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Already have a VA?
Want to rescue an overpriced variable annuity? Refinance retirement with a tax-free 1035 exchange.
Chances are, your traditional variable annuity is not working hard enough for you. With high asset-based fees, many traditional VAs can erode principal and reduce growth potential. With sales commissions and locked-in surrender charges, many VAs are sold inappropriately. With limited fund choices, most VAs simply don't perform.
Now you may be able to save more money by transferring those assets to a flat insurance-fee variable annuity through a tax-free 1035 exchange.1 It's simple, fast and can be completed in just minutes.
Before the exchange, you'll want to see if your current annuity will assess any surrender charges. You'll also want to evaluate the current annuity's features to determine if you need these benefits or if you can use a more cost-effective solution.
The decision differs for every investor and the expertise of a trained professional can help you evaluate the pros and cons. Here's a primer that can help show you what to look for.
Why pay more? A flat insurance fee can save you thousands.
Nearly all annuity companies charge "mortality and expense" fees (M&E). This covers basic insurance guarantees: the basic death benefit—such as return of the current account value or some portion of the initial premium—and a guaranteed lifetime payout option.
Typically these fees are calculated as a percentage of your annuity assets. Translation? The more you invest and the more your annuity grows, the higher those fees will grow, too. Over time, these fees can cost more than the benefits that you or your heirs might receive.
Which do you want? Added value vs. expensive add-ons.
While traditional VAs are sold for their insurance guarantees—death benefits, withdrawal benefits or long-term care coverage—many experts agree that VAs are not a cost-effective "one-size fits-all" financial solution.
It is widely believed that fees, tax treatment and asset allocation are the primary determinants of investment performance. Time to review what you have and see if you're paying a fair price for what you're getting.
Enhanced death benefits could cost an extra 40 basis points per year, or more. If you're insurable, a term life insurance policy may be a more cost-effective alternative.
Living benefits can cost an extra 30 to 75 basis points per year—or more. To secure additional future income, tax-free bonds may be a better alternative. And when it comes to preparing for retirement, keeping costs low to maximize your savings is critical. The more savings you accumulate, the more income you can generate.
Why settle for limited fund options?
Instead of complex insurance guarantees, a flat insurance-fee VA offers 4x more choices than the typical VA.2 This virtual supermarket of funds allows you to allocate assets between standard investments and more esoteric options such as commodities, real estate, currency products and hedge-like funds.3
Most typical annuities simply don't offer enough options across the full range of investment classes. But when innovative VAs are designed to provide you with a low-cost tax-deferred investment platform—instead of a costly insurance contract—they give you an ultra-efficient alternative to build a healthy nest egg for the long haul—instead of a big goose egg.
Already have a VA? A simple check up could save you thousands of dollars a year
Americans still need to save more for retirement and rescuing an overpriced annuity is one way to help.
Most annuity companies continue to sell VAs with expensive asset-based fees and complicated features. Now you can trade up to a better deal—and save thousands each year—by refinancing retirement savings with a flat insurance-fee VA: Monument Advisor, the only VA with a flat insurance fee of $20 per month,4 no matter how much you invest5 or how much your annuity grows.
Like other variable annuities, the customer pays fees of the underlying funds selected (currently ranging from 0.23% - 2.72%; except for Rydex VT Inverse Gov't Long Bond Fund which is currently 5.12%) plus the fees of any advisor hired. The range of underlying fund fees reflect the minimum and maximum charges after contractual waivers that have been committed to through at least May 1, 2008. This VA does not provide any enhanced living, guaranteed death or withdrawal benefits.
| Groundbreaking Benefit | Why it may benefit you |
| Lower Fees |
| ZERO Mortality and Expense Charges |
Monument Advisor does not assess any M&E fee. Most annuities keep an average 1.35%6 of consumers' assets each year to cover insurance charges. |
| ZERO Sales Charges |
100% of your investment to Monument Advisor starts building potential earnings. Without the drain of sales charges, your assets are poised to grow faster. |
| ZERO Surrender Charges |
Unlike other VAs, Monument Advisor does not penalize you if you need to withdraw assets at any time. Just remember that the IRS assesses a 10% early withdrawal penalty before age 59½. |
| ZERO Commissions Paid |
Unlike other annuities, Monument Advisor does not pay commissions to any sales person. This reduces your expenses—and it assures you of unbiased advice from your advisor. |
| ONE Flat Insurance Fee of Only $20 Per Month4 |
With most variable annuities, the greater the annuity assets, the higher the insurance fees. But with Monument Advisor, your insurance fee remains the same, whether your account grows to $100,000 or $10 million, guaranteed. |
| MORE Investment Flexibility |
| A Diverse Range of Fund Options |
Monument Advisor offers over 165+ underlying fund options managed by more than 20+ independent and respected fund families—4x more than the typical variable annuity.2 |
| Options for Active Management |
Monument Advisor's full range of investment options include 40+ trading-friendly Rydex funds as well as the ability to make tax-deferred transfers whenever you need to. (Just check our prospectus for any limitations.) |
So when was the last time you gave your annuity a check up? According to Morningstar®, the average VA charges 1.35% a year in insurance fees. On a $250,0007 annuity that adds up to $3,375 per year. With Monument Advisor's flat insurance fee of $240, you save over $3,000 per year. Over 20 years this can translate into insurance fee savings of more than $130,000.
And now there is a simple, unbiased online tool using the latest data from Morningstar to compare virtually any competing variable annuity—985 different products from 117 companies—versus Jefferson National's Monument Advisor. Take the "Annuity Rescue Challenge" to see how much more you can save and how much more your annuity can potentially grow. This VA does not provide any enhanced living, guaranteed death or withdrawal benefits.
The Annuity Rescue Center is powered by Jefferson National, which developed the first flat insurance fee variable annuity. For more information, visit www.jeffnat.com or call 1-866-WHY-FLAT (866-949-3528).
FORM #JNL2007CL068 04/07
1 Please consult with a tax advisor for any potential tax consequences for switching from one variable annuity to another. Please note this is not an endorsement to switch from your current annuity to the Monument Advisor variable annuity. You should review your particular situation to determine which variable annuity is appropriate for your needs. Withdrawals before age 59½ may incur a 10% tax penalty.
2 The average variable annuity has 38 underlying fund options according to Morningstar data as of 12/31/06.
3 These are speculative investments and carry a high degree of risk, including the possible loss of benefits. Read your prospectus carefully before making an investment decision.
4 Jefferson National's Monument Advisor charges a $20 flat insurance fee with no transaction fees on more than 97% of underlying funds. Jefferson National also makes available ultra low-cost funds on a transaction fee basis ranging from $19.99 to $49.99 per transaction, depending on the number of transactions per year. See the prospectus for details. Like other variable annuities, the customer pays fees of the underlying funds selected (currently ranging from 0.23% - 2.72%; except for Rydex VT Inverse Gov't Long Bond Strategy Fund which is currently 5.12%) plus the fees of any advisor hired. The range of underlying fund fees reflect the minimum and maximum charges after contractual waivers that have been committed to through at least May 1, 2008.
5 Minimum contribution $25,000. Deposits in excess of $10 million are subject to company approval.
6 Morningstar, 12/31/06.
7 $198,545 is the average Monument Advisor contract as of 12/31/06.
8 Morningstar, 12/31/06.
An investor should carefully consider the investment objectives, risks, charges and expenses of the investment before investing or sending money. For a prospectus containing this and additional information, please contact your financial professional. Read it carefully before investing. The summary of product features is not intended to be all-inclusive. Restrictions may apply. The contracts have exclusions and limitations, and may not be available in all states or at all times.
Variable annuities are investments subject to market fluctuation and risk, including possible loss of principal. Your units, when you make a withdrawal or surrender, may be worth more or less than your original investment.
Variable annuities are long-term investments to help you meet retirement and other long-range goals. Withdrawal of tax-deferred accumulations are subject to ordinary income tax. Withdrawals made prior to age 59½ may incur a 10% IRS tax penalty. Jefferson National does not offer tax advice. Annuities are not deposits or obligations of, or guaranteed by any bank, nor are they FDIC insured.
Monument Advisor is issued by Jefferson National Life Insurance Company (Dallas, TX) and distributed by Jefferson National Securities Corporation, FINRA member. Policy series JNL-2300-1, JNL-2300-2.
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