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ING Annuity Commencement Date (ACD) Option Update

Friday, January 29, 2010

01-29-2010

Annuity Commencement Date (ACD) Option Update

ING will no longer be offering the extra-contractual option to defer the annuity commencement date (ACD) to the contract anniversary following the annuitant’s 95th birthday. The maximum ACD permitted under the contract will be the latest date permitted under the contract. The annuity commencement date is a contractual provision in annuity products to address IRS requirements.

Contract holders will have the following contractual options:

Option 1: Select an Annuity Payment Option
The contract owner may select one of a number of different annuity payment options as described in the contract and on the enclosed Annuity Option Selection- Standard Payout Options Form. Please refer to the attached form for details of the annuity options.

Option 2: Surrender Contract
The contract owner may select to surrender the contract and receive the cash surrender value. A surrender charge, along with any applicable market value adjustment, may apply. If this option is selected, the contract must be surrendered on or before ACD.

Option 3: Default Annuity Payment Option
If the contract holder does not complete and return the Annuity Option Selection- Standard Payout Options Form by the annuity commencement date, then the annuity payments will automatically begin on the ACD based on the contract’s default annuity payment option. The contract specifies this option for the contract holder.

Important points:
• Contract owners will continue to have the opportunity to select an available option on the Annuity Option Selection- Standard Payout Options Form and return to ING USA by the contract's ACD.
• Annuity payments will be based on the accumulation value or the cash surrender value (depending on the contract) upon receipt of the Annuity Option Selection form in good order or on the date selected on the form. Under the Default Annuity Payment Option, annuity payments will be based on the accumulation value at the ACD.
• Once annuity payments begin, the death benefit available during the accumulation phase will terminate.
• If the form is not received by the ACD, the annuity payments will automatically commence under the contract's default annuity payment option. In most cases, the default annuity option will be Income for Life with a specified Period Certain.
• For custodial owned contracts, notification will be sent per the individual firm’s custodial agreement approximately 45 days prior to the contract’s ACD. When annuity payments begin, the primary annuitant will become the owner. The beneficiary will be changed from the custodian and proceeds will be paid to the estate, unless otherwise directed.
• Each option will have tax consequences that will depend in part on individual circumstances and some tax consequences are uncertain. Federal (and state, if applicable) income taxes will be withheld from the payment(s) that are made, unless elected otherwise. This information is not tax advice, and the contract owner should consult a tax advisor.
• Contract holders who previously received a notification letter with a deferral option to age 95 will still have the options to defer to 95.
• The Annuity Option Selection- Standard Payout Form and the letter that will be mailed to contract holders are attached for your reference.