SecureGain 5 by Great American Life Insurance is a step-rate multiyear guaranteed annuity that contains 5 rates predefined under a seven-year surrender period. The multi-year annuity offers an interest rate of 1.9% and 0.25% bonus on the first year. These add up to 2.15% total interest for the first year. From then onwards, the interest rates rises within the first seven years. The product is not available in CT IN MN MO NY OH PR VA and VI.
The annuity has high and low band variants. For the high band annuity, the following rates apply for the first five years. 2.15%, 2.00%, 2.10%, 2.20% and 2.3%, for each respective year. This gives the policy holder a guaranteed effective rate of 2.15% for the first five years.
The low band annuity on the other hand will be credited with interest as follows: 2.3%, 2.15%, 2.25%, 2.35% and 2.45% for the five years. This yields an effective rate of 2.30%.
Secure Gain 5 Features
Minimum and Maximum Premiums
The minimum single premium for this annuity is 10,000 $ while the maximum single premium is 1,000,000. This is however for non-qualified persons up to the age of 75 years. Above this age, the maximum premiums reduce to $750,000 for those aged between 76-80 and $500,000 for those aged above 80 years.
Issue Age
The annuity is issued for persons between 0-89 years of age. There are age restrictions for persons qualified and non-qualified persons above 89 years.
Annuitization
This annuity has three annuitization options viable within the first year. There is the income for a fixed period, single life annuity and joint and one half survivor. Any outstanding balance on loans will be subtracted from the amount payable.
Free Withdrawals
This annuity allows policy holders to make 12 free withdrawals each limited to a maximum 10% the value of the annuity. The withdrawal is based on accumulation. Should one wish to withdrawal the interest amount only, one will have to do so after 30 days. The minimum withdrawal amounts and account values are $500 and $10,000 respectively. Above the 10% free withdrawal amount, additional withdrawals will be charged at 9% of the value, a figure which then gradually reduces to 5% in the fifth year.
Minimum Distributions
Each tax-qualified contract should be in compliance with the RMD rules set out in the endorsement. For this annuity the rules generally stipulate that distributions will have to be made from the age of 70.5 years onwards.
Systematic Withdrawals
Systematic withdrawals are available with SecureGain 5. These have withdrawal frequencies of monthly, quarterly, semi-annually or annual basis. The minimum amount that can be withdrawn is $500 and the minimum account value is $5000
Market Value Adjustment
For the first five years of the contract, a market value adjustment shall be applied in case of two events; if the policy holder surrenders the contract or if a withdrawal is made that exceeds the free withdrawal.
Terminal Illness Waiver
If a policyholder has a diagnosis rendered more than a year after the effective date of the annuity contract, an amount up to 100% of the account value can be withdrawn in which case the policy holder will not incur an early withdrawal charge provided the owner or joint owner’s terminal illness has a prognosis of 12 months or less. For this annuity, the rider can only be used once. For SecureGain 5, this is not available in MA
Extended Care Waiver
If an owner completes the first year and is confined to a nursing home for at least 90 days (consecutive) he/she can make withdrawals up to the full amount without incurring withdrawal charges. (Not available in FL KY MA MS NJ OR PA WA)
Death Benefit
Should the annuitant die, the greater of the GMSV and the account value will be paid. If there is a spouse who is a joint owner of the annuity or a beneficiary, they will become the owner of the annuity.
