Form 497VPU Transamerica Financial

SPECIAL TERMS

SUMMARY OF POLICY FEATURES THAT HAVE CHANGED

IMPORTANT INFORMATION YOU SHOULD CONSIDER ABOUT THE POLICY

APPENDIX A – INVESTMENT OPTIONS AVAILABLE UNDER THE POLICY

Surrender Charges. If you Surrender or withdraw money from the Policy during the first six years after your purchase the Policy or make an additional premium payment, you may be assessed a surrender charge of up to 8% (as a percentage of premium payments Surrendered or withdrawn). For example, if you were to make an early withdrawal, you could pay a surrender charge of up to $8,000 on a $100,000 investment. This loss will be greater if there are negative Interim Value adjustments, taxes, or tax penalties.

Interim Value Adjustments. If all or a portion of your Policy Value is removed from an Index Account Option before the end of its Crediting Period, an Interim Value adjustment will apply, which may be negative. In extreme circumstances, it is possible to lose up to 100% of your investment in an Index Account Option due to the application of a negative Interim Value adjustment (i.e., a complete loss of your principal and any prior earnings). For example, if you allocated $100,000 to an Index Account Option with 2-year Crediting Period and make a withdrawal before the 2 years have ended, you could lose up to $100,000 due to a negative Interim Value adjustment. This loss will be greater if you also have to pay surrender charges, taxes, or tax penalties.

An Interim Value adjustment will apply if any of the following transactions occur prior to the end of a Crediting Period for an Index Account Option: (i) a fee or charge is deducted; (ii) you take a Surrender or any withdrawal; (iii) the Policy is annuitized; (iv) the death benefit is calculated; or (v) you exercise the Performance Lock feature.

FEE TABLE

EXPENSES AND ADJUSTMENTS – SURRENDER CHARGES

INTERIM VALUE ADJUSTMENT

FEE TABLE

EXPENSES AND ADJUSTMENTS – SPECIAL SERVICE FEES

There is an implicit ongoing fee on the Index Account Options to the extent that your participation in Index gains is limited by either a Cap Rate or an Edge Rate or Edge+ Rate. This means that your returns may be lower than the Index’s returns. In exchange for accepting a limit on Index gains, you will receive some protection from Index losses. This implicit ongoing fee is not reflected in the tables below.

The table below describes the fees and expenses that you may pay each year, depending on the Allocation Accounts you choose. Please refer to your Policy specification page for information about the specific fees you will pay each year based on the options you have elected.

FEE TABLE

EXPENSES AND ADJUSTMENTS

APPENDIX A: INVESTMENT OPTIONS AVAILABLE UNDER THE POLICY

¹      Reflects the current annual service charge. The current annual service charge is $0 or 0%.

²      Reflects a 2.00% service charge. The maximum annual service charge is the lesser of $50 or 2% (as a percentage of your Policy Value as of your Policy Anniversary, before the deduction of any fees or charges).

Because your Policy is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Policy, the following table shows the lowest and highest cost you could pay each year based on current charges. This estimate assumes that you do not take withdrawals from the Policy, which could add surrender charges and negative Interim Value adjustments that substantially increase costs.

Assumes:

•      Investment of $100,000 in an Index Account Option

•      5% annual appreciation

•      No sales charges

•      No additional premium payments, transfers, or withdrawals

Assumes:

•      Investment of $100,000 in an Index Account Option

•      5% annual appreciation

•      No sales charges

•      No additional premium payments, transfers, or withdrawals

Yes.

•      You can lose money by investing in this Policy, including the loss of principal.

•      Each available Index Account Option has a Buffer downside feature that provides only limited protection against any negative Index rate of return that may be charged to your investment at the end of a Crediting Period.

•      At the end of a Crediting Period, the maximum amount of loss that you could experience from negative Index performance, after taking into account the current limits on Index loss provided under the Policy, is 90% for an Index Account Option with a 10% Buffer Rate, 85% for an Index Account Option with a 15% Buffer Rate, or 80% for an Index Account Option with a 20% Buffer Rate

•      We will always offer an Index Account Option with a 10% Buffer Rate.

•      This Policy is not a short-term investment and is not appropriate for an investor who needs ready access to cash.

•      The Policy’s tax deferral and long-term income features are generally more beneficial to investors with a long time horizon.

•      Amounts withdrawn from the Policy may result in surrender charges, taxes, and tax penalties. Withdrawals could result in significant reduction to Policy Value, the death benefit and other Policy benefits. In addition, withdrawing or otherwise removing amounts from an Index Account Option before the end of its Crediting Period may result in a negative Interim Value adjustment and loss of positive Index performance.

•      Partial withdrawals taken, and fees and charges deducted, from an Index Account Option before the end of its Crediting Period will result in a proportionate reduction to your Index Base. The reduction to your Index Base may be greater than the amount withdrawn or the fee or charge deducted. Reductions to your Index Base will result in lower Interim Values for the remainder of the Crediting Period and less Index Credit (if any) at the end of the Crediting Period. The negative impact to your Policy Value and Policy benefits may be significant.

•      At the end of a Crediting Period, Policy Value in the matured Allocation Account will be reinvested, transferred, withdrawn, or annuitized per your instructions. In the absence of such instructions, Policy Value in the matured Allocation Account will be automatically reinvested in the same Allocation Account for another Crediting Period (with the Cap Rate, Edge Rate and Edge+ Rate, or annual interest rate applicable to a new Crediting Period).If the matured Allocation Account is no longer available for investment, Policy Value in the matured Allocation Account will be automatically transferred to the Fixed Account Option with a 1-year Crediting Period by default.

•       An investment in this Policy is subject to the risk of poor investment performance and can vary depending on the performance of the Allocation Accounts available under the Policy.

•       Each Allocation Account, including each Index Account Option and the Fixed Account Option, has its own unique risks. You should review the available Allocation Accounts before making an investment decision.

•      The Cap Rate or Edge Rate and Edge+ Rate for an Index Account Option, as applicable, may limit positive Index returns (e.g., limited upside). This limit may result in you earning less than the Index’s return. For example:

o      If the Index Change is 12% and the Cap Rate is 4%, we will apply an Index Credit equal to +4% at the end of the Crediting Period.

o      If the Index Change is 12% and the Edge+ Rate is 5%, we will apply an Index Credit equal to +5% at the end of the Crediting Period.

•      While the Edge and Edge+ Growth Opportunity Type may provide for a positive Index Credit in the event of negative Index performance, there is no guarantee of investment gain. Like any other Index Account Option, a negative Index Change in excess of the Buffer Rate will result in loss, which could be significant.

•      The Buffer Rate for an Index Account Option will limit negative Index returns (e.g., limited protection in the case of market decline). For example, if the Index Change is -25% and the Buffer Rate is 10%, we will apply an Index Credit equal to -15% (the amount of negative Index Change that extends beyond the Buffer Rate) at the end of the Crediting Period, meaning your investment will decrease in value by 15%. You bear all loss that exceeds the Buffer.

•      For each Index, Index performance is on a “price return” basis, not a “total return” basis, and therefore does not reflect dividends paid on the securities composing the Index. Certain Indexes also deduct fees and costs that will reduce Index performance. These factors will reduce the Index return and cause the Index to underperform a direct investment in the securities composing the Index.

Yes. There may be restrictions that limit the Allocation Accounts you may choose, and there are limitations on the transfer of Policy Value among Allocation Accounts.

•      Transfers from an Allocation Account are permitted only at the end of the Allocation Account’s Crediting Period (or on the next Allocation Anniversary if you exercised Performance Lock but not Early Re-Entry).

•      The Fixed Account Option may not always be available for investment.

•      We reserve the right to add or remove Index Account Options. We guarantee that the following Index Account Option will always be available for investment (subject to our right of Index substitution): S&P 500^® Index, 1-Year Crediting Period, Buffer (Buffer Rate: 10%), Cap (Cap Rate: no lower than 5.00% for new Crediting Periods). This may be the only Index Account Option that we offer in the future.

•      Each Index Account Option’s limit on Index losses (i.e., Buffer Rate) will not change for so long as that Index Account Option remains available. However, because we reserve the right to add and remove Index Account Options, the limits on Index loss offered under the Policy may change from one Crediting Period to the next.

•      We may change the features of an Index Account Option from one Crediting Period to the next, including the Index and the current limit on Index gain (i.e., the Cap Rate or Edge Rate and Edge+ Rate, subject to minimum guarantees).

•      We reserve the right to substitute the Index for an Index Account Option during its Crediting Period.

•      We reserve the right to limit or refuse additional premium payments.

The availability of Allocation Accounts may vary depending on the financial intermediary through which the Policy is sold.

PREMIUM PAYMENTS

FIXED ACCOUNT OPTION

INDEX ACCOUNT OPTIONS

SELECTING ALLOCATION ACCOUNTS FOR INVESTMENT

APPENDIX A: INVESTMENT OPTIONS AVAILABLE UNDER THE POLICY

APPENDIX D: FINANCIAL INTERMEDIARY VARIATIONS 

Yes. There are restrictions and limitations relating to the benefits offered under the Policy (e.g., death benefits, Performance Lock).

•       Except as otherwise provided, Policy benefits may not be modified or terminated by the Company.

•       For Performance Lock+:

o      Exercising Performance Lock for an Index Account Option will result in an Interim Value adjustment, which may be negative and result in significant loss.

o      Exercising Early Re-Entry will re-expose your investment to the possibility of Index losses, negative Interim Value adjustments, and reductions to your Index Base.

o      Early Re-Entry is not available for Index Account Options with a one-year Crediting Period, or if there will be less than 12 months remaining in a Crediting Period upon re-entry.

INDEX ACCOUNT OPTIONS – PERFORMANCE LOCK

ACCESS TO YOUR MONEY

BENEFITS AVAILABLE UNDER THE POLICY

DEATH BENEFIT

APPENDIX D: FINANCIAL INTERMEDIARY VARIATIONS 

•      Withdrawals may significantly reduce the death benefit. If your Policy has the GMDB rider, any withdrawal will reduce the guaranteed minimum death benefit. Withdrawals may result in reductions to the benefit that are greater than the amount withdrawn.

•      The availability of Policy benefits may vary depending the financial intermediary through which the Policy is sold.

•       You should consult with a tax professional to determine the tax implications of an investment in and payments received under the Policy.

•       If you purchase the Policy as an individual retirement account (IRA) or through a tax qualified plan, you do not get any additional tax benefit.

•       You will generally not be taxed on increases in the value of your Policy until they are withdrawn. Earnings on your Policy are taxed at ordinary income tax rates when withdrawn, and you may have to pay a penalty if you take a withdrawal before age 59½.

Index  

Type of Index 

Crediting Period 

Current Limit on Index Loss (if held until end of Crediting Period) 

Minimum Limit on Index Gain (for the life of the Index Account Option) 

Early Re-Entry (Performance Lock+): Minimum Limit on Index Gain for Remaining Crediting Period² 

S&P 500® Index¹  

U.S. Large-Cap Equities 

1-Year 

Buffer  
Buffer Rate: 10% 

Cap Rate: 

No lower than 5.00% 

N/A 

S&P 500® Index¹  

U.S. Large-Cap Equities 

1-Year 

Buffer  
Buffer Rate: 15% 

Cap Rate: 

No lower than 4.50% 

N/A 

S&P 500® Index¹  

U.S. Large-Cap Equities 

2-Year 

Buffer  
Buffer Rate: 10% 

Cap Rate: 

No lower than 10.00% 

Cap 

Cap Rate: No lower than 5.00% 

S&P 500® Index¹  

U.S. Large-Cap Equities 

2-Year 

Buffer  
Buffer Rate: 15% 

Cap Rate: 

No lower than 9.00% 

Cap 

Cap Rate: No lower than 4.50% 

S&P 500® Index¹  

U.S. Large-Cap Equities 

6-Year 

Buffer  
Buffer Rate: 10% 

Cap Rate: 

No lower than 30.00% 

Cap 

Cap Rate: No lower than 5.00% 

S&P 500® Index¹  

U.S. Large-Cap Equities 

6-Year 

Buffer  
Buffer Rate: 20% 

Cap Rate: 

No lower than 24.00% 

Cap 

Cap Rate: No lower than 4.00% 

S&P 500^® Index¹  

U.S. Large-Cap Equities 

1-Year 

Buffer  
Buffer Rate: 10% 

Edge and Edge+ Rates: 

No lower than 5.00% 

N/A 

S&P 500^® Index¹  

U.S. Large-Cap Equities 

2-Year 

Buffer  
Buffer Rate: 10% 

Edge and Edge+ Rates: 

No lower than 10.00% 

Edge and Edge+ Rates: 

No lower than 5.00% 

S&P 500^® Index¹  

U.S. Large-Cap Equities 

6-Year 

Buffer  
Buffer Rate: 10% 

Edge and Edge+ Rates: 

No lower than 30.00% 

Edge and Edge+ Rates: 

No lower than 5.00% 

 

 

Buffer 

Guaranteed Minimum Reset Cap Rate or Edge Rate and Edge+ Rate 

Months Remaining in Crediting Period upon Re-Entry 

71-60

59-48

47-36

35-24

23-12

10% 

25.00%

20.00%

15.00%

10.00%

5.00%

15% 

22.50%

18.00%

13.50%

9.00%

4.50%

20% 

20.00%

16.00%

12.00%

8.00%

4.00%

Name

Crediting Period

Minimum Guaranteed

Interest Rate

Fixed Account Option

1-Year

1.00%¹