Presentation on theme: "Why Partner with SunAmerica Variable Annuities?"— Presentation transcript:
1 Why Partner with SunAmerica Variable Annuities? Performance, Protection, StrengthThank you for taking time out of your busy schedules to meet with us today.
2 Why Partner with SunAmerica & Polaris? PerformanceRespected money managers, 40+ investment options crossing 12 asset classes, plus professionally designed asset allocation modelsProtectionInnovative optional features for retirement income and for protecting beneficiariesStrengthSunAmerica is financially strong and stable with a long track record of successToday, we’ll be discussing SunAmerica – The Retirement Specialist – and its flagship variable annuity family, Polaris.Why should you consider partnering with SunAmerica and Polaris?There are many reasons, but here are the three we’ll focus on today.Performance. And by that we mean not just historical performance, but the opportunity for future performance that comes from having a strong line-up of money managers and close to 40 investment options with 10-year or longer track records. And while past performance does not guarantee future performance, in times like these, it can be reassuring to know that these are money management firms that have been through challenging times before.Protection. Variable annuities offer alternatives for ensuring your clients have lifetime income. We’ll discuss both the living benefits as well as the death benefits available in the SunAmerica variable annuities.Strength. It’s important to know about the company that backs the guarantees of a variable annuity, so we’ll be providing you with information about the financial strength of SunAmerica.For broker/dealer use only.Not to be used with the public.
3 Why Partner with SunAmerica? What your SunAmerica wholesaler can do to support your business:Product knowledgeMarketing supportValue add programsClient seminars and meetingsAnother important consideration in choosing a company to work with is what the wholesaler brings to the relationship. I think you’ll find we can provide not only solid product knowledge – which you’d expect from any wholesaler – but also innovative ideas to help you build your business. Here are four areas where we can offer assistance:Product knowledgeMarketing supportValue add programsClient seminars and meetingsFor broker/dealer use only.Not to be used with the public.
4 3 Considerations When Choosing a Variable Annuity Carrier Financial stabilityCompetitiveness of product/featuresPerformance of the investment optionsAs you consider the variable annuity choices available to you, you may be considering these three areas:The financial stability of the company you chooseThe competitiveness of the products and features availableThe performance potential of the investment options that your clients can invest in.For broker/dealer use only.Not to be used with the public.
5 Financial StabilitySunAmerica Annuity and its sister domestic life companies rank as the third largest life insurance organization in the U.S.SunAmerica Annuity is financially strong with capital reserves in excess of that required by state regulatorsCash and short-term investments total $1.1 billion and represent more than one quarter of SunAmerica Annuity’s general account portfolio93% of SunAmerica Annuity’s $2.0 billion bond portfolio is invested in investment grade bondsLet’s take a moment to talk about SunAmerica. SunAmerica variable annuities are issued by SunAmerica Annuity and Life Assurance Company (“SunAmerica Annuity”).SunAmerica Annuity, together with its sister domestic life companies, rank as the third largest life insurance organization in the U.S. with more than $214 billion of admitted assets (as of June 30, 2009), and more than $17 billion in sales for the 12 months ending June 30, 2009.SunAmerica Annuity is financially strong with capital reserves in excess of that required by state regulators.Cash and short-term investments total $1.1 billion and represent more than one quarter of SunAmerica Annuity’s general account portfolio.SunAmerica Annuity also has a high quality bond portfolio—93% of SunAmerica Annuity’s $2.0 billion bond portfolio is invested in investment grade bonds.This financial data is current as of 6/30/09.For broker/dealer use only.Not to be used with the public.
6 Competitiveness of Product/Features Polaris offers three share classesPolaris Platinum III“B-share” (7-year withdrawal charge schedule)1.30% M&E feePolaris Choice III“L-share” (4-year withdrawal charge schedule)1.52% M&E feePolaris Advantage“Bonus” product (9-year withdrawal charge schedule)1.65% M&E fee4.5% bonus up to $249,999; 5.5% for $250,000 to $499,999; 6.5% for $500,000+Summary information only as of 10/01/09. Please see prospectus for details.The Polaris family of variable annuities are available in 3 different share classes.Polaris Platinum III is the newest VA, with a lower cost mortality and expense fee of 1.30% and a traditional 7-year withdrawal charge schedule.Polaris Choice III offers a shorter withdrawal charge schedule of 4 years, and has a mortality and expense fee of 1.52%The third option we’ll discuss today is Polaris Advantage. This is a “bonus” variable annuity, which provides an immediate upfront payment enhancement of 4.5% to 6.5%, depending upon the amount invested. It comes with a slightly higher mortality and expense fee of 1.65% and a longer 9-year withdrawal charge schedule. (Keep in mind, products that pay a payment enhancement may impose higher mortality and expense risk charges and longer surrender charge periods than a similar annuity without a payment enhancement. Over time, the higher expenses could be more than the value of the credits.)These are the major differences between these three products. Next we’ll turn our attention to the living benefits, which are available on all three products.For broker/dealer use only.Not to be used with the public.
7 Competitiveness of Products/Features MarketLock Income Plus6% income credit for up to 10 yearsAnnual market step-ups through age 90Annual withdrawals:45-64: 4% for life (single or joint)65+: 5% for life (single) 4.75% (joint)Uniqueness of feature: partial income credit available even in years withdrawals are taken (provided withdrawals are taken within feature’s parameters)“RMD friendly” provided withdrawals taken within feature’s parametersMarketLock Income Plus is our premier living benefit. It provides the opportunity for a 6% income credit to be added to the income base each year for up to 10 years (if the income credit period is extended). The income base is the amount on which guaranteed withdrawals are based. In addition to the income credit, this benefit also offers the opportunity to “lock in” investment gains, if greater each year on the contract’s anniversary. This “market step-up” can continue for more than 10 years -- all the way through age 90 if the feature’s evaluation period is extended.Another aspect of this feature that may be important to you is the withdrawal amount. If withdrawals begin between ages 45-64, a 4% withdrawal is available for lifetime income. If withdrawals begin at age 65 or later, 5% for life is available on single life contracts, with a slight reduction to 4.75% for joint life contracts.Now, what really makes this feature different from the competition is that the opportunity for an income credit continues even in years a withdrawal is taken, provided the withdrawal is within the maximum annual withdrawal amount. The income credit is simply reduced by the withdrawal percentage. For example, if a client withdraws 4%, they would still receive a 2% income credit (6-4=2).You may have clients who have IRAs and are nearing the time when they must begin taking their RMDs. Because a withdrawal does not eliminate the income credit during the first 10 years, this feature can help provide rising income, even after withdrawals begin. Keep in mind, if clients withdraw more than the maximum annual withdrawal amount – even if it is to meet their contract’s RMD – they will not receive an income credit on the next contract anniversary. However, if they withdraw more than the maximum annual withdrawal amount to meet their contract’s RMD, SunAmerica will not penalize them by adjusting their income base or income credit base (used to determine the annual income credit) provided withdrawals are taken through the Systematic Withdrawal Program. If withdrawals are not taken through the Systematic Withdrawal Program and the RMD exceeds the maximum annual withdrawal amount, then the income base and income credit base (if applicable) will be reduced. Also, only withdrawals taken to satisfy the RMD for that contract are eligible for this favorable treatment; withdrawals taken to satisfy RMDs for other contracts which result in annual withdrawals that exceed the maximum annual withdrawal amount will reduce the income base and income credit base (if applicable).Keep in mind guarantees are backed by the claims-paying ability of the issuing insurance company. Optional features are available at contract issue for an additional fee. Age restrictions and other limitations and requirements apply. To realize the benefits, clients must take withdrawal within the feature’s parameters. Upon each extension of the feature’s income credit period and/or evaluation period, the feature’s fee and investment requirements may change. Please see a prospectus for complete details.Note: upon each extension of the feature’s income credit period or evaluation period, the feature’s fee and investment requirements may change. Please see a prospectus for complete details.For broker/dealer use only.Not to be used with the public.
8 Competitiveness of Product/Feature Recent enhancements to PolarisMarketLock For Life: Low cost GMWB: 0.70% single life, 0.95% joint life2-year enhanced DCA Fixed accountCombination HV & Roll-up Death Benefit optionOffers 5% growth or maximum anniversary valueMaximum Anniversary Value Death Benefit now adjusted for withdrawals “dollar for dollar” with GMWB featuresInvestment requirements for GMWB features now include option to build a customized portfolioWe’ll take just a few minutes to update you on some other features that are now available on the Polaris variable annuities.This year, we introduced a low cost, market step up living benefit, called MarketLock For Life. This feature is attractive to clients who are cost sensitive and bullish about the market.We also introduced a 2-Year DCA Fixed Account for those clients who want to invest gradually in the market. (Of course, clients should consider their ability to invest during periods of market volatility. Any fixed rates credited will be paid on a declining balance. Money in this account is automatically transferred out on a monthly basis.)We also introduced a new death benefit option, available for an additional fee, that offers a market step up prior to age 85, or 5% guaranteed growth for up to 15 years (up to age 80 if earlier). This feature is designed for clients who are interested in protecting a legacy and is not available if a living benefit is selected.For clients who have selected a living benefit, we now calculate the impact of withdrawals on their death benefit “dollar for dollar” instead of pro-rata in years they take a withdrawal within the feature’s maximums. If withdrawals exceed the feature’s maximums, the death benefit will be reduced on a proportional basis.With the living benefits we’ve also expanded the number of ways that the investment requirements can be met. In addition to investing in one of three Ibbotson-designed asset allocation models, or investing in a balanced fund, you can help your clients construct a more customized investment by following some very simple allocation requirements: 30% in a fixed account, DCA fixed account or certain bond portfolios, and 70% in other equity subaccounts. Of this 70%, up to 10% can be allocated to specialty portfolios. (Keep in mind, if a DCA fixed account is used, money must be moved out of the DCA fixed account into portfolios that meet the feature’s investment requirements within the specified DCA fixed account’s time frame (for example, 6 months, 1 year or 2 years). Please see a prospectus for complete details.For broker/dealer use only.Not to be used with the public.
9 Performance AllianceBernstein American Funds (Capital Research and Management Company)ColumbiaDavisEdgeFederatedFranklin TempletonGoldman SachsJP MorganLord AbbettMacKay ShieldsMarsicoMFSOppenheimerPIMCOPutnamSunAmerica Asset MgmtVan KampenWellingtonWells CapitalSo returning to the “performance” part of our Polaris story – here are the available money managers. These are money managers that are not only respected, but also well-known – names your clients will likely recognize.For broker/dealer use only.Not to be used with the public.
10 Performance For broker/dealer use only. We’re pleased that we have so many portfolios with 10 year --- or longer – track records. In fact, many of these portfolios have achieved top 10 rankings for ten-year performance from Lipper. These are highlights from our latest Time-Tested Performance brochure you can order from our Sales Desk.Keep in mind, past performance is no guarantee of future results. The Lipper rankings shown for the Van Kampen LIT portfolios and the American Funds SAST portfolios have been adjusted to reflect the additional fees associated with the Van Kampen LIT Class II shares and American Funds SAST portfolios offered in Polaris Variable Annuities. The actual Lipper rankings are based on Van Kampen LIT Class I shares and American Funds Insurance Series funds and are as follows for periods ending 6/30/09: Van Kampen LIT Growth and Income ranked #2 out of 38 funds in the Large-Cap Value category for the 10-year period; #10 out of 95 funds for the 5-year period; #27 out of 122 funds for the 1-year period. Van Kampen LIT Comstock ranked #7 out of 38 funds in the Large-Cap Value category for the 10-year period; #45 out of 95 funds for the 5-year period; #4 out of 122 funds for the 1-year period. American Funds Global Growth ranked #5 out 16 funds in the Global Growth category for the 10-year period; #4 out of 29 funds for the 5-year period; #3 out of 46 funds for the 1-year period. American Funds Growth ranked #4 out of 36 funds in the Multi-Cap Growth category for the 10-year period; #38 out of 102 funds for the 5-year period; #100 out of 143 funds for the 1-year period.Lipper rankings are as of 6/30/09 and based on performance of the underlying fund, net of management fees, 12b-1 fees and other expenses. They do not reflect the annual mortality risk, expense risk and distribution expense charge, any withdrawal charges, the deduction of an annual contract administration charge of $35 (currently waived for contract values of $50,000 or greater) or fees for any optional features. Fees and charges vary by product. Please see the prospectus for details. An investment in Polaris involves risk. The investment return and principal value of an investment in the securities underlying a Polaris Variable Annuity will fluctuate and when redeemed, could be worth more or less than the total amount invested.1 Van Kampen Life Investment Trust—Class II shares 2 The American Funds SunAmerica Series Trust (SAST) portfolios (“Feeder Funds”) do not invest directly in individual securities; instead they invest all of their assets in corresponding funds (“Master Funds”) of the American Funds Insurance Series (“AFIS”). Investing in a Feeder Fund will result in higher fees and expenses than investing directly in a Master Fund. Please see the prospectus and Statement of Additional Information for more information regarding the master-feeder fund structure.For broker/dealer use only.Not to be used with the public.
11 Performance For broker/dealer use only. We also have a number of investment options with 4- and 5-star Morningstar rankings. Again past performance is no guarantee of future results. Morningstar, Inc. data as of 6/30/09. Morningstar is an independent investment research firm that rates the performance of variable annuity subaccounts based on return and risk. Morningstar proprietary ratings reflect historical risk-adjusted performance. These ratings are subject to change every month and are calculated from the subaccounts’ 3-, 5-, and 10-year average annual returns (as applicable) in excess of 90-day Treasury bill returns with appropriate fee adjustments, and a risk factor that reflects subaccount performance below 90-day Treasury bill returns. The overall star rating is based on a weighted average (rounded to the nearest integer) of the number of stars assigned to the subaccount in the 3-, 5-, and 10-year rating periods. Returns for the category are calculated using an average of the returns for all funds in the category. Fund returns are annualized and are computed by taking the change in net asset value, reinvesting all income and capital gains distributions and dividing by the starting net asset value. Returns are based on the performance of the underlying fund net of management, administrative and 12b-1 fees and other costs automatically taken out of fund assets. They do not reflect the annual mortality risk, expense risk and distribution expense charge, any withdrawal charges, the deduction of an annual contract administration charge of $35 (currently waived for contract values of $50,000 or greater) or fees for any optional features. Fees and charges vary by product. Please see the prospectus for details. Note: Ten percent of subaccounts in a ratings universe receive 5 stars; the next 22.5% receive 4 stars; the next 35% receive 3 stars; the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. Past performance is no guarantee of future results.For broker/dealer use only.Not to be used with the public.
12 And to give you the full performance picture, here are the 5-year and 1-year Lipper Rankings, along with the Morningstar ratings for 10-years, 5-years, and 3-years, for the portfolios presented on the last two slides.For broker/dealer use only.Not to be used with the public.
13 Supporting Your Business American Speaks Out on RetirementAs we said in the beginning, your choice of a company to do business with is not solely about product. There are other factors to consider as well. That’s why we are proud that for several years running, SunAmerica has partnered with Harris Interactive to conduct the “America Speaks Out” survey, measuring the concerns people have about retirement and other financial issues. We’ve taken the results of this research to create a client education seminar and workbook, which we’d be happy to share with you.For broker/dealer use only.Not to be used with the public.
14 Supporting Your Business R.A.M.PRetention, Acquisition, Marketing, Practice ManagementAnother way we can support you is with our newest value add program, RAMP. This program brings together a wide range of sales ideas as well as client programs to help you in 4 key areas: Retention, Acquisition, Marketing, and Practice Management. The program is getting rave reviews from advisors who have seen it and we’d welcome the opportunity to schedule a appointment with you to review this program in more detail.For broker/dealer use only.Not to be used with the public.
15 Supporting Your Business Emarketing site for personalized mailersOne more exciting way we can bring value to our relationship is with our emarketing site. The emarketing site is a way for you to create cost effective, personalized mailers and seminar invitations that can be mailed directly to clients and prospects. After you register on the site, you can upload your photograph and your client list and create personalized direct mail programs.For broker/dealer use only.Not to be used with the public.
16 Supporting Your Business Advanced MarketingTo end our discussion today, we also want to mention the resources of our Advanced Markets group. They are available to help you in a number of different areas, including our latest broker and client pieces on the expanded opportunity next year for Roth conversions.We’d like to thank you for the opportunity to speak with you and for the time you’ve given us. If we have a few more minutes available, we’d like to answer any questions you may have about the information we’ve presented to you today.For broker/dealer use only.Not to be used with the public.
17 Important Information Polaris Variable Annuities are sold by prospectus only. The prospectus contains the investment objectives, risks, fees, charges, expenses and other information regarding the contract and underlying funds, which should be considered carefully before investing. A prospectus may be obtained by calling Clients should read the prospectus carefully before investing.Annuities are designed for long-term retirement investing. Withdrawals of taxable amounts are subject to ordinary income tax and, if taken prior to age 59½, a 10% federal tax penalty may apply. Early withdrawals may be subject to withdrawal charges. Partial withdrawals also reduce benefits available under the contract as well as the amount available upon a full surrender. An investment in Polaris involves investment risk, including possible loss of principal.Polaris Variable Annuities are issued by SunAmerica Annuity and Life Assurance Company. Products and features may not be available in all states. The contract, when redeemed, may be worth more or less than the total amount invested. The purchase of Polaris is not required for, and is not a term of, the provision of any banking service or activity. Distributed by SunAmerica Capital Services, Inc.Read slide.Not FDIC or NCUA/NCUSIF InsuredMay Lose Value • No Bank or Credit Union Guarantee • Not a Deposit • Not insured by any Federal Government AgencyR4034WBP (9/09)For broker/dealer use only.Not to be used with the public.