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PolarisSelect InvestorVARIABLE ANNUITYPOLARISFOR THOSE WHO WANT MORE SM
WHEN YOUR GOALS AREAccumulationTax-advantaged investingProfessionally managed investmentsPolaris Select InvestorSMVARIABLE ANNUITYVariable annuities are long-term investments designed for retirement purposes. Variable annuities work in two phases.In the accumulation phase, they can help you build assets on a tax-deferred basis. In the income phase, they canprovide you with guaranteed income through annuitization. Variable annuities are subject to costs that include aseparate account fee, a contract maintenance fee, expenses related to the operation of the variable portfolios andthe costs associated with any optional features.Retirement plans and accounts, such as IRAs and 401(k)s, defer payment of taxes on earnings until withdrawn. If youare considering funding a retirement plan or account with an annuity, you should know that an annuity does not provideany additional tax-deferred treatment of earnings beyond the treatment provided by the plan itself. In addition, whileother variable annuities may provide more robust insurance benefits, such as optional guaranteed livingbenefits and optional enhanced death benefits, the Polaris Select Investor’s insurance benefits are limited tothe optional Return of Purchase Payment Death Benefit and standard annuitization options. You should fullydiscuss the decision to fund a retirement plan or account with the Polaris Select Investor Variable Annuity with yourfinancial advisor.Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. PolarisVariable Annuities are issued by American General Life Insurance Company (AGL) except in New York, wherethey are issued by The United States Life Insurance Company in the City of New York (US Life).2
In recent years, planning for the financial aspect of retirement has becomeincreasingly important. And, for many, the impact of taxes on assets being setaside for retirement is growing in significance. Polaris Select Investor VariableAnnuity brings together the benefits of tax deferral with diverse investmentchoices and leading money managers to help you reach your long-term goals.Polaris Select Investor offers you More Control,More Choice, and More ExperienceMore Control.You’ll have more control over when you pay taxes on your earnings through tax-deferredaccumulation and tax-free transfers between investment options—giving you a potentiallymore tax-efficient way to invest.More Choice.You can choose from over 90 investment options covering diverse asset classes, plusprofessionally designed asset allocation models.More Experience.Money is invested by more than 30 professional, experienced money managers with longtrack records of performance. Of course, past performance is no guarantee of future results.Earnings are taxed upon withdrawal. Withdrawals of taxable amounts are subject to ordinary income tax, andif taken prior to age 59½, an additional 10% federal tax may apply.1
Polaris Principlesfor Retirement InvestingLeverage the power of tax deferralTaxes can have a big impact on long-term investment returns. The highest marginal incometax rate now stands at 39.6%—up from 35% in 2012. The dividends and capital gains tax ratehas increased to 20% for investors in the highest tax bracket. And there are new Medicaretaxes on net investment income and earned income, not to mention the phase-out of itemizeddeductions, for high income individuals.Position your assets to your advantageWhile you may have committed to accumulating assets for use later during your retirementyears, you may not have considered the importance of positioning different types of assets indifferent types of accounts (called asset location). Asset location can have a substantial effecton the overall return of your investments. By placing your least tax-efficient investments in atax-deferred account (such as an IRA or annuity), you can potentially reduce your currentincome tax liability and control when you have to pay for the taxes on gains, distributions,and dividends.Keep in mind, retirement plans and accounts already defer payment of taxes on earningsuntil withdrawal and funding a retirement plan or account with an annuity does not provideany additional tax-deferred treatment of earnings. You should fully discuss the decision tofund a retirement plan or account with the Polaris Select Investor Variable Annuity withyour financial advisor.More Tax EfficientAsset classeshave different taxconsequencesLess Tax Efficient2Municipal BondsU.S. Large Growth StocksInternational StocksEmerging Markets StocksU.S. Large Value StocksU.S. Mid Cap StocksBalanced FundsU.S. Small Cap StocksTaxable BondsReal EstateCommoditiesWorld BondCorporate BondHigh Yield BondsSource: Morningstar, 2015. Based on Morningstar 10-year average tax cost ratio for major Morningstar categories as of 2/28/15.
Polaris Select InvestorVARIABLE ANNUITYTaxable vs. tax-deferredIn a rising tax environment, it may make sense to complement your existing investments,especially those in taxable accounts, with tax-deferred investments. Annuities are intendedas long-term investments designed for retirement, so your investment can grow tax-deferredand benefit from the compounding of investment earnings. With Polaris Select Investor, youcan also reallocate between different investment options without triggering immediate taxconsequences. Because investment gains within a variable annuity are not taxed until awithdrawal is taken, you have more control over when you pay taxes on your earnings.Tax deferral for greater potential growthHypothetical 100,000 investment—currently taxable vs. tax-deferred—over 25 years 600,000 542,743 500,000 400,000 418,775 341,875 300,000 200,000 100,000 100,000InitialInvestmentWithoutTax DeferralTax-deferredInvestment(after taxes)Tax-deferredInvestment(before taxes) This chart shows the hypothetical value of 100,000 earning a 7% gross return in a currently taxable investment and a comparablehypothetical tax-deferred investment over 25 years with no withdrawals. The rate of return will fluctuate and is not guaranteed. Bothinvestments assume a 28% federal income tax rate. No state income tax is included. This chart is for illustrative purposes only. Uponwithdrawal, the value of the tax-deferred investment would be reduced by income taxes on the investment gains. This example doesnot reflect the actual performance of the Polaris Select Investor Variable Annuity or any particular investment, nor the fees and chargesassociated with any investment. If shown, these fees and charges would reduce the results of the tax-deferred investment. Tax rates and taxtreatment of earnings may impact comparative results. Capital gains and dividends in the taxable investment may be taxed at a rate that islower than the income tax rate, which could increase the taxable return and reduce the difference in performance between the investments. Withdrawals of taxable amounts are subject to ordinary federal income tax and if taken before age 59½, an additional 10% federal taxmay apply. Withdrawals are also subject to state tax. Talk to your financial advisor about your investment time horizon and income tax brackets, both current and anticipated, when makingan investment decision. There is no guarantee that an investment in Polaris Select Investor will keep pace with inflation.3
Retirement InvestingConsider the long-termgrowth potential of stocksStocks historically have outperformed other types of investments over long periods of time, asillustrated below. And while past performance is not a guarantee of future results, it’s importantto consider the long-term wealth-building opportunity an investment in stocks may provide.Of course, an investment in stocks is subject to risk and market fluctuation.Stocks can help provide long-term growth potentialGrowth of 100,000 in various asset classes over the 30-year period ended 12/31/14 3,000,0003000000 2,500,0002500000Stocks 2,509,926 2,000,0002000000 1,500,0001500000 1,000,0001000000Bonds 861,592500000 500,00004T-Bills 324,819 01985199019952000200520102014Source: Wilshire Compass, 2015. This chart is for illustrative purposes only and does not represent any particular investment. Performance forany specific investment is available from your financial advisor. Past performance is not a guarantee of future results. Stocks are representedby the S&P 500 Index, a representative sample of leading companies in key industries that reflect the U.S. stock market. Stocks are oftensubject to significant price fluctuations and, therefore, you may have a gain or loss in principal when shares are sold. Bonds are representedby the Barclays U.S. Aggregate Bond Index, which covers the U.S. investment grade fixed-rate bond market with index components forgovernment and corporate, mortgage pass-through and asset-backed securities. T-bills are represented by the BofA Merrill Lynch 91-DayTreasury Bill Index. Government bonds and Treasury bills are subject to interest rate risk, but they are backed by the full faith and credit ofthe U.S. Government if held to maturity. The repayment of principal and interest of a corporate bond is guaranteed by the issuing company,and subject to default and credit risks. Stocks and bonds are not subject to the separate account fees, administration charges and potentialwithdrawal charges associated with an investment in a variable annuity. Underlying investment options in a variable annuity are subject toportfolio operating expenses. Indexes are unmanaged; you cannot invest directly in any index. The appropriateness of particular types ofinvestments depends on your time horizon, risk tolerance and individual circumstances, such as your current and anticipated tax brackets.
Polaris Select InvestorVARIABLE ANNUITYDiversification may help reduce riskand lower volatilityWhile stocks have outperformed other investments and historically have provided an effectivehedge against inflation over the long term, diversification within your portfolio may help offsetshort-term volatility. As the chart below shows, a mix of asset classes can provide opportunityfor growth with potentially less volatility.A case for l26.35%Large CapGrowth11.82%Bonds5.24%High YieldBond57.50%Large CapValue7.04%Large tfolio Small Cap5.44%18.35%Bonds6.96%2011201220132014Small Cap26.85%Bonds7.84%Large CapValue17.50%Small Cap38.82%S&P 500Index13.69%Large CapGrowth37.21%Large CapGrowth16.72%High YieldBond4.38%Int’l17.31%Large CapGrowth33.49%Large .78%Large CapValue15.51%Large CapGrowth2.63%Small Cap16.34%Large CapValue32.54%Large CapGrowth13.05%S&P 500Index5.49%High YieldBond-26.39%Small Cap27.19%High YieldBond15.19%S&P 500Index2.11%S&P 500Index16.06%S&P 500Index32.39%DiversifiedPortfolio6.09%S&P 500Index4.89%Diversified DiversifiedPortfolioPortfolio Small Cap14.08%5.09%-33.80%S&P 500Index26.47%S&P 500Index15.06%Large CapValue0.39%High YieldBond15.58%Int’l22.78%Bonds5.97%Small Cap4.56%High YieldBond11.72%Cash4.74%Cash3.01%Large CapGrowth9.08%High YieldBond2.21%S&P 500Index-37.00%Large CapValue19.69%Int’l7.75%Cash0.08%High YieldBond2.73%Cash4.76%Large CapValue-0.17%Large CapGrowth-38.43%Bonds5.93%Bonds6.54%Small ds4.33%Small 2.14%Cash0.07%Bonds-2.02%Int’l-4.90%Large CapGrowth5.27%S&P 500Index15.81%2010Large Cap Diversified Diversified Diversified Large Cap ortfolio Small ified High YieldPortfolioBond12.79%7.42%HIGHESTAnnual Returns2006High YieldBond2.50%LOWEST International Stocks: MSCI EAFE Index. Large Cap Growth: Russell 1000 Growth Index. Large CapValue: Russell 1000 Value Index. S&P 500 Index. Small Cap: Russell 2000 Index. High Yield Bond:BofA Merrill Lynch High Yield Master II Index. Bonds: Barclays U.S. Aggregate Bond Index. Cash: CitigroupGlobal Markets 3-Month T-Bill Index. Diversified Portfolio: equal annual investments in the eight differentmarket segments noted. Source: Wilshire Compass, 2015.Diversification does not ensure a profit or protect against market loss. There is no assurance that a diversified portfolio willoutperform a non-diversified portfolio. Past performance is not a guarantee of future results.5
Design Your InvestmentTap the expertise of respectedmoney managersPolaris Select Investor offers you the benefits of professional money management andtime-tested investment techniques to help you diversify your investment and potentiallymaximize long-term growth potential. Polaris money managers have been selected for theirextensive experience managing retirement assets, as well as for their investment managementstyle, investment process and track record of attractive performance over time. Of course,past performance is not a guarantee of future results.12Additional information American Funds SAST Portfolios and the VCP Managed Asset Allocation SAST Portfolio invest in the American Funds Insurance Series,which has the same investment manager (Capital Research and Management Company) as American Funds.2 A Waddell & Reed investment management company.16
Polaris Select InvestorVARIABLE ANNUITYDiversify your investment across asset classesIn addition to a wide selection of experienced money managers, Polaris Select Investor hasover 90 investment options from which you can choose. Working with your financial advisor,you can create a strategy that feels comfortable to you by diversifying your investmentacross multiple asset classes to help meet your objectives for any number of goals—includingincome, volatility control, and inflation protection.Polaris Select Investor also offers you the opportunity to invest in alternative asset classes andalternative strategies. Traditionally, alternatives have been widely available to institutionalinvestors and include portfolios that invest in real assets (such as real estate, natural resourcesand infrastructure) and commodities. They provide an alternative to investing in traditionalfixed income (bond) and equity (stock) investments and may help create a stabilizing effect ona portfolio as they may have low correlation with traditional investments. This low correlationmay provide added portfolio diversification and has the potential to enhance a portfolio’srisk/return profile.Choose from these asset classesEquityFixed Income/CashAsset AllocationLarge GrowthMoney MarketTraditionalLarge CoreShort-Term BondIncome OrientedLarge ValueInflation Protected SecuritiesRisk ManagedSmall and Mid-Cap GrowthCorporate/Govt. BondTacticalSmall and Mid-Cap CoreHigh-Yield BondMulti-AlternativesSmall and Mid-Cap ValueForeign and Global BondMulti-CapMulti-Sector/Non-Traditional BondSpecialtyForeign and Global StockEmerging MarketsAdditional information While certain Polaris portfolios may be similar to other funds managed by the same investment adviser, this does not mean that a portfolio’sinvestment results will be comparable to the investment results of other similar funds, including other funds with the same investment adviser.The portfolios’ investment results will likely differ, and may be higher or lower than the investment results of other similar funds. Money managers, with the exception of SunAmerica Asset Management, LLC and VALIC, are not affiliated with AGL, US Life or AmericanInternational Group, Inc. (AIG). Please refer to the product and trust prospectuses for more information about the contract and the variable portfolios. Please see backcover for additional information about investing in the variable portfolios. There is no guarantee that an investment in Polaris Select Investor will keep pace with inflation.7
Design Your InvestmentChoose your investing approachWith Polaris Select Investor, you have the flexibility to choose one of theseinvestment approaches:1 Build your own allocationYou and your financial advisor can select from a wide range of over 90 portfolios anddesignate percentage allocations to help meet your diversification and investment goals.We encourage you to meet with your financial advisor periodically to review yourinvestments to ensure they align with your goals.2 Choose an asset allocation model designedby Ibbotson Associates, Inc.Polaris Portfolio Allocator models are developed exclusively by Ibbotson Associates, Inc.—a recognized leader in asset allocation for more than three decades.Polaris Portfolio Allocator models are designed to help you take advantage of thepotential benefits of asset allocation. You can use a model and its allocation as a guidewhen designing your investment allocation. Keep in mind, while diversification and assetallocation are both proven investment strategies, they can’t guarantee greater or moreconsistent returns and they can’t protect against loss.Polaris Portfolio Allocator modelsdeveloped by Ibbotson Associates, Inc.Model 150% Stocks50% Fixed IncomeLower8Model 260% Stocks40% Fixed IncomeModel 370% Stocks30% Fixed IncomeRisk/RewardPotentialPlease see back cover for additional information on Ibbotson Associates, Inc.Model 490% Stocks10% Fixed IncomeHigher
Polaris Select InvestorVARIABLE ANNUITY3 Choose a Select Strategy that includes alternative investmentsSelect Strategies offer you an easy way to add alternatives to your investment.Designed by SunAmerica Asset Management, LLC (SAAMCo) specifically forPolaris Select Investor Variable Annuity, the Select Strategies combine a pre-selectedallocation of six alternative investments with a Polaris Portfolio Allocator model.Each Select Strategy allows you to invest 70% of your investment in one of fourPolaris Portfolio Allocator models and 30% in pre-selected alternative investmentsto further diversify your risk and return potential.When alternative asset classes are chosen within your variable annuity, the usualcomplex tax filings are not required (for example, K-1s) and earnings will be taxedas ordinary income upon withdrawal. These funds expect to invest in positions thatemphasize alternative investment strategies and/or non-traditional asset classes and,as a result, are subject to special risks. Alternative investment strategies may be riskierthan traditional investment strategies and involve leverage or may use variouscomplex hedging techniques, like options and derivatives.Additional information about Polaris Portfolio Allocator models and Select Strategies You may invest in only one model or Select Strategy at a time. If you attempt to invest in more than one model or Select Strategy at a time,your investment may no longer be consistent with the intended investment objective. While certain Polaris portfolios may be included in a Polaris Portfolio Allocator model or Select Strategy, this does not mean that theseportfolios are superior to any other portfolio not included in a model or Select Strategy. Polaris Portfolio Allocator models and Select Strategies are not intended to provide investment advice. They should not be relied upon asproviding individualized investment recommendations. The models and Select Strategies are considered “static” because the portfolios andthe percentages of contract value allocated to each portfolio within a model or Select Strategy will not be changed by us. To maintain thetarget asset allocation of a model or Select Strategy, you can elect to have your investment rebalanced quarterly, semi-annually, or annually.Please note that due to market returns and other factors, over time the asset allocation models and Select Strategies may no longer alignwith their original investment objective. You should consult your financial advisor from time to time to review whether the model allocation orSelect Strategy you hav
Variable Annuities are issued by American General Life Insurance Company (AGL) except in New York, where they are issued by The United States Life Insurance Company in the City of New York (US Life). Polar
