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Rating                                                                    Market
                              American Equity’s
                               commitment to
                              sound business
                            principles has been
recognized by A.M. Best, a nationally recognized
industry rating authority.

A.M. Best’s rating of “A-” (Excellent) for American
Equity is a measure of performance in the areas of:
Investment Quality     Capital Adequacy
  Policy Reserves         Cost Control
          Management Experience
A.M. Best uses 15 rating categories ranging from
A++ to F An A- rating from AM Best is its fourth
highest rating.

Tax Interpretations
Neither American Equity Investment Life Insurance
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
            Fax 515-221-9947

  Form 1003 (08/08/06)                                Annuity Contract
Market                                                 Effect of Future Interest Rate Changes on
ValueAdjusted                                               Annuity Cash Surrender Values
Annuity Contract                                         1       $107,000   $97,055    $88,580   $88,580    $88,580
The Market Value Adjusted (MVA) annuity
contract has earned a special appeal in today's          2        110,743   100,449     91,237    91,237     91,237
marketplace because it offers the consumer an            3        114,824   105,171     96,412    95,067     95,067
acceptable option to the traditional fixed annuity,      4        119,039   110,101    101,911    99,045     99,045
the common certificate of deposit and the
                                                         5        123,392   115,247    107,710   103,175    103,175
broader equity market, including stocks, bonds
                                                         6        127,889   120,618    113,824   107,473    107,465
and variable insurance products. This appeal is
enhanced by the inherent security provided by            7        132,534   126,224    120,271   114,652    111,919
deferred annuity contracts in general versus most        8        137,330   132,074    127,067   122,295    117,745
other financial strategies.                              9        142,283   138,179    134,232   130,433    126,776
                                                        10        147,398   144,550    141,784   139,096    136,484
In a declining rate environment, the Owner is
                                                        11        154,287   152,789    151,320   149,879    148,465
guaranteed a minimum interest rate, common to
                                                        12        161,427   161,427    161,427   161,427    161,427
other fixed annuities. In addition, due to the
mechanics of the MVA feature, the Cash                  * Values assume $100,000 single premium, 5% first year
Surrender Value actually increases as interest          interest rate and 3% subsequent rate.
rates fall, much like a bond. In this situation,      increased, however, the Cash Surrender Value
current credited rates for the annuity contract are   would go down, as illustrated.
typically higher than other new money strategies
which might then be available.                        During the Surrender Charge period of your
                                                      contract, American Equity permits a penalty-free
Likewise, when interest rates have increased over     Withdrawal once each year after the first Contract
a period of time, Cash Surrender Values, like         Year, which is not subject to any Market Value
bonds, may decline. However, unlike a bond, the       Adjustment, of up to 10% of the Contract Value.
Owner has the guarantee that the Cash Surrender       The Market Value Adjustment would apply only to
Value is never less than the total premiums paid,     a total Surrender or a Withdrawal in excess of this
minus Withdrawals, accumulated at the minimum         10% penalty-free partial withdrawal made during
guaranteed interest rate of the specific contract     the Surrender Charge period.
form, less any applicable Surrender Charges.
                                                      Also, in the event of death, the benefits paid would
The following table illustrates the effect of the     not be subject to a Market Value Adjustment.
Market Value Adjustment on the Cash Surrender
Value of a typical Market Value Adjusted annuity,     American Equity's Market Value Adjusted annuities
assuming future interest rates increase or            provide many advantages, plus the benefits of
decrease by 1% or 2%.                                 being associated with a financially secure life
                                                      insurance company.
In the example, the 7th year Cash Surrender
Value would be $120,271, assuming there was           American Equity's Market Value Adjusted annuity
no change in interest rates during that time          is an excellent product for financial diversification.
period. If new money rates decreased by 2% over
that same seven year time, the Cash Surrender         The Market Value Adjusted annuity is an insurance product
Value would increase to $132,534; if rates            and is not guaranteed by any bank or insured by the FDIC.

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