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Life Insurance Product Overview

Product Type



Without term riders

• Guaranteed Premiums – cannot change
• Fully reserved with cash values available to policy owners
• Over 100+ years history. Whole life has consistently paid benefits

• Expensive – highest premium for the death benefit
• Inflexible design – difficult to change premium or death benefit
• Actual dividends are unlikely to be as high as currently illustrated dividend crediting rates
• Dividends paid at insurance company’s discretion

Without secondary death benefit guarantees

• Lower projected premium
• A great amount of premium flexibility
• Adjustable death benefit

• Client at risk for having to pay higher premium
Company can change cost of insurance, credited rate and expense charges
• Very little is guaranteed – Almost everything is subject to company’s discretion

With secondary death benefit guarantees

• Low guaranteed premium
• Premiums remain flexible. However, changes in premiums or timing of payment may adversely
affect guarantees

• Very high expense loads lead to low cash values
• Inability to adjust charges may create financial pressure on the company
• No potential for better-than guaranteed results.
• Little or no ability to adapt policy to future changes.
• If not properly managed, guarantees can be lost, leading to expensive “catch-ups’ or policy lapse

Without secondary death benefit guarantees

• All expenses are described in prospectus.
• Client selects investments
• Historically higher rates of return can be used to reduce premium payments, increase benefits or
provide flexibility
• Additional safety of separate accounts gives maximum protection from insurance company insolvency

• Client has a higher premium if targeted returns are not achieved as illustrated
• Volatility of returns affects policy performance. Some clients are not sophisticated enough to understand or manage product
• Product may not be suitable for very conservative policyholders

With secondary death benefit guarantees

• All advantages of #3 and #4
• Combines flexibility, low overall cost and potential for strong performance

• These products have charges for the guarantees
• Younger clients with robustly funded VUL policies may prefer lower charges of VUL
• Guaranteed premiums are usually higher than with Non-Variable Universal Life. The upside potential may not offset this for older age clients
• Fewer insurance companies offer this product

Without secondary death benefit guarantees

• All advantages of #2
• Somewhat higher cash value growth potential than Universal Life
• If chosen indices experience a loss, cash value protected by a minimum floor (usually 0%)

• All disadvantages of #2
• Extremely complex product mechanics usually
• accompanied by various administrative technicalities that may materially alter the product
performance results
• Limited historical information on carrier treatment of non-guaranteed performance elements related to the index in various economic environments
• It is a product that gives the insurance company the most latitude to change key non-guaranteed elements to the detriment of policy holders

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