Farmers Equity-Indexed Annuity

The Annuity With the Best of Both Worlds

 Are you looking for ways to maximize your retirement income while protecting your principal?  To accomplish this, many people diversify their retirement portfolios.  Such portfolios typically include not only stocks and bonds but also safer instruments such as certificates of deposit, Treasury bills and fixed annuities, whic provide more stable returns.

You Can Take Control of Your Future

Farmers Equity-Indexed Annuity can be a part of a program to help you to take control of your financial future.  You can achieve the potential for higher, long-term growth and protect your principal from undue risk.

If you want to buildmmore secure retirement income, you should consider the Farmers Equity-Indexed Annuity.

You Can Have the Best of Both Worlds

The Farmers Equity-Indexed Annuity is a single premium deferred annuity featuring guarantees and potential growth.  This annuity links interest earnings to increases in a leading U.S. stock market indicator, the Standard & Poor's 500 Composite Stock Price Index, known as the S&P 500 (without dividends), while providing the safety of a traditional guaranteed minimum return.  Purchase of this product does not represent participation in the stock market or the stocks that make up the S&P 500.

Index-Linked Interest Earnings

Potentially higher interest is linked to increases in the S&P 500 Index.

Income Tax Advantage

Interest earnings are not taxed until withdrawn, which allows for faster accumulation.  If earnings are held until retirement, you may be in a more favorable income tax bracket.

The S&P 500 Index

The S&P Index is a leading benchmark for U.S. equity market performance.  This index measures the combined performance of stocks from many of the largest corporations in America.  Increases in the index are a key component in determining the interest credited to the Farmers Equity-Indexed Annuity.

Income Tax-Favored Interest Accumulation

An annuity is one of the last remaining income tax-advantaged vehicles available to accumulate money for the future.  It can be used to supplement your pension or Social Security or to fund your Individual Retirement Account (IRA).  There are two main advantages to purchasing an annuity.  First, the interest you earn will not be taxed until you make a withdrawal, so your funds accumulate faster.  Second, if you access your money after retirement, chances are you'll be in a more favorable tax bracket.  This means that the income you receive through your annuity may be taxed at a lesser rate than your pre-retirement income.

Farmers Equity-Indexed Annuities can be used to fund traditional or Roth IRAs as well as SIMPLE IRAs. 

How it Works

Interest Earnings Linked to S&P 500

When you purchase a Farmers Equity-Indexed Annuity with a minimum $5,000 premium ($3,000 for IRAs), you receive interest linked to the change in the S&P 500.  The beginning Index value is set at the start of a seven-year term.  The ending index value is based on the average of S&P Index values at the end of four quarterly intervals preceding the end of the term. 

The percentage change in the S&P 500 Index value is then multiplied by a participation rate to determine the amount of interest to be credited to your annuity.  You must hold the annuity a full seven years to realize this increase in your policy value.

Guaranteed Participation Rate

Your participation rate is set at the time of issue.  It is guaranteed not to change during the term.

Your Principal is Protected

No matter what happens to the S&P 500 Index, your annuity has a guaranteed minimum value.  The value at any time is 90 percent of your initial premium (less withdrawals) accumulated at 3 percent annual interest.  Assuming no withdrawals, you are guaranteed not less than 110 percent of your initial premium when held for the full index term.

To continue on to features and how the interest earnings are calculated please click here.