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| Why invest in a BRK Direct SPDA? |
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The financial security of your insurer should be a key consideration in your purchase decision. As a member of the Berkshire Hathaway group of insurance companies, we offer the financial strength that is second to none. Berkshire Hathaway Life Insurance Company of Nebraska, your annuity provider, is rated AAA (Extremely Strong - Insurer Financial Strength Rating) by Standard & Poor's and A++ (Superior) by A.M. Best; these ratings are the highest possible ratings.
Because BRK Direct sells its product directly, we can offer a more competitive interest rate to you. We do not pay an agent or broker any of the premium you invest with us. Therefore your entire premium is put to work for you.
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BRK Direct is taking a unique approach with respect to the Single Premium Deferred Annuity (SPDA) as compared to more traditional life insurance industry practices. The manner in which BRK Direct sets the accrual interest rate on the SPDA is what differentiates our SPDA product from the traditional deferred annuity products offered.
BRK Direct will credit your SPDA with an interest rate that is equal to the yield of a comparable U.S. Treasury Strip. The yield is capped at the 30 year U.S. Treasury Bond. You can choose to have this interest rate fixed for the life of the contract or reset periodically, at an interval period chosen by you. The rate will be fully guaranteed and the manner in which this rate is set will not be altered for any reason.
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| Many companies market the SPDA product by employing 'teaser' interest rates, which appear very attractive, and are intended to entice you into buying the product. Once you have invested in their SPDA, you are at the company’s mercy in terms of the interest rate that will be credited to the annuity in future years. While you might have the right, under such an SPDA, to do a 1035 exchange, the surrender charges levied are typically more than enough to compensate the insurance company for the teaser rate they credited your annuity during the first year. Under a BRK Direct SPDA, the rate or adjustable rate plan you select will be guaranteed.
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An interest rate guarantee for the life of an SPDA is an extremely valuable feature, yet annuity providers do not currently offer it. The manner in which an SPDA is typically sold should be understood, in order to fully appreciate the rate guarantee feature of a BRK Direct SPDA.
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