The Solution
Federal Retirement Shield is a “Hybrid Insurance Policy” that offers a unique opportunity to grow your monthly premium1 deposits on a Tax Deferred basis. After the nominal administrative and insurance costs are deducted, the balance of your money will be allocated to any of the Managed Stock Market Index Strategies2 you choose that are offered within the Plan, and best yet that money will participate in the upside of the stock market through those Indexes, without any downside market risk whatsoever.
Below is an illustration ledger for a 50 year old male federal employee, who wanted to set aside $400 per month to supplement his retirement, and have the added value of a life insurance death benefit. At age 65, he will stop his premium1 contributions and take $7378 per year in loans3, to help bolster his retirement income. As long as the policy remains in force, these loans3 will be on a Tax-Free Basis. The Tax-Free Death Benefit component attached to this plan, allowed him to save money by reducing his FEGLI Part B coverage accordingly. This Death Benefit4 increases every year until the withdrawals begin, and then start to modestly decrease over time. Each financial services company product differs in the availability, riders, and optional additional features5. In addition, each product will also have its own limitations and restrictions and may have additional charges that are subject to change. the Index Strategies may be subject to a cap, participation declared rate, index gain interest rate and/or a spread which are subject to change.
The illustration ledger below is not representative of any one of the Companies that we allow to participate in Federal Retirement Shield, but rather a composite of Companies in a simplified format. It only shows the Projected Values and not the Guaranteed Values which would be much lower. The example is hypothetical, non-guaranteed and is not an indication of any policy’s and/or interest crediting option’s past or future performance.
Our Advisors will be happy to provide you with a customized illustration ledger designed specifically to address your unique retirement goals and will include all of the components of this “Hybrid Life Insurance Policy”.
Sample Ledger Illustration
Year | Age | Premium Deposit | Annual Income | Projected Yield | Accumulated Value | Surrender Value | Net Death Benefit | ||
---|---|---|---|---|---|---|---|---|---|
1 | 50 | $4,800 | $0 | 5.77% | $4,032 | $2,317 | $73,126 | ||
2 | 51 | $4,800 | $0 | 5.77% | $8,255 | $6,625 | $77,349 | ||
3 | 52 | $4,800 | $0 | 5.77% | $12,685 | $11,142 | $81,779 | ||
4 | 53 | $4,800 | $0 | 5.77% | $17,336 | $15,886 | $86,430 | ||
5 | 54 | $4,800 | $0 | 5.77% | $22,223 | $20,868 | $91,317 | ||
6 | 55 | $4,800 | $0 | 5.77% | $27,522 | $26,575 | $96,616 | ||
7 | 56 | $4,800 | $0 | 5.77% | $33,128 | $32,355 | $102,222 | ||
8 | 57 | $4,800 | $0 | 5.77% | $39,056 | $38,464 | $108,150 | ||
9 | 58 | $4,800 | $0 | 5.77% | $45,321 | $44,917 | $114,415 | ||
10 | 59 | $4,800 | $0 | 5.77% | $51,939 | $51,732 | $121,033 | ||
11 | 60 | $4,800 | $0 | 5.77% | $59,446 | $59,446 | $128,540 | ||
12 | 61 | $4,800 | $0 | 5.77% | $67,377 | $67,377 | $136, 471 | ||
13 | 62 | $4,800 | $0 | 5.77% | $75,753 | $75,753 | $144,847 | ||
14 | 63 | $4,800 | $0 | 5.77% | $84,601 | $84,601 | $153,695 | ||
15 | 64 | $4,800 | $0 | 5.77% | $93,945 | $93,945 | $163,039 | ||
$72,000 | Income Starts | $93,945 | $93,945 | $163,039 | |||||
16 | 65 | $0 | $7,378 | 5.77% | $99,143 | $91,583 | $155,478 | ||
17 | 66 | $0 | $7,378 | 5.77% | $104,598 | $89,129 | $147,570 | ||
18 | 67 | $0 | $7,378 | 5.77% | $110,327 | $86,586 | $139,298 | ||
19 | 68 | $0 | $7,378 | 5.77% | $116,350 | $83,956 | $130,645 | ||
20 | 69 | $0 | $7,378 | 5.77% | $122,688 | $81,243 | $121,594 | ||
21 | 70 | $0 | $7,378 | 5.77% | $129,344 | $78,432 | $112,127 | ||
22 | 71 | $0 | $7,378 | 5.77% | $136,379 | $75,565 | $102,224 | ||
23 | 72 | $0 | $7,378 | 5.77% | $143,842 | $72,669 | $91,866 | ||
24 | 73 | $0 | $7,378 | 5.77% | $151,792 | $69,785 | $83,446 | ||
25 | 74 | $0 | $7,378 | 5.77% | $160,242 | $66,902 | $78,119 | ||
26 | 75 | $0 | $7,378 | 5.77% | $169,805 | $64,610 | $73,100 | ||
27 | 76 | $0 | $7,378 | 5.77% | $179,873 | $62,278 | $71,272 | ||
28 | 77 | $0 | $7,378 | 5.77% | $190,468 | $59,904 | $69,427 | ||
29 | 78 | $0 | $7,378 | 5.77% | $201,613 | $57,482 | $67,563 | ||
30 | 79 | $0 | $7,378 | 5.77% | $213,331 | $55,009 | $65,676 | ||
31 | 80 | $0 | $7,378 | 5.77% | $225,642 | $52,477 | $63,760 | ||
32 | 81 | $0 | $7,378 | 5.77% | $238,567 | $49,876 | $61,804 | ||
33 | 82 | $0 | $7,378 | 5.77% | $252,124 | $47,192 | $59,799 | ||
34 | 83 | $0 | $7,378 | 5.77% | $266,333 | $44,414 | $57,730 | ||
35 | 84 | $0 | $7,378 | 5.77% | $281,210 | $41,522 | $55,582 | ||
36 | 85 | $0 | $7,378 | 5.77% | $296,758 | $38,484 | $53,322 | ||
37 | 86 | $0 | $7,378 | 5.77% | $312,999 | $35,284 | $50,933 | ||
38 | 87 | $0 | $7,378 | 5.77% | $329,940 | $31,889 | $48,336 | ||
39 | 88 | $0 | $7,378 | 5.77% | $347,578 | $28,256 | $45,635 | ||
40 | 89 | $0 | $7,378 | 5.77% | $365,905 | $24,334 | $42,629 | ||
41 | 90 | $0 | $7,378 | 5.77% | $384,921 | $20,076 | $39,322 | ||
42 | 91 | $0 | $7,378 | 5.77% | $405,225 | $16,037 | $32,246 | ||
43 | 92 | $0 | $7,378 | 5.77% | $427,044 | $12,392 | $25,204 | ||
44 | 93 | $0 | $7,378 | 5.77% | $450,650 | $9,364 | $18,377 | ||
45 | 94 | $0 | $7,378 | 5.77% | $476,372 | $7,226 | $11,989 | ||
46 | 95 | $0 | $7,378 | 5.77% | $504,400 | $6,113 | $6,113 | ||
47 | 96 | $0 | $7,378 | 5.77% | $534,073 | $5,304 | $5,304 | ||
48 | 97 | $0 | $7,378 | 5.77% | $565,491 | $4,837 | $4,837 | ||
49 | 98 | $0 | $7,378 | 5.77% | $598,757 | $4,753 | $4,753 | ||
50 | 99 | $0 | $7,378 | 5.77% | $633,983 | $5,094 | $5,094 | ||
Even though contract values may be affected by external indexes, the contract life insurance policy is not an investment in the stock market and does not participate in any stock, bond or equity investments. Information provided regarding tax or estate planning should not be considered tax or legal advice. Consult your own tax professional or attorney regarding your unique situation. Surrender charges may apply to partial and full surrenders. Surrenders may be taxable and may be subject to penalties prior to age 59 ½.
1Please review the policy for premium details. If premiums are not paid, as scheduled, your policy may terminate or may increase the likelihood that the surrender value will be insufficient to cover the monthly mortality costs and expense charges unless additional premium is paid.
2Indexed interest rates are subject to a cap, spread and/or participation rate. Caps, spreads and participation rates are subject to change at the discretion of the life insurance company.
3Surrenders, withdrawals and loans will reduce available death benefit and may be subject to surrender charges. Surrenders and withdrawals beyond basis may be taxable income and subject to penalties if taken prior to age 59 ½. Excessive and unpaid loans will reduce policy values and may cause the policy to lapse. In order to receive favorable tax treatments on distributions made during the lifetime of the
4You have the choice to change death benefit options after the first policy year.
5Optional provisions and riders have limitations, restrictions and additional charges.
insured (including loans), a life insurance policy must satisfy a 7-pay premium limitation during the first seven policy years. A new 7-year limitation will be imposed after certain policy changes. Failure to satisfy this limitation would cause your policy to be considered a Modified Endowment Contract (MEC).
Issuance of the life insurance policy depends in part on answers to health questions in the application.
Even though contract values may be affected by external indexes, the life insurance contract is not an investment in the stock market and does not participate in any stock, bond, or equity investments. Indexed growth rates are subject to caps, participation rates and/or spreads, which may change at the discretion of the Life Insurance Company.
Interest rates are subject to change.