Standard Insurance Company Deferred Annuity Application

10040 (01/05) 1 of 4 (04/09) Policy: SRA, SRA-B, SPDA, FPDA

Standard Insurance CompanyIndividual Annuities 800.247.6888 Tel 800.378.4570 Fax1100 SW Sixth Avenue Portland OR 97204-1093 www.standard.com Deferred Annuity Application

1 Purchase

G Secured Rate Annuity G SRA 1 G SRA 3 G SRA 5 G SRA 6 G First Rate Annuity G FRA 7 G Focused Growth Annuity G FGA 5 G FGA 6 G Principal Growth Annuity G PGA 5 G PGA 7 G PGA 9 G Flexible Premium Deferred Annuity G Other _____________________________________________________________________________________________

2 Annuitant (Limit to one Annuitant per contract.)

NAME SSN (or TIN) BIRTH DATE

ADDRESS CITY STATE ZIP CODE

GENDER

G Female G MalePHONE

3 Owner (Complete only if the Owner is not the Annuitant. Limit to one Owner per contract.)

NAME SSN (or TIN) BIRTH DATE


GENDER

G Female G Male G Not Applicable PHONE

TRUST NAME (IF APPLICABLE) TRUSTEE NAME (IF APPLICABLE) TRUST DATE (IF APPLICABLE)

4 Initial Premium

AMOUNT PLANNED ANNUAL PREMIUM (IF APPLICABLE) PAYMENT MODE (IF APPLICABLE)

G Monthly G Quarterly G Semiannually G AnnuallyMONEY SOURCE

G New Investment G Rollover (Attach form 12213.) G Transfer (Attach form 12213.) G Exchange (Attach form 12213.)

5 Annuity Purpose

G Non-Qualifi ed G IRA G Traditional G Roth G SEP G 403(b) TSA G Non-ERISA G ERISA with contributions from: G Participant G Employer G Qualifi ed Pension: ________ (Attach form 5835.) G Defi ned Benefi t G Defi ned Contribution

G List Bill: _____________________ ________________________________________________________________

6 Interest Paid As Earned (Attach form 5031 or IRS forms W-9 and W-4P.) (Minimum payment is $100. No additional premium will be accepted. Not available on FPDA. For payments via direct deposit, attach form 11426.)

INITIATE INTEREST PAYMENTS

G Yes G NoPAYMENT MODE

G Monthly G Quarterly G Semiannually G Annually

7 Benefi ciary Designation (To name additional benefi ciaries please use Remarks in section 8.)

PRIMARY SSN (or TIN) BIRTH/TRUST DATE RELATIONSHIP


CONTINGENT SSN (or TIN) BIRTH/TRUST DATE RELATIONSHIP


PLAN YEAR

EMPLOYER PLAN NUMBER EMPLOYER NAME


Notices and Disclosures

Contract Return; Information RequestThe owner may return the contract for any reason within thirty (30) days after it is received. If the contract is returned, The Standard will: (a) cancel the contract from the beginning; and (b) promptly refund any premium paid by the owner, less any prior partial withdrawals. Upon the owner’s written request, The Standard will provide factual information about the contract’s benefi ts and provisions within a reasonable time.

Applies if the annuity is purchased through a bank or credit union. The annuity is not a deposit. The annuity is not guaranteed by any bank or credit union. The annuity is not insured by the FDIC or by any other governmental agency. The purchase of an annuity is not a provision or condition of any bank or credit union activity. Some annuities are subject to investment risk and they may go down in value.

State Fraud Notices

AR, KY, LA, ME, NM, OH, OK, PA and TN Residents: Any person who knowingly and with intent to defraud any insurance company or other person fi les an application for insurance or statement of claim containing any materially false information or conceals for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties.

CO Residents: It is unlawful to knowingly provide false, incomplete or misleading facts or information to an insurance company for the purpose of defrauding or attempting to defraud the company. Penalties may include imprisonment, fi nes, denial of insurance and civil damages. Any insurance company or agent of any insurance company who knowingly provides false, incomplete, or misleading information to a policyholder or claimant for the purpose of defrauding or attempting to defraud the policyholder or claimant with regard to a settlement or award payable from insurance proceeds shall be reported to the Colorado Division Of Insurance of Regulatory Services.

DC Residents: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefi t or knowingly presents false information in an application for insurance is guilty of a crime and may be subject to fi nes and confi nement in prison.

FL Residents: Any person who knowingly and with intent to injure, defraud, or deceive any insurer fi les a statement of claim or an application containing any materially false, incomplete, or misleading information is guilty of a felony of the third degree.

MD Residents: Any person who knowingly and willfully presents a false or fraudulent claim for payment of a loss or benefi t or who knowingly and willfully presents false information in an application for insurance is guilty of a crime and may be subject to fi nes and confi nement in prison.

NJ Residents: Any person who includes any misleading information on an application for an insurance policy is subject to criminal and civil penalties.

Privacy StatementI understand that, in the course of processing my application, Standard Insurance Company (The Standard) may collect personal information about: (a) me; and (b) others I have identifi ed in this application; e.g. benefi ciaries, policyowners and annuitants. I understand that the personal information may include information about my: (a) age; (b) occupation; (c) income; (d) fi nances; and (e) other insurance. The Standard may obtain personal information from: (a) this application; (b) other forms I submit to The Standard; (c) an employer; (d) an insurance sales representative; (e) other insurance companies; and (f) other sources, such as The Standard’s Web sites. In the course of processing this transaction there may be circumstances in which The Standard discloses to other parties the information collected about me. I authorize The Standard to disclose personal information: (a) to an employer; (b) to organizations or persons, including insurance sales representatives, that perform services or functions necessary to process this transaction; and (c) to other insurance companies. No other disclosure may be made without my further authorization except: (a) to the extent necessary for the conduct of The Standard’s business; or (b) as permitted or required by law. I understand that failure to sign the authorization: (a) may impair the ability to process my application or evaluate my claim for benefi ts; and (b) may be the basis for denying my application or my claim for benefi ts. I understand that this authorization: (a) will automatically expire 24 months after the date I sign this form; (b) may be revoked by me at any time by sending a written request for revocation to The Standard at the address shown at the top of this form; and (c) such revocation may be the basis for denying my application or my claim for benefi ts. I also understand that: (a) I or my authorized representative has the right to request a copy of my authorization and to learn the nature and substance of any personal information about me in The Standard’s fi le; (b) I have the right to ask The Standard to correct or amend such information, if necessary; and (c) The Standard will carefully review my request and, where appropriate, make the necessary change. To obtain further information about these rights and The Standard’s information practices, I have been informed that I may request a copy of The Standard’s Notice of Information Practices from the Annuity Department at the address shown at the top of this form.

8 Remarks (WV residents must consent in writing to any changes shown in this section.) (For any additional remarks that are attached to this application, be sure to sign and date all papers.)


Declarations and Signatures

9 Annuitant and Owner

A G Yes G No The owner has existing life or annuity policies. (For states using replacement form 10443, always attach that completed form.)

B G Yes G No To the best of my knowledge, the contract applied for will replace an existing life insurance or annuity contract. In the event of replacement, I understand that the agent must leave the original or a copy of all written or printed communications used for presentation to me. I represent that all statements and information herein are true and complete to the best of my belief and knowledge. I understand that the application will be attached to and made part of the annuity contract. (If Yes, include a state replacement form where required.)

C G Yes G No I understand that The Standard guarantees additional interest to be credited to the Annuity Fund only: (a) for the fi rst contract year on an SRA 1 and an FRA; and (b) for one year from the date of premium receipt on a PGA. D G Yes G No I am buying an FGA and I have received the Focused Growth Annuity Disclosure (form 11937). I understand that the FGA includes a Market Value Adjustment feature. During the MVA period, any amount surrendered or used to provide annuity benefi ts is subject to an MVA. The MVA may increase or decrease the amounts payable under the contract. If interest rates rise after the contract effective date, the MVA will generally decrease the surrender value; if interest rates fall, the MVA will generally increase the surrender value.

____________________________________________________________________________________________ _______________________________ _______________________________ ANNUITANT SIGNATURE DATE SIGNED AT (CITY, STATE)

____________________________________________________________________________________________ _______________________________ _______________________________ OWNER SIGNATURE (IF NOT ANNUITANT) , TITLE (IF APPLICABLE) DATE SIGNED AT (CITY, STATE)

10 Insurance Broker

NAME E-MAIL PHONE

BUSINESS OR INSTITUTION NAME


LICENSE NUMBER STANDARD INSURANCE COMPANY PRODUCER IDENTIFICATION

I declare that: (a) the application was signed and dated by the annuitant, and by the owner (if not the annuitant) after all answers and information were recorded herein; and (b) I have truly and accurately recorded on this form all of the information provided by the annuitant and the owner (if not the annuitant). A G Yes G No The owner has existing life or annuity policies. (For states using replacement form 10443, always attach that completed form.)

B G Yes G No To the best of my knowledge, the contract applied for will replace an existing life insurance or annuity contract. (If Yes, include a state replacement form where required.)

C G Yes G No I certify that an appropriate product disclosure form and a Buyer’s Guide To Fixed Deferred Annuities (form 10427) have been delivered.

____________________________________________________________________________________________ _______________________________ _______________________________ INSURANCE BROKER SIGNATURE DATE SIGNED AT (CITY, STATE)

If premium is received detach and leave with purchaser.

Standard Insurance Company • Deferred Annuity Premium Receipt (Make checks payable to Standard Insurance Company.)

Received from _______________________________________________ the sum of $ _______________________ to be applied

to the purchase of a Standard Insurance Company __________________ annuity for ____________________________________.

___________________________________________________________________________ _______________________

PURCHASER NAME AMOUNT

PRODUCT ANNUITANT NAME

INSURANCE BROKER SIGNATURE DATE

Standard Insurance CompanyIndividual Annuities 800.247.6888 Tel 800.378.4570 Fax

1100 SW Sixth Avenue Portland OR 97204-1093 www.standard.com

Deferred Annuity Application


STANDARD INSURANCE COMPANY HOME OFFICE USE

12641 (10/08) 1 of 1



First Rate Annuity Disclosure

The First Rate Annuity is a single premium deferred annuity in which (a) premiums are accepted in the first 90 contract days; (b) interest is earned during the accumulation phase; and (c) the annuity payments are deferred until the maturity date or upon annuitization. The First Rate Annuity’s principal and earnings are not subject to income taxes until funds are withdrawn or distributed. A 10% IRS early-withdrawal penalty may apply to withdrawals or distributions prior to age 59½.

Issue Age A First Rate Annuity will be issued for annuitants and owners ages 0 – 90.

Contract Effective DateA First Rate Annuity’s effective date is the date the premium is received in the home office of The Standard. This date is indicated on the policy cover and in the contract’s data pages.

PremiumA First Rate Annuity may be established with an initial premium ranging from $15,000 to $1,000,000 (or more with prior home-office approval). That premium will receive the interest rate in effect as of the date the application and premium are received in the home office.Additional premium payments may be made during the first 90 days of the contract. Additional premiums will be credited with the rate in effect at the time they are received in the home office.Some states assess a premium tax, which will be deducted from the Annuity Fund by The Standard.

Safety And Guarantees The Standard guarantees that the owner or beneficiary will never receive less than 100% of the total premium payments, net of any withdrawals or loans that may have been taken.

Interest RatesThe premium payment is credited a guaranteed interest rate for one year. Thereafter the contract will receive renewal rates based on the current economic and interest-rate environment. Additional interest of 2% is credited during the first contract year.

Maturity DateThe maturity date is the later of the anniversary nearest the date the annuitant reaches age 95 and the tenth contract anniversary. At this time the contract will annuitize and begin its payout phase, unless otherwise directed.

Surrender ChargesThe surrender charges below represent a percentage of the annuity balance and may apply to withdrawals made during the contract’s surrender-charge period. Withdrawals must be $500 or more and $2,000 must remain in the account for the contract to remain in force. A 10% IRS penalty may apply to withdrawals made before age 59½.

FRA 7 Year 1 2 3 4 5 6 7Charge 9% 8% 7% 6% 5% 4% 2%

Accessing FundsThe First Rate Annuity offers many ways to access funds without incurring a surrender charge. There are no surrender charges associated with the following options, but an IRS penalty may apply before age 59½. See the marketing information for more details.• Regularlyscheduledpaymentsofinterestearnings • Annualwithdrawalsofupto10%oftheannuityfund (inclusive of all other partial withdrawals)➀ • Nursinghomeandterminalconditionwaivers➀ ➁

• SubstantiallyEqualPeriodicPayments • IRSRequiredMinimumDistributions • Out-of-surrender-charge-periodwithdrawals

AnnuitizationA First Rate Annuity may be converted into an income annuity with The Standard at any time to begin receiving regular payments without surrender charge. A life income option or an income option with a payout period of five years or more must be chosen.

Death Benefit The annuity’s value is paid to the beneficiary upon the death of the annuitant. If the annuitant is not the owner and the owner dies, the annuity’s value is paid to the beneficiary. Such death benefit must be must begin within one year of the date of death, may not extend beyond the beneficiary’s life expectancy and must be paid within 5 years of the date of death unless the beneficiary is the spouse, in which case the spouse may continue to contract as though the spouse were the original owner.

Guarantees are based on the claims-paying ability of Standard Insurance Company. Policy SPDA (9/03); Rider R-EIO (9/03), R-NHB (9/03), R-TCB (9/03), R-TEN (9/03), R-GOP (9/03), R-DB (7/04), SWO-DEF (9/01), R-ERTSA (11/08), R-NERTSA (11/08), IRA (7/02), Roth IRA (7/02), R-QPP (9/03) ➀ Available after the first contract year. ➁ The nursing home waiver is not available in Massachusetts. State-specific conditions apply to the terminal condition waiver.

12216 (04/07) �of�



Acknowledgement of Suitability in an Annuity Purchase

� Notice

Sound investment practices, as well as state regulations, dictate that annuity brokers who recommend the purchase or exchange of an annuity must have grounds to believe that the transaction is in the purchaser’s interest and is appropriate for the purchaser’s financial needs and goals. As part of this process, you and your broker should engage in a thoughtful, thorough interview in order to understand your financial background, and current and future needs. Below is a list of suggested topics for discussion. The collection and discussion of this information is for your benefit. It will be used to help your broker determine if an annuity is a suitable investment for you. This information will not be used for any other purpose and will remain confidential.

2 TopicsforDeterminationofSuitability

Financial status, net worth and current assets, including any existing annuity or life insurance Annual incomeTax status Risk toleranceInvestment objectivesCurrent and future monthly financial needsAnticipated need to access cash values in the near future (versus the annuity’s surrender charge schedule and

IRS pre-age 59½ tax penalty, if applicable)Any other information relevant to determining whether the annuity is suitable

•••••••

•

3 Acknowledgement

Determining the suitability of an annuity contract for a purchaser is the responsibility of the insurance broker, not of the insurance company. In recommending the purchase of an annuity (or the exchange of an annuity that results in another insurance transaction or series of transactions), an insurance broker shall have reasonable grounds for believing that the recommendation is suitable for the purchaser. This determination is made on the basis of facts, disclosed by the purchaser, as to his/her investments and other insurance products, and current financial situation and future financial needs.

Before executing the purchase (or exchange) of an annuity that is the result of the broker’s recommendation, an insurance broker shall make reasonable efforts to obtain information about the purchaser’s age, financial status, tax status, investment objectives and any other relevant information used or considered to be reasonable by the insurance broker in making the recommendation.

PURCHASERNAME(S)

DATEOFBIRTH

By signing below, I(we) hereby certify that the above requirements have been met in regard to the Standard Insurance Company annuity application that was signed and dated _____________________. I(We) believe this annuity is suitable based on my(our) insurance needs and financial objectives.

______________________________________________________________________________________________________________________________________________________________PURCHASERSIGNATUREDATE

______________________________________________________________________________________________________________________________________________________________PURCHASERSIGNATUREDATE

INSURANCEBROKERNAME

By signing below, I acknowledge that based on the information the Purchaser(s) provided and based on all circumstances known to me at the time the recommendation was made, this annuity purchase is suitable to the insurance needs and financial objectives of the Purchaser(s). In addition, I have verified the identity of the Purchaser(s) with government-issued photo identification and believe the identity information provided to me is true and accurate.

______________________________________________________________________________________________________________________________________________________________INSURANCEBROKERSIGNATUREDATE

APPLICATIONDATE

10601 (09/05) �of� AR,CA,ID,IL,NE,SC



Notice of Replacement of Life Insurance or Annuities

� ImportantNotice:ReplacementofLifeInsuranceorAnnuities (Thisnoticemustbesignedbytheapplicant(s)andbroker,withtheoriginalsenttoStandardInsuranceCompanyandacopyleftwiththeapplicant(s).)

Replacing your life insurance policy or annuity?

Are you thinking about buying a new life insurance policy or annuity and discontinuing or changing an existing one? If you are, your decision could be a good one — or a mistake. You will not know for sure unless you make a careful comparison of your existing benefits and the proposed benefits.

Make sure you understand the facts. You should ask the company or agent that sold you your existing policy to give you information about it and its replacement.

There may be disadvantages to dropping your existing life insurance or annuities. Hear both sides before you decide. This way you can be sure you are making a decision that is in your best interest.

We are required by law to notify your existing company that you may be replacing your policy.

You are urged not to take action to terminate, assign or alter your existing policy until your new policy has been issued and you have examined it and found it acceptable.

2 PolicyInformationforExistingInsurance

INSURERNAME INSUREDORANNUITANTNAME POLICYNUMBER* GENERICNAME FACE/ANNUITYAMOUNT

_______________________ ___________________________ ___________ ___________ $______________ _______________________ ___________________________ ___________ ___________ $______________ _______________________ ___________________________ ___________ ___________ $______________

* If a number has not been assigned by the existing insurer, indicate alternative identification such as an application or receipt number.

The proposed policy is: _________________________________________________________________ $______________

3 Acknowledgement

OWNERNAME(S) PHONE BIRTHDATE(S)

ADDRESS CITY STATE ZIPCODE

PROPOSEDINSUREDORANNUITANTNAME(S)(IFDIFFERENTTHANOWNER) PHONE BIRTHDATE(S)


______________________________________________________________________________________________________________________________________________________________OWNERSIGNATUREDATE


4 Broker

BROKERNAME PHONE LICENSENUMBER


______________________________________________________________________________________________________________________________________________________________BROKERSIGNATUREDATE

TYPEOFPOLICY—GENERICNAME FACE/ANNUITYAMOUNT

10606 (03/07) �of� IL



Notice of Replacement of Life Insurance or Annuities to Existing Carrier

ImportantNotice:ReplacementofLifeInsuranceorAnnuities(Thisnoticemustbesignedbytheapplicant(s)andbroker,withtheoriginalsenttoStandardInsuranceCompanyandacopyleftwiththeapplicant(s).)

� ExistingCarrier

NAME


You are herewith given notice that Standard Insurance Company is in receipt of an application(s) for an individual presently insured with your company for the replacement of an annuity contract.

2 ContractOwner

OWNERNAME(S)


POLICYNUMBER(S)



This notice is provided pursuant to 50 Illinois Administrative Code 917.70(c).

3 Broker

BROKERNAME PHONE LICENSENUMBER


______________________________________________________________________________________________________________________________________________________________BROKERSIGNATUREDATE

12213 1 of 2 (4/09)

Request for Rollover, Transfer or Exchange

1 Transferring Institution

COMPANY OR CUSTODIAN PHONE

STREET ADDRESS (NOT A POST OFFICE BOX) CITY STATE ZIP CODE

2 Existing Policy or Account

OWNER(S) OWNER SSNs (or TINs)


ANNUITANT(S), INSURED(S) OR PARTICIPANT ANNUITANT, INSURED(S) OR PARTICIPANT SSNs (or TINs)

BENEFICIARY (IF PARTICIPANT IS DECEASED) BENEFICIARY SSN (or TIN)

INVESTMENT VEHICLE

CD Life Insurance Annuity Custodial Account Other ___________________ACCOUNT OR CONTRACT NUMBER(S)

3 Transaction Type (Complete section A or B.)

A Qualified Funds (For rollover, transfer or exchange into a 403(b) Tax-Sheltered Annuity, use form 12213-TSA-A.)

Funds From Funds To

Traditional IRA Inherited IRA Roth IRA SEP IRA 403(b) TSA Qualified Pension or Profit Sharing Plan Other: _______________________

Initiated by Participant Traditional IRA

Roth IRA

SEP IRA

Qualified Pension or Profit Sharing Plan

Other: __________________________

Initiated by Beneficiary Inherited IRA (Attach form 13668.)

Standard Insurance Company’s Traditional IRA, Roth IRA, SEP and 403(b) contracts meet the requirements of Internal Revenue Code § 408(b), 408A, 408(k) and 403(b)(1) respectively.

B Non-Qualified Funds

Transaction Type: Direct Transfer 1035 Exchange

Additional Funds Forthcoming After This Transfer: No Yes: $________________

The undersigned owner(s) authorizes the transferring institution to liquidate and transfer the requested amount or percentage of the owner(s)’s rights, title and interest in the referenced account(s), without exception to Standard Insurance Company. This assignment is made to facilitate the exchange of all or a portion of the above-referenced policy for a new policy(ies) with Standard Insurance Company pursuant to Section 1035 of the Internal Revenue Code. The undersigned owner(s) understands and agrees that Standard Insurance Company is providing this form and participating in this exchange at the owner(s)’s request. The owner(s) acknowledges that Standard Insurance Company has not made, and will not make, any representations or warranties regarding the tax effects, if any, of this assignment, and any resulting taxes will be the sole responsibility of the owner(s). In consideration of Standard Insurance Company’s willingness to participate in this exchange, the owner(s) accepts all responsibility for the validity of this assignment and releases Standard Insurance Company from any and all claims or liability resulting from this exchange. This Absolute Assignment shall be binding on the owner(s) and on the owner(s)’s personal representatives, heirs, successors and assignees. The owner(s) acknowledges and warrants that no other person has any interest in this policy, that no proceeding in bankruptcy is pending or has been filed affecting the policy, and that any collateral assignment of the policy has been properly released by the collateral assignee prior to the execution of this Absolute Assignment contract’s benefits and provisions within a reasonable time.

Standard Insurance CompanyIndividual Annuities 800.247.6888 Tel 800.378.4570 Fax1100 SW Sixth Avenue Portland OR 97204-1093 www.standard.com

12213 2 of 2 (4/09)

4 Lost Policy Statement (Applicable only to a full surrender to effect the rollover, transfer or exchange.)

The undersigned certifies that: The policy or contract is attached. The policy or contract is lost or has been destroyed. To the best of my knowledge it is not in anyone’s possession.

5 Participant/Beneficiary Declaration (Complete only for rollover of 403(b) Tax-Sheltered Annuity funds.)

The undersigned requestor is a: Participant, older than age 59½, severed from employment or with another distributable event. The beneficiary of a deceased participant of the plan sponsor releasing these funds. Neither of the above.

6 Authorization

The undersigned owner(s) or beneficiary authorizes the transferring institution to liquidate and transfer

__________% or $ __________________ as cash from the policy or account to Standard Insurance Company:

Transfer Immediately (default action if no selection is made) Transfer on Maturity or Anniversary Date Transfer on _______________________________

I(We) authorize disclosure of information to Standard Insurance Company as necessary to complete the requested transaction. I(We) understand that the rollover, transfer or exchange will be effective on the date the check(s) is(are) received.

__________________________________________________________________________________ ________________________ OWNER OR BENEFICIARY SIGNATURE DATE

__________________________________________________________________________________ ________________________ OWNER SIGNATURE DATE

__________________________________________________________________________________ ________________________ GUARANTEE SIGNATURE (IF APPLICABLE) DATE

7 Request for Funds Transfer (To be completed only by an authorized Standard Insurance Company home-office employee.)

Standard Insurance Company is prepared to accept the assets as indicated in this document and will transfer the assets into a new or existing policy with Standard Insurance Company.

Standard Insurance Company (TIN #93-0242990) hereby requests that the above-documented surrender or partial withdrawal be transacted immediately. All proceeds, including any premiums, shall be payable and forwarded to:

Standard Insurance Company FBO:

Unit 36 P.O. Box 5000 Portland, OR 97208-5000

Please refer to the Standard Insurance Company annuity contract number: ____________________________ .

The requested action is a 1035 Exchange, therefore please: • Provide Cost Basis (see the enclosed Request For Cost Basis And Balance form).

AUTHORIZED STANDARD INSURANCE COMPANY HOME OFFICE EMPLOYEE DATE

OWNER(S), ANNUITANT(S) OR BENEFICIARY NAME

CONTRACT NUMBER

DATE

5031 (06/06) �of�



Substitute IRS Forms W-4P and W-9

� Identification

TAXPAYERNAME POLICYNUMBER(S)


Withholding Certificate for Pension or Annuity Payments — Substitute IRS Form W-4P2 FederalIncomeTaxWithholding

1 Check here if you do not want any Federal income tax withheld from your pension or annuity. ❏ (Do not complete lines 2 or 3).

2 Total number of allowances and marital status you are claiming for withholding from each periodic pension or annuity payment. (You may also designate an additional dollar amount on line 3.) _______________

❏ Single ❏ Married ❏ Married, but withhold at higher “Single” rate

3 Additional amount, if any, you want withheld from each pension or annuity payment $______________ (Note: For periodic payments, you cannot enter an amount here without entering the number (including zero) of allowances on line 2.)

3 StateIncomeTaxWithholding

1 State for income tax withholding _______________ ❏ Withhold ❏ Do Not Withhold (unless required)

2 Additional amount, if any, you want withheld from each pension or annuity payment $______________

Request for Taxpayer Identification Number and Certification — Substitute IRS Form W-9This form is required. If the form is not on file, Standard Insurance Company will be required to withhold income taxes according to Internal Revenue Service guidelines. You (as payee) are required by law to provide Standard Insurance Company (as payor) with your correct taxpayer identification number (generally your Social Security number). Failure to do so may result in a $50 penalty imposed by the Internal Revenue Service. In addition, in the event of such failure, we are required to withhold from your taxable distribution according to current regulation, regardless of your withholding election above.

4 TaxpayerIdentificationNumber(TIN)

TAXIDENTIFICATIONNUMBER(E.G.SOCIALSECURITYNUMBER)

5 Certification

Under penalties of perjury, I certify that: 1 The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and 2 I am not subject to backup withholding because: (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3 I am a U.S. person (including a U.S. resident alien). Important Note: You must STRIKE OUT the language in section (2) above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.

6 Authorization

I have completed appropriate sections of this form and represent that all information is true and accurate. The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.

______________________________________________________________________________________________________________________________________________________________TAXPAYERSIGNATUREDATE

ALLOWANCES

AMOUNT

STATE

AMOUNT

BUYER’S GUIDE TOFIXED DEFERRED ANNUITIESWITHAPPENDIX FOR EQUITY-INDEXEDANNUITIES

Prepared by theNAIC

National Association of Insurance Commissioners

The National Association of Insurance Commissioners is anassociation of state insurance regulatory officials. This association helps the various insurance departments to

coordinate insurance laws for the benefit of all consumers.

This guide does not endorse any company or policy.

Reprinted by....

©1999 National Association of Insurance Commissioners

1

IT ISIMPORTANT

That you understand the differences among various annuities so you canchoose the kind that best fits your needs. This guide focuses on fixeddeferred annuity contracts. There is, however, a brief description of vari-able annuities. If you're thinking of buying an equity-indexed annuity, anappendix to this guide will give you specific information. This Guideisn't meant to offer legal, financial or tax advice. You may want to con-sult independent advisors. At the end of this Guide are questions youshould ask your agent or the company. Make sure you're satisfied withthe answers before you buy.

WHAT ISAN ANNUITY?

An annuity is a contract in which an insurance company makes a series ofincome payments at regular intervals in return for a premium or premiumsyou have paid. Annuities are most often bought for future retirement income.Only an annuity can pay an income that can be guaranteed to last as long asyou live.

An annuity is neither a life insurance nor a health insurance policy. It's not asavings account or a savings certificate. You shouldn't buy an annuity toreach short-term financial goals.

Your value in an annuity contract is the premiumsyou've paid, less any applicable charges, plus inter-est credited. The insurance company uses the valueto figure the amount of most of the benefits thatyou can choose to receive from an annuity contract.This guide explains how interest is credited as wellas some typical charges and benefits of annuitycontracts.

A deferred annuity has two parts or periods.During the accumulation period, the money you putinto the annuity, less any applicable charges, earnsinterest. The earnings grow tax-deferred as long asyou leave them in the annuity. During the secondperiod, called the payout period, the company paysincome to you or to someone you choose.

WHAT ARE THE DIFFERENT KINDS OF ANNUITIES?

This guide explains major differences in different kinds of annuities to helpyou understand how each might meet your needs. But look at the specificterms of an individual contract you're considering and the disclosure docu-ment you receive. If your annuity is being used to fund or provide benefitsunder a pension plan, the benefits you get will depend on the terms of theplan. Contact your pension plan administrator for information.

This Buyer’s Guide will focus on individual fixed deferred annuities.2

3

SINGLE PREMIUM OR MULTIPLE PREMIUMYou pay the insurance company only one payment for a single premiumannuity. You make a series of payments for a multiple premium annuity.There are two kinds of multiple premium annuities. One kind is a flexiblepremium contract. Within set limits, you pay as much premium as youwant, whenever you want. In the other kind, a scheduled premium annuity,the contract spells out your payments and how often you'll make them.

IMMEDIATE OR DEFERREDWith an immediate annuity, income payments start no later than one yearafter you pay the premium. You usually pay for an immediate annuity withone payment.

The income payments from a deferred annuity often start many years later.Deferred annuities have an accumulation period, which is the time betweenwhen you start paying premiums and when income payments start.

FIXED OR VARIABLE Fixed

During the accumulation period of a fixed deferred annuity, your money(less any applicable charges) earns interest at rates set by the insurancecompany or in a way spelled out in the annuity contract. The companyguarantees that it will pay no less than a minimum rate of interest. Duringthe payout period, the amount of each income payment to you is generallyset when the payments start and will not change.

VariableDuring the accumulation period of a variable annuity, the insurance compa-ny puts your premiums (less any applicable charges) into a separateaccount. You decide how the company will invest those premiums, depend-ing on how much risk you want to take. You may put your premium into astock, bond or other account, with no guarantees, or into a fixed account,with a minimum guaranteed interest. During the payout period of a variableannuity, the amount of each income payment to you may be fixed (set at thebeginning) or variable (changing with the value of the investments in theseparate account).

HOW ARE THE INTEREST RATES SET FOR MY FIXED DEFERRED ANNUITY?

During the accumulation period, your money (less any applicable charges)earns interest at rates that change from time to time. Usually, what theserates will be is entirely up to the insurance company.

CURRENT INTEREST RATEThe current rate is the rate the company decides to credit to your contract ata particular time. The company will guarantee it will not charge for sometime period.

The initial rate is an interest rate the insurance company may credit for aset period of time after you first buy your annuity. The initial rate in somecontracts may be higher than it will be later. This is often called a bonusrate.

The renewal rate is the rate credited by the company after the end of theset time period. The contract tells how the company will set the renewalrate, which may be tied to an external reference or index.

MINIMUM GUARANTEED RATEThe minimum guaranteed interest rate is the lowest rate your annuity willearn. This rate is stated in the contract.

MULTIPLE INTERESTRATESSome annuity contracts apply differ-ent interest rates to each premiumyou pay or to premiums you pay dur-ing different time periods.

Other annuity contracts may havetwo or more accumulated values thatfund different benefit options. Theseaccumulated values may use differ-ent interest rates. You get only oneof the accumulated values dependingon which benefit you choose.

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WHAT CHARGES MAY BE SUBTRACTED FROM MYFIXED DEFERRED ANNUITY?

Most annuities have charges related to the cost of selling or servicing it.These charges may be subtracted directly from the contract value. Ask youragent or the company to describe the charges that apply to your annuity.Some examples of charges, fees and taxes are:

SURRENDER OR WITHDRAWAL CHARGESIf you need access to your money, you may be able to take all or part of thevalue out of your annuity at any time during the accumulation period. If youtake out part of the value, you may pay a withdrawal charge. If you take outall of the value and surrender, or terminate, the annuity, you may pay a sur-render charge. In either case, the company may figure the charge as a per-centage of the value of the contract, of the premiums you've paid or of theamount you're withdrawing. The company may reduce or even eliminate thesurrender charge after you've had the contract for a stated number of years. Acompany may waive the surrender charge when it pays a death benefit.

Some annuities have stated terms. When the term is up, the contract mayautomatically expire or renew. You're usually given a short period of time,called a window, to decide if you want to renew or surrender the annuity. Ifyou surrender during the window, you won't have to pay surrender charges. Ifyou renew, the surrender or withdrawal charges may start over.

In some annuities, there is no charge if you surrender your contract when thecompany's current interest rate falls below a certain level. This may be calleda bail-out option.

In a multiple-premium annuity, the surrender charge may apply to each pre-mium paid for a certain period of time. This may be called a rolling surren-der or withdrawal charge.

Some annuity contracts have a market value adjustment feature. If interestrates are different when you surrender your annuity than when you bought it,a market value adjustment may make the cash surrender value higher orlower. Since you and the insurance company share this risk, an annuity withan MVA feature may credit a higher rate than an annuity without the feature.

Be sure to read the Tax Treatment section and ask your tax advisor for infor-mation about possible tax penalties on withdrawals.

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FREE WITHDRAWALYour annuity may have a limited free withdrawal feature. That lets you make one or more withdrawals without a charge. The size of the free withdrawal is often limited toa set percentage of your contract value. Ifyou make a larger withdrawal, you may paywithdrawal charges. You may lose any inter-est above the minimum guaranteed rate onthe amount withdrawn. Some annuitieswaive withdrawal charges in certain situa-tions, such as death, confinement in a nursinghome or terminal illness.

CONTRACT FEEA contract fee is a flat dollar amount charged either once or annually.

TRANSACTION FEEA transaction fee is a charge per premiumpayment or other transaction.

PERCENTAGE OF PREMIUM CHARGEA percentage of premium charge is a charge deducted from each premiumpaid. The percentage may be lower after the contract has been in force for acertain number of years or after total premiums paid have reached a certainamount.

PREMIUM TAXSome states charge a tax on annuities. The insurance company pays this taxto the state. The company may subtract the amount of the tax when you payyour premium, when you withdraw you contract value, when you start toreceive income payments or when it pays a death benefit to your benefici-ary.

WHAT ARE SOME FIXED DEFERRED ANNUITY CONTRACT BENEFITS?

ANNUITY INCOME PAYMENTSOne of the most important benefits of deferred annuities is your ability touse the value built up during the accumulation period to give you a lumpsum payment or to make income payments during the payout period.Income payments are usually made monthly but you may choose to receivethem less often. The size of income payments is based on the accumulatedvalue in your annuity and the annuity's benefit rate in effect when incomepayments start. The benefit rate usually depends on your age and sex, andthe annuity payment option you choose. For example, you might choosepayments that continue as long as you live, as long as your spouse lives orfor a set number of years.

There is a table of guaranteed benefitrates in each annuity contract. Mostcompanies have current benefit rates aswell. The company can change the cur-rent rates at any time, but the currentrates can never be less than the guaran-teed benefit rates. When income pay-ments start, the insurance companygenerally uses the benefit rate in effectat the time to figure the amount of yourincome payment.

Companies may offer various incomepayment options. You (the owner) oranother person that you name maychoose the option. The options aredescribed here as if the payments aremade to you.

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Life OnlyThe company pays income for your lifetime. Itdoesn't make any payments to anyone after youdie. This payment option usually pays the high-est income possible. You might choose it if youhave no dependents, if you have taken care ofthem through other means or if the dependantshave enough income of their own.

Life Annuity with Period CertainThe company pays income for as long as you liveand guarantees to make payments for a set num-ber of years even if you die. This period certainis usually 10 or 20 years. If you live longer thanthe period certain, you’ll continue to receive pay-ments until you die. If you die during the periodcertain, your beneficiary gets regular paymentsfor the rest of that period. If you die after theperiod certain, your beneficiary doesn't receiveany payments from your annuity. Because the"period certain" is an added benefit,each incomepayment will be smaller than in a life-onlyoption.

Joint and SurvivorThe company pays income as long as either you or your beneficiary lives.You may choose to decrease the amount of the payments after the firstdeath. You may also be able to choose to have payments continue for a setlength of time. Because the survivor feature is an added benefit, eachincome payment is smaller than in a life-only option.

DEATH BENEFITIn some annuity contracts, the company may pay a death benefit to yourbeneficiary if you die before the income payments start. The most commondeath benefit is the contract value or the premiums paid, whichever is more.

CAN MY ANNUITY'S VALUEBE DIFFERENT DEPENDING ON MY CHOICE OF BENEFIT?

While all deferred annuities offer a choice of benefits, some use differentaccumulated values to pay different benefits. For example, an annuity mayuse one value if annuity payments are for retirement benefits and a differentvalue if the annuity is surrendered . As another example, an annuity may useone value for long-term care benefits and a different value if the annuity issurrendered. You can't receive more than one benefit at the same time.

WHAT ABOUT THETAX TREATMENT OF ANNUITIES?

Below is a general discussion about taxes and annuities. You should consulta professional tax advisor to discuss your individual tax situation.

Under current federal law, annuities receive special tax treatment. Income taxon annuities is deferred, which means you aren't taxed on the interest yourmoney earns while it stays in the annuity. Tax-deferred accumulation isn'tthe same as tax-free accumulation. An advantage of tax deferral is that thetax bracket you're in when you receive annuity income payments may belower than the one you're in during the accumulation period. You'll also beearning interest on the amount you would have paid in taxes during the accu-mulation period. Most states' tax laws on annuities follow the federal law.

Part of the payments you receive from annuity will be considered as a returnof the premium you've paid. You won't have to pay taxes on that part.Another part of the payments is considered interest you've earned. You mustpay taxes on the part that is considered interest when you withdraw themoney. You may also have to pay a 10% tax penalty if you draw the accu-mulation before age 59 ½. The Internal Revenue Code also has rules aboutdistributions after the death of a contract holder.

Annuities used to fund certain employee pension benefit plans (those underInternal Revenue Code Sections 401(a), 401(k), 403(b), 457 or 414) defertaxes on plan contributions as well as on interest or investment income.Within the limits set by the law, you can use pretax dollars to make paymentsto the annuity. When you take money out, it will be taxed.

You can also use annuities to fund traditional and Roth IRAs under InternalRevenue Code Section 408. If you buy an annuity to fund an IRA, you'llreceive a disclosure statement describing the tax treatment. 9

WHAT IS A"FREE LOOK" PROVISION?

Many states have laws which give you a set number of days to look at the annu-ity contract after you buy it. If you decide during that time that you don't wantthe annuity, you can return the contract and get all your money back. This isoften referred to as a free look or right to return period. The free look periodshould be prominently stated in your contract. Be sure to read your contractcarefully during the free look period.

HOW DO I KNOWIF A FIXED DEFERRED ANNUITY IS RIGHT FOR ME?

The questions listed below may help you decide which type of annuity, if any,meets your retirement planning and financial needs. You should think aboutwhat your goals are for the money you may put into the annuity. You need tothink about how much risk you're willing to take with the money. Ask your-self:

How much retirement income will I need in addi-tion to what I will get from Social Security and mypension?

Will I need that additional income only for myselfor for myself and someone else?

How long can I leave my money in the annuity?

When will I need income payments?

Does the annuity let me get money when I need it?

Do I want a fixed annuity with a guaranteed inter-est rate and little or no risk of losing the principal?

Do I want a variable annuity with the potential forhigher earnings that aren't guaranteed and the pos-sibility that I may risk losing principal?

Or, am I somewhere in between and willing totake some risks with an equity-indexed annuity?

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WHAT QUESTIONS SHOULD I ASK MY AGENT OR THE COMPANY?

Is this a single premium or multiple premiumcontract?

Is this an equity-indexed annuity?

What is the initial interest rate and how long isit guaranteed?

Does the initial rate include a bonus rate andhow much is the bonus?

What is the guaranteed minimum interest rate?

What renewal rate is the company crediting onannuity contracts of the same type that wereissued last year?

Are there withdrawal or surrender charges or penalties if I want to end mycontract early and take out all of my money? How much are they?

Can I get a partial withdrawal without paying surrender or other charges orlosing interest?

Does my annuity waive withdrawal charges for reasons such as death, con-finement in a nursing home or terminal illness?

Is there a market value adjustment (MVA) provision in my annuity?

What other charges, if any, may be deducted from my premium or contractvalue?

If I pick a shorter or longer payout period or surrender the annuity, will theaccumulated value or the way interest is credited change? Is there a deathbenefit? How is it set? Can it change?

What income payment options can I choose? Once I choose a paymentoption, can I change it?

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FINAL POINTS TO CONSIDER

Before you decide to buy an annuity, you should review the contract. Termsand conditions of each annuity contract will vary.

Ask yourself if, depending on your needs or age, this annuity is right foryou. Taking money out of an annuity may mean you must pay taxes. Also,while it's sometimes possible to transfer the value of an older annuity into anew annuity, the new annuity may have a new schedule of charges thatcould mean new expenses you must pay directly or indirectly.

You should understand the long-term nature of your purchase. Be sure youplan to keep an annuity long enough so that the charges don't take too muchof the money you put in. Be sure you understand the effect of all charges.

If you're buying an annuity to fund an IRA or other tax-deferred retirementprogram, be sure that you're eligible. Also, ask if there are any restrictionsconnected with the program.

Remember that the quality of service that youcan expect from the company and the agent is avery important factor in your decision.

When you receive you annuity contract, READIT CAREFULLY!! Ask the agent and companyfor an explanation of anything you don't under-stand. Do this before any free look periodends.

Compare information or similar contracts fromseveral companies. Comparing products mayhelp you make better decisions.

If you have a specific question or can't get answers you need from the agentor company, contact your state insurance department.

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APPENDIX IEQUITY-INDEXED ANNUITIES

This appendix to the Buyer's Guide for Fixed Deferred Annuities willfocus on equity-indexed annuities. Like other types of fixed deferredannuities, equity-indexed annuities provide for annuity income payments,death benefits and tax-deferred accumulation. You should read theBuyer's Guide for general information about those features and about pro-visions such as withdrawal and surrender charges.

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WHAT AREEQUITY-INDEXED ANNUITIES?

An equity-indexed annuity is afixed annuity, either immediateor deferred, that earns interestor provides benefits that arelinked to an external equityreference or an equity index.The value of the index mightbe tied to a stock or other equi-ty index. One of the mostcommonly used indices isStandard & Poor's 500Composite Stock Price Index(the S&P 500)1, which is anequity index. The value of anyindex varies from day to dayand is not predictable.

When you buy an equity-indexed annuity you own an insurance contract.You are not buying shares of any stock or index.

While immediate equity-indexed annuities may be available, this appendixwill focus on deferred equity-indexed annuities.

HOW ARE THEY DIFFERENTFROM OTHER FIXED ANNUITIES?

An equity-indexed annuity isdifferent from other fixed annu-ities because of the way it cred-its interest to your annuity'svalue. Some fixed annuitiesonly credit interest calculated ata rate set in the contract. Otherfixed annuities also credit inter-est at rates set from time to timeby the insurance company.Equity-indexed annuities creditinterest using a formula basedon changes in the index to whichthe annuity is linked. The for-mula decides how the additionalinterest you get and when youget it depends on the features ofyour particular annuity.

Your equity-indexed annuity, like other fixed annuities also promises to paya minimum interest rate. The rate that will be applied will not be less thanthis minimum guaranteed rate even if the index-linked interest rate is lower.The value of your annuity also will not drop below a guaranteed minimum.For example, many single premium contracts guarantee the minimum valuewill never be less that 90 percent of the premium paid, plus at least 3% inannual interest (less any partial withdrawals). The guaranteed value is theminimum amount available during a term for withdrawals, as well as forsome annuitizations (see "Annuity Income Payments") and death benefits.The insurance company will adjust the value of the annuity at the end ofeach term to reflect any index increases.

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WHAT ARE SOMEEQUITY-INDEXED ANNUITYCONTRACT FEATURES?

Two features that have the greatest effect on the amount of additional inter-est that may be credited to an equity-indexed annuity are the indexingmethod and the participation rate. It is important to understand the featuresand how they work together. The following describes some other equity-indexed annuity features that affect the index-linked formula.

INDEXING METHODThe indexing method means the approach used to measure the amount ofchange, if any, in the index. Some of the most common indexing methods,which are explained more fully later on, include annual reset (ratcheting),high-water mark and point-to-point.

TERMThe index term is the period over which index-linked interest is calculated;the interest is credited to your annuity at the end of a term. Terms are gen-erally from one to ten years, with six or seven years being most common.Some annuities offer single terms while others offer multiple, consecutiveterms. If your annuity has multiple terms, there will usually be a window atthe end of each term, typically 30 days, during which you may withdrawyour money without penalty. For installment premium annuities, the pay-ment of each premium may begin a new term for that premium.

PARTICIPATION RATEThe participation rate decides how much of the increase in the index will beused to calculated index-linked interest. For example, if the calculatedchange in the index is 9% and the participation rate is 70%, the index linkedinterest rate for your annuity will be 6.3% (9% x 70% = 6.3%). A companymay set a different participation rate for newly issued annuities as often aseach day. Therefore, the initial participation rate in your annuity willdepend on when it is issued by the company. The company usually guaran-tees the participation rate for a specific period (from one year to the entireterm). When that period is over, the company sets a new participation ratefor the next period. Some annuities guarantee that the participation rate willnever be set lower than a specified minimum or higher than a specifiedmaximum.

CAP RATE OR CAPSome annuities may put an upper limit, or cap, on the index-linked interestrate. This is the maximum rate of interest the annuity will earn. In theexample given above, if the contract has a 6% cap rate, 6%, and not 6.3%,would be credited. Not all annuities have a cap rate.

FLOOR ON EQUITY INDEX-LINKED INTERESTThe floor is the minimum index-linked interest rate you will earn. The mostcommon floor is 0%. A 0% floor assures that even if the index decreases invalue, the index-linked interest that you earn will be zero and not negative.As in the case of a cap, not all annuities have a stated floor on index-linkedinterest rates. But in all cases, your fixed annuity will have a minimumguaranteed value.

AVERAGINGIn some annuities, the average of anindex's value is used rather than the actu-al value of the index on a specified date.The index averaging may occur at thebeginning, the end, or throughout theentire term of the annuity.

INTEREST COMPOUNDINGSome annuities pay simple interest dur-ing an index term. That means index-linked interest is added to your originalpremium amount but does not compoundduring the term. Others pay compoundinterest during a term, which means thatindex-linked interest that has alreadybeen credited also earns interest in thefuture. In either case, however, the inter-est earned in one term is usually com-pounded in the next.

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MARGIN/SPREAD/ADMINISTRATIVE FEEIn some annuities, the index-linked interestrate is computed by subtracting a specificpercentage from any calculated change inthe index. This percentage, sometimesreferred to as the "margin," "spread," or"administrative fee," might be instead of, orin addition to, a participation rate. Forexample, if the calculated change in theindex is 10%, your annuity might specifythat 2.25% will be subtracted from the rateto determine the interest rate credited. Inthis example, the rate would be 7.75% (10%- 2.25% = 7.75%). In this example, thecompany subtracts the percentage only ifthe change in the index produces a positiveinterest rate.

VESTINGSome annuities credit none of the index-linked interest or only part of it, ifyou take out all your money before the end of the term. The percentage thatis vested, or credited, generally increases as the term comes closer to its endand is always 100% at the end of the term.

HOW DO THECOMMON INDEXINGMETHODS DIFFER?

ANNUAL RESETIndex-linked interest, if any, is determined each year by comparing theindex value at the end of the contract year with the index value at the startof the contract year. Interest is added to your annuity each year during theterm.

HIGH-WATER MARKThe index-linked interest, if any, is decided by looking at the index value atvarious points during the term, usually the annual anniversaries of the dateyou bought the annuity. The interest is based on the difference between thehighest index value and the index value at the start of the term. Interest isadded to your annuity at the end of the term.

LOW-WATER MARKThe index-linked interest, if any, isdetermined by looking at the indexvalue at various points during the term,usually the annual anniversaries of thedate you bought the annuity. The inter-est is based on the difference betweenthe index value at the end of the termand the lowest index value. Interest isadded to your annuity at the end of theterm.

POINT-TO-POINTThe index-linked interest, if any, isbased on the difference between theindex value at the end of the term andthe index value at the start of the term.Interest is added to your annuity at theend of the term.

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WHAT ARE SOME OF THEFEATURES AND TRADE-OFFS OFDIFFERENT INDEXING METHODS?

ANNUAL RESETSince the interest earned is "locked in" annually and the index value is"reset" at the end of each year, future decreases in the index will not affectthe interest you have already earned. Therefore, your annuity using theannual reset method may credit more interest than annuities using othermethods when the index fluctuates up and down often during the term. Thisdesign is more likely than others to give you access to index-linked interestbefore the term ends.

HIGH-WATER MARKSince interest is calculated using the highest value of the index on a contractanniversary during the term, this design may credit higher interest thansome other designs if the index reaches a high point early or in the middleof the term, then drops off at the end of the term.

LOW-WATER MARKSince interest is calculated using the lowest value of the index prior to theend of the term, this design may credit higher interest than some otherdesigns if the index reaches a low point early or in the middle of the termand then rises at the end of the term.

POINT-TO-POINTSince interest cannot be calculated before the end of the term, use of thisdesign may permit a higher participation rate than annuities using otherdesigns.

FEATURES

Generally, equity-indexed annuities offer preset combinations of features.You m ay have to make trade-offs to get features you want in an annuity.This means the annuity you chose may also have features you don’t want.

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TRADE-OFFS

ANNUAL RESETYour annuity's participation rate may change each year and generally will belower than that of other indexing methods. Also an annual reset design mayuse a cap or averaging to limit the total amount of interest you might earneach year.

HIGH-WATER MARKInterest is not credited until the end of the term. In some annuities, if yousurrender your annuity before the end of the term, you may not get index-linked interest for that term. In other annuities, you may receive index-linked interest, based on the highest anniversary value to date and the annu-ity's vesting schedule. Also, contracts with this design may have a lowerparticipation rate than annuities using other designs or may use a cap tolimit the total amount of interest you might earn.

LOW-WATER MARKInterest is not credited until the end of the term. With some annuities, ifyou surrender your annuity before the end of the term, you may not getindex-linked interest for that term. In other annuities, you may receiveindex-linked interest based on a comparison of the lowest anniversary valueto date with the index value at surrender and the annuity's vesting schedule.Also, contracts with this design may have a lower participation rate thanannuities using other designs or may use a cap to limit the total amount ofinterest you might earn.

POINT-TO-POINTSince interest is not credited until the end of the term, typically six or sevenyears, you may not be able to get the index-linked interest until the end ofthe term.

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WHAT IS THEIMPACT OF SOME OTHEREQUITY-INDEXED ANNUITYPRODUCT FEATURES?

CAP ON INTEREST EARNEDWhile a cap limits the amount of interest you might earn each year, annu-ities with this feature may have other product features you want, such asannual interest crediting or the ability to take partial withdrawals. Also,annuities that have a cap may have a higher participation rate.

AVERAGINGAveraging at the beginning of a term protects you from buying your annuityat a high point, which would reduce the amount of interest you might earn.Averaging at the end of the term protects you against severe declines in theindex and losing index-linked interest as a result. On the other hand, aver-aging may reduce the amount of the index-linked interest you earn when theindex rises either near the start or at the end of the term.

PARTICIPATION RATEThe participation rate may vary greatly from one annuity to another andfrom time to time within a particular annuity. Therefore, it is important foryou to know how your annuity's participation rate works with the indexingmethod. A high participation rate may be offset by other features, such assimple interest, averaging, or a point-to-point indexing method. On theother hand, an insurance company may offset a lower participation rate byalso offering a feature such as an annual reset indexing method.

INTEREST COMPOUNDINGIt is important for you to know whether your annuity pays compound orsimple interest during a term. While you may earn less from an annuity thatpays simple interest, it may have other features you want, such as a highparticipation rate.

WHAT WILL ITCOST ME TO TAKE MY MONEY OUT BEFORETHE END OF THE TERM?

In addition to the information discussed in this Buyer's Guide about surren-der and withdrawal charges and free withdrawals, there are additional con-siderations for equity-indexed annuities. Some annuities credit none of theindex-linked interest or only part of it if you take out money before the endof the term. The percentage that is vested, or credited, generally increasesas the term comes closer to its end and is always 100% at the end of theterm.

ARE DIVIDENDS INCLUDEDIN THE INDEX?

Depending on the indexused, stock dividendsmay or may not beincluded in the index'svalue. For example, theS&P 500 is a stock priceindex and only considersthe prices of stocks. Itdoes not recognize anydividends paid on thosestocks.

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HOW DO I KNOWIF AN EQUITY-INDEXEDANNUITY IS RIGHT FOR ME?

The questions listed belowmay help you decide whichtype of annuity, if any,meets your retirementplanning and financialneeds. You should consid-er what your goals are forthe money you may putinto the annuity. You needto think about how muchrisk you're willing to takewith the money. Ask your-self:

Am I interested in a vari-able annuity with thepotential for higher earn-ings that are not guaran-teed and willing to risk los-ing the principal?

Is a guaranteed interestrate more important to me,with little or no risk of los-ing the principal?

Or, am I somewhere inbetween these twoextremes and willing totake some risks?

HOW DO I KNOWWHICH EQUITY-INDEXEDANNUITY IS BEST FOR ME?

As with any other insuranceproduct, you must carefullyconsider your own personalsituation and how you feelabout the choices available.No single annuity designmay have all the featuresyou want. It is important tounderstand the features andtrade-offs available so youcan choose the annuity thatis right for you. Keep inmind that it may be mislead-ing to compare one annuityto another unless you com-pare all the other features ofeach annuity. You mustdecide for yourself whatcombination of featuresmakes the most sense foryou. Also remember that itis not possible to predict thefuture behavior of an index.

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QUESTIONS YOU SHOULD ASKYOUR AGENT OR THE COMPANY

You should ask the following questions about equity-indexed annuities inaddition to the questions in the Buyer's Guide to Fixed Deferred Annuities.

How long is the term?

What is the guaranteed minimum interest rate?

What is the participation rate? For how long is the participation rate guar-anteed?

Is there a minimum participation rate?

Does my contract have an interest rate cap? What is it?

Does my contract have an interest rate floor? What is it?

Is interest rate averaging used? How does it work?

Is interest compounded duringa term?

Is there a margin, spread, oradministrative fee? Is that inaddition to or instead of a par-ticipation rate?

What indexing method is usedin my contract?

What are the surrender charges or penalties if I want to end my contractearly and take out all of my money?

Can I get a partial withdrawal without paying charges or losing interest?Does my contract have vesting? If so, what is the rate of vesting?

FINAL POINTSTO CONSIDER

Remember to read yourannuity contract care-fully when you receiveit. Ask your agent orinsurance company toexplain anything youdon't understand. Ifyou have a specificcomplaint or can't getanswers you need fromthe agent or company,contact your stateinsurance department.

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Standard Insurance Company Deferred Annuity Application

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Transcript of Standard Insurance Company Deferred Annuity Application