A Guide To Fixed Annuities

Fixed Annuity products issued by Transamerica Life Insurance and Annuity Company, Charlotte, NC.These products may not be available in all jurisdictions.

IS AN ANNUITY RIGHT FOR ME?

MAYBE, MAYBE NOT.

A fixed annuity may be for you if: You are looking for a steady source of retirement

income, with low risk. You are looking for a way to grow your

retirement funds and defer taxes.

What is an Annuity?An annuity is a contract issued by an insurancecompany. When you buy an annuity the insurance

company credits interest to your annuity, guarantees minimum earnings, and pays income.

Two Phases in the Life of an Annuity The Accumulation Phase The Payout Phase, or Annuitization Phase

The Accumulation Phase Single Premium Flexible Premium

Payout Phase - Annuitization Income is paid out during the Payout Phase The most unique feature of a fixed annuity is that

it can provide a stream of income that the annuitant cannot outlive.

Is an Annuity Right for you? Are you interested in the possibility of reducing taxes? Do you need to diversify your retirement portfolio? Have you maximized tax-deferrals through an IRA, 401(k),

or other tax-qualified retirement plans? Would you like to secure your retirement income? Are you concerned with safety of principal?

If you said “yes” to any of these questions then an annuitymay be right for you because it offers security coupledwith tax-deferred growth.1

1Tax deferral is only available to individuals. It is not available for annuities ownedby entities such as corporations and most types of trusts.

Tax-Deferred GrowthBecause the earnings of an annuity grow tax-deferred until withdrawn, all your earnings-plus the money you would normally pay in taxes remains in the annuity contract to accumulate interest. With an annuity, you won’t have to pay taxes on your money as it grows, only as you withdraw it. Generally, you would withdraw funds at an older age when taxes are often lower. As a result, your nest egg can grow even faster!

Tax-Deferred EarningsComparison Chart

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Now 10 Years 20 Years 30 Years

Taxable account

Tax-deferred account

Tax-deferred account, aftertaxes upon withdrawal*

*Hypothetical rate used for illustrative purposes only. Not intended to predict or guarantee any actual product results. These amounts do not reflect the effect of fees, charges, and/or tax penalties that may apply to withdrawals from an annuity.

$50,000 Principal, 5% Compound Interest, 28% Tax Bracket

Beneficiary EarningsEnhancement (BEE) RiderWhat happens to your tax-deferred earningswhen you die? Your annuity’s earnings go to two parties: your

beneficiaries and the government. Income taxes can reduce the value of your earnings by up to 38.6%,2 taking a large bite out of your total annuity value.

2Based on 2002 IRS Tax Rate Schedules.

Beneficiary EarningsEnhancement (BEE) RiderWhat can you do? Add the Beneficiary Earnings Enhancement

(BEE) Rider to your annuity from Transamerica Life Insurance and Annuity Company. The BEE is a smart, flexible way to add value to your annuity and pass on more to your loved ones. It adds extra cash to your annuity based on what you’ve gained since adding the rider, that can be used to offset taxes or other expenses that may be incurred after you die.

Beneficiary EarningsEnhancement (BEE) RiderWhat can you do? You can choose to add the BEE to your

annuity or cancel it at any time—you’re not limited to adding it only when you purchase the annuity, or only on a policy anniversary. You can even cancel the BEE and add it back again later.3 BEE offers you extra choices as well as a way to protect your annuity’s value.

3If rider is added after previous termination, the additional death benefit amount will be recalculated based on the

new rider date.

Beneficiary EarningsEnhancement (BEE) RiderHere’s what your beneficiary gets with the BEE: For issue ages up to 70: an additional 40% on

the earnings in the annuity since the rider was elected.4 For issue ages 71 to 80: an additional 25% on the earnings since the rider was elected.4

(“Issue age” is the age of the oldest owner at the time the rider is added to the contract.5)

4Earnings are calculated during the period the rider is in effect. Benefit will change if any contributions or distributions are made afterthe rider is added.

5Rider cannot be added after age 81 of the oldest owner. Rider benefit is paid when death proceeds are payableunder the base contract and will be subject to taxation in the same manner. No benefit is payable if there are noearnings on the date the death benefit is calculated. Rider benefit is terminated when the annuity contract is annuitizedor surrendered or when the rider benefit is paid.

WHAT ADVANTAGES DOES

A FIXED ANNUITY OFFER?

Triple-Compounded,Tax Deferred Growth Your money earns interest. Your interest earns interest. The money you would have paid in taxes

remains in the account, earning interest.

Guaranteed Interest RatesThroughout the life of your annuity, you are guaranteed that your money will earn no less than the guaranteed interest rate, no matter how the market performs.

Access to Your Funds6

You can withdraw a percentage of your annuity value penalty-free.7

6May not be available in all jurisdictions.

7Under current federal tax laws, amounts withdrawn or distributed may be subject, in whole or in part, to federal income tax. In addition, a 10% federal tax penalty may apply if distributions are made prior to the owner reaching age 59 1/2.

Protection From Market RiskYour annuity is safe from the volatility of the stock and bond markets, with no risk to principal.8

8Loss of principal may occur if contract is surrendered prior to the end of the surrender charge period.

Beneficiary ProtectionAssets can pass directly to beneficiaries, avoiding the cost and delays of probate.

Extended Care Waiver6

Penalty-free access to your money upon qualifying confinement.7

6May not be available in all jurisdictions.

7Under current federal tax laws, amounts withdrawn or distributed may be subject, in whole or in part, to federal income tax. In addition, a 10% federal tax penalty may apply if distributions are made prior to the owner reaching age 59 1/2.

Flexible Payout OptionsChoose from several income options to meet your needs.

Guaranteed Income for LifeIf outliving your savings is a concern, a fixed annuity can provide the solution with a steady stream of periodic payments for the rest of your life-a retirement income you can’t outlive!

WHY TRANSAMERICA?

Not all annuities—or the companies that issue them—are alike. An annuity is only as strong as the company behind it. Your annuity is backed by the strength and financial stability of Transamerica Life Insurance and Annuity Company. For nearly a century, Transamerica companies have been leading providers of insurance and investment products for individuals and companies.

Transamerica Life Insurance and Annuity Company is a member of the AEGON Insurance Group, one of the leading life insurance and financial services organizations in the world.

Transamerica Life Insurance and Annuity Company is a member of the Insurance Marketplace Standards Association (IMSA). IMSA is an independent organization that was established to maintain high standards of market conduct for individually sold life and annuity products. Rigorous membership requirements and adherence to IMSA’s Principles and Code of Ethical Market Conduct demonstrate our commitment to the highest market and business standards.

PUT A TRANSAMERICA FIXED ANNUITYTO WORK FOR YOU!The future is now and now is the time to putyour money to work for you.

Thank you!