Why Do We Like Ohio National’s GLWB and GLWB Plus Lifetime Withdrawal Benefit Riders?

Back to the most competitive Lifetime Withdrawal Benefits We’ve Found

Overview

We like Ohio National’s Guaranteed Lifetime Withdrawal Benefit (GLWB) rider for the following primary reasons:

1. Lifetime withdrawals you can’t outlive, no matter how steeply the market declines. The GLWB and GLWB Plus Riders permit 4-7% lifetime annual withdrawals, depending on Rider and age. In particular, the GLWB Plus Rider offers amongst the most competitive annual withdrawals for the cost of any company we know of with a similar finanical strength rating (5.25% for life for a 65-year old – see complete age bands below).
   
2. 8% annual increase / 200% Deferral Credit. For each year in which you do not take withdrawals, Ohio National will add 8% or your original investment to your withdrawal base. With a GLWB Plus Rider, if no withdrawals are taken, you are guaranteed that the withdrawal base on the tenth rider anniversary will be equal to at least 200% of your initial investment.
3. Annual resets. If your contract value is higher than your withdrawal base on an anniversary, your withdrawal base will step-up to the higher amount, capturing your contract gains. Upon step-up, the 8% annual growth opportunity restarts for another 10 years, and the 8% annual increases are based on the stepped-up, higher amount.
4. Single & joint life versions. Single life guarantees withdrawals for the rest of your life; joint life guarantees withdrawals for the rest of your life and your spouse’s life.
5. Three optional death benefits. For an additional fee, you can have access to income withdrawals for both single life and joint life and still provide a legacy to beneficiaries.
6. Reasonable annual rider fees.
7. The GLWB Plus Rider utilizes an asset allocation strategy called Managed Volatility Portfolios designed to help protect against market swings and produce more consistent returns over time.
8. For the GLWB Plus Rider, the Guaranteed Principal Protection 8 feature gives you the ability to restore your contract value to its original amount on the 8th anniversary.

Please read below for additional details. At the bottom of the page, you can download product-specific PDF files. Remember, always be sure to read the prospectus before making any investment decisions -- Contact Annuity FYI at 866-223-2121 if you have any questions, or to order a complete (and free) information kit and a full current prospectus.

How Much In Lifetime Withdrawals Am I Guaranteed?

The maximum annual lifetime withdrawals you can receive depends on your age when you start taking withdrawals (in the event of joint life, it is based on the age of the younger spouse):

Age Band	GLWB Rider	GLWB Plus Rider
59 1/2 - 64	4.00%	4.25%
65 - 74	5.00%	5.25%
75 - 79	5.50%	6.00%
80 - 84	6.00%	6.50%
85 +	6.50%	7.00%

If you have a step-up after you've entered a higher withdrawal age bracket, withdrawals will be based on the higher percentage!
The lifetime income percentage is based on what’s called the “withdrawal base.” The withdrawal base assures that the number on which the withdrawal percentage is calculated continues to grow over time and is protected from market downturns. And if you have a step-up, the withdrawal percentage will be based on the higher amount. Read on to understand these important features and why the GLWB Plus rider is one of our Top Picks.

How is the Withdrawal Base Determined?

Your guaranteed lifetime withdrawals are based on your withdrawal base. The Withdrawal Base is always the greater of:

8% Annual Growth / 200% Deferral Credit
For each of the first 10 years in which you do not make any withdrawals, Ohio National will add 8% of your original purchase payments to the withdrawal base. For the GLWB Plus Riders, if no withdrawals are taken for 10 years, on the 10th rider anniversary your withdrawal base would be at least 200% of your initial investment -- an initial investment of $500,000 would result in a withdrawal base of $1,000,000 in 10 years.

Annual Step-Ups
If your contract value is higher than your withdrawal base on any rider anniversary, the withdrawal base will step-up to that higher amount. Each time you step-up, you’ll start a new 10-year period for 8% annual increases on the stepped-up, higher amount. And if you have a step-up after you've entered a higher withdrawal age bracket, withdrawals will be based on the higher percentage.

GLWB, GLWB Plus, and Managed Volatility Portfolios

Why does the GLWB Plus have higher withdrawal percentages, and lower costs, than the GLWB, and for that matter than most other lifetime withdrawal benefit riders on the market from companies with comparable financial strength ratings? The answer is that when you choose a GLWB Plus Rider, your purchase payments are allocated to the Managed Volatility Portfolios (MVPs). The MVPs are professionally managed portfolios designed to help protect your investment from extreme market swings without sacrificing growth potential. These portfolios are actively monitored and adapt to changing market conditions. Allocations are adjusted accordingly, potentially on a daily basis. The MVPs provide innovation and diversification, with each offering a unique strategy for minimizing volatility and protecting your retirement assets. Your purchase payments are allocated among a broad selection of investment options, thereby lessening the risks associated with individual equities, bonds or other investments. The MVPs seek to reduce the severity of market losses, which may increase the power of compounding and potentially result in a higher Contract Value over time. With a higher Contract Value, you’ll also have greater potential to lock in your gains as a result of GLWB Base Step-Ups, and increase your future retirement income. While market gains may also be reduced, managing downside volatility can result in more consistent, predictable returns over time.

Guaranteed Principal Protection 8 Feature

With the GLWB Plus Rider, you have an additional layer of protection from potential market losses. On your 8th anniversary, you have the option to exercise the Guaranteed Principal Protection 8 (GPP8) feature built into the GLWB Plus Rider. This allows you to choose whether you’d rather receive the benefits of the GLWB Plus Rider or restore your Contract Value to its original amount.* The GPP8 feature provides comfort in knowing that – if your future needs change – you have the flexibility to select the option that best meets your financial situation and protects your personal retirement plan.

What Happens When Someone Passes Away?

With joint protection, upon your death, your spouse will be able to continue taking lifetime withdrawals. Upon your spouse's death, the beneficiaries will receive the benefits afforded by the Premium Protection or Premium Protection Plus Rider, were they elected. With single life protection, upon your death your spouse can choose to receive the current death benefit amount, or continue the rider (if you die before taking withdrawals, your spouse's withdrawal base will be the greater of the contract value or withdrawal base; if you die after you have begun taking withdrawals, your spouse's withdrawal base will equal the current contract value).

With the Premium Protection Rider, your beneficiaries will receive no less than the total purchase payments, adjusted for withdrawals on a dollar-for-dollar basis (except in the case of an excess withdrawal). The death benefit amount will be maintained even in the event the Contract Value goes to zero, provided no excess withdrawals have been made.

With the Premium Protection Plus Rider, your initial death benefit is equal to the total purchase payments, and prior to the contract anniversary following the Annuitant's 85th birthday, withdrawals allowed under the GLWB or GLWB Plus Riders will not reduce the death benefit. After the contract anniversary following the annuitant's 85th birthday, withdrawals allowed under the riders will reduce the death benefit on a dollar-for-dollar basis. Also, with the Premium Protection Plus Rider, on the Rider's 7th anniversary, the death benefit value steps up to the Contract Value, if higher, to lock in any market gains. However, if the Contract Value is reduced to $0 prior to the anniversary following the Annuitant’s 95th birthday, the Rider will terminate without paying a benefit.

For More Information

Contact Annuity FYI at 866-223-2121 if you have any questions, or to order a complete (and free) information kit and a full current prospectus.

Click here to download product info on Ohio National products and riders (in PDF), disclaimers and disclosures, and important assumptions about the above examples.

* GPP8 feature restores Contract Value to the Guaranteed Principal Amount, which equals the total of all purchase payments made within the first 6 months of the contract, adjusted pro-rata for withdrawals. If you exercise the Guaranteed Principal Protection option, the GLWB Plus Rider, and, if selected, the Premium Protection and Premium Protection Plus Death Benefit Riders, will immediately terminate.

Variable annuities issued by the Ohio National Life Insurance Company and distributed by Ohio National Equities Inc., member FINRA. Issuer is not licensed to conduct business and products not distributed in AK, HI or NY.

Updated 02/02/12.