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What is a variable deferred bonus annuity?

It is a variable deferred annuity that offers you a bonus on premium or purchase payments made into your annuity contract. Bonus annuities are designed to help you build retirement assets over a long period of time and once annuitized, offer a steady source of guaranteed¹ income during your retirement years.    

Why consider a variable deferred bonus annuity?

If you are like millions of Americans, you may find that a variable deferred annuity with a "bonus feature" can help you reach your retirement goals, especially in today's low interest rate environment. 

As with all variable annuities, the First Choice Variable Deferred Bonus Annuity has certain fees and expenses that you should be aware of and understand before purchasing the annuity. These fees and charges may be higher and the surrender charge period may be longer than contracts that do not provide a bonus. For example, the First Choice Variable Deferred Annuity has a lower mortality and expense charge (1.0 percent) and a shorter surrender period than the First Choice Variable Deferred Bonus Annuity.

The First Choice Variable Deferred Bonus Annuity is a "back-loaded" annuity which means that if you cash in or surrender your annuity within the first nine years, you will pay a surrender charge that begins at 8.00 percent and scales down over a period of nine years. See the First Choice Variable Deferred Bonus Annuity prospectus for a schedule of fees and charges.

1 Guarantees are subject to the financial strength and claims-paying ability of Foresters Life Insurance and Annuity Company which makes no guarantees with respect to the investment return or principal value of the underlying subaccounts.

2 Both the return and principal value of the underlying subaccounts will fluctuate and the surrender value may be worth more or less than the original investment when the contract is surrendered.

3 Under current federal tax law, the portion of each annuity payment that represents earnings is taxed as ordinary income. Surrenders from a variable annuity are assumed to be from gains first and from principal second.

Annuity contracts contain certain exclusions and limitations as well as terms for keeping them in force and for the payment of benefits. For complete costs and details, see your Representative. Contract guarantees apply only to certain annuity features and are subject to the claims-paying ability and financial strength of Foresters Life Insurance and Annuity Company.

For more complete information, including charges and expenses, you can view or download a free prospectus for the First Choice Variable Deferred Bonus Annuity from Foresters Life Insurance and Annuity Company. You may also obtain a free prospectus by contacting your Foresters Financial Representative, calling 800 832 7783, or writing to our administrative office at the following address: Foresters Life Insurance and Annuity Company, Raritan Plaza 1, P.O. Box 7836, Edison, NJ 08818. You should consider the subaccounts' investment objectives, risks, charges and expenses carefully before you purchase an annuity or send money. The prospectus contains this and other information about the product, and should be read carefully before purchasing. Contract availability and provisions may vary by state.

Consider potential risks:

Investment Risk. You bear all of the investment risk of the Funds that correspond to  the Subaccounts you select, which means you could lose money.

Fees and Charges. An investment in a Contract is not a direct investment in a mutual fund. There are additional charges for the death benefit and other features of the Contract that are not associated with a mutual fund.

Because the Contract offers Bonus Payments, the charges and expenses, such as the surrender charges and the mortality and expense risk charges, may be higher than expenses for a similar Contract that does not credit a Bonus Payment.  In addition, because we credit a Bonus Payment, the amount of charges you pay will be higher than if we had not credited a Bonus Payment.  Over time, the value of the Bonus Payment may be more than offset by the additional charges.

Internal Revenue Service (IRS) Penalty. Because a 10 per cent federal tax penalty is generally imposed on the taxable portion of surrenders prior to age 59½, you should not invest in the Contract if you have short-term investment objectives that would require you to liquidate all or a portion of the Contract prior to reaching age 59½.

Holding Period. A minimum holding period is often necessary before the tax benefits of tax deferral are likely to outweigh the often higher fees imposed on variable annuities relative to alternative investments.

Be Careful With Your Tax-Deferred Arrangement. A tax-deferred accrual feature is already provided by any tax-qualified arrangement, such as an IRA or 401(k) plan. Therefore, you should have reasons other than tax deferral, such as the additional benefits described in this prospectus, for purchasing a Contract within an IRA or other arrangement that receives tax deferral under the Internal Revenue Code.

Surrender Charges. There is a maximum 8 per cent surrender charge. All the surrender charge percentages are listed below.

Number of Years from Receipt of Purchase Payment to the Date of Surrender:

Date

Percentage

1 year or less

8.00 per cent

1

8.00 per cent

2

8.00 per cent

3

8.00 per cent

4

7.00 per cent

5

6.00 per cent

6

5.00 per cent

7

3.00 per cent

8

1.00 per cent

9 years or more      

0.00 per cent

 

Taxation of Surrenders. A partial or total surrender of a Contract is taxed for federal income tax purposes as ordinary income to the extent that the Accumulation Value exceeds your investment in the Contract (i.e., on an “income first” basis).

Taxation of Death Benefits. The death benefit paid to the Beneficiary of a Contract is taxed for those purposes as ordinary income to the Beneficiary at the Beneficiary’s tax rate to the extent that the death benefit exceeds the Contractowner’s Investment in the Contract.  Thus, if your primary objective is to pass wealth on to your heirs, a life insurance policy may be more appropriate for you.  For federal tax purposes, the amount of the death benefit on a life insurance policy passes federal income-tax free (though not necessarily federal estate-tax free) to the Beneficiary; an annuity death benefit does not.

General Account Risk. The assets of the General Account support our insurance obligations and are subject to general liabilities from our business operations and to claims by our general creditors. Amounts allocated to the Fixed Account and any guarantees under your Contract that exceed your Contract Value (such as those that may be associated with the Death Benefit), are paid from the General Account. Any such amounts that we are obligated to pay in excess of your Contract Value are subject to our financial strength and claims-paying ability.

Neither Foresters Life Insurance and Annuity Company nor its affiliates provide legal, tax or estate planning services. Should you require such services, you should consult a legal, tax or estate planning professional. Contract availability and features are subject to eligibility criteria and state variations. The First Choice Variable Deferred Bonus Annuity is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

First Choice Variable Deferred Bonus Annuity is approved in these states with the following form numbers:
FPBA-1 (10-12)(CA), FPBA-1 (10-12)(CT),  FPBA-1 (10-12)(DC),  FPBA-1 (10-12)(DE),  FPBA-1 (10-12)(FL),  FPBA-1 (10-12)(ND), FPBA-1 (10-12)(NY). 

In addition, the following states are approved as form number ICC12-FPBA-1 (10/12): AL, AR, AZ, CO, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, NC, NE, NH, NJ, NM, NV, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WI, WV, WY. 

The First Choice Variable Deferred Bonus Annuity is issued by Foresters Life Insurance and Annuity Company, 40 Wall Street, New York, NY 10005, 800 832 7783 and distributed by Foresters Financial Services, Inc., 40 Wall Street, New York, NY, 10005,  800 423 4026.

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