Annuity Basics

An annuity is an investment contract sold by life insurance companies. It accumulates value and provides a stream of income for contract holders in their later years. The life of an annuity contract can be divided into two parts – the “accumulation phase,” the period during which the contract owner makes contributions to the plan, and the “annuitization phase,” the period during which the contract owner begins to receive scheduled payments. Annuities are not intended to be a short-term investment strategy. Annuities typically offer the most return to the contract owner if a long-term financial commitment is made. Surrender charges can be particularly high during the first few years of the contract.

Hermann Sons Life offers only fixed annuities. Fixed annuities are financially more conservative than other types of annuities. These annuities generate earnings at a current interest rate that is set by Hermann Sons Life. This rate can fluctuate over time, but will never drop below the guaranteed minimum. Hermann Sons Life fixed annuity contracts are invested in conservative, non-stock market investments with no investment input from the client.

Hermann Sons Life offers non-qualified annuities (such as the Flexible Premium Deferred Annuity (FPDA)) and qualified annuities (such as the Traditional IRA and ROTH IRA).

All annuities are tax deferred.

For a chart summarizing our current Portfolio of Products, please see the next page.

Color Codes: Adults: Blue Juniors: Green

Notes

Payment Modes = Annual, Semi-annual, Quarterly, Monthly, Monthly Bank Draft

= Guaranteed renewable at stipulated times with premium rates at attained

= Can covert a term plan to a whole life plan prior to the applicable anniversary date before age 70, without medical exam with conversion premium credits as stipulated.

• IPR = Insurable Protection Rider (guarantee issue of stipulated amount of death benefit at specific ages

• S/NS = Rate bands for Tobacco and Non-tobacco

• M/F = Premium rates for Males and Females

• FPDA = Flexible Premium Deferred Annuitiessold only to adults. Cannot sell to age 90 or older if not currntly a member. Juniors cannot be owners or beneficiaries.