Single Premium Deferred Annuity Quote | NMAA Annuity Center for Military Sea Service and Select Government Agencies

Navy Mutual's Single Premium Deferred Annuity is a non qualified fixed annuity contract that permits you to make a onetime premium deposit that accrues guaranteed interest over a period of time in anticipation of distribution at a future date. A "premium bonus" may be added by the Association for members locking in deposits for seven years or longer. The interest accruing on the contract enjoys very favorable tax treatment under current federal income tax law.

At the end of the deferral period, when you are prepared to withdraw the funds, the contract guarantees the periodic amount of money that will be paid out over your lifetime or for a specified period of years. An annuity can pay an income that can be guaranteed to last as long as you live. In addition, should you decide to withdraw the funds from your annuity during the accumulation phase you may do so at any time subject to certain adjustments that may be made for early surrenders of the contract.

Features of the Single Premium Deferred Annuity

Review your Annuity for 15 Days

The owner of an annuity may terminate his/her contract within 15 days after purchase and receive a full refund ofpremium placed into the annuity.

Single Premium Amounts

Annuity Interest Rate Lock-In Periods

Navy Mutual establishes current interest rates periodically for all new Navy Mutual Single Premium Deferred Annuity contracts based on your chosen lock-in period. A lock-in period of either 2, 5, 7 or 10 years ensures that your interest rate does not change during that period.

Options After The Interest Rate Lock-In Period

Once the plan reaches the end of the lock-in period, the annuity owner has a number of options from which to choose.

1.       Continue the annuity with a new lock-in period of 2, 5, 7, or 10 years at current interest rates.

2.       Continue the annuity with market interest rates which will fluctuate throughout the year.

3.       Receive a guaranteed stream of income over a specific number of years or for lifetime.

4.       Receive the accumulation value as a lump sum payment.

Premium Bonus When You Lock Investment Period

Navy Mutual will credit to the single premium deposit a bonus equal to 1% of the amount of the single premium when an annuity is purchased with a Lock-In Period of either 7 or 10 years. The bonus immediately enhances the single premium and therefore the amount being accumulated at the applicable interest rate. For example, a $100,000 premium will receive an immediate $1,000 bonus which results in a $101,000 initial accumulation value which will begin accumulating interest from the beginning of the contract. Lock-in periods of less than 7 years will not receive a premium bonus. If an annuity is surrendered voluntarily prior to the end of the lock-in period, the bonus and any interest earned on the bonus will be deducted from the surrender value. See the discussion of Early Surrenders below.

Tax-Deferred Accumulation for Higher Growth Rate

Under current U.S. tax code, earnings generated within Navy Mutuals SPDA do not create an income tax liability until payments are distributed from the annuity. Without taxes being paid on the interest gain every year, the annuity will enjoy a greater effective growth rate than comparable taxable investments.

Safety

You are guaranteed by Navy Mutual to receive your initial interest rate from the annuity effective date through your elected lock-in period unless withdrawals or early surrenders are exercised.

Withdrawals from Your Annuity

After the Navy Mutual Single Premium Deferred Annuity has been in effect for one year the owner may make annual withdrawals of up to 10% of the accumulated value. The 10% withdrawal amount is not cumulative. Up to four withdrawals may be made each year without charge; withdrawals in excess of four will incur a withdrawal fee. Under current United States tax code, all withdrawals are considered a withdrawal of interest first and principal second. Therefore, an income tax liability will be incurred on any interest distributed. Any untaxed interest received by the annuitant in the future will be received as ordinary income. Fund withdrawals received prior to age 59 1/2 may be subject to a 10% federal tax penalty. Please consult your tax professional for details.

Early Surrenders

Navy Mutuals Single Premium Deferred Annuity may be surrendered at anytime during the interest rate lock-in period. If surrender occurs prior to the completion of the current lock-in period, you will receive the current value of your annuity as determined by the market value of the investment (see the section Market Value Adjustment for more details), less any premium bonus and accumulated interest on the bonus, plus accumulated interest on the original premium deposit to the date of termination. Interest distributed prior to age 59 1/2 may be subject to a 10% federal tax penalty. Since Navy Mutual is a nonprofit company there will be no surrender fees, loads, or commissions taken from your annuity!

Market Value Adjustment of Your Annuity

In the event you elect to terminate your annuity contract prior to completing the contracted lock-in period, the SPDAs accumulated value will be adjusted by the difference between the current declared rate and the guaranteed rate established on the existing contract. Therefore, the value of your annuity may be higher or lower than the accumulated value. The market value adjustment may be waived if the contract is surrendered due to the owners need for nursing home care, the owners terminal illness, the owners death, or early annuitization. Early annuitization requires a payout period that meets or exceeds the owners life expectancy.

Ownership

Only an eligible individual, as described under the section Navy Mutual Eligibility, may be established as the owner. Joint ownership is not allowed. Please be aware that minor children who are established as contract owners do not have legal capacity to make any changes to a contract until they become of legal age (as determined by your state).

Death Proceeds

A named successor owner or beneficiary will receive the accumulation value of the annuity at the time of death without the delay and cost of probate. Any accumulated interest will be taxable to the new owner as income is distributed from the annuity.

Tax-Deferred Exchanges

The surrender value of an existing deferred annuity or permanent life insurance plan can be transferred into an Navy Mutual single premium deferred annuity without incurring an immediate taxable event! This transfer is called a 1035 Exchange. To qualify for a tax-deferred 1035 Exchange, the same person or persons must be covered under the new contract. Please be aware that retirement accounts such as a 401(k), IRA, etc. will not qualify for a 1035 Exchange to any of Navy Mutuals annuity products. To insure that your transfer will qualify, please contact your tax advisor. Please contact a Navy Mutual counselor to receive the forms necessary to perform a tax-deferred 1035 Exchange.

Annuity Payout Options

Once the decision to receive income is made, you may choose from the various SPDA Amortization pay out options explained below.

Lump Sum

A payment of the entire accumulated cash value may be received as a single payment.

Fixed Period

An individual may receive income over a fixed number of years which can range from 1 to 30 years. All payments will cease after the elected period is complete. If the annuitant should die during the fixed period, a designated beneficiary will receive the remainder of the payments.

Life Income With No Death Benefit

This option allows an individual to receive the highest monthly income over the course of a lifetime. Payments are guaranteed to continue for the life of the annuitant. Upon the annuitants death, payments will cease.

Life Income With A Fixed Period Certain

Payments are guaranteed to continue during the annuitants lifetime. In addition, this option contains a feature that ensures the continuation of payments to the owner or beneficiary (as applicable) if the annuitant should die within a predetermined period of time, referred to as a period certain. A period certain of 5, 10, 15, or 20 years may be elected. Should the annuitant die during the period certain, payments will continue to a designated beneficiary for the remainder of the period certain. For example, if a 15 year period certain is elected and the annuitant dies in the 11th year, a beneficiary will continue to receive the payments for 4 years (15 - 11). If the annuitant death occurs after the period certain, no additional payments will be paid.

Joint and Survivor Income

Payments are made until the death of the surviving annuitant. Upon the death of one annuitant, the surviving annuitant will continue to receive a previously elected percentage of the original annuity payment. The survivor may receive 100%, 66 2/3% or 50% of the annuity payment. Payments cease upon the death of the second annuitant.

Navy Mutual Eligibility

Navy Mutual's Single Premium Deferred Annuity (SPDA) may be purchased on the life of and owned by an eligible member, spouse, child, or grandchild. A plan may be purchased on a Member or spouse at any age while children and grandchildren must be between the ages of 6 months and age 24. Nonmembers (i.e., service member who does not currently maintain a policy with Navy Mutual) applying for a SPDA must be a service member of one of the five sea services (i.e., Navy, Marine Corps, Coast Guard, U.S. Public Health Service, and National Oceanic and Atmospheric Administration) who is either active duty, retired, a reservist or an honorably discharged veteran (who resides in Virginia, North Carolina, or South Carolina).

Single Premium Deferred Annuity for Simple, Secure Investing