Guidelines Rating Systematic
• Complete Form 4006 to request the start of
Systematic Withdrawal American Equity’s
A Flexible Distribution Program
• Payments will begin within 30 days after we sound business
receive the request (or 30 days after contract principles has been
issue if the request form and the premium recognized by A.M. Best, a nationally recognized
accompany the application) industry rating authority.
• Systematic Withdrawal may be changed once A.M. Best’s rating of “A-” (Excellent) for American
each contract year, with 30 days notice Equity is a measure of performance in the areas of:
• The minimum withdrawal must be $50, or a less Investment Quality Capital Adequacy
frequent mode will be used. (For annual Policy Reserves Cost Control
payments, contract minimums will prevail) Management Experience
A.M. Best uses 15 rating categories ranging from
• Once started, Systematic Withdrawal will
A++ to F An A- rating from AM Best is its fourth
continue until we receive written notice to
change it or the Minimum Contract Value highest rating.
Allowed is reached.
Systematic Withdrawal is a distribution system Generally, all distributions from deferred
developed by American Equity for the benefit of our annuities are deemed to be interest first, and thus
contract owners. It is not a guaranteed benefit in any are subject to income tax. Furthermore,
annuity contract and is subject to change. distributions prior to age 59½ may be subject to
additional IRS penalties.
Not all contract forms are eligible for systematic
Withdrawal. Contact the Marketing Department Neither American Equity Investment Life Insurance
for details. Company nor any of its agents give legal, tax or
investment advice. The information here is a
summary of our understanding of current tax laws
as they relate to this insurance product. Consult
your own personal advisor for these matters.
P Box 71216
Des Moines, IA 50325
Form 1005 (08/09/06) Fixed Amount
What are your All withdrawals or surrenders, including distributions from contracts offering additional
Systematic Withdrawals, may be subject to the interest. By current Company practice, these
Needs? surrender charges described in your contract. If
available, a distribution will incorporate the 10%
payouts will be penalty-free if the contract form
allows penalty-free distributions of interest-only
penalty-free withdrawal privilege as determined in the first year, and the amount being paid out
Whether you’re faced with income needs for
by the contract provisions. is less than the actual interest credited.
retirement, or the special care of a family
NOTE: While all Systematic Withdrawals in any contract year will
member, you’ve probably asked yourself: be treated as one withdrawal for penalty purposes, once the Fixed Percentage
cumulative pay-out equals the penalty-free amount, future
• Where can I get a competitive interest rate for payments in that year will have the appropriate charges deducted. We will send you a fixed percentage of your
my dollars? Contract Value in regular installments. The
• Will my money be safe?
• Will I have access to my funds if I need it? How it Works amount of the distribution payment will be re-
calculated each contract anniversary.
• Do I have a choice of income options? Simply complete the request form and we will mail NOTE: Fixed Amount and Fixed Percentage payouts may
• How will income taxes affect my rate of growth? or deposit electronically to your bank account a result in a reduction of your original premium.
payment at regular intervals until you notify us to
• Can I protect myself against inflation?
Systematic Withdrawal is a distribution
make a change, or until the Minimum Contract The Advantages
Value Allowed is reached. You may select from
program developed by American Equity to
address your concerns.
three methods of calculating the amount of your
distribution, as long as each withdrawal equals at
What is Systematic
least $50.00. Withdrawal
The attractions of Systematic Withdrawal over
Withdrawal? At the same time, your contract will continue to earn
current renewal interest rates, as well as all other normal annuitization settlement options are
With Systematic Withdrawal you can receive benefits of an American Equity deferred annuity. primarily two-fold. First, you can design and
income after 30 days from an American Equity modify the distribution format to meet your
tax-deferred annuity on a monthly, quarterly,
semi-annual or annual basis - while keeping
What Are My Options? changing cash flow needs. Second, you keep
the ability to make additional partial
complete control over your Contract Value. Interest Only withdrawals, over and above the regular
distributions, should you have any special
Unlike the settlement option for a standard The interest credited to the contract will be sent to needs in the future.
annuity, with Systematic Withdrawal you you at regular intervals. Since interest is
maintain your right to make partial or full compounded and credited daily, distributions more In addition, in the event of your death, the
withdrawals from your contract. frequent than annually will result in a slightly lower remaining Contract Value will be available to
effective annual yield than the stated rate. your beneficiaries, which may not be the case
NOTE: When used with a first-year additional interest product, with all settlement options.
interest checks will be reduced significantly after the first
contract year. IT IS SUGGESTED THAT INTEREST-ONLY NOT BE
USED BEFORE THE FIRST ANNIVERSARY WITH ADDITIONAL
How Safe is My Money?
Our high standard of quality investments and
Fixed Amount emphasis on stability have resulted in our
You may choose to receive the same amount in investing in a high percentage of government,
each check, regardless of future interest rates or government agency, and investment grade
other withdrawal activity. This method is corporate bonds—providing you with
recommended for first-year outstanding stability for your funds!
American Equity Investment Life Insurance Company