People often purchase tax-deferred annuities during their working years in anticipation of the need for retirement income later in life.

The period between the purchase date of a deferred annuity and the onset of the payout period is known as the accumulation period. You can pay for the annuity either in a single premium payment or in a series of periodic premium payments. The flexibility of UTUIA's annuity is in the amount and timing of contributions. Any amount ($25 minimum) can be contributed at any time.

All of the interest earnings accumulated in your annuity remain tax-sheltered until withdrawn. Although UTUIA reserves the right to adjust its interest rate from time to time based on market conditions, your annuity will never earn less than the guaranteed rate of 3%.

When you begin making withdrawals, you will be taxed on only the amount you withdraw each year on which taxes have not previously been paid. (Federal law requires that the interest portion of your annuity be withdrawn and taxed first.) The remaining funds continue to accumulate tax-deferred. In all probability, you will benefit because you will be in a lower tax bracket than during the accumulation period.

Early withdrawals may be subject to a UTUIA surrender charge. Any amount withdrawn in the first policy year is subject to a UTUIA surrender charge. In the second through seventh policy years, as much as 10% of the annuity value may be withdrawn once per policy year without a UTUIA surrender charge. The charge is 5% in the first through third policy years, decreasing 1% per year through the seventh policy year. After seven years, 100% of the annuity value can be withdrawn without a UTUIA surrender charge.

At retirement, you may choose to annuitize your contract, i.e., to receive a series of periodic payments. UTUIA offers several settlement options which include:

• Income of a Fixed Amount;
• Income for a Fixed Period;
• Life Income with Payments Guaranteed for a Fixed Period;
• Special Arrangement.

Upon death, the annuity value of your Flexible Premium Deferred Annuity will be paid directly to your beneficiary which avoids the expenses, delays and frustrations of probate.

If you surrender your annuity early, there is an IRS tax penalty for withdrawing all or any part of it before age 59 1/2, except in the event of death or total disability, or unless the funds are paid out in a series of payments made over your life expectancy (or the joint life expectancy of you and your beneficiary). You must include a portion of the amount withdrawn as ordinary income for the year of receipt and, if applicable, you must pay the tax penalty.