Market Recovery Program
It's legal, it works, and it's guaranteed!
Chapter 14
YOU’RE IN CONTROL
Once I’ve “turned on” the income stream under the rules of the Income Rider, can I “turn it off”?
Yes. You are in complete control of whether or not you receive the annual payout even after you‘ve begun to receive them.
However, once the income stream is turned on, I wouldn’t encourage anyone from turning it off.
Why?
Maximum benefit is derived by receiving the Guaranteed Annual Payments from the Income Account. If this stream is “turned off” and the annuitant dies, what is left in the Indexed Annuity account portion of the investment in all likelihood would have been growing at a rate less than the 8%.
In addition, you’re paying a premium for the benefit of having your funds accumulate at 8% in the Income Account.[1] At the time of this writing that premium costs 0.45% of the account value per year. Again, it is my conviction that one should not go into this investment without the clear intention of taking advantage of the income payouts available through the Income Rider. If you have other reasons for purchasing this investment, it may not be suitable for you.
But, certainly, there would be instances in which I would want to stop the income stream and access what’s in the Indexed Annuity account as a lump-sum. Won’t I be able to do this?
Yes, you can.
You may access any or all of the funds in the Indexed Annuity account at any time. It’s your money. For example, if your desire is to make a large purchase and the only available funds are those in the Indexed Annuity, go for it!
However, be aware of “surrender charges.” During the initial contract period, a deduction in the form of surrender charges will reduce the value of what you end up with. There also may be a significant tax liability if a lump-sum is distributed as it may “bump“ you up into a higher tax bracket. Again, consult a tax professional for the ramifications of such an action.
[1] The product used for illustration purposes here includes an option in its Income Rider for funds to grow at 5% in the Income Account. There is no Rider Free for the 5% option.
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