Index Annuities and Income Riders

For internal use only. Not for use with the general public.

Retirement Planning in the 21st Century

or

These Aren’t Your Fathers’ Annuities

Index Annuities and Income RidersIndex Annuities and Income Riders

page 2

1930 - 2008

American Gothic

He – 62

She – 30

He – 63

She – 37

Rod Stewart & Penny Lancaster

page 3

Retire

Re-tire, noun:

To withdraw, or go away or apart, to a place of privacy, shelter, or seclusion: He retired to his study

To go to bed: He retired at midnight

To withdraw from office, business or active life, usually because of age: to retire at the age of 60

To fall back or retreat in an orderly fashion and according to plan, as from battle, an untenable position, danger, etc.

To withdraw or remove oneself: After announcing the guests, the butler retired.

Source: www.dictionary.com

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Retirement in the News

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Retirement in the News

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Retirement – Are we ready?

Brinker Retirement Indicator Survey, March 2008

“TYPICAL” RETIREMENT AGE AN ARCHAIC NOTION

• “Do you think the concept of a ‘typical’ retirement age is still relevant in the US today?

– 86% of financial advisors weighed in with a resounding “NO”

• When asked why:

– 59% said “traditional retirement is just an outmoded concept; people will work as long as they feel physically and mentally able”

– 17% said “serious retirement saving began too late for most Americans”

– 8% said “people are living longer, therefore they’re working longer”

• When asked if their clients expect to work past 65:

– 54% said Yes

– 46% said No

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Retirement – Are we ready?

Americans view financial risk adversely. Majority of working and retired Americans say they are most interested in financial products that yield some minimum return without risk

Among already retired Americans, 81% say their standard of living has decreased or stayed the same

85% of working Americans overwhelmingly feel their living standards will remain the same or decrease

–75% of retirees report that their retirement income is lower than their most recent salary

–Workers in all age groups think Social Security is in serious trouble

Axa – Equitable survey Senior Market Advisor, April 2008

page 8

69% worry about OUTLIVING financial resources

80% are concerned about having ADEQUATE INCOMEduring retirement

Boomers will collectively LIVE LONGERLIVE LONGER than any other generation

Leading Edge Boomers; Rethinking Retirement and Exploring Annuities.Harris Interactive Inc., for Guardian Life Insurance Company of America.

Among Leading Edge Boomers

For agent use only.

page 9Source: Annuity 2000 Mortality Table. Figures assume client is in good health.

On average, what’s the life expectancy of today’s 65-year old?

LONGEVITY RISK: HOW LONG WILL YOUR CLIENTS NEED INCOME?

Male Age 65

FemaleAge 65

CoupleAge 65 92

88

85

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MaleAge 65

FemaleAge 65

CoupleAge 65

LONGEVITY RISK: HOW LONG WILL YOUR CLIENTS REALLY NEED INCOME?

9494

9797

1 out of 4 will outlive this age

9292

1 out of 2 will outlive this age

But their plan will fail 50% of the time—if they play the averages!

92

88

85

Source: Annuity 2000 Mortality Table. Figures assume client is in good health.

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48% were not sure of what their best choices were forsaving for retirement

41% admitted they were not completely confident that their retirement savings and investments were diversified sufficiently

Many still shaken by “recent” stock market turmoil-57% concerned that stock market volatility would DECREASE their retirement INCOME.


Among Leading Edge Boomers

For agent use only.


National Underwriter Life & Health December 18/25, 2006



page 15

71% liked the idea of a retirement vehicleThat provides a steady stream of income

Once they retire…

And 69% liked the idea of a vehicle that GUARANTEES THE PRINCIPAL !!

FOR INSTANCE…When asked their opinion of certain

Product benefits……


Boomers

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Boomers are attracted to investments with certain Guaranteed features

but don’t always recognize That they can get those features by buying…

ANNUITIES !


Boomers

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86%86% of leading Boomers DON’T ownAnnuities

70%70% say they have not thought of buying anAnnuity because…

YET…YET…The study found…


They don’t know enough about the product !!!They don’t know enough about the product !!!

Boomers

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Fixed Indexed Annuities for Boomers?

Steady Stream of Income

Upside Potential

CONTROL of retirement savings

Safety of Principal (assumes no withdrawals)

Safety of the Income

CONTROL of the Income


Let’s

the perception


Your ToolboxRecent Launches and the 1st Quarter 2008


Income Select Platinum

•12 / 12 / 12 / 11 / 10 / 9 / 9 / 7 / 6 / 4 / 0

•Simple - 3 Interest Crediting Strategies

•BIG rates: +1% Fixed, +2.25% Cap, +10% Par

For agent education only. Not intended to solicit annuity or life sales to public. Income Select Platinum [form FPIAR (10/07) or state variation] is issued by American Investors Life Insurance Company, Inc., Topeka, KS. Product features, limitations and availability vary by State; see disclosure for details.


•Addition to the Income Series

–Industry-Leading Liquidity

–Innovative Crediting Strategies

–Income Edge/Income Edge Plus Withdrawal Rider

•Walk-away 10-YEAR 10% Premium Bonus Product

–Credited day 1, vests over 10 years

–Competitive commission

For agent education only. Not intended to solicit annuity or life sales to public. Income Select Bonus [form FPIAX (1/08) or state variation] is a fixed indexed annuity issued by American Investors Life Insurance Company, Inc., Topeka, KS. Product features, limitations and availability vary by State; see disclosure for details.

Income Select Bonus


Product Symmetry

Income Select Plus

5% Bonus

Core Product

Income Select Platinum

No Bonus

Higher Crediting

Income Select Bonus

10% Bonus

Lower Crediting

Choices for YOUR Clients!


Income Edge Rider (Rev. 09/07)

•Guarantees lifetime income without annuitization!

•Prior to any withdrawals under the Income Edge benefit, the Income Account Value is guaranteed to increase at least 6% per year for the first 10 years.

•Three Choices for Withdrawals–Free withdrawals–Elect “Income Withdrawals”–Elect “Lifetime Income Withdrawals”

•Automatic Step-ups


–Issue Ages 40-85^

–105% Income Account Multiple

–Immediate Rider Withdrawals^

–Percentage ONLY 0.50% less for Joint Annuitants

–Non-natural Owners

–Rider charge begins immediately

^ Must be age 50+ for Lifetime Income W/ds



Income Select Series

Non-Bonus Annuities–5 Year Withdrawal Schedule

• Income Select 5

–7 Year Withdrawal Schedule• Income Select 7

–10 Year Withdrawal Schedule• Income Select 10• Income Select Platinum

*May not be available in all states, check for your state’s approval on www.Aviva.com/agents


Income Select Series

•Bonus Annuities–10 Year Withdrawal Schedule

• Income Select Plus – 5%• Income Select Bonus – 10%

*May not be available in all states, check for your state’s approval on www.Aviva.com/agents


Premium Limits

•Minimum Initial Premium–$5,000 •Maximum Initial Premium (w/o home office approval)–$1,000,000 •Additional Premiums–$1,000 Minimum–$100,000 Maximum in any 12-month period

All contracts are Flexible Premium Deferred Fixed Indexed Annuities

For Agent Use Only – not for use with the General Public.

Additional premiums are automatically deposited in to the Fixed Account if not made on a contract anniversary and may be allocated to indexed strategies at contract anniversary.


Income Select Bonus


Premium Bonus:

•10% applied for all premiums credited in the first two policy years

•Premium Bonus Recapture Charge Rate Schedule

10, 10, 10, 10, 8, 7, 6, 5, 4, 2, 0%

•Bonus is fully vested upon death of annuitant, as well any free withdrawals—Confinement, Home Health Care and Terminal Illness Waivers, 10% or 20% free, RMDs

For Internal and Agent Education Only ~ Not for use in solicitation to the general public.Bonus annuities typically include lower cap rates, higher spreads or other restrictions that are not included in similar annuities that don't offer a premium bonus feature.

Income Select Bonus


• 1 Fixed Strategy (1-Year Guar.)

• 7 Indexed Strategies– 1-Year Point-to-Point Participation Index (No Cap)– 1-Year Point-to-Point Index– 1-Year Uncapped Average Index– 1-Year Monthly Cap Index– 1-Year Uncapped Multiple Index – 1-Year Multiple Index (No Spread)– 1-Year Average Index (No Spread)

All indexed strategies lock-in and credit any index-linked interest credits each year.

Interest Crediting Strategies

Market Indices do not include dividends paid on the underlying stocks, and therefore do not reflect the total return of the underlying stocks; neither an Index nor any market-indexed annuity is comparable to a direct investment in the equity markets. Indexed annuities are not registered securities or stock market investments and do not directly participate in any stock or equity investments. Clients who purchase MultiChoice Income Series annuities are not directly investing in a stock market index.


Issue Ages

0 – 80 – no commission reduction for older ages

10-Year Withdrawal Charge Schedule

For Internal and Agent Education Only ~ Not for use in solicitation to the general public.Withdrawals in excess of the free amount are not credited with index interest for that term, are subject to withdrawal charges, premium bonus recapture charges and a market value adjustment, which are also imposed retroactively if the contract is surrendered within 12 months of a free withdrawal.

Year 1 2 3 4 5 6 7 8 9 10 11+

W/d Charge Schedule

12 12 12 11 10 9 8 7 6 4 0%

Income Select Bonus


Liquidity Options

• 10% Free Withdrawal – Beginning in Year 1

• 20% Cumulative Withdrawal – If withdrawal was not taken in the previous contract

year

• Early Income Option – SPIA conversion option after year 1

• Next Generation Income Edge or Income Edge Plus Optional Lifetime Withdrawal Rider

For Internal and Agent Education Only ~ Not for use in solicitation to the general public.Withdrawals in excess of the free amount are not credited with index interest for that term, are subject to withdrawal charges, premium bonus recapture charges and a market value adjustment, which are also imposed retroactively if the contract is surrendered within 12 months of a free withdrawal.


Confinement Waiver

• Waives withdrawal charges in the event of confinement to a qualified care facility

• 100% of Accumulated Value Available after Year 1

• Requires 60 Consecutive Days of Confinement

• No Age Restrictions– Other restrictions may apply


May not be available in all States. In Texas, this benefit is available in the first year; waiver not available in Massachusetts.


Terminal Illness Waiver

• Waives withdrawal charges in the event of terminal illness

• 100% of Accumulated Value Available after Year 1

• Requires Statement from Doctor stating that death will result within one year of diagnosis



Waiver not available in Massachusetts; in Texas, waiver is available in the first year; in Pennsylvania, waiver is referred to as the Terminal Condition Waiver.


Home Health Care Waiver

• Waives withdrawal charges in the event of qualifying home health care

• 20% of Accumulated Value available annually after year 1

• Requires Statement from Doctor regarding inability to perform 2 of 6 activities of daily living (ADLs)



May not be available in all States. In Texas, this benefit is available in the first year.


Death Benefit

• Full Accumulated Value Upon Death of Annuitant for All Ages

• No Commission Chargeback Upon Death



Premier Guaranteed Minimum Withdrawal Rider for Life

We are the original!

We have now made it even better!

Income Edge Rider [form AIR (Rev. 09/07) or state variation], an optional Rider for which an annual Premium is charged, is issued by American Investors Life Insurance Company, Topeka, KS. Product features, limitations, and availability vary by state.


Income Edge & Income Edge Plus

•Now Two Great Choices to Offer Your Clients


Choice #1


• 105% Income Account Multiple

• 6% Guaranteed Growth on the Income Account Value, prior to withdrawals

105% is applied to the Adjusted Accumulated Value and Income

Account Value for all Premium; the Accumulated Value of the Base

Contract is applied at 100%.


Guaranteed Accumulation

Years of Income Deferral

Income Account Value

1 $111,300

2 $117,978

3 $125,056

4 $132,560

5 $140,514

6 $148,945

7 $157,881

8 $167,354

9 $177,395

10 $188,039

Assumes 100% allocated to the Indexed Strategies and no withdrawals. Rider withdrawals will stop the 4% guaranteed growth in the Income Account Value.

$100,000 Premium 6% Guaranteed

AccumulationRegardless of Actual Index Performance


For Agent Use Only ~ not for use in advertising to the public.

Initial Premium $100,000$100,000

Income Select Bonus both with a 10% Premium Bonus $110,000$110,000

105% Indexed Strategy Income Account Percentage $115,500$115,500*

*Income Account Value



Choice #2

• Income Edge Plus Rider

• Income Doubles for Confinement

• Wellness Benefits: Mayo Clinic Health Risk Assessment, Personal Health Management Portal, Access to As Mayo 24-hour Nurse Line, Quarterly Mayo Clinic newsletter and calendar – with Agent contact info

• 7.2% Guaranteed Growth on the Income Account Value, prior to withdrawals

See contract for qualifying confinement criteria.


Income Edge Plus Income Account Value

Years of Income Deferral Income Account Value

No Wait $100,000

1 $107,200

2 $114,918

3 $123,193

4 $132,062

5 $141,571

6 $151,764

7 $162,691

8 $174,405

9 $186,962

10 $200,423

$100,000 Initial Premium 7.2% Guaranteed Interest for the First 10 Contract Years

Amounts assume $100,000 Initial Premium, no rider Withdrawals, no additional Premium, and a restart of the Accumulation Years after the 10th Contract Year. Rider Withdrawals stop the guaranteed growth.


Restart – Accumulation Years

• Step-up of Income Account Value to actual Accumulated Value if indexed interest credits outpace 6% or 7.2% guaranteed growth– Available on or after 5th contract anniversary

• Increased Income Account Value also increases the guaranteed income distribution amount

• Upon restart, Rider benefit is based on the current charge at the time of restart.

• Re-starting begins a new 10-year accumulation period– Must wait at least 5 years between “Restarts”

Restart initiates a new accumulation phase with the 6% guarantee in the Income Account Value for a new 10-year period. In addition to extending the guaranteed period, the Restart locks-in any indexed interest credits above the 4% guarantee in the Income Account Value.The restart is no longer available after taking income under the rider. If the cost of the rider is higher at the time of a Restart, it may be increased to the current charge at the time of Restart, but is guaranteed to never be more than 1.0%. The charge will never decrease even if the charge is lower at the time of restart. A Restart will not cause the withdrawal charge schedule to start over.

Power of RestartImpact on Income Account Value

Years of Deferral Income Account Value (6% Growth Rate) Hypothetical Accum. Value

1 $111,300 $108,000

2 $117,978 $115,560

3 $125,056 $124,804

4 $132,560 $133,540

5 $140,514 $144,223

Restart Income Account Value Accumulation Based on $144,223

Years of Deferral Income Account Value (6% Growth Rate) Hypothetical Accum. Value

6 $152,877 $144,223

7 $162,049 $149,000

8 $171,772 $152,000

9 $182,078 $160,000

10 $193,003 $172,800

11 $204,583 $186,625

12 $216,858 $200,620

13 $229,869 $230,754

14 $243,662 $230,754

15 $258,282 $245,753

Hypothetical example assumes $100,000 initial premium and varying annual interest credits and no withdrawals. This example is for illustration purposes only and is not indicative of past, nor intended to predict future performance of the annuity. Use of alternate premium and rate assumptions will produce different results.


Immediately at Issue!• Must be > Age 50 for Lifetime Income Withdrawals.• Income Withdrawals can be elected at any age.

• No longer 1-year waiting period for Rider withdrawals!

For Agent Use Only ~ not for use in advertising to the public.Taxable amounts withdrawn prior to 59½ may be subject to a 10% IRS penalty. Withdrawals in excess of the free amount are not credited with index interest for that term, may forfeit potential interest credits, may be subject to withdrawal charges and a market value adjustment. Withdrawal charges and MVA are imposed retroactively if the contract is surrendered within 12 months of a free withdrawal (not applicable to the Income Select 10 or Income Select Platinum).

Rider Income Withdrawal Availability

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Options for Distribution 4 Choices

Take normal distributions without starting Rider

Annuitization:

• Total loss of control over the asset for the client

• Irrevocable option

Elect the Income Withdrawal under the rider and receive up to 8% annually of the Income Account Value until it reaches zero

Elect Lifetime Income Withdrawal receive Annual Guaranteed Income for Life

• Maximum control over the asset for the client

Income Withdrawal percentage is 4% if attained age 50 and increases by 0.5% every five years until reaching the maximum 8% upon attained age of 90. Amount is then guaranteed as long as there are no excess withdrawals. Rider withdrawals stop the 4% guaranteed growth in the Income Account Value.

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Single Withdrawal PercentagesHow is the Income Determined?

Annuitant’s Age at Time of Election

Single Annuitant Income Percentage

50 - 54 4.00%

55 - 59 4.50%

60 - 64 5.00%

65 - 69 5.50%

70 - 74 6.00%

75 - 79 6.50%

80 - 84 7.00%

85 - 89 7.50%

90+ 8.00%

page 55

Joint Withdrawal PercentagesHow is the Income Determined?

Youngest Joint Annuitant Age at Time of Election

Joint Annuitant Income Percentage

50 - 54 3.50%

55 - 59 4.00%

60 - 64 4.50%

65 - 69 5.00%

70 - 74 5.50%

75 - 79 6.00%

80 - 84 6.50%

85 - 89 7.00%

90+ 7.50%


Automatic Step-UpDistribution

• On each contract anniversary following the first elected withdrawal, customers are eligible for an automatic step-up

• Annual benefit will be “stepped-up” (increased) if the “Adjusted” Accumulated Value exceeds the Income Account Value at the time

• Customers must notify issuing company if increase is not desired

Assumes 100% of the premium is allocated to the Indexed Strategies and no withdrawals.Income Withdrawal steps-up only if Accumulated Value exceeds the Income Account Value at the time that Income Withdrawals began.


Automatic Step-Up $100,000 Initial Premium, 70 yr. old male

Hypothetical example assumes $100,000 initial premium and varying annual interest credits as shown. The annual Lifetime Income Withdrawal amount is increased in years 2 and 5 since the Accumulated Value at the end of those contract years is greater than the Income Account Value. This example is for illustration purposes only and is not indicative of past, nor intended to predict future performance of the annuity. The use of alternate premium and rate assumptions could product significantly different results.

Year IAVAccumulated

Value

Interest Credits

Accumulated Value

Lifetime Income Withdrawal

Election $100,000 $100,000 $6,000

1 $94,000 5.0% $98,700 $6,000

2 $101,970 10.0% $101,970 $6,118

3 $95,852 0.0% $95,852 $6,118

4 $89,734 7.0% $96,015 $6,118

5 $103,381 15.0% $103,381 $6,203

6 $97,178 0.0% $97,178 $6,203

7 $90,976 5.0% $95,524 $6,203

8 $84,773 8.0% $96,467 $6,203

9 $78,570 0.0% $90,264 $6,203

10 $72,367 10.0% $92,468 $6,203


Death Benefit

• Spousal continuation benefits provided by the base contract will not be adversely affected by the Income Edge benefit

• Upon the death of the owner, if the surviving spouse is age 50 or older, the Income Edge benefit will also continue.

Surviving spouse must be age 50 or older at that time, the sole primary beneficiary and elected withdrawals not have started prior to annuitant's death.


Death Benefit

• If withdrawals under the Income Edge benefit have already been elected, the beneficiary is eligible to receive:

• Current Accumulated Value in a lump sum;

or

• Remaining Income Account Value in a series of payments up to 7.0% per year – Based on the beneficiary’s age at the time of step-in until

the amount is paid in full.*

The beneficiary, including a spousal beneficiary, does not have the option to elect Lifetime Income Withdrawals.

*7.5% ages 85-89, and 8.0% ages 90+

For Agent Use Only ~ not for use in advertising to the public.

Income EdgeIncome Edge Income Edge Income Edge PlusPlus

Issue Ages 40 – 85

Guaranteed Income Account Interest Rate

6% 7.2%

Indexed Strategy Income Account Percentage

105% 100%

Fixed Allocation Percentage 105% 100%

Wellness Benefits No Yes

Income Withdrawal Multiplier (2)

Upon Confinement0

2

(after 1-Year Qualification

Waiting Period)

Rider Charge 40 bps annually 5050 bps annually

Income Withdrawal Available Immediately (no minimum age)

Lifetime Income Withdrawal Available Immediately (if attained age 50)

Withdrawal Percentages - Joint Annuitants

0.50% less than single

Non-Natural Owner Yes


DisclosureFor internal and agent use only - not for use with the public.For internal and agent use only - not for use with the public.

Income Edge [form AIR Rev.(09/07) or state variation], an optional rider for which an annual premium is charged, and the Income Select Bonus [form FPIAX (02/08) or state variation], are issued by American Investors Life Insurance Company, Topeka, KS. Product features, limitations and

availability vary by State.During the Withdrawal Charge period, any withdrawals in excess of the free amount are not credited with index interest for that term, are subject to

withdrawal charges, premium bonus recapture charges and a market value adjustment, which are also imposed retroactively if the contract is surrendered within 12 months of a free withdrawal. Excess withdrawals may result in the loss of principal if taken during the first 10 years of the

Contract and may be subject to a 10% penalty tax assessed by the IRS on any withdrawal taken prior to age 59½.This presentation only provides product highlights—please refer to the product disclosure for information regarding exclusions,

limitations, reductions of benefits and terms, including costs and complete details of coverage.

Market Indices do not include dividends paid on the underlying stocks, and therefore do not reflect the total return of the underlying stocks; neither an Index nor any market-indexed annuity is comparable to a direct investment in the equity markets. Indexed annuities are not registered securities or

stock market investments and do not directly participate in any stock or equity investments.Bonus annuities typically include lower cap rates, higher spreads or other restrictions that are not included in similar annuities that don't

offer a premium bonus feature.


Documents

Index Annuities and Income Riders