Product
Your accumulation annuity is an investment product that accumulates value by adding interest to the investment. The interest rates may typically be guaranteed for periods of 1, 3, 5 and up to 10 years. Assuris’ protection applies to your accumulation annuity, regardless of the term. Accumulation annuities are commonly known as GICs (Guaranteed Investment Certificates).
Assuris Protection
If your life insurance company fails, Assuris will seek to transfer your policy to a solvent company.
- Assuris guarantees that you will retain the amount of your investment under Assuris’ Accumulated Value Benefit up to a maximum of $100,000.
Example 1
Accumulated Value
In calculating your Assuris protection, you will retain the amount of your accumulated value benefit up to a maximum of $100,000.
Since the amount is less than $100,000, your accumulated value benefit is fully protected.
Example 2
Accumulated Value
In calculating your Assuris protection, you will retain the amount of your accumulated value benefit up to a maximum of $100,000.
Since the amount is more than $100,000, your accumulated value benefit is protected for $100,000.
The liquidator, appointed to manage the failed company, will seek to sell the assets and transfer the liabilities with the aim to get the best value for policyholders. This will determine the recovery percentage.
Your benefits will be adjusted to the greater of the Assuris protection or the recovery percentage achieved by the liquidator.
For example, if your accumulation annuity is greater than $100,000 and the liquidator recovers 90% of the assets, your benefit will be adjusted to 90% instead of Assuris’ maximum guarantee of $100,000.
Original Benefit Amount
Recovery
Liquidator Recovery:
$108,000
($120,000 × 90%)
Assuris Protection:
Up to $100,000
Explanation
Since the liquidator’s recovery is greater than Assuris’ protection, you will retain $108,000.
Other Accumulation Annuity Accounts
Universal life overflow account – is an associated account with a universal life policy. These accounts may be used to hold pre-paid premiums or savings in excess of the tax-exempt limits. These types of accounts receive Assuris’ Accumulated Value protection.
Associated account with whole life – is an investment account with a whole life policy. This may be used to hold pre-paid premiums or accumulated cash dividends. These types of accounts receive Assuris’ Accumulated Value protection.
Questions and Answers
1. What happens if I have more than one accumulation annuity?
Assuris protects each member company separately. If you have more than one accumulation annuity with the same member company, all similar benefits are added together before Assuris’ protection is applied.
2. Will interest continue to be added after Assuris protection takes effect?
Yes, interest will continue to be credited on the protected amount after the date of failure, in accordance with the terms of the policy.
3. What if my policy uses the change in a stock index instead of an interest rate?
The stock index will continue to be applied to the protected amount after the date of failure, in accordance with the terms of the policy.
4. What happens if I have a joint accumulation annuity and an individual annuity?
All similar benefits issued by the same member life insurance company are added together before Assuris’ protection is applied.
Your accumulation annuity is protected under Assuris’ Accumulated Value protection.
Your accumulation annuity that is jointly owned is split evenly and added to any individually owned accumulation annuities, and then Assuris’ protection is applied.