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Protection for you and your spouse.


Academic year: 2021

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Protection for you

and your spouse.



• Not a deposit • Not FDIC or NCUSIF insured • Not guaranteed by the institution • Not insured by any federal government agency • May lose value


The Spousal



is like having

dual airbags:


for both



Annuity basics.

An annuity is a long-term, tax-deferred

investment you buy from an insurance company to help you save for retirement. It allows you to create a fixed or variable stream of income through a process called annuitization and also provides a variable rate of return based on the performance of the underlying investments. But, as with most things in life, an annuity does have limitations. If you decide to take your money out early, you may face fees called surrender charges. Plus, if you’re not yet 59½, you may also have to pay an additional 10% tax penalty on top of ordinary income taxes. A death benefit is available with most variable annuities, and naturally, if you do take an early withdrawal, your death benefit and the contract value of the annuity contract will be reduced.

You should also know that an annuity contains guarantees and protections that are subject to the claims-paying ability of Nationwide Life Insurance Company. But these guarantees don’t apply to any variable accounts, which are subject to investment risk, including possible loss of your principal.



Serious protection for

a serious time.

When it comes to your family, protection is important. When you buy a car,

the same logic applies. Let’s say you’ve narrowed your decision down to two

cars of the same make, model and features. The only difference: one has dual

airbags, and the other only has a driver’s side airbag. That’s an easy choice,

right? You want protection for both you and your passenger.

The same should be true for your financial future. That’s why most Nationwide®

variable annuity death benefits offer the Spousal Protection Feature (SPF). It

gives you the opportunity to extend the guaranteed death benefit to cover

either spouse, regardless of who passes away first.


The person’s life on which the annuity is based; the annuitant and the contract owner are usually the same person.

Contract owner The person who owns all rights under the contract.


The recipient of the death benefit proceeds from an annuity if either the annuitant or co-annuitant passes away.

How SPF works.

Most Nationwide variable annuity death benefits have a feature called the Spousal Protection Feature (SPF). It’s available on IRA or non-IRA contracts.

SPF protects you and your spouse if either one passes away by extending the death benefit coverage to the surviving spouse. SPF provides the surviving spouse the choice to receive the death benefit payout — no matter which spouse passes first or which spouse owns the contract — or continue the contract at the death benefit amount.

How Nationwide’s SPF works in an IRA.

With an individual retirement account, also known as an IRA, only one individual may be listed as the contract owner. Most annuities are owner driven, which means that only the death of the contract owner will trigger a death benefit to his or her surviving spouse, the primary beneficiary. What’s unique about annuities held within Nationwide IRAs is that they’re annuitant driven, which means that with SPF, a death benefit is provided upon the death of the annuitant or the co-annuitant on the contract. If either spouse passes away, the death benefit transfers to the surviving spouse, regardless of who owns the contract. It’s not limited to the death of just the contract owner like most IRAs outside of Nationwide.

With SPF, the surviving spouse can continue the contract, and then can name a new beneficiary. If that surviving spouse then passes away, his or her new beneficiary will receive a death benefit or can continue the inherited contract at the death benefit amount.


Let’s look at an example.

Mike bought a Nationwide variable annuity contract in his IRA. He named his wife, Sarah, as co-annuitant and primary beneficiary. By his first contract anniversary, Mike’s account value grew due to positive market performance. Because he purchased a One-year Enhanced Death Benefit rider* that stepped-up and locked in the increase, his death benefit value increased on his first contract anniversary. After that, Mike’s account value fell, and Sarah passed away shortly afterward.

* The One-year Enhanced Death Benefit is an optional rider available for an additional charge. SPF is available on most Nationwide variable annuities, regardless of the death benefit option. Please see the prospectus for additional information. This example is hypothetical. It does not reflect the performance of any investment. If the owner takes a withdrawal, the death benefit and cash value will be reduced.

With the One-year Enhanced Death Benefit rider and SPF, Mike had a few options after Sarah passed away. His financial advisor explained that he could either step-up his contract value to the previously locked-in death benefit amount, or he could take a lump-sum payment. Mike continued his contract and named a new beneficiary, who will also have the same options upon Mike’s death.

Without SPF, nothing would have happened to Mike’s account, and a death benefit would not have been paid. That’s because the death of his spouse would not have any impact on his IRA contract.

Without SPF With SPF

Nothing happens. A death benefit

is paid only when Mike passes away. Sarah’s death triggers the death benefit step-up in Mike’s IRA.

Remember, with SPF it doesn’t matter who dies first. If Mike had passed away first, Sarah would be given the choice to receive the stepped-up death benefit or continue the contract at the death benefit value — with any investment gains remaining tax deferred until she surrendered the contract.


contract value Contract value on first anniversary


Contract value at Sarah’s death

Death benefit The dollar amount the

beneficiaries or estate receives when the annuitant dies.

Contract value

The dollar amount of your contract. Any withdrawals or fees, if applicable, would reduce this amount.


An option you can add to your annuity at an additional cost that gives you extra features or guarantees to fit your personal situation.

The death benefit “locked in” at the higher amount, even though Sarah passed away after the contract value had fallen.


This brochure is only authorized for client use when preceded or accompanied by a variable annuity product prospectus. The prospectus describes the investment objectives, risk factors, expenses, fees and surrender charges that may apply to you. You should read it carefully before purchasing a variable annuity.

Variable products are sold by prospectus. Both the product prospectus and underlying fund prospectuses can be obtained from your investment professional or by writing to Nationwide Life Insurance Company, P.O. Box 182021, Columbus, OH 43218-2021. Before investing, carefully consider the fund’s investment objectives, risks, charges and expenses. The product prospectus and underlying fund prospectuses contain this and other important information. Read the prospectuses carefully before investing.

Nationwide variable annuities are issued by Nationwide Life Insurance Company, Columbus, Ohio. The general distributor is Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation.

Nationwide, Nationwide Financial and the Nationwide framemark are service marks of Nationwide Mutual Insurance Company.

© 2005 – 2014 Nationwide Financial Services, Inc. VAM-0377AO.9 (02/14)

Dual airbags give you extra protection.

Why not do the same for your retirement?

Details to remember.

• Both spouses must be under age 85* at the time of issue and be

named co-annuitants and primary beneficiaries

• No other person may be named as contract owner, annuitant or

primary beneficiary**

• SPF may have an additional cost; see your prospectus for details

• All guarantees are subject to the claims-paying ability of Nationwide

Life Insurance Company

• Available with IRA or non-IRA variable annuities

Mike Sarah

Contract owner 

Co-annuitant  

Primary beneficiary  

* Age may vary based on annuity product.

** A revocable trust may be named as the contract owner, as long as either or both of the spouses is/are grantor(s).


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