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gerryborn

Quick Aig Valic Question

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Greetings All,

I was told that by a Valic employee that Valic products no longer have surrender charges. Is this true?

 

Gerry Born

LaGrange, GA

403b Boondoggle

 

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I think the charges are still there. I lifted this off their current webpage.

 

 

Portfolio Director Fixed and Variable Annuity

Premium Enhancement

Premium Enhancement on eligible deposits into your Portfolio Director account.

 

 

 

 

A Few Things to Keep in Mind

Annuities are long-term investments and the value of the variable options you choose will fluctuate. This means that your account value at withdrawal may be worth more or less than the original value. Income taxes are payable upon withdrawal, and federal restrictions and tax penalties may apply to early withdrawals.

 

Income taxes on your contributions to Portfolio Director are deferred, subject to applicable contribution limits and related rules. The tax deferral is a result of issuing the contract, which satisfies specific important tax law requirements, including plan requirements. It does not result from the mere fact that the Portfolio Director contract is an annuity. Consequently, you don’t receive any additional tax-deferred treatment of earnings beyond the treatment provided by the tax-qualified retirement plan itself.

 

Investment options and features to create your personal retirement investment program

 

The VALIC Portfolio Director® Fixed and Variable Annuity (Portfolio Director) combines a wide array of competitively priced and professionally managed investment options, convenience and flexibility to help you reach your retirement goals. By offering a wide array of investment options that completely cover all major suitable asset categories and classes, Portfolio Director provides you with the opportunity to develop a suitably diversified portfolio.

 

Portfolio Director features and benefits include:

 

Fees and charges

• No initial sales charge

• Separate Account fees, which ranges from 0.35% to 1.25%, depending on the investment option and contract, and Net Fund Annual Expense which ranges from 0.25% to 1.35% depending on the investment options selected. The Net Fund Annual Expense is the Total Fund Annual Expense less any expense waivers and reimbursements. Fund Annual Expenses are subject to change

• No account maintenance fees for fixed options

• Low account maintenance fees for variable options.

• A quarterly fee of only $3.75 pays for processing and administration of your account.

• See current prospectus for fee information.

 

No-cost withdrawals

• VALIC waives all surrender charges upon your death and for any withdrawals you make if:

1 You select an annuity payout of five or more years; or

2 You select systematic withdrawals of five or more years; or

3 You have not made any deposits to your account over the past 60 months; or

4 Your account has been in effect 15 or more years;

5 You are at least age 59 1/2, and your account has been in effect for five or more years; or

6 You are at least 55, have participated in your plan for at least five years and have terminated employment; or

7 You are required by federal law to begin taking minimum required distributions; or

8 You become disabled.

• If your withdrawal doesn't meet one of these conditions, you can still withdraw up to 10% of your account balance each year without any VALIC surrender charges.

 

Low-cost withdrawals

• If your withdrawal doesn't meet any of the previously stated conditions, your account value will be subject to a VALIC surrender charge of the lesser of:

1 5% of contributions received during the most recent 60 months; or

2 5% of the amount withdrawn in excess of 10% annually.

• Remember that income taxes will be payable on withdrawals from your retirement account. Also, federal restrictions and early withdrawal penalties might apply.

 

No-cost transfers

• No charge for transferring amounts among investment options

• Transfer all or part of your variable account values to other options.

• Once money is transferred into the Short-Term Fixed Account, you can transfer money from this account in as soon as 90 days.

• Up to 20% of your Fixed Account Plus value can be transferred to other options each contract year during the accumulation phase.

• Amounts transferred to Fixed Account Plus within 90 days of the last transfer from Fixed Account Plus may be credited with a different interest rate.

 

Tax-free loans

• Access a portion of your accumulated account value without permanently reducing your account balance or incurring federal tax penalties.

• Defaulted loan amounts will be taxed as ordinary income and might incur a 10% federal tax penalty if you are under age 591/2.

• Loans may be subject to employer plan provisions and regulations.

• A $60 loan initiation fee might be applied to your loan and will be considered part of the loan amount. Your financial advisor can help you determine whether such a fee applies to your loan.

 

Death benefit

• Provides a guaranteed death benefit to your beneficiary

• Backed by VALIC's claims-paying ability, your beneficiary will never receive less than the amount you have contributed to fixed or variable options, provided no withdrawals have been made from the account. These provisions can vary by state and contract.

• Withdrawals will reduce your death benefit, depending on your account value at the time of withdrawal. See your prospectus for details.

• The death benefit passes directly to your beneficiary, generally avoiding costs and delays of probate.

• Depending on the circumstances, your beneficiary can leave all or a portion of the account balance on deposit.

• Generally, your beneficiary can make withdrawals at any time without VALIC charges, though the IRS may require distributions within certain time frames.

• No VALIC charges if your beneficiary withdraws the entire account balance

 

To obtain a Portfolio Director contract and underlying fund prospectuses, visit www.aigvalic.com or call 1-800-448-2542 (press 1, then 3). The prospectuses contain the investment objectives, risks, charges, expenses and other information about the respective investment company that you should consider carefully before investing. Please read the prospectuses carefully before investing or sending money. Applicable to Portfolio Director Fixed and Variable Policy Form series UIT-194, UITG-194 and UITG-194P.

 

Annuity contracts typically include limitations, surrender charges, exclusions and expense charges.

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