The United States Life Insurance Company CHAZ Value Partial Withdrawal Guide

Understanding CHAZ Value and Partial Withdrawals at The United States Life Insurance Company

The United States Life Insurance Company offers the CHAZ Value annuity, a fixed-indexed product that credits interest based on the performance of a market index while protecting against loss of premium. A partial withdrawal lets you access a portion of your accumulated value without surrendering the entire contract. For policyholders considering liquidity, understanding the mechanics, limits, and consequences of a partial withdrawal is essential before making a decision.

CHAZ Value policies are structured with specific rules governing withdrawals, including a withdrawal charge period and a limit on how much you can take out each year. These terms vary by contract issue date and rider attachments, so the exact numbers in your policy document will determine what is available to you.

How Partial Withdrawals Work Under the CHAZ Value Contract

When you submit a partial withdrawal request, The United States Life Insurance Company reduces your contract's cash value by the withdrawn amount plus any applicable charges. The remaining balance continues to earn interest based on the chosen crediting strategy and index allocation. Most CHAZ Value contracts allow a percentage of the account value to be withdrawn annually during the surrender charge period, often starting at around 10 percent and potentially increasing over time.

Key elements to verify before initiating a withdrawal include:

• The current account value and accumulated interest
• The withdrawal charge schedule still in effect
• The annual withdrawal allowance as stated in your contract
• Any rider-specific rules, such as those attached to a guaranteed lifetime withdrawal benefit

Surrender Charges and Withdrawal Fees

During the surrender charge period, partial withdrawals typically incur a fee calculated as a percentage of the amount withdrawn. This charge decreases over the life of the contract according to a schedule outlined in the policy. The United States Life Insurance Company will apply the withdrawal charge before crediting any remaining value back to the contract. If a withdrawal causes the contract's value to fall below a required minimum, additional penalties or a loss of rider benefits may apply.

Timing a partial withdrawal outside the surrender charge period eliminates this fee, but most contracts have a long surrender window, often seven to ten years from issue. Reviewing the surrender schedule in your contract is the only reliable way to know what fee, if any, a withdrawal will trigger.

Tax Treatment of Partial Withdrawdrawals from a CHAZ Value Annuity

For non-qualified contracts funded with after-tax dollars, withdrawals are taxed on a last-in, first-out basis. This means gains are taxed as ordinary income before any premium recovery is returned tax-free. If the contract is inside a qualified retirement plan or an IRA, the full withdrawn amount is treated as ordinary income and may be subject to a 10 percent federal penalty if taken before age 59½, unless an exception applies.

The United States Life Insurance Company will typically withhold taxes on distributions that are not rollover-qualified. Policyholders should plan for this withholding and consider the tax impact as part of the decision to withdraw, especially when large sums are involved.

Impact on Contract Benefits and Future Growth

Every partial withdrawal reduces the account value that serves as the basis for future interest crediting. Because indexed annuities like CHAZ Value calculate interest on a smaller base after a withdrawal, the contract's long-term growth potential declines. For riders linked to the account value, such as guaranteed minimum withdrawal benefits or legacy benefits, a withdrawal may also reduce the available benefit base.

In some cases, withdrawing above the allowed annual percentage can reset the crediting rate or trigger a loss of a rider. The United States Life Insurance Company will apply the terms of the specific rider in force, so maintaining the contract's required minimum value is important for preserving rider protections.

How to Submit a Partial Withdrawal Request

The United States Life Insurance Company generally requires a written withdrawal request submitted through your agent, broker, or the company's customer service portal. The request must specify the withdrawal amount, the destination account for the proceeds, and the contract number. Once processed, the company will issue a check or direct deposit and update the contract's account value accordingly.

Before submitting, gather the following:

• Your contract number and policyholder identification
• The exact withdrawal amount you wish to receive
• Your preferred payment method and bank account details
• A copy of your most recent contract statement for reference

When a Partial Withdrawal Makes Sense

Partial withdrawals can be useful for addressing unplanned expenses, supplementing retirement income, or rebalancing without fully surrendering the annuity. They are most cost-effective when taken after the surrender charge period ends or when the withdrawal charge has declined to a minimal level. For contracts with long surrender periods, a withdrawal may still be worthwhile if the fee is low relative to the liquidity gained and the remaining contract value continues to provide meaningful growth and protection.

Because each CHAZ Value contract is unique, confirming the specific withdrawal terms with The United States Life Insurance Company or your licensed agent is the recommended next step before taking action.