The Best of American Platinum Edge Annuity is a registered flexible purchase payment, modified guaranteed annuity that offers investment options referred to as Guaranteed Period Options (GPO).
The GPOs provide for guaranteed interest rates that are credited over specified durations. 3-, 4-, 5-, 6-, 7-, 8-, 9- and 10-year GPOs are available. A guaranteed fixed rate is declared for the length of each GPO. The guaranteed rate is valid only if the investment is held until maturity. Investments may be split amongst several GPOs.
Withdrawals made before maturity of a GPO may be subjected to a contingent deferred sales charge (CDSC) and/or a market value adjustment (MVA). The length of the CDSC schedule is equivalent to the duration of the GPO.
At the end of each GPO (or maturity), the assets are moved to a transition account that offers a minimal interest rate. Withdrawals from the transition account are not subject to a contingent deferred sales charge (CDSC) or a market value adjustment (MVA). If assets are transferred from the transition account, a new CDSC schedule will apply for each newly elected GPO.
More about market value adjustment
A market value adjustment (MVA) may apply to any withdrawal made prior to the maturity of a Guaranteed Period Option (GPO). The MVA reflects the impact of any changes in interest rate swaps between the time the GPO was elected and the time of the withdrawal. Generally, upward movement of the interest rate swaps will cause market value to go down, while downward rate movement will cause increasing market values. An MVA could increase or decrease the amount of the withdrawal.
Annuity contract considerations
Please note that withdrawals may be subject to contingent deferred surrender charges (CDSC) and a market value adjustment (MVA). Early withdrawals, those taken prior to age 59½ , may be subject to a 10% early withdrawal federal tax penalty in addition to ordinary income taxes. All withdrawals will reduce the death benefit and cash surrender value.
Federal income tax laws are complex and subject to change. The information provided is based on current interpretations of the law and is not guaranteed. Nationwide® and its representatives do not give legal or tax advice. You should consult your attorney or tax advisor for answers to your specific tax questions.