LIR Consumer Reference Guide

Lifetime Income Rider Reference Guide KANSAS CIT Y LIFE INSURANCE COMPANY

Lifetime Income Rider The Lifetime Income Rider (LIR) Kansas City Life Insurance Company can provide guaranteed lifetime income while still allowing control of your fixed annuity. The LIR is an optional rider that can be added to any of Kansas City Life’s currently issued fixed annuity policies. This guide provides the key definitions and features of the LIR. Please refer to the LIR brochure for additional details.

Benefits of the Lifetime Income Rider • Provides guaranteed lifetime income for retirement, even during market turmoil.

• Allows continued access to the contract value of the annuity.

• Offers increased lifetime income during eligible nursing home confinement, if available in your state.

Guaranteed Withdrawal Balance The Guaranteed Withdrawal Balance (GWB) is the amount used to determine your Lifetime Income Amount (LIA). The Guaranteed Withdrawal Balance is not the same as your contract value and is not available as a lump sum withdrawal amount or a death benefit. The GWB is initially equal to the premium paid (or contract value if added to an existing annuity). It increases as a result of additional premiums, bonuses or step-ups and decreases as a result of withdrawals.

Bonus During the first 20 years of the LIR, the GWB will be increased by a bonus each year you do not take a withdrawal. The bonus will equal 7.2 percent of the GWB during the first 10 years of the rider and 4 percent of the GWB during rider years 11 – 20.

Step-Up On each rider anniversary and on the day lifetime income begins, the GWB will step-up to the contract value of the annuity if the contract value is greater than the GWB. Lifetime Income Option When you decide to begin lifetime income, you will select a lifetime income option – single or joint. The option you choose will determine the length of the lifetime income. If you choose the single lifetime income option, lifetime income will be available as long as the annuitant is alive. If you choose the joint lifetime income option, lifetime income will be available as long as the annuitant or the beneficiary is alive. For the joint lifetime income option, the annuitant must also be the owner and the beneficiary must be the spouse of the annuitant. You must be at least 50 years

old to start lifetime income. If you choose the joint lifetime income option, the beneficiary must also be at least 50 years old to start lifetime income.

Lifetime Income Amount Once you start lifetime income, the LIA is the annual amount that is guaranteed to be available for withdrawal as long as you limit your annual withdrawals to the LIA. The LIA is calculated on the day you begin lifetime income and is the GWB multiplied by the applicable lifetime income percentage shown in the table below. Withdrawals equal to the LIA are guaranteed to be available, even when your contract value is zero and will continue for the length of time selected under your lifetime income option (single or joint).

Lifetime Income Percentages Lifetime Income Start Age*

50 to 54

55 to 59

60 to 64

65 to 69

70 to 74

75 to 79

80 to 84

85 to 89 90 and above

Single Lifetime Income Option

Joint Lifetime Income Option

3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0%

2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5%

*The age of the younger of annuitant or beneficiary for joint lifetime income option.

Rider Cost There is a monthly charge for this rider. The charge for the rider begins immediately even if lifetime income has not started.

The monthly charge is 0.0333 percent (0.40 percent annually) multiplied by the GWB. The monthly charge percentage is guaranteed never to change on your policy.

How the LIR Works John is age 50 and has been saving for retirement. He has accumulated $250,000. When he purchases a fixed annuity with the Lifetime Income Rider, John can guarantee future lifetime income. The amount of his income will vary based on the age when he decides to begin receiving lifetime income.

The following values are based on John’s fixed annuity with the Lifetime Income Rider and a $250,000 single premium with no withdrawals taken prior to the start of lifetime income.

Guaranteed Guaranteed Attained Bonus Withdrawal

Age Percentage Balance

Guaranteed Lifetime Income Percentage single

joint*

3.0% 3.0% 3.0% 3.0% 3.0% 3.5% 3.5% 3.5% 3.5% 3.5% 4.0% 4.0% 4.0% 4.0% 4.0% 4.5% 4.5% 4.5% 4.5% 4.5% 5.0%

2.5% 2.5% 2.5% 2.5% 2.5% 3.0% 3.0% 3.0% 3.0% 3.0% 3.5% 3.5% 3.5% 3.5% 3.5% 4.0% 4.0% 4.0% 4.0% 4.0% 4.5%

50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70

– 7.20 7.20 7.20 7.20 7.20 7.20 7.20 7.20 7.20 7.20 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00

$250,000 $268,000 $287,296 $307,981 $330,156 $353,927 $379,410 $406,727 $436,012 $467,405 $501,058 $521,100 $541,944 $563,622 $586,167 $609,613 $633,998 $659,358 $685,732 $713,162 $741,688

*The Joint Lifetime Income Percentage uses the younger age of you and your spouse.

If John elects to begin taking lifetime income at age 65, his Lifetime Income Amount is guaranteed to be $27,433 per year.

The Lifetime Income Amount of $27,433 is the Guaranteed Withdrawal Balance of $609,613 multiplied by the single Lifetime Income Percentage of 4.50 percent for age 65. If he waits to begin lifetime income for five additional years, his Lifetime Income Amount is guaranteed to be $37,084 per year at that point.

In addition, if John were to be confined to an eligible nursing home and qualify for the Nursing Home Confinement

Enhancement, his Lifetime Income Amount would be increased by 50 percent. If he began lifetime income at age 65 and was confined at age 74, his Lifetime Income Amount would increase from $27,433 to $41,150 per year for as long as he was confined.

The Power of Waiting Delaying the start of lifetime income greatly increases the guaranteed lifetime income available. Based on the previous example, the following table shows the guaranteed lifetime income available to John if he begins lifetime income at varying ages.

Guaranteed Lifetime Income

Lifetime Income

Start Age

Single Lifetime Income Amount

Joint Lifetime Income Amount

50 51 52 53

$7,500 $8,040 $8,619 $9,239

$6,250 $6,700 $7,182 $7,700

54 55 56 57 58 59 60 61 62 63 64

$9,905 $12,387 $13,279 $14,235 $15,260 $16,359 $20,042 $20,844 $21,678 $22,545 $23,447

$8,254 $10,618 $11,382 $12,202 $13,080 $14,022 $17,537 $18,239 $18,968 $19,727 $20,516

65 66 67 68 69 70

$27,433 $28,530 $29,671 $30,858 $32,092 $37,084

$24,385 $25,360 $26,374 $27,429 $28,526 $33,376

Nursing Home Confinement Enhancement The LIA will increase by 50 percent for as long as you are confined to an eligible nursing home. There are additional requirements for qualification described in the rider. This enhancement is not available in all states.

Excess Withdrawals The LIR still allows you full access to your policy’s contract value. If you withdraw more than the Lifetime Income Amount in any year (an excess withdrawal), the Lifetime Income Amount is reduced in the same proportion that the contract value was reduced by the excess withdrawal.

Security Assured.

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The coverage described is for the Lifetime Income Rider offered by Kansas City Life Insurance Company (Home Office: Kansas City, Mo.).

Coverage may not be available in all states. Rider form R222. Form number may differ by state.

6779

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