The Annuity Solution. Investment Products are distributed through Registered Representatives of...

The Annuity Solution

.

Investment Products are distributed through Registered Representatives of Mutual of Omaha Investor Services, Inc., Mutual of Omaha Plaza, Omaha, NE 68175-1020. Fixed Annuities underwritten by United of Omaha Life Insurance Company, Mutual of Omaha Plaza, Omaha, NE 68175.

AFN29780_0905


• Strong, secure and customer focused

• Since 1926, one of the Mutual of Omaha Companies

•Mutual of Omaha has over $18.4 billion in assets under management

United of Omaha Life Insurance Company


An annuity is an insurance policy that offers tax-deferred growth of earnings and flexible income options.

What is an Annuity?


Annuities address the two important phases of retirement planning:

• Accumulation of funds prior to retirement

• Reliable income after retirement


Why Plan Financially for Retirement?

• Maintain current lifestyle

• People are living longer

• Need for income


An annuity from United of Omaha Life Insurance Company can provide valuable protection against the loss of income resulting from increasing life expectancies.


Source: National Vital Statistics Reports, Vol. 52, No. 3, Sept, 2003

Life Expectancy at Birth

YEAR MALE FEMALE

1940 60.8 65.2

1960 66.6 73.1

1980 70.0 77.4

2000 74.3 79.7

2002 74.5 79.9


Types of Annuities

• Fixed

• Immediate

• Deferred

• Variable


• Considered safe, conservative

• Earn a fixed rate of interest

• Provide minimum rate guarantees

• Renewal rates set by insurance company

• Have flexible income options

Fixed Annuities


• Potential for higher returns vs. fixed annuities

• Greater risk because there is no initial rate guarantee

• Owner directs investment of the premium into stock or bond portfolios or a fixed account

• Variable returns - Based on the performance of selected sub-accounts

• Tax-deferred growth and death benefits

Variable Annuities


• Purchased with a single premium

• Provides guaranteed payments over a lifetime or specific period of time

Annuity payments must begin within 13 months of purchase

Immediate Annuities


Typical Income Options

• Life Annuity - Income for Life•Joint Life

•Joint and Last Survivor

• Life Annuity with Period Certain•Joint and Survivor Life with Period Certain

• Period Certain without Life


Earnings accumulate within the annuity on a tax deferred basis until a future date.

Deferred Annuities


• Taxes are not paid on the investment earnings until they are withdrawn.

• Over time, this can significantly increase the size of your nest egg.

The Power of Tax Deferral


$2

6,2

50

$2

5,9

00

$2

5,9

00

$4

0,7

22

$3

6,3

20

$3

5,6

07

$6

6,3

32

$5

4,7

59

$5

0,7

15

$1

08

,04

9$

84

,79

5$

72

,23

3$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

1 Year 10 Yrs 20 Yrs 30 Yrs

Tax-DeferredSavings

Taxable at 1, 10, 20,& 30 years*

Taxable Savings

The Power of Tax Deferral

* $25,000 one-time purchase payment, 28% tax bracket, 5% interest rate. This chart is for illustrative purposes only. Surrender penalties may apply. Withdrawals made prior to age 59 1/2 may be subject to income tax and a 10% early withdrawal penalty.


• Meet IRS guideline for certain tax advantages• Examples: Deductible IRAs and 401(k) rollovers

• Contributions may be deductible, and earnings grow tax deferred - Taxes haven’t been paid

• Withdrawals before age 59-1/2 may be subject to a 10% IRS penalty

• Required distributions must begin at age 70-1/2

Qualified Annuities


• Purchase payments made with after-tax dollars

• Creates “basis” - not taxable when distributed

• Only the earnings are taxable when withdrawn

• Withdrawals of earnings before age 59-1/2 may be subject to a 10% IRS penalty

Non-Qualified Annuities


Income from non-qualified annuities isreceived on a tax-advantaged basis.

Exclusion Ratio - The portion of each payment that is considered a return of principal and is non-taxable

• ER = Principal / Expected Return

Exclusion Ratio


$100,000 Single Premium Immediate Annuity

Non-qualified with a 10-year period certain payout

$1,050 per month for 10 years = $126,000 *

Exclusion Ratio ($100,000 / $126,000) = 79.4%

$834 (79.4%) of each payment is not taxed

Remaining $216 of monthly income is taxable * Monthly payment amount is for illustration purposes only

Exclusion Ratio Example


United of Omaha has a complete menu of annuity offerings:

• Single Premium Immediate Annuities

• Single Premium Deferred Annuities

• Flexible Premium Annuities


• Talk to your representative

• Ask questions about product features

• Learn about the available income options

• Look for a company that is reputable, consumer-oriented and financially strong

Tips on Buying Annuities


No other financial tool gives you the option of receiving a lifetime income benefit with a guarantee that your money will never run out.

Investment Products are distributed through Registered Representatives of Mutual of Omaha Investor Services, Inc., Mutual of Omaha Plaza, Omaha, NE 68175-1020. Fixed Annuities underwritten by United of Omaha Life Insurance Company, Mutual of Omaha Plaza, Omaha, NE 68175.

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