Ultra Select Indexed Universal Life Providing Upside Potential with Downside Protection

Transcription

1 IUL Ultra Select Indexed Universal Life Providing Upside Potential with Downside Protection Product issued by National Life Insurance Company 30 % MK3177(1110) TC58389(1110)

2 Introducing Ultra Select, an Indexed Universal Life product from National Life Insurance Company, a trusted and proven name in the indexed life insurance industry. 2

3 Multiple Needs. One Affordable Solution. Life seems more complicated than ever. Most of us have many responsibilities to take care of every day: children, spouses, parents, businesses. And what about issues like retirement and long-term care? Life Insurance is a solution that can address multiple needs. 1

4 Indexed Universal Life is considered to be one of the most flexible types of life insurance available in the marketplace today. Ultra Select is an Indexed Universal Life Insurance policy that allows you to: Adjust the amount of insurance coverage and premiums paid to meet your changing insurance needs. Build cash value income-tax deferred which can be accessed during your lifetime for unexpected cash needs, to take advantage of opportunities or to supplement retirement income. 1 Accelerate the death benefi t during your lifetime to pay for expenses associated with a chronic or terminal illness. 2 Exercise the Lifetime Income Benefi t Rider, once certain conditions are met, to guarantee yourself income for life - money you can count on in retirement. 3 Waive specifi ed premiums if you become totally disabled with the Waiver of Specifi ed Premium Rider. 4 Ultra Select can potentially be the solution to your multiple insurance needs. 2 1 Contract loans and withdrawals will reduce the contract s cash value and death benefi t and may result in a taxable event. Withdrawals up to the basis paid into the contract and contract loans thereafter would not create an immediate taxable event, but substantial tax ramifi cations could result upon contract lapse or surrender. This would not be true if the contract were classifi ed as a Modifi ed Endowment Contract (MEC), as all withdrawals would be considered taxable income. 2 Receipt of accelerated benefi ts will reduce the policy s cash value and death benefi t and may result in a taxable event. In Massachusetts, accelerated benefi ts for chronic illness may only be used for qualifi ed long-term care services. 3 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 60 and 85, and that the policy has been in-force for at least 15 years. Insufficient policy values, outstanding policy loans and other considerations may also restrict exercising the rider. 4 Waiver of Specifi ed Premium, form series 8456/8457/8456(0606)/8457(0606), is available at an additional charge and may not be available in all states.

5 Disability Benefits Multiple Needs Accelerated Living ts Cash Value Accumulation Life Insurance One Affordable Solution Options Flexibility Value Five interest crediting strategy choices. Four are based on the performance of the Standard & Poor s (S&P) 500 Index and one is fi xed. Improved access to policy cash and death benefi t value while you are living. 1 No additional cost living benefits Guarantees 100% Participation Rate and No Cap interest crediting option. Exercise the Lifetime Income Benefi t Rider (LIBR) 3, once certain conditions are met, to guarantee yourself income for life - money you cannot outlive! No matter where you re going in life, Ultra Select Indexed Universal Life can fit into your plan. 3

6 Choices In How Your Premiums Are Allocated Ultra Select offers fi ve choices of interest crediting strategies. You choose either a fi xed rate of interest or one of the following strategies based on changes in the S&P 500 Index: Point-to-Point, Cap Focus Point-to-Point, Participation Rate Focus Point-to-Point, No Cap Point-to-Average Guarantees That Help Protect What You Earn Ultra Select offers guaranteed 1 features such as 100% Participation Rates and no Cap Strategies. The minimum interest that will be credited to account values, at the end of each 1-year index segment, regardless of what happens to the index, will be the floor of 0%. At death or full surrender of your policy, the accumulated value used to determine the amount of benefi t that will be received will be equal to the larger of the current accumulated value or the guaranteed accumulated value calculated at 2.5%. 4 1 Guarantees are dependent upon the claims-paying ability of the insurer.

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8 Flexibility A Policy That Can Change With You Flexible Premiums and Death Benefit With Ultra Select you can make regular, level payments; change payment amounts; or if you have sufficient cash value built up, you can use it to pay the premium. Paying higher than required premiums can result in more cash value available for tax-deferred cash value accumulation and, ultimately, greater premium payment flexibility down the road. As your needs change, your policy s death benefi t can be increased 1 or decreased thereby eliminating the need for multiple policies. Accessing Cash Value During Your Lifetime Ultra Select offers tax deferred build-up of policy cash value and the ability to access that value during your lifetime, income-tax free. 2 Ultra Select offers a number of ways to access your policy values during lifetime, including withdrawals and policy loans. As added protection, Ultra Select offers an Overloan Protection Rider 3 which helps protect your policy from lapsing as a result of the outstanding loans. 6 1 Additional underwriting may be required. 2 Contract loans and withdrawals will reduce the contract s cash value and death benefi t and may result in a taxable event. Withdrawals up to the basis paid into the contract and contract loans thereafter would not create an immediate taxable event, but substantial tax ramifi cations could result upon contract lapse or surrender. This would not be true if the contract were classifi ed as a Modifi ed Endowment Contract (MEC), as all withdrawals would be considered taxable income. 3 Limitations apply to exercising the Overloan Protection Rider, form series 8309/8309(0206) including that the policy be in force for at.least 15 years and the insured having attained the age of 75.

9 Guaranteed Income for Life The fear of outliving retirement income has become a very realistic concern to many who are facing retirement, and for good reason. Growing old in America 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 there is a flip side to the coin. As Americans continue to live longer a new challenge presents itself: How do I make sure my retirement income lasts? Fortunately, there is a simple solution. The Lifetime Income Benefi t Rider (LIBR) is an optional living benefi t that can be added to your policy. Once exercised, 1 LIBR guarantees you a steady stream of income for the rest of life it really is money you cannot outlive! 1 The Lifetime Income Benefit Rider provides a benefit for the life of the insured if certain conditions are met, including but not limited to the insured s attained age being between 60 and 85, and that the policy has been in-force for at least 15 years. Insufficient policy values, outstanding policy loans and other considerations may also restrict exercising the rider. Exercising the rider and receiving an income benefit will reduce the policy s cash value and death benefit and may terminate other riders or reduce their benefits. Guarantees are dependent upon the claims-paying ability of the issuing company. The Lifetime Income Benefi t Rider, form series 8865/8865(0910), is optional and only available at policy issue. There is no additional charge to add the rider to your policy, but there is an annual charge from the accumulated value during the income payment period. 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. 7

10 More Than Just Life Insurance Living Benefits Medical conditions and illnesses, though not always fatal, can have a serious impact on your lifestyle and your ability to live independently. Uncovered costs can also deplete even substantial savings in fairly short order. Through the Accelerated Benefi ts Rider 1, you can access your policy s death benefi t, while you are living, to cover expenses associated with a Chronic or Terminal illness. These benefi ts can be used to pay for anything such as travel, medical expenses, additional care or other unexpected costs. ABR proceeds for chronic illness in the state of MA can only be used to pay for expenses incurred for Qualifi ed Long-Term Care Services Accelerated Benefi t Rider, form series 7490/7493/7490(0200)/7493(0200)/ 0092 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 qualifi ed longterm care services. 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-oflife-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 acceleration-of-life-insurance benefits 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 qualified tax advisor and with social service agencies concerning how receipt of such a payment will affect you, your spouse s and your family s eligibility for public assistance. Riders are optional and may not be available in all states. Chronic Illness is not available in Connecticut, Kansas, Maryland, and New York.

11 Note: A terminal illness is defi ned as one that is expected to result in death within two years (one year in CT, PA and VT). A chronic illness is defi ned as one that leaves you unable to perform two of the six normal activities of daily living without assistance or that leaves you with deterioration or loss in intellectual capacity. The six activities of daily living include bathing, continence, dressing, eating, toileting and transferring. 2 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 persuant to a plan of care prescribed by a licensed health care practitioner. Ultra Select Indexed Universal Life (IUL), form series 8385/8386/8385ID (1206)/8386ID(1206) is underwritten by National Life Insurance Company, Montpelier, Vermont. Riders are optional, may require additional premium and may not be available in all states. 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 indexed segment. 9

12 In the event the market declines, Ultra Select has a built-in 0% interest crediting floor. The Floor is the minimum earnings percent that will be credited. For Ultra Select the minimum annual rate of interest credited to funds in the fi xed-interest 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 of policy only if the policy return is less than 2.5% over the life of the policy. Ultra Select Indexed Universal Life insurance 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 1 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. The product is not sponsored, endorsed, sold or promoted by S&P and S&P makes no representation regarding the advisability of investing in this Product. The S&P 500 Index does not reflect dividends paid on the stocks underlying the index. National Life Group is a trade name of National Life Insurance Company, Montpelier, VT and its affiliates