Masters Prime Variable AnnuitySM

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Growth

While you’re saving for the future, Masters Prime Variable AnnuitySM gives you the opportunity to:
  • Manage your investment strategy with a comprehensive selection of investment options
  • Potentially grow your retirement assets through the power of tax deferral and compounding

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Investment Options

Masters Prime Variable AnnuitySM allows you to choose from a lineup of investment options (with few restrictions, even if you choose one of the optional riders) across a broad range of major asset classes, investment styles, and industries, managed by well-established investment management companies with a collective 300 years' experience of managing investors' money. Masters Prime Variable AnnuitySM also offers a fixed account1 and the option to take advantage of dollar cost averaging (DCA).2

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The value of variable annuity investment options will fluctuate so that units, when redeemed, may be worth more or less than the original cost.

Tax Deferral

With a variable annuity, you don’t pay taxes on any earnings or growth in your annuity until you withdraw your money or receive lifetime income, generally in retirement. This means that all of your money has the chance to grow—it is not being reduced by taxes.

The Benefits of Tax Deferral

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This hypothetical chart illustrates how tax deferral would affect a $100,000 initial premium, before any withdrawals or fees, during a 20-year period. The chart assumes an annual interest rate of 5% and a federal income tax rate of 28%. Actual tax rates may vary for different taxpayers and assets from those illustrated (for example, capital gains and qualified dividend income). Actual performance of your investment also will vary. Lower maximum tax rates on capital gains and dividends would make the investment return for the taxable investment more favorable, thereby reducing the difference in performance between the examples shown. Consider your personal investment time horizon and income-tax brackets, both current and anticipated, when making an investment decision. This example illustrates tax deferral and does not represent the past or future performance of any product. Actual results will vary. If variable annuity charges were included (such as rider fees or investment management fees), the tax-deferred performance would be significantly lower.

Income

An annuity is all about income. That’s why you save for retirement — so you can have income when you no longer have a paycheck—and why you purchase an annuity.

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When you retire, you can choose to:

  • Convert your assets to guaranteed, lifetime retirement income with the optional Guaranteed Lifetime Withdrawal Benefit (GLWB) rider3
  • Leave a financial legacy through a guaranteed death benefit
  • Take advantage of other options for retirement: periodic or systematic withdrawals or annuitization. Please refer to the product prospectus for more information.
  • Guarantee that beneficiaries will receive at least 100% of the premiums you paid (adjusted proportionally for prior withdrawals) with the optional Return of Premium (ROP) rider4
  • Lock in investment gains each year with the optional Highest Anniversary Value (HAV) death benefit rider5

Optional riders are available for additional fees.

Optional Guaranteed Lifetime Withdrawal Benefit (GLWB) Rider

Masters Prime Variable AnnuitySM can be converted into guaranteed, lifetime income with the optional Guaranteed Lifetime Withdrawal Benefit (GLWB) rider (available at an additional cost). The GLWB rider, offered at issue up to the maximum age of 80, guarantees that you (or you and your spouse) will receive retirement income payments for life, even if the annuity account cash value drops to zero.

The GLWB provides a balance of benefits:

  • A valuable combination of a simple interest bonus amount, step-up potential and payout rates
  • Few investment option restrictions, a diverse lineup and reasonable fees offer performance potential that may exceed living benefits available in other solutions

Simple interest roll-up for guaranteed growth

How much lifetime income you'll receive is determined by the age at which you start taking income and your "withdrawal benefit base." The withdrawal benefit base starts with your initial premium amount and then is guaranteed to grow by a 6.25% simple interest bonus amount annually on your contract anniversary for up to 10 years. This 6.25% does not affect your contract value, but adds to your withdrawal benefit base, which is used to calculate your rider fee and your annual withdrawal amount.

The 10-year bonus period begins when you purchase your contract and ends after 10 years or when you start to take income, whichever comes first. However, your bonus period may extend or restart for another 10 years whenever there is a step-up in your withdrawal benefit base. On your contract anniversary, we look at your contract value for each quarter of the past year and if any is higher than your withdrawal benefit base, your withdrawal benefit base will automatically increase (or step-up) to equal the contract value. If you start taking income between contract anniversaries, you will receive a proportionate amount of the bonus.

Your income potential can increase more than once

Delaware Life's optional GLWB rider offers the potential for an extra boost to help your future income grow even more. Whenever your withdrawal benefit base “steps up” to the higher amount, a new 10 year bonus period begins—even after a bonus period has ended.

How your Guaranteed Withdrawal Benefit Base can grow

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This illustration is a hypothetical example used to show how the GLWB 10-year bonus periods and step-ups work. It is not meant to represent the performance in any product and does not account for fees and/or charges which would reduce the withdrawal benefit base and contract value. It also does not account for any withdrawals

 

Additional purchase payments

When you select the GLWB, you will have the option to make additional purchase payments for the first 3 contract years.

Your withdrawal benefit base and annual withdrawal amount (AWA)

Your withdrawal benefit base is used to calculate the AWA. The withdrawal benefit base is equal to the initial contract value, and applicable bonuses and step-ups, adjusted for any withdrawals and charges. Your withdrawal benefit base is increased by any applicable:

  • Subsequent premiums up to the first 3 years
  • Bonus amounts during the bonus period
  • Step-up

Your withdrawal benefit base can increase even after you start taking income if there is a step-up. Your AWA is set at the income start date and at any subsequent step-up. Lifetime withdrawal percentages depend upon whether you select single or joint life income. You make that choice at the income start date. Note that your withdrawal benefit base is calculated apart from your account value.

Withdrawals prior to age 55 are allowed, however, they will adversely affect your guaranteed benefit income, as will withdrawal in excess of the annual withdrawal percentage. Any withdrawal before age 59½ could be subject to a 10% tax penalty and excess withdrawals that are greater than your AWA may reduce or eliminate the benefit provided under the GLWB rider.

Step-through for higher income potential

If you achieve a step-up after starting your guaranteed lifetime income withdrawal at 55 (or later), and you have aged into a new coverage age tier, your AWA will be recalculated. You will step-through to a new age tier and your AWA calculation will be based on your new withdrawal benefit base AND your new lifetime withdrawal percentage. Your withdrawal amount may decrease if you exceed your AWA.

Portfolio diversification requirements for optional riders

If you choose one of the optional riders, you will have to invest according to certain portfolio diversification requirements:

  • The investment options lineup will be grouped into one of four investment categories
  • Each of those categories will be assigned a minimum/maximum allocation, and you must stay within those parameters
  • You will not be able to allocate to the fixed account
  • You can utilize the DCA as long as you meet the portfolio diversification requirements (see the product prospectus for more details)

If you do not select a rider(s), there are no restrictions on your investment options allocation.

Guarantees, including optional benefits, are subject to the claims-paying ability and financial strength of the issuing insurance company, and do not protect the value of underlying investment options within a variable annuity which are subject to risk.

The withdrawal benefit base is not available for withdrawal and is not a guarantee of contract value.

Withdrawals in excess of the maximum allowable limit may negatively impact the guarantee, including reducing and/or terminating your contract. Your investment options must be allocated proportionately based on limits imposed. While you may begin withdrawal at age 50, there may be tax implications for taking withdrawals prior to 59½. Your withdrawal benefit base is not available for withdrawal and is only used to determine your lifetime withdrawal benefits.

Legacy Planning

If your goal is to leave money to your family, or other beneficiaries, Masters Prime Variable AnnuitySM can help provide that.

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Standard death benefit

If you die before you begin receiving annuity income payments, Masters Prime Variable AnnuitySM guarantees that your beneficiaries will receive the full account value and they may avoid probate.6 The death benefit is payable on the death of first owner in the case of joint annuity owners.

Optional Return of Premium (ROP) rider - preserve principal

This optional rider—available upon contract issue for an additional cost—can help guarantee that beneficiaries will receive the greatest of contract value or premiums paid less any withdrawals or partial surrenders.7

With this option, if the annuitant dies prior to their annuity income start date, the beneficiary will receive the greatest of contract value or premiums paid, less any withdrawals. Upon the annuity income start date, the rider is automatically terminated.

Guarantees, including optional benefits, are subject to the claims-paying ability and financial strength of the issuing insurance company, and do not protect the value of underlying investment options within a variable annuity which are subject to risk.

Return of Premium (ROP) rider in action

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This is a hypothetical example of how the ROP rider would work. You may terminate the rider at any time. The rider fee will be deducted until the earliest of: the termination of the rider, the annuity date or the termination of the contract. If you choose the ROP, you will have to invest according to certain parameters.

Optional Highest Anniversary Value (HAV) rider – preserve investment gains

The HAV is used to calculate the death benefit. This optional rider—available for an additional cost—can help lock in investment gains each year on the contract anniversary date, up until your 81st birthday.

When you purchase your VA, your HAV is equal to your initial purchase payment. On each contract anniversary your HAV will be the greater of:

  • the current HAV
  • the contract value
  • premiums (less any withdrawals)

If, at the date of death, the contract value is greater than the current HAV, your HAV will automatically “step-up” to an amount equal to the contract value. Your HAV8 increases with additional premiums and decreases with any withdrawals. You may terminate the rider at any time. The rider fee will be deducted until the earliest of: the termination of the rider, the annuity date or the termination of the contract. If you choose the HAV, you will have to invest according to certain parameters.

Highest Anniversary Value (HAV) rider in action

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This is a hypothetical example of how the HAV rider would work. The optional riders may be canceled at any time. Upon cancellation, all benefits and rider fees shall cease. However, a pro-rata fee is assessed at the time of cancellation.

Portfolio diversification requirements for optional riders

If you choose one of the optional riders, you will have to invest according to certain portfolio diversification requirements:

  • The investment options lineup will be grouped into one of four investment categories
  • Each of those categories will be assigned a minimum/maximum allocation, and you must stay within those parameters
  • You will not be able to allocate to the fixed account
  • You can utilize the DCA as long as you meet the portfolio diversification requirements (see the product prospectus for more details)

If you do not select a rider, there are no restrictions on your investment options allocation.

1 In a fixed account, the interest rate credited to the monies allocated to the fixed portion are declared monthly, subject to a guaranteed minimum interest rate. The guaranteed minimum interest rate is set annually. The fixed account is not available for contracts with any of the optional riders.

2 With DCA, you invest a specific amount of money on a set schedule. It can help minimize the impact of market volatility because the automatic investment is set over a period of time, regardless of unit price. Because unit prices fluctuate and your investment remains the same, at times you will pay higher than average and at other times lower than average. Masters Prime Variable AnnuitySM can automatically transfer your contract value among selected investment choices on a 6-month or 12-month schedule. DCA is only available for contracts with optional riders as long as you meet the portfolio diversification requirements as outlined in the product prospectus. Only variable annuity investment options are included in any DCA program you elect.

3 The current GLWB rider fee is 1.20% (which can change up to a maximum of 1.95% annually) calculated based on the withdrawal benefit base. Charged quarterly at 0.30% and deducted proportionately from the contract value. The rider fee percentage could be increased as a result of a step-up. Delaware Life will notify you in advance and you can elect not to receive the step-up. The rider fee will never be greater than a set maximum rider fee. The GWLB withdrawal benefit base is capped at $5 million. Withdrawals of taxable amounts will be subject to ordinary income tax and may be subject to additional taxes. Withdrawals taken prior to age 59½ may be subject to a 10% penalty.

4 Available for an annual fee of 0.20% calculated based on the withdrawal benefit base. Charged quarterly at 0.05% and deducted proportionately from the contract value.

5 Available for an annual fee of 0.40% calculated based on the current HAV. Charged quarterly at 0.10% based on issue date and deducted proportionately from the contract value. The starting HAV is equal to your initial purchase payment. The HAV is used to calculate the death benefit.

6The death benefit is subject to adjustments for applicable charges and taxes.

7The ROP value is not available for withdrawal or surrender.

8The HAV value is not available for withdrawal.

Variable annuities are subject to investment risks, including the possible loss of principal. Variable annuities are long-term investments designed for retirement purposes. Variable annuities have limitations, exclusions, charges, termination provisions and terms for keeping them in force. The contract value is subject to market fluctuations and investment risk so that, when withdrawn, it may be worth more or less than its original value, even when an optional living benefit is elected. All product guarantees, including optional living and death benefits, are subject to the claims-paying ability and financial strength of the issuing insurance company.

The prospectus for the Masters Prime Variable AnnuitySM is available from your financial professional. You should carefully consider a variable annuity’s risks, charges, limitations and investment goals of underlying investment options prior to making any investment decisions. This and other information is available in the product prospectus, as well as the underlying investment option prospectuses. These prospectuses are available from your financial advisor or by calling 844-DEL-SALE (844-335-7253). Read them carefully before investing.

Variable annuities are long-term investments designed for retirement. Annuity withdrawals and other distributions of taxable amounts, including death benefit payouts, will be subject to ordinary income tax. For non-qualified contracts, an additional 3.8% federal tax may apply on net investment income. If withdrawals and other distributions are taken prior to age 59½, an additional 10% federal tax may apply. A withdrawal charge also may apply. Withdrawals will reduce the contract value and the value of the death benefits, and also may reduce the value of any optional benefits. Under current law, a non-qualified annuity that is owned by an individual is generally entitled to tax deferral. IRAs and qualified plans— such as 401(k)s and 403(b)s—are already tax-deferred. Therefore, a deferred annuity should be used only to fund an IRA or qualified plan to benefit from the annuity’s features other than tax deferral. These include lifetime income, death benefit options, and the ability to transfer among investment options without sales or withdrawal charges.

Policy and rider form numbers may vary by state. Products, riders and features may vary by state, and may not be available in all states. This material may not be approved in all states. Ask your financial professional for more information. This brochure is a general description of the product.

Delaware Life does not provide tax or legal advice. Any tax discussion is for general informational purposes only. Clients should refer to their tax advisor for advice about their specific situation.

The Masters Prime Variable AnnuitySM is issued by Delaware Life Insurance Company and distributed by Clarendon Insurance Agency, Inc. (member FINRA). Both companies are members of Group One Thousand One.

Issued on Contract: ICC18-DLIC-VA-C-01 (state variations may apply)

Rider Numbers: ICC18-DLIC-VA-GLWB-01, ICC18-DLIC-VAHAVDB, ICC18-DLIC-VAROPDB, ICC18-DLIC-VANHW, ICC18 DLIC-VATIW (state variations may apply)

Delaware Life Insurance Company, 1601 Trapelo Road, Waltham, MA