many single payments, and all your contributions will be tax-free.
- Flexibility – the Commonwealth Annuity Advantage IV variable annuity offers flexibility when it comes to access to funds.
- Predictability during retirement – the Advantage IV variable annuity offers diverse annuitization options for investors who are looking to incorporate annuities into their retirement strategy.
Looking for more information or considering buying the Global Atlantic Advantage IV Variable Annuity? Talk to a skilled annuity product specialist from AnnuityBroker who can help you make the right decision.
