Legacy Optimization : A Case Study

Legacy Optimization Case Study The Problem Individuals want to pass on qualified money and IRAs to their beneficiaries but are forced to liquidate over life expectancy (RMDs). The Solution Use BalancedChoice® Annuity with the FamilyEndowment Rider® with premium bonus to provide withdrawals over the client’s lifetime while leaving an increasing legacy.

Legacy Optimization Case Study Mr. and Mrs. Jones Are 65 and 62 years old Have a large IRA and are concerned about RMDs. Mrs. Jones is most concerned about what will be left for her when Mr. Jones is gone, as Mr. Jones gets older and is forced to take a greater withdrawal each year.

RMD Solution using the BalancedChoice® Annuity 12 Foundation Core Strategy with the FamilyEndowment Rider® with 10% Premium Bonus End of Year Age RMD Paid to Client Total Income Cash Surrender Value Accumulation Value Death Benefit* 1 66 $0 $875,204 $1,091,500 $1,100,000 2 67 $875,068 $1,082,660 3 68 $874,575 $1,073,466 $1,124,864 4 69 $873,708 $1,063,905 $1,169,858 5 70 $872,448 $1,053,961 $1,216,653 6 71 $38,466 $832,309 $1,005,154 $1,226,853 7 72 $37,930 $76,396 $792,217 $956,795 $1,237,997 8 73 $37,375 $113,771 $755,791 $908,898 $1,250,142 9 74 $36,797 $150,568 $724,219 $861,474 $1,263,144 10 75 $36,196 $186,765 $692,206 $814,541 $1,276,488 11 76 $35,569 $222,334 $659,786 $768,121 $1,289,948 12 77 $34,915 $257,249 $633,797 $722,242 $1,303,261 13 78 $34,068 $291,317 $808,683 $677,096 $1,316,433 14 79 $39,837 $331,153 $768,847 $626,070 $1,315,217 15 80 $39,428 $370,581 $729,419 $575,463 $1,310,035 16 81 $39,006 $409,588 $690,412 $536,456 $1,249,770 17 82 $38,571 $448,158 $651,842 $497,886 $1,187,497 18 83 $38,119 $486,278 $613,722 $459,767 $1,123,113 19 84 $37,652 $523,929 $576,071 $422,115 $1,056,514 20 85 $37,166 $561,095 $538,905 $384,949 $987,597 21 86 $36,412 $597,508 $502,492 $348,537 $916,915 22 87 $35,638 $633,145 $466,855 $312,899 $844,422 23 88 $34,840 $667,985 $432,015 $278,059 $770,080 24 89 $34,017 $702,002 $397,998 $244,042 $693,864 25 90 $33,166 $735,169 $364,831 $210,876 $615,760 26 91 $32,003 $767,171 $332,829 $178,873 $536,621 27 92 $30,817 $797,989 $302,011 $148,055 $456,506 28 93 $29,609 $827,598 $272,402 $118,446 $375,493 29 94 $28,375 $855,973 $244,027 $90,071 $293,684 30 95 $26,816 $882,789 $217,211 $63,255 Premium • $1,000,000 Client age at issue • 65 RMD begins at age 70½ Annual Enhanced Death Benefit Rider Charge Rate • 0.85% Declared Rate Allocation • 73% Index Allocation • 27% Death Benefit roll-up • 4% Assumes 0 Percent interest credits for the life of the Contract. $561,095 $987,597 * Death Benefit is the greater of the Accumulation Value or the Enhanced Death Benefit provided under the FamilyEndowment Rider®. These hypothetical assumptions are not guaranteed; the use of alternate premium and rate assumptions could produce significantly different results.

RMD Solution using the BalancedChoice® Annuity 12 Foundation Core Strategy with the FamilyEndowment Rider® with 10% Premium Bonus End of Year Age RMD Paid to Client Total Income Cash Surrender Value Accumulation Value Death Benefit* 1 66 $0 $875,204 $1,091,500 $1,130,794 2 67 $919,856 $1,162,015 3 68 $923,620 $1,152,821 $1,194,323 4 69 $982,466 $1,227,056 5 70 $991,551 $1,217,112 $1,260,928 6 71 $44,420 $1,016,100 $1,250,802 7 72 $47,200 $91,620 $985,344 $1,194,864 $1,237,880 8 73 $46,674 $138,295 $1,017,291 $1,224,616 $1,224,761 9 74 $49,580 $187,874 $982,992 $1,166,348 $1,224,164 10 75 $49,006 $236,880 $1,011,817 $1,191,663 $1,224,060 11 76 $52,038 $288,918 $973,777 $1,131,029 $1,220,802 12 77 $51,410 $340,328 $1,009,722 $1,151,381 $1,217,868 13 78 $54,310 $394,639 $1,090,720 $1,088,606 $1,211,658 14 79 $53,730 $448,369 $1,103,612 $1,205,454 15 80 $56,596 $504,964 $1,040,605 $1,038,737 $1,195,693 16 81 $55,647 $560,612 $1,059,225 $1,138,985 17 82 $59,175 $619,786 $1,003,731 $1,002,107 $1,079,147 18 83 $58,698 $678,484 $1,016,859 $1,020,385 19 84 $62,384 $740,868 $958,009 $956,643 $991,082 20 85 $61,807 $802,675 $964,954 21 86 $65,200 $867,875 $903,108 $902,020 $934,493 22 87 $64,050 $931,925 $904,085 23 88 $67,469 $999,394 $839,757 $838,960 $869,163 24 89 $66,123 $1,065,517 $834,330 25 90 $69,527 $1,135,044 $767,702 $767,218 $794,838 26 91 $67,342 $1,202,386 $756,110 27 92 $70,010 $1,272,396 $688,727 $688,533 $713,320 28 93 $67,522 $1,339,919 $671,477 29 94 $69,946 $1,409,864 $603,962 $625,705 30 95 $66,369 $1,476,234 $581,861 Premium • $1,000,000 Client age at issue • 65 RMD begins at age 70½ Annual Enhanced Death Benefit Rider Charge Rate • 0.85% Declared Rate Allocation • 73% Index Allocation • 27% Death Benefit roll-up • 4% Non Guaranteed Rate of 3.60%** * Death Benefit is the greater of the Accumulation Value or the Enhanced Death Benefit provided under the FamilyEndowment Rider®. $802,675 $964,954 ** Non-Guaranteed Illustrated Rate – The interest-crediting rate assumed for the projected, non-guaranteed Accumulation Value column is based the hypothetical example above, assumes no other riders, and reflects the historical movement of the S&P 500® Index (excluding dividends), then averaged over the most recent 30-year period ending 12/31/2015. These hypothetical assumptions are not guaranteed; the use of alternate premium and rate assumptions could produce significantly different results.

Legacy Optimization Case Study Your clients are concerned about what will be left for their beneficiaries after having to take RMDs from their IRAs. They want a solution that allows them to spend their RMDs and still pass on as much as possible to their surviving spouse.

Disclosures These hypothetical examples assume the BalancedChoice® Annuity Foundation Core Strategy is chosen, which currently has no charge and the examples do not include an optional income rider. Amounts are shown after charges. Withdrawals or assumptions that vary from those shown will produce different results and may erode the death benefit. This example is based on current Required Minimum Distribution rates; changes in those rates will produce different results. Any withdrawals in excess of the Free Withdrawal amount will incur a Withdrawal Charge and Premium Bonus Recapture Charge. A 10% tax penalty may apply to withdrawals prior to age 59½. * Death Benefit is the greater of the Accumulation Value or the Enhanced Death Benefit provided under the FamilyEndowment Rider® with premium bonus. BalancedAllocation Strategy® and FamilyEndowment Rider® are registered trademarks of Annexus. All rights reserved including all rights to BalancedChoice® Annuity. Annuities are not FDIC insured. Guarantees provided by annuities are subject to the financial strength of the issuing insurance company and not guaranteed by any bank or the FDIC. The information contained herein is based on our understanding of current tax law. The tax and legislative information may be subject to change and different interpretations. We recommend that your clients seek professional legal advice for applicability to their personal situation. Once issued, the owner may not elect to terminate the rider for any reason. The BalancedChoice® Annuity [BAABAS (02/13), BAA12 (09/09), or state variation] and the Premium Bonus Rider with FamilyEndowment Rider® [BDBR12 (02/13) or state variation] are issued by Athene Annuity and Life Company, which was formerly known as Aviva Life and Annuity Company, which is headquartered in West Des Moines, IA. Aviva Life and Annuity Company is in the process of a name change in every state except New York to Athene Annuity and Life Company, with a planned effective date of March 3, 2014. Limitations and availability vary by state; see the applicable product Disclosure Summaries for details.

Disclosures The S&P 500® Index is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by Athene Annuity and Life Company. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Athene Annuity and Life Company. Athene Annuity and Life Company’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500® Index. The calculation for any RMD amounts indicated in these hypothetical examples are based on the previous year’s ending Accumulation Value, and do not take into consideration the value of benefits provided by any additional riders. Therefore, keep in mind that the RMD amount shown is a projected amount that could be higher or lower. If the actual RMD amount that you must withdraw is higher than the amount shown, the remaining Accumulation Value and Death Benefit amounts will be correspondingly lower. Consult your tax advisor for definitive tax consequences.