Common use of Distributions During Your Life Clause in Contracts

Distributions During Your Life. No tax penalty is imposed on distributions from your XXX after you reach age 59 1/2 or become permanently disabled. Distributions must begin no later than the first day of April following the calendar year in which you reach age 70 1/2. Generally, you are permitted to receive your XXX in a lump sum or installments over a period not extending beyond your life expectancy or the joint life and last survivor expectancy of you and your Beneficiary. You may also request a distribution of any part of your XXX balance. Life expectancies are determined in accordance with the IRS tables. Unless otherwise elected by you prior to the required commencement of your distributions, your life expectancy and that of your spouse will not be recalculated annually. An election by you to recalculate shall be irrevocable and shall apply to all subsequent years. The life expectancy of a nonspousal Beneficiary cannot be recalculated. All distributions are taxed at ordinary income tax rates and are not eligible for capital gains treatment or five-year averaging. If you direct distributions to be made over your life or the joint lives of you and your designated Beneficiary, the Custodian will purchase with your XXX an immediate annuity contract from an insurance company you choose and your payments will be made under the annuity. You must provide a completed annuity application from the insurance company of your choosing. When requesting a distribution, you must specify the reason for the distribution. Examples are: premature distributions (i.e., distributions before age 59 1/2), rollovers, disability, death, normal (at or after age 59 1/2), excess contribution returns and other.