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February 13, 2004 at 07:00 PM
NU Online News Service, Feb. 13, 2004, 2:52 p.m. EST – A unit of Nationwide Financial Services Inc., Columbus, Ohio, wants to offer a 5% bonus on some first-year variable annuity payments.[@@]
Nationwide Life Insurance Company has applied to the U.S. Securities and Exchange Commission for permission to market a 5% “Extra Value Option” with its Nationwide Variable Account-II annuity contract.
A customer who bought the option would have to pay 0.45% of the daily net assets of the variable account for the first 8 contract years.
In return, Nationwide Life would apply a credit equal to 5% of all purchase payments made during the first 12 months of the contract.
Nationwide Life would pay the credit from its general account.
Nationwide Life already offers a 3% Extra Value Option and a 4% Extra Value Option.
The annual variable account charge for the underlying contract would be 1.55% of the daily net assets of the variable account.
Nationwide Life would not recapture the 5% credit if a contract holder died, took the minimum distributions required by the tax code or made scheduled, age-based withdrawals.
The company would take all of the credit back in other cases if a customer dropped the annuity during the short “free look” period.
The company would take back some or all of the credit if the customer dropped the annuity before the end of the seventh contract year.
