• What are they?
• Why do I need one?
• What are my SBLI annuity options?
      IRA Deferred Annuity
      Life Saver III Annuity
      Single Premium Immediate Annuity
      Optimizer Annuities
• Annuity Products Comparison Chart
• What is the fine print?
• What is my next step?

What are they?

An annuity is a contract between you and SBLI which provides tax-deferred growth. You make payments into an annuity and we promise to make payments to you for a specific period or over your entire lifetime. Our annuities are either immediate or deferred. Immediate annuities begin making guaranteed payments to you either monthly, quarterly, semi-annually, or annually. It's your choice. Deferred annuities commence payments at a later maturity date providing unique benefits such as tax deferral and enhanced growth.

The life of an annuity is often described in two phases:

• The Accumulation Phase: The period of time when contributions are made and your earnings grow tax-deferred.
• The Income Phase: The period of time when you begin to receive payouts or "distributions" from your annuity.

SBLI offers two types of annuities:

• Immediate Annuity: Provides payments immediately after you purchase the annuity.
• Deferred Annuity: Provides payments at a later date.

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Why do I need one?

It is an ideal plan for retirement because it provides regular payments (after Accumulation Phase) over the course of your entire life (or for as long as you choose). Also, it features tax-deferred growth. Simply put, the earnings on your annuity will grow, and you won't pay Federal or state taxes on the earnings until you make withdrawals.

An SBLI tax-deferred annuity is ideal if you:

• Prefer a safe, predictable place to put your retirement funds;
• Have 'maxed-out' your 401(k) contributions;
• Want to save money, tax-deferred;
• Want a steady income stream for life at a later date

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What are my SBLI annuity options?

Because everyone has different goals and objectives, SBLI offers four different annuities. For a quick overview:

IRA Deferred Annuity

There are many benefits of a traditional IRA Deferred Annuity, including:

• A guaranteed minimum interest rate of at least 3% during the Accumulation phase, with earnings that are tax-deferred;
• No limit on the number of contributions you can make in any given year. (Note: IRA annual contribution dollar limitations are determined by the IRS and may change annually.)
• A low minimum contribution – just $500 – with a maximum contribution of $250,000. Your total contributions cannot exceed $1,000,000;
• Withdrawal of money when you need it (You must generally be age 59 ½ or older to avoid IRS penalties). If you withdraw funds during the first 7 years, a surrender charge of 7% in the first year, declining 1% each year thereafter, will apply;

  During Year	1	2	3	4	5	6	7	8
  Surrender Charge	7%	6%	5%	4%	3%	2%	1%	0%

• When withdrawing funds as part of the Required Minimum Distribution, you will not be subject to surrender charges. (The Federal Government mandates that you start making withdrawals from your annuity by April 1st of the year after you attain 70 ½ years of age.)

Life Saver III Annuity

SBLI's Life Saver III Annuity is similar to the Traditional IRA Deferred Annuity, except:

• You may withdraw up to 10% of the annuity's accumulated value once per year after the first year without a withdrawal charge.
• SBLI guarantees the minimum interest rate will be at least 3% for the life of the contract;
• You may fund the annuity with transfers or exchanges from other non-qualified annuities in addition to funding it with cash;
• You may make up to 3 additional payments in any given year;
• The minimum contribution is $1,000 for additional payments;
• You must make at least one contribution annually or you'll have to start a new annuity;
• Once you have owned the annuity for 5 years, you may choose to begin receiving payments any time between the ages of 50 and 90.
• You can tailor your payment schedule: one lump sum; income for a fixed period of time; income for life with a guaranteed period of years; income for life; or income for two joint lives.

Single Premium Immediate Annuity

You can begin receiving payments immediately in the first year.

• The initial minimum deposit is $10,000;
• You can choose to receive payments monthly, quarterly, semi-annually, or annually;
• You cannot make additional contributions nor surrender the contract for cash.

Optimizer Annuities

The Optimizer Annuities are single premium tax deferred annuities. Among their benefits:

• Your money grows tax deferred until you make a withdrawal, allowing you to grow your money faster
• Competitive, guaranteed initial interest rates for up to five years
• Depending on the annuity you choose, you can earn a first-year interest rate bonus or a first year-premium bonus for higher initial premiums
• You will always receive at least your single premium less any previous surrenders and surrender charges
• Your beneficiary will receive the full accumulated value of your annuity with no surrender charges deducted, unless you have specified a non-lump sum payment
• You can withdraw all of your money without surrender charges in the case of terminal illness, chronic illness (applicable in Massachusetts), or if you are confined to a nursing home (applicable in all states except Massachusetts)

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Annuity Products Comparison Chart

	IRA Deferred Annuity	Life Saver III	Single Premium Immediate Annuity	Optimizer Single Premium Deferred Annuities
Initial Premium	Minimum initial premium $500 with maximum of $250,000. Initial interest rate guaranteed for one year. Unless approved by SBLI.	Min. initial premium $5,000. Fund with cash or 1035 exchanges. Initial interest rate guaranteed for one year.	Min. initial premium $10,000. Fund with cash.	Minimum initial premium $5,000 (into one interest rate guarantee period).*$1,000,000 ($500,000 above age 75) without prior approval.
Additional Contributions	Between $500 and $250,000. Total premiums cannot exceed $1,000,000. Any premium above the limits require prior approval. Annual IRA contributions cannot exceed maximum amounts established by the IRS.	Yes. Min. $1,000, up to 3 times per year.	No.	No.
Ages Available	Open to ages 18 through 89, including rollovers and transfers. Annual IRA contributions allowed for any taxable year in which the owner has earned compensation and has not attained age 70 1/2. All ages available for follovers and transfers.	Up to age 85 yrs., 6 mos.	Up to age 90 (Non-qualified)	Owner: up to age 85 (age last birthday of owner).
Income Payment Options	Income for a fixed period or income for life with period certain.	Withdraw in one lump sum, income for a fixed period, income for life, or income for two joint lives.	Monthly, quarterly, semiannually, or annual payments for life, a fixed number of years, or a combination of both. Direct deposit of payments available.	Life Income with Period Certain of 5, 10, 15, 20, 25 years.
Taxes	All distributions are reported to the IRS. Client and tax advisor determine the tax deductibility of contributions.	Early withdrawals may be subject to IRS penalty. Accumulates on a tax-deferred basis.	Under non-qualified plans, portion of each payment will consist of taxable interest income.	Early withdrawals may be subject to taxes and an IRS penalty if done prior to age 59 1/2. Accumulates on a tax-deferred basis. Consult with tax professional for tax advice.
Annuity Maturity	No earlier than one year from issue date of contract. Maximum Maturity Age of 90.	Matures anytime between the annuitant's age 50-90, but not earlier than 5 years from issue.	N/A	Before both annuitant and owner’s age 95.
Withdrawals	Funds can be withdrawn at any time. Any amount distributed to the annuitant after age 70 1/2 as "Required Minimum Distribution" will not be subject to any withdrawal charges.	10% of the accumulated annuity value per year may be withdrawn, once per year, free of withdrawal charges after the first contract year.	N/A	(1) 10% of the accumulated value beginning in contract year 1 (2) Required Minimum Distributions.
Surrender Charges	Withdrawal charges will apply to funds at a rate of 7% in the first year and declining 1% each year thereafter.	7% in the first year and declining 1% each year thereafter.	N/A	See chart below

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What is the fine print?

• About the Optimizer Annuities: Terminal Illness Rider: If the owner is diagnosed as having a terminal condition with not more than 12 months to live, the contract may be surrendered or a portion of the accumulated contract value may be withdrawn free of surrender charges. Chronic Illness Rider (only available in MA): If the owner fails two out of six activities of daily living the contract may be surrendered or a portion of the accumulated contract value may be withdrawn free of surrender charges. Nursing Home Rider (not available in MA): If the owner is confined in a nursing facility for 30 consecutive days, the contract may be surrendered or a portion of the accumulated contract value may be withdrawn free of surrender charges.
  Surrender charges:
  

  Year	1	2	3	4	5	6	7	8	9
  Optimizer 1	9%	8%	7%	6%	5%	0%
  Optimizer 2	8%	8%	7%	6%	5%	4%	0%
  Optimizer 3	9%	8%	7%	6%	5%	4%	0%
  Optimizer 4	9%	8%	7%	6%	5%	4%	3%	2%	0%

• State insurance laws regulate sale of these annuities, since they are insurance products. Neither the FDIC nor the Deposit Insurance Fund of Massachusetts insures these annuities, since they are not bank deposits. Banks that sell these annuities do not themselves guarantee it, and have no obligation to it. The Securities and Exchange Commission does not regulate these annuities because they are not investment securities.
• Annuity Withdrawals: SBLI Optimizer Annuities are intended to be long-term contracts to provide for retirement or other needs. All distributed earnings are subject to ordinary income tax and any applicable SBLI withdrawal charges. You may withdraw earnings from these annuities prior to retirement age (currently age 59½), but early distributions are generally subject to a 10% tax penalty in addition to ordinary income tax and any applicable SBLI withdrawal charges. Please consult with your tax professional for tax advice.
• Availability: Our IRA Deferred Annuity is currencly available in: Delaware, District of Columbia, Maine, New Hampshire, North Carolina, Rhode Island, Tennessee, Vermont, Virginia, and West Virginia. Our Life Saver III annuity is currently available in Delaware, District of Columbia, Maine, New Hampshire, North Carolina, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, and West Virginia. The Single Premium Immediate Annuity is currently available in Maine, Massachusetts, New Hampshire, and Rhode Island. Our Optimizer Annuities are currently available in Massachusetts only.
• Annuity Guarantee: All of our annuity plans have a 10 day, money-back guarantee (up to 30 days if contract involves a replacement). Return the policy within that period of receiving it, and we'll issue you a full refund.

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What is my next step?

• Request information and an SBLI representative will call you to answer any questions about our annuity products.
• Consult our Glossary of insurance and annuity terms
• Read more about the background of Massachusetts-based Savings Bank Life Insurance (SBLI).

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