Important Change to Florida Annuities

Effective January 1, 2011

Effective January 1, 2011 the state of Florida requires that all annuities sold in Florida conform to regulations that limit withdrawal charges for senior consumers (65 years of age or older). An annuity contract issued to a senior consumer in Florida may not contain a withdrawal charge that exceeds 10 percent. Additionally, withdrawal charges may not extend beyond the 10th policy year or 10 years after the premium is paid, whichever is later.

These regulations will result in changes to some of the annuities offered by Life Insurance Company of the Southwest (LSW) as well as future products to be introduced. There will also be one product withdrawn. The regulations and effective date are applicable to all life insurance companies doing business in Florida.

What type of product changes will occur?

Effective January 1, 2011 the maximum issue age will be age 64 on certain products. Please see the Summary of LSW Product Changes in Florida for the list of products affected.

What is important for me to know right now?

Policies issued prior to January 1, 2011 are not affected nor are any contributions made to such policies on or after January 1, 2011. Policies issued after December 31, 2010 are required to conform to the new regulations. That means if you are selling an affected product to a person who will be age 65 or older on the date of issue, you must ensure the policy is funded and issued no later than December 31, 2010. If the policy owner will be age 64 or younger when the policy is issued, the transaction is not affected.

What Forms and Materials should I use for Policies to be issued after December 31, 2010?

Most forms are unaffected by these changes and you may continue to use existing forms provided the plan will be available at the annuitant’s age at issue. Refer to the Summary of LSW Product Changes in Florida chart for issue age limitations.

How does this affect planning for 2011?

If you are taking applications now for anyone who will be age 65 or older as of January 1, 2011 and expect to fund the annuity with a premium that will reach the home office after December 31, 2010, you need to make sure the policy you are offering will be available for issue. Remember, a policy needs to be issued before January 1, 2011 to avoid being affected. Merely submitting the application is not enough.

We want you to know these rules now so you can plan accordingly for any policies you expect to be issued after December 31, 2010.

For more information about current product specifications, please call the Annuity Sales Desk at 800-906-3310 or visit lifeofsouthwest.com.

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Form No. 10401(1010)