Living Benefits A Key to Life Insurance

Transcription

1 Living Benefits A Key to Life Insurance 30 % Life Insurance Company of the Southwest MK2333(0911) TC63573(0911)

2 Plan today. Protect tomorrow. Life insurance is a powerful fi nancial tool that can be used to meet many needs. Most commonly, life insurance is used to provide a death benefi t to help secure your family s fi nancial future when you are gone. How do you protect against an unforeseen illness?

3 Consider the following: About every 26 seconds, an American will suffer a coronary event, and about every minute someone will die from one. (American Heart Association, American Stroke Association, Heart Disease and Stroke Statistics, 2008 update) On average, every 40 seconds someone in the United States has a stroke. (American Heart Association, American Stroke Association, Heart Disease and Stroke Statistics, 2008 update) At age 65, the odds are nearly one in two that you will require nursing home services for at least 2.5 years. (Medicare, US Dept. of Health and Human Services, 2007) At Life Insurance Company of the Southwest (LSW), we believe you should get more from a life insurance policy. We think you should have access to benefi ts you can use, while you are living. The future is unpredictable... are you and your family prepared? Disability Benefits Multiple Needs Accelerated Living ts Cash Value Accumulation Life Insurance One Affordable Solution

4 Do you have Living Benefits? Nicholas, a husband and father of two, suffers a severe heart attack at the age of 54. He uses his critical illness rider (Accelerated Benefi t Rider 3). He is able to use this money to cover his medical expenses, and pay off his family s mortgage. 1 Juan and Maria are parents of Antonio, a freshmen entering college. Through policy loans and withdrawals, they are able to access their policy s accumulated value to offset his tuition payments. 2 1 Receipt of accelerated benefi ts will reduce the policy s death benefi t and cash value and may result in a taxable event. There are no restrictions on how the benefi t received is used. Accelerated benefi t riders are available at no additional cost. 2 Loans and withdrawals will reduce the policy s Cash Value and Death Benefi t and may result in a taxable event. Surrender charges may reduce the policy s cash value in early years.

5 Sophie, at age 79, becomes chronically ill and enters a nursing home. She decides to use 2% of her death benefi t each month, available to her through the chronic illness rider (Accelerated Benefi t Rider 2), to help pay for her nursing home stay and other medical expenses. 1 Isaac s doctor has told him he has less than two years to live. Using the terminal illness rider (Accelerated Benefi t Rider 1), he chooses to access his full death benefi t to enjoy life to the fullest during his last two years. 1 Life events such as these can happen to you at anytime, most without warning. With your policy, you decide how and when to use its benefits. LSW policies offer more than just a death benefit, they help insure your life.

6 You should have access to benefits you can use, while you are living. We feel LSW s Living Benefi ts provide a combined solution that you can afford to have, but cannot afford to be without. This combination of benefi ts can help protect your plans for today and tomorrow. We call it: life insurance you don t have to die to use.

7 Q: What does life insurance you don t have to die to use mean to me? A: You can access your policy s benefi ts while you are still living. Your benefi ts may include coverage in case of a: Chronic Illness Critical Illness Terminal Illness Disability You also have access to your policy s cash value for events such as education, a down payment on a house, or retirement. Benefi ts are not all inclusive. The use of one benefi t may reduce or eliminate other benefi ts.

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9 LSW offers a comprehensive package of options, commonly referred to as riders, that may be added to your life insurance policy. These riders give you the flexibility to customize your policy, based on your needs. Some are available at no additional premium. Our rider 1 portfolio includes the following: Accelerated Benefi ts Rider1 Other Insured Rider (Terminal Illness) Overloan Protection Rider Accelerated Benefi ts Rider2 Guaranteed Insurability Rider (Chronic Illness) Children s Term Rider Accelerated Benefi ts Rider3 Accidental Death Benefi t Rider (Critical Illness) Unemployment Rider Disability Income Rider Waiver of Specifi ed Premium Rider Plan today. Protect tomorrow. 1 All riders except for the Accelerated Benefi ts and Unemployment Riders require an additional premium. Riders are optional and may not be available in all states or on all products.

10 Following are details about some of our most popular riders: Accelerated Benefi ts Rider 1 (ABR1) ** Provides benefi ts in case of terminal illness ABR1 gives you the option of receiving your death benefi t early if a person covered under the policy is terminally ill. For purposes of this rider, terminal illness means that a doctor has certifi ed that the insured s death is expected within two years, one year in CT, VT and PA. If this situation exists, you may: Request the full acceleration, on a discounted basis, of the policy s death benefi t and use the lump-sum as you wish, Choose to leave a portion of the policy s death benefi t intact for your benefi ciary, or Leave the entire policy intact for your benefi ciary. ABR1 is available at no additional premium and is intended to qualify for favorable tax treatment. ABR1 benefi ts may be used for any purpose. The Accelerated Benefi ts offered under ABR1, ABR2 and ABR3 are intended to qualify for favorable tax treatment under the Internal Revenue Code of Whether such benefi ts qualify depends on factors such as your life expectancy at the time benefi ts are accelerated or whether you use the benefi ts to pay for necessary long-term care expenses, such as nursing home care. If the acceleration-of-life-insurance benefi ts qualify for favorable tax treatment, the benefi ts will be excludable from your income and not subject to federal income taxation. Tax laws relating to acceleration-of-life-insurance benefi ts are complex. You are advised to consult with a qualifi ed tax advisor about circumstances under which you could receive acceleration-of-life-insurance benefi ts excludable from income under federal law. Receipt of accelerated life-insurance benefi ts may affect you, your spouse or your family s eligibility for public assistance programs such as medical supplementary Social Security Income (SSI), and drug assistance programs. You are advised to consult with a qualifi ed tax advisor and with social service agencies concerning how receipt of such a payment will affect you, your spouse and your family s eligibility for public assistance.

11 Accelerated Benefi ts Rider 2 (ABR2) Provides benefi ts in case of chronic illness ABR2 gives you the option of receiving your death benefi t early if a person covered under the policy is chronically ill. For purposes of this rider, chronic illness means that a doctor has certifi ed that the insured is either unable to perform two of the six daily activities of living without assistance (bathing, continence, dressing, eating, toileting, and transferring) or is cognitively impaired (deterioration or loss in intellectual capacity). Benefi ts are available after the rider is in force for two years. * If a chronic illness exists and after a 90-day waiting period, you may: Request to accelerate up to 2% of the death benefi t each month to use as you wish, or Leave the policy intact for your benefi ciary. ABR2 is available at no additional premium and is intended to qualify for favorable tax treatment. ABR2 benefi ts may be used for any purpose. 1 Some states may have a different time requirement before benefi ts are available. It s important to determine what your state specifi c requirements are. 2 Death Benefi ts, cash values and loan values (for policies with such values) will be reduced if an Accelerated Benefi t is paid.

12 Accelerated Benefi ts Rider 3 (ABR3) Provides benefi ts in case of critical illness ABR3 gives you the option of receiving your death benefi t early if a person covered under the policy is critically ill. For purposes of this rider, critical illness is defi ned as a heart attack, stroke, cancer, a major organ transplant, blindness, or having been diagnosed with Lou Gehrig s disease (ALS) or end stage renal failure. If one of these illnesses exist, you may: Request the full acceleration of the policy s death benefi t and use the lump-sum as you wish, Choose to leave a portion of the policy s death benefi t intact for your benefi ciary, or Leave the entire policy intact for your benefi ciary. With ABR3, the level of discounting applied to the death benefi t varies depending upon the insured s age and the severity of the critical illness. ABR3 is available at no additional premium and is intended to qualify for favorable tax treatment. ABR3 benefi ts may be used for any purpose. Death Benefi ts, cash values and loan values (for policies with such values) will be reduced if an Accelerated Benefi t is paid. The Accelerated Benefi ts offered under these ABR1, ABR2, and ABR3 are intended to qualify for favorable tax treatment under the Internal Revenue Code of Whether such benefi ts qualify depends on factors such as your life expectancy at the time benefi ts are accelerated or whether you use the benefi ts to pay for necessary long-term care expenses, such as nursing home care. If the acceleration-of-life-insurance benefi ts qualify for favorable tax treatment, the benefi ts will be excludable from your income and not subject to federal income taxation. Tax laws relating to acceleration-of-life-insurance benefi ts are complex. You are advised to consult with a qualifi ed tax advisor about circumstances under which you could receive acceleration-of-lifeinsurance benefi ts excludable from income under federal law. Receipt of accelerated life-insurance benefi ts may affect you, your spouse or your family s eligibility for public assistance programs such as medical supplementary Social Security Income (SSI), and drug assistance programs. You are advised to consult with a qualifi ed tax advisor and with social service agencies concerning how receipt of such a payment will affect you, your spouse and your family s eligibility for public assistance. Chronic Illness is not available in all states. Critical Illness is not available in all states. We currently limit the amount of death benefi t that may be accelerated under all accelerated benefi t riders applying to the same insured to $1,000,000. We reserve the right to change this limit in the future, however the limit will never be less than $500,000.

13 Remember, if you choose to use your death benefi t early, the actual ABR payment you receive will be less than the death benefi t you accelerate. Benefi ts used under any Accelerated Benefi ts Rider will reduce the policy s cash value, death benefi t and loan values.

14 National Life Group National Life Insurance Company, was founded in Life Insurance Company of the Southwest was incorporated in Our commitment to our customers is our steadfast and primary responsibility, while our joint commitment to fi nancial strength and profi table growth helps to ensure we can deliver on our promises to our customers. National Life Group is a Fortune 1000 Company that serves more than 850,000 customers and employs roughly 900 employees. The Group is made up of its flagship company, National Life Insurance Company, as well as Life Insurance Company of the Southwest, Sentinel Investments and Equity Services, Inc. National Life Group, Montpelier, Vermont Office National Life Group is a trade name representing National Life Insurance Company, Montpelier, VT and its affiliates. Life Insurance Company of the Southwest, Addison, TX, is licensed in all states except NY. Each company is solely responsible for its own fi nancial condition and contractual obligations. Sentinel Investments is the unifying brand name for Sentinel Financial Services Company, Sentinel Asset Management, Inc., and Sentinel Administrative Services, Inc. Sentinel Financial Services Company, Member FINRA, and Equity Services, Inc., Member FINRA/SIPC, are Registered Broker/Dealer Affiliates of National Life Insurance Company, One National Life Drive, Montpelier, Vermont (802)

15 The riders referenced in this brochure are optional, are available at additional cost unless otherwise indicated, and may not be available in all states or on all products. Benefi ts and terms may vary by state. Riders are available on LSW Harbor and LSW Horizon universal life insurance policies, form series 8514/8515/8514ID(0707)/8515ID(0707), and various other permanent and term life insurance policies issued and underwritten by Life Insurance Company of the Southwest. Following are the form series numbers for the LSW Life Insurance Riders referenced in this brochure: Terminal Illness Rider (ABR1), form series 8052(0798), not available in MT and ND; Chronic Illness Rider (ABR2), form series 8095(0399), not available in CT, KS, LA, MN, MT, ND, OR, WA; Critical Illness Rider (ABR3), form series 8165(0703), not available in CT, MA, MT, NJ, ND; Disability Income Rider, form series 8054(0798), 8065(0798), not available in KS, MA, MT, NJ, ND, Waiver of Specifi ed Premium Rider, form series 8520(0707); Other Insured Rider, form series 8057(0707); Overloan Protection Rider, form series 8542(0707); Guaranteed Insurability Rider, form series 8051(0798), not available in MA, MT, ND; Children s Term Rider, form series 8056(0707); Accidental Death Benefi t Rider, form series 8050(0798), not available MT, ND; Unemployment Rider 8058(0798), not available in AZ, CA, FL, MA, MD, MI, MN, MO, MT, ND, NJ, SC, TN, VA, VT, WA. For costs and complete details of the coverage, write or call your agent or company. None of the information in this piece is intended as tax or legal advice. Please consult with your Attorney or Accountant prior to acting upon any of the information contained herein. This is a solicitation of insurance. An insurance agent may contact you. National Life Group is a trade name representing various affiliates, which offer a variety of fi nancial service products. Centralized Mailing Address: One National Life Drive, Montpelier, VT Home Office: Addison, TX

16 IUL FlexLife Indexed Universal Life Products issued by National Life Insurance Company Life Insurance Company of the Southwest 30 % LSW is not an authorized insurer in New York and does not conduct insurance business in New York MK3523(1011) TC64239(1011)

17 FlexLife is an innovative Indexed Universal Life (IUL) product designed to meet your lifetime protection and accumulation needs. This fl exible IUL policy provides valuable protection for your family through the death benefit. However, FlexLIfe does not stop there, it can also help you accomplish lifetime financial goals, including meeting retirement objectives. Die Too Soon Become Ill Live Too Long Experience FlexLife IUL 1

18 What is Indexed Universal Life? Experience Flexibility Indexed universal life is a form of universal life insurance and is considered to be one of the most flexible types of life insurance. This flexibility allows you to adjust the amount of your policy coverage 1, (also called the face) amount, and the premiums you pay. You also have the potential to build cash value in your policy and if enough value accumulates, you may even be able to stop 2 paying premiums. Or, you can continue to pay additional premiums to accumulate even more cash value that you can access through policy loans and withdrawals later in life. 3 Experience Upside Potential with Downside Protection Indexed products credit interest based on the changes in value of a major market index. However, your policy can never lose value because there is a 0% floor built in which allows you to take advantage of the upside potential of the index while also having downside protection in the event the index drops below 0%. 2 1 Additional coverage may require additional underwriting. 2 It is possible that coverage will expire when either no premiums are paid following the initial premium, or subsequent premiums are insufficient to continue coverage. 3 Policy loans and withdrawals reduce the policy s cash value and death benefi t and may result in a taxable event. Surrender charges may reduce the policy s cash value in early years.

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20 What Makes FlexLife Different? Cash value accumulation is based on the S&P 500 Index with fi ve interest crediting strategies to choose from. Competitive income distribution options with improved access to policy cash value through loans and withdrawals 1. Potential to guarantee 4 yourself a stream of income for life money you can t outlive through the Lifetime Income Benefi t Rider if certain criteria is met. 2 Accelerated Benefi t Riders at no-additional cost. 3 Option to elect the Systematic Allocation Rider for annual lump sum premium distribution into your chosen index strategies. Option to earn a guaranteed 4 fi xed interest rate. 0.35% Account Value Enhancement credited to your accumulated cash value starting at the beginning of policy year 11. By purchasing the Death Benefi t Protection Rider 5, as long as a certain level of premium is maintained, your death benefi t will not lapse, even in times of tight cash flow. 4 1 Policy loans and withdrawals reduce the policy s cash value and death benefi t and may result in a taxable event. Surrender charges may reduce the policy s cash value in early years. 2 The Lifetime Income Benefi t Rider provides a benefi t for the life of the insured if certain conditions are met, including but not limited to the insured s attained age being between age 60 and 85, and that the policy has been in-force at least 15 years. Insufficient policy values, outstanding policy loans and other considerations may also restrict exercising the rider. Receipt of income benefi ts will reduce the policy s cash value and death benefi t and may terminate other riders or reduce their benefi ts. 3 Receipt of accelerated benefi ts will reduce the cash value and death benefi t and may result in a taxable event. 4 Guarantees are dependent on the claims-paying ability of the issuing company. 5 Monthly premium test must be met. Premium payments just equal to the Monthly Guarantee Premiums will not necessarily provide for the build-up of signifi cant accumulated policy value.

21 3 Accelerated Benefi t Rider, Death benefi ts, cash values and loan values (for contracts with such values) will be reduced if an accelerated benefi t is paid. The accelerated benefi ts offered under this rider are intended to qualify for favorable tax treatment under the Internal Revenue Code of Whether such benefi ts qualify depends on factors such as your life expectancy at the time benefi ts are accelerated or whether you use the benefi ts to pay for necessary long-term care expenses, such as nursing home care. If the acceleration-of-life-insurance benefi ts qualify for favorable tax treatment, the benefi ts will be excludable from your income and not subject to federal taxation. Tax laws relating to acceleration-of-life-insurance benefi ts are complex. You are advised to consult with a qualifi ed tax advisor about circumstances under which you could receive acceleration-of-life-insurance benefi ts excludable from income under federal law. Receipt of accelerationof-life-insurance benefi ts may affect your, your spouse or your family s eligibility for public assistance programs such as medical supplementary social security income (SSI), and drug assistance programs. You are advised to consult with a qualifi ed tax advisor and with social service agencies concerning how receipt of such a payment will affect your, your spouse s and your family s eligibility for public assistance. Riders are optional and may not be available in all states. We currently limit the amount of death benefi t that may be accelerated under all accelerated benefi t riders applying to the same insured to $1,000,000. We reserve the right to change this limit in the future, however the limit will never be less than $500,000. 5

22 Comprehensive Death Benefit Protection Experience Security Your loved ones depend on you for their present needs and their future fi nancial security. First and foremost, you need to protect the income(s) on which everything you have, everything you re doing and everything you re planning are based especially if you have family members depending on you for fi nancial support. As with all life insurance policies, the primary purpose of FlexLife is to provide a benefi t to your family at your death. Each premium payment you make into your policy goes towards this death benefi t. In the event of your death, your family will receive this death benefi t, income tax-free. 1 They can then use these funds to pay taxes and other fi nal expenses, maintain their lifestyle and protect their future fi nancial security or to even pay education expenses for your children. 1 Internal Revenue Code 101(a)(1). There are some exceptions to this rule. Please consult a qualifi ed tax professional for advice concerning your individual situation. 6

23 Guaranteed Income for Life with the Lifetime Income Benefit Rider The fear of outliving retirement income has become a very realistic concern to many who are facing retirement, and for good reason. Growing old isn t what it used to be, and in many ways, that s a good thing. People are not only living longer, they have better educations resulting in better health, higher income, and a higher standard of living in retirement. But, as Americans continue to live longer, a new challenge presents itself: How do I make sure my retirement income lasts? Fortunately, there may be a simple solution. The Lifetime Income Benefi t Rider (LIBR) is automatically added to your policy, offering you a valuable option later in life. Once qualifi cations are met and the rider is exercised, LIBR guarantees you a steady stream of income for the rest of your life money you can t outlive. The Lifetime Income Benefi t Rider provides a benefi t for the life of the insured if certain conditions are met, including but not limited to the insured s attained age being between age 60 and 85, and that the policy has been in-force at least 15 years. Insufficient policy values, outstanding policy loans and other considerations may also restrict exercising the rider. Receipt of income benefi ts will reduce the policy s cash value and death benefi t and may terminate other riders or reduce their benefi ts. Guarantees are dependent upon the claims-paying ability of the issuing company. Exercising the rider and receiving an income benefi t will reduce the policy s cash value and death benefi t and may terminate other riders or reduce their benefi ts. There is an annual charge from the accumulated value during the income payment period. 7

24 Living Benefits with Accelerated Benefit Riders Medical conditions and illnesses, although not always fatal, can have a devastating impact on your lifestyle, your independence and your ability to earn an income. They can even deplete your savings in no time at all. Our no-additional cost Accelerated Benefi t Riders can help provide a cost effective way to protect your fi nancial security in the event you are diagnosed with a terminal, chronic or critical illness. If you qualify, you can access your policy s death benefi t while you are living to help cover some of the expenses associated with your illness. These benefi ts are not restricted and can be used for anything. In the state of MA, however, benefi ts for chronic illness must be used to pay for qualifi ed expenses 1. Help Balance Market Fluctuations with the Systematic Allocation Rider The Systematic Allocation Rider, available at no additional charge, allows you to use your lump sum and spread the money out over a 12 month period. During this 12 month period, a portion of your premium will be allocated from a fi xed interest account to the different interest crediting strategies according to your wishes. Systematic allocation allows you to spread out your lump sum over the year to capitalize on gains and losses during market fluctuations. It also gives you an efficient way to allocate a lump sum by allowing you to create one allocation schedule for the year without the monthly maintenance. 8 1 Qualifi ed Long-Term Care services: The necessary diagnostic, preventative, therapeutic, curing, treating, mitigating and rehabilitative services, and maintenance or personal care services that are required by a chronically ill individual and are provided pursuant to a plan of care prescribed by a licensed health care practitioner.

25 Policy Protection with the Death Benefit Protection Rider 1 We don t always know what life has in store for us and we all could certainly benefi t from a little more security in our lives. By adding the optional Death Benefi t Protection Rider to your policy, and maintaining premiums to meet the monthly premium test, you will help ensure that your policy will not lapse during the death benefi t protection period, even in times of tight cash flow. The death benefi t protection period will vary up to 30 years based on the insured s age when the policy is issued. Death Benefi t Protection Period Issue Age Zero to to to to DBP Period 1 The Death Benefi t Protection (DBP) Rider, ensures that during the DBP Period, the policy will not lapse even if the cash surrender value is less than or equal to zero as long as the monthly premium test is met. Withdrawals and policy loans taken against the policy will impact the Monthly Premium Test. If a withdrawal or transfer made or a policy loan taken against this policy results in the net accumulated premiums falling below the accumulated Monthly Guarantee Premiums on any Monthly Policy Date, a notice of pending termination of the rider will be sent. An additional premium would then be required to keep the rider in force. If the DBP Rider lapses while the cash surrender value of the policy is zero, the policy may enter a grace period and an additional premium may be required to keep the policy in force. Premium payments just equal to the Monthly Guarantee Premiums will ensure that a death benefi t is payable under the policy, according to the guarantees provided by the Death Benefi t Protection Rider, but this level of funding will not necessarily provide for the build-up of signifi cant accumulated value in the policy. 9

26 Meeting Business Owner Needs In addition to meeting lifelong personal goals, FlexLife IUL may also be a flexible solution for business owners. If you are a business owner, you can benefi t from a FlexLife policy in a variety of different ways. The income-tax free 1 death benefi t can provide the funds to keep your business running in the event you prematurely die. It can also protect against the unexpected loss of a co-owner or key employee. Use a FlexLife policy to attract, reward and retain top talent in your organization. By adopting a Buy-Sell agreement funded with FlexLife, you can ensure the transition of your business happens according to your wishes. FlexLife can also provide a way to equalize your estate, which may be of particular interest if you have some family members who already have business interest. The Balance Sheet Benefit Rider can increase the policy s collateral value for business accounting purposes Internal Revenue Code 101(a)(1). There are some exceptions to this rule. Please consult a qualifi ed tax professional for advice concerning your individual situation.

27 12 The Participation Rate is the maximum percentage of the annual increase in the index that will be credited. For example: The one year increase in the index is 10%. If the Participation Rate is 90%, then 9% would be used to calculate the interest credit [10% x 90%=9%]. The Cap is the maximum earnings percent that will be credited. For example: The Participation Rate is 100% and there is a Cap of 12%. If the one year increase in the Index is 14%, the earnings will be capped at 12%. Participation Rates and Caps are subject to change annually for a given index segment. In the event the market declines, FlexLife policies have a built-in 0% interest crediting floor. The floor is the minimum earnings percent that will be credited. The minimum annual rate of interest credited to funds in the fi xedinterest strategy is 2.5% and the minimum interest credited in the indexed strategies is 2.5% which will be applied in case of death or full surrender only if the policy return is less than the 2.5% guarantee. FlexLife has a 10 year declining surrender charge. Surrender charges may reduce the policy s cash value in early years. The policy s cash surrender value is the accumulated value less the surrender charges. Failure to maintain the policy to maturity will result in no participation in the equity index. Each crediting period is one year in length. Index earnings are credited to each indexed segment at the end of the crediting period. Each indexed segment will have a participation rate and an index earnings cap, which are determined in advance for each crediting period. On each segment anniversary of an indexed segment, the index growth for that segment will be calculated, as a function of the index performance over the previous crediting period. Excess Interest Formula - Index earnings for each indexed segment are calculated at the end of the crediting period as follows: index growth is multiplied by the segment s participation rate, adjusted so that this rate is no greater than the segment s index earnings cap, and no less than 0%; multiplied by the value in the indexed segment value. Index earnings are not direct participation in any stock or equity investment. Upon death of the insured, a death benefi t equivalent to the death benefi t at the time of the insured s death less any policy debt and less other amounts owed to the insurance company will be paid to the benefi ciary. Standard & Poor s, S&P, S&P 500, Standard & Poor s 500, and 500 are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by National Life Insurance Company and Life Insurance Company of the Southwest. The product is not sponsored, endorsed, sold or promoted by S&P and S&P makes no representation regarding the advisability of investing in the product.

28 NL FlexLife Indexed Universal Life Insurance, form series 8971/8972/ ICC (0911)/ICC (0911), Lifetime Income Benefi t Rider, form series 8865(0910), Death Benefi t Protection Rider, form series 8984/ICC (0911), Systematic Allocation Rider, form series 8985/ICC (0911), and Accelerated Benefi t Riders, form series 7490/7493/9744/8591NY(0108)/ ICC (0310) are underwritten National Life Insurance Company. LSW FlexLife Indexed Universal Life Insurance, form series 8973/8974/ ICC (0911)/ICC (0911), Lifetime Income Benefi t Rider, form series 8866(0910), Death Benefi t Protection Rider, form series 8991/ICC (0911), Systematic Allocation Rider, form series 8992/ICC (0911), and Accelerated Benefi t Riders, form series 8052/8095/8165/ICC (0310) are underwritten by Life Insurance Company of the Southwest (LSW). LSW policies are not available in New York. Riders are optional, require an additional premium unless otherwise noted, and may not be available in all states. The Lifetime Income Benefi t Rider is available at policy issue. Benefi t payments are funded via withdrawals and policy loans, which will reduce the policy s cash value and death benefi t. The policyholder cannot make additional premium payments or request additional withdrawals or policy loans during the benefi t payment period or the rider will terminate. Terminating the rider may result in a lapsed policy and substantial tax consequences. The ABR Chronic II Accelerated Benefi t Rider for Covered Chronic Illness (form 8591NY(0108) is optional and only available in New York. Death Benefi ts and cash values will be reduced if an Accelerated Benefi t is paid. There is no restriction placed on the use of the benefi t received. The maximum amount, over the entire lifetime of the Insured, that will be accelerated or converted to reduced paid-up insurance under all contracts made on the life of the Insured is $2,000,000 when benefi ts paid are due to a chronic illness in NY. For terminal and critical accelerated benefi t riders, the maximum $1,000,000 lifetime benefi t applies. Receipt of Accelerated Benefi ts may be taxable and may affect eligibility for public assistance programs such as medical assistance (Medicaid), Aid to Families with Dependent Children, and Supplemental Security Income. Prior to applying for Accelerated Benefi ts, policy owners should seek assistance from a qualifi ed tax advisor and consult with the appropriate social services agency concerning how receipt will affect the eligibility of the recipient and/or the recipient s spouse or dependents. This product is a life insurance policy with a rider that accelerates the death benefit on account of chronic illness and is not a health insurance policy providing long-term care insurance subject to the minimum requirements of New York Law, does not qualify for the New York State Long-Term Care Partnership program and is not a Medicare supplement policy. 13

29 National Life Group is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of the Southwest (LSW), Addison, TX and their affiliates. Each company of National Life Group is solely responsible for its own fi nancial condition and contractual obligations. Centralized Mailing Address: One National Life Drive, Montpelier, VT