Life Insurance HELP PROTECT YOUR HOME, FAMILY AND INCOME. Life insurance can help protect what s important to you. TC84163(0415)3 Cat No (0415)

Transcription

1 Life Insurance HELP PROTECT YOUR HOME, FAMILY AND INCOME Life insurance can help protect what s important to you Product issued by Life Insurance Company of the Southwest Cat No (0415)

2

3 Help Protect your home, family and income all in one policy A house is one of the largest purchases you will ever make, and your home mortgage will likely be your largest fi nancial obligation. Maintaining adequate insurance protection will help your family to keep their home should something happen to you. A life insurance policy from Life Insurance Company of the Southwest (LSW) helps you to protect your home and your family in case of premature death or the fi nancial devastation of an illness that is terminal, chronic, critical or a critical injury.

4 By 2010, medical bills were the number one cause of bankruptcy in the United States. 2 Protection for Today and Tomorrow In addition to the death benefi t protection, the optional Accelerated Benefi ts Riders 1 (ABR) provide access to your death benefi t while you are still alive if you are diagnosed with an illness that is terminal, chronic, critical or a critical injury. From blindness and heart attacks to Alzheimer s and cancer, your Life Insurance Company of the Southwest policy can be there to help. Best of all, the protection comes at no additional cost Use your accelerated benefi t to cover any expense (with the exception of chronic illness in the state of Massachusetts, which can only be used to pay for expenses incurred for Qualifi ed Long-Term Care services 3 ), including but not limited to: nursing home care medical procedures quality-of-life expenditures experimental medical treatments drug therapies home health care household expenses 1 Receipt of accelerated benefi ts will reduce the policy s death benefi t and cash value (for policies with such values), may result in a taxable event and may affect a family s eligibility for public assistance programs. Actual payments are discounted since the benefi t is received prior to death. Riders are optional, may be subject to underwriting, exclusions and/or limitations and may not be available in all states or on all products. 2 Laurie Garrett, a Senior Fellow for Global Health on the Council on Foreign Relations: The Lancet, 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.

5 Why Life Insurance Company of the Southwest? Purchasing a life insurance policy may be one of the best decisions you ever make because of the death benefi t protection it provides your family. With a life insurance policy from LSW, it can be so much more! LSW s Life Insurance protection offers a combined affordable solution that can help provide protection for you and your family. This flexible package can help protect your plans for today and tomorrow through: Death benefi t protection for your loved ones Optional living benefi ts help to provide fi nancial security in the event of a qualifying illness 4 The choice of Whole Life or Universal Life coverage that offers the potential for cash value accumulation or affordable Term coverage for a specifi c period of time, and Disability Income Rider to help with fi nancial obligations should you become disabled 5 All riders described herein involve an additional cost except for the ABR. Riders may not be available on all policies and in all states. We call it: Life insurance you don t have to die to use. 4 Living Benefi ts are provided by no additional premium Accelerated Benefi t Riders. 5 Certain occupations are ineligible for coverage. Disability riders stay in force until the policy anniversary following the insured s 65th birthday.

6 The Choice One of the fi rst and most important decisions to make is whether to choose Whole Life, Universal Life or Term coverage. For many situations, term coverage may be the right decision for both your needs and your budget. One important question to ask yourself is, How long do I need coverage? If the answer is just until your mortgage is paid off, then choosing Term coverage may be sufficient to meet those needs. Term If you are someone who is looking for coverage for a specifi ed amount of time at an affordable cost, then Term may be the right solution for you. If your situation changes and you should need permanent coverage, the option to convert your term policy to a permanent Whole Life or Universal Life policy also exists. Whole Life For those looking for strong guarantees: guaranteed death benefi t protection for life, guaranteed level premiums, guaranteed cash value accumulation, a Whole Life policy may be the appropriate choice. Guarantees are dependent on the claims-paying ability of the issuing company. Universal Life For people looking for more permanent protection, a Universal Life policy may be the answer. A Universal Life policy does more than just provide a death benefi t, it also has the potential to build cash value for other needs that may arise such as taking supplemental income through policy loans and withdrawals for retirement or meeting other family life events that may occur. 6 Regardless of what type of coverage you choose, life insurance can help provide both fl exibility and benefits to help protect what s important to you. 6 Policy 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. 7 Alzheimer s Disease Education & Referral Center, U.S. Department of Health & Human Services

7 As many as 5.1 million Americans have Alzheimer s Disease. 7

8 Cash Value Accumulation With your Whole Life or Universal Life insurance policy, you can enjoy the potential for tax-deferred cash value accumulation. You can access your cash value through policy loans and withdrawals to help achieve your unique and personal objectives, including: Help your children pay for college For a down payment on a second home Take advantage of new opportunities Meet unexpected emergencies Whatever your needs and goals may be, the cash value accumulation that your whole life or universal life insurance policy may provide can help you with your future plans. Cash value in a universal life insurance policy could also be used to reduce or eliminate out of pocket premium payments. 8 8 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.

9 Living Benefits Accelerated Benefits Riders 11 The optional Accelerated Benefi ts Riders are an exceptional benefi t available at no additional cost that allows you to accelerate all or part of your death benefi t to help with costs from an illness that is terminal, chronic, or critical or a critical injury. Each year, about 795,000 people suffer a stroke in the US. 10 When Accelerated Benefit Riders are added to a term life insurance policy, the ability to accelerate the death benefit will end when the life insurance policy is terminated. There is no restriction placed on the use of the accelerated benefi t with the exception that ABR proceeds for chronic illness in the state of Massachusetts can only be used to pay for expenses incurred for Qualifi ed Long-Term Care services. 9 American Heart Association, Heart Disease & Stroke Statistics 2012 Update. 10 LSW Accelerated Benefit Riders - form series 8052, 8095, 8165, 8766, ICC , 20287, 20288, ICC , ICC , ICC Riders are optional, may be subject to underwriting, exclusions and/or limitations and may not be available in all states or on all products. Receipt of accelerated benefi ts will reduce the cash value and death benefi t, may be a taxable event and may affect a family s eligibility for public assistance programs. Please consult your personal tax advisor to determine the tax status of any benefi ts paid under this rider 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. 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 how the benefi ts are used. The actual payment you receive will be less than the portion of the death benefi t accelerated because the benefi ts are paid prior to death. Values are based on a current interest rate and mortality rates. There is an initial administrative fee at the time the rider is exercised. We currently limit the amount of death benefi t that may be accelerated under all contracts made over the entire lifetime of the insured to $1,500,000 for critical illness or critical injury, and $1,000,000 for terminal illness or chronic illness. We reserve the right to change this limit in the future; however the limit will never be less than $500,000. Other restrictions, limitations and waiting periods may apply. Our Terminal Illness riders allow for the payment of a portion of an insured s death benefi t, on a discounted basis, if the insured has an illness or chronic condition which can reasonably be expected to result in death in 24 months or less. There is no additional premium for this rider. Our Chronic Illness and Covered Chronic Illness riders allow for the payment of a portion of an insured s death benefi t, on a discounted basis, if the insured is Chronically Ill. A chronic illness is defi ned as one that leaves you unable to perform, without substantial assistance, two of the six normal activities of daily living for a period of at least 90 consecutive days due to a loss of functional capacity or requires substantial supervision to protect oneself for a period of 90 consecutive days from threats to health and safety due to severe cognitive

10 impairment. The six activities of daily living include bathing, continence, dressing, eating, toileting, and transferring. There is no additional premium for this rider. Our Critical Illness or Critical Injury riders allow for the payment of a portion of an insured s death benefi t, on a discounted basis, if the insured is critically ill or critically injured. Covered critical illnesses are: diagnosed ALS (Lou Gehrig s disease), Aorta Graft Surgery, Aplastic Anemia, Blindness, Cancer, Cystic Fibrosis, End Stage Renal Failure, Heart Attack, Heart Valve Replacement, Major Organ Transplant, Motor Neuron Disease, Stroke, and Sudden Cardiac Arrest. Covered critical injuries are: Coma, Paralysis, Severe Burns, and Traumatic Brain Injury. Covered critical illness or critical injury conditions may vary by state. Covered Critical illness in the state of MA includes: Coronary artery disease resulting in acute infarction vascular or requiring surgery; End-stage Renal Disease; Major organ transplant; Permanent neurological deficit resulting from cerebral vascular accident; Diagnosis of an invasive malignancy characterized by the uncontrolled growth and spread of malignant cells and the invasion of tissue. Cancer does not include: Stage A Prostate Cancer; Any skin cancer, except invasive malignant melanoma into the dermis or deeper; Pre-malignant lesions, benign tumors, or polyps; and Carcinoma in-situ. There is no additional premium for this rider. Accelerated Benefits Riders (ABR) vs. Long-term Care (LTC) Insurance Certain states require advertising for ABRs to provide a comparison to the benefi ts provided by LTC insurance. However, Accelerated Benefi ts provided by the ABR riders are not long-term care insurance, and are not intended to be the same as, or an alternative to, long-term care insurance. This is a life insurance benefit that also gives you the option to accelerate some or all of the death benefit in the event that you meet the criteria for a qualifying event described in the policy. This policy or certificate does not provide long-term care insurance subject to California long-term care insurance law. This policy or certificate is not a California Partnership for Long-Term Care program policy. This policy or certificate is not a Medicare supplement (policy or certificate). ABR Riders are supplemental benefi ts that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance. Receipt of benefits may reduce or eliminate the availability of other policy riders and benefits. Benefi ts available are calculated at time of claim based on the age of the policy and our expectation of your future mortality. The amount of Accelerated Benefi t available will depend on your life policy s death benefi t value when ABR benefi ts are claimed. For policies in good standing, if ABR benefi ts are not used, policy death benefi ts and other rider benefi ts are still available. Long-term care (LTC) insurance is a form of health insurance, rather than an optional rider on a life insurance policy, and as such, has no death benefi t or cash value. LTC insurance benefi ts are specifi ed at the time of the contract. LTC benefi ts are paid as a form of expense reimbursement for qualifi ed longterm care expenses. By comparison, since ABR benefi ts can be used for any reason, they are paid once qualifi cations are met, and do not require you to provide receipt of specifi c expenses to qualify for the benefi t. LTC premiums vary based on the level and length of benefi t chosen by the policyholder. Premiums are paid on a recurring basis, and failure to pay premiums will generally lapse the policy. If LTC benefi ts are not claimed, they are typically forfeited. LTC insurance policies may offer non-forfeiture benefi ts for additional premium. This is a solicitation of insurance. An insurance agent may contact you.

11 Family Protection Currently, one in four deaths in the United States is due to cancer. 12 If you rely on two incomes, as so many families do, you can apply for coverage for both spouses under this policy. The optional Other Insured Rider [form series 8057,8535] offers term insurance protection for your spouse. You can also select the optional Children s Term Rider [form series 8056] to provide life insurance coverage for all of your children until they reach the age of 23. Your child can convert this coverage to his or her own individual policy. Disability Income Rider coverage is also available to help protect both you and your spouse s income. Optional riders offer a choice of a two-year or fi ve -year b ene fi t p er io d. 12 Cancer Statistics, 2012, American Cancer Society.

12 Disability Benefits Disability benefi ts can help meet fi nancial obligations such as your mortgage and household expenses in the event you become disabled: Disability Income Rider 13 [form series 8054, 8065] The Disability Income Rider is available should you become disabled and unable to work. It pays a fi xed monthly benefi t amount to help you cover expenses that you may no longer be able to meet while not working. Depending on your disability and needs, there is either a Two-Year Disability Rider or a Five-Year Disability Rider.

13 Customizing Your Coverage All in all, life insurance can help provide security and help accomplish goals for you and your family. Your death benefi t can be used to pay off debts such as a mortgage, fund a college tuition or supplement a spouse s income. With multiple options and riders to choose from, your agent can custom design a policy for you. Adjustable Death Benefits Your life insurance policy provides the flexibility to increase or decrease the death benefi t as your needs change without having to purchase a new policy. 14 Guaranteed Insurability Rider [form series 8051] If your needs shift and you need more coverage, this rider allows you to increase protection without producing evidence of insurability during certain option periods. Accidental Death Benefit Rider [form series 8050] If in the unfortunate event you should die as a result of an accident, this rider pays an additional death benefi t. 15 Unemployment Rider [form series 8058] If you were to involuntarily become unemployed from your full-time job, this rider allows you to waive your policy premiums for three months. Riders are optional and require additional premium unless otherwise noted. Riders are not available in all states. 13 If the policy lapses while the benefi t is being paid, it will be paid to you until your disability ends. 14 Increases in coverage may require evidence of insurability. 15 This rider stays in force until the policy anniversary following your 70th birthday, as long as your life insurance coverage remains in force.

14 Compare our whole life and universal life insurance policies to a traditional mortgage insurance policy: Our Policy Traditional Policies Flexibility Structure your policy to meet your needs The mortgage determines the structure Choice You choose your benefi ciary The mortgage holder is the benefi ciary Death B e ne fi t The death benefi t goes to your named benefi ciary, they choose how to use it The death benefi t automatically goes to the mortgage holder Protection The death benefi t does not decrease automatically The death benefi t generally decreases in step with the outstanding mortgage debt Portability You can take your policy with you when you sell your home or refi nance A traditional mortgage protection policy is normally tied to a specifi c mortgage Cash Value If you choose a whole life or universal life policy, your policy can build cash value for the future Traditional mortgage policies do not build any future value Living B e ne fi t s Optional Riders can provide access to your death benefi t in case of a terminal, chronic, or critical illness No living benefi ts Optional Riders Optional riders can provide benefi ts in case of disability or unemployment No disability or unemployment benefi ts Experience the Advantage of an LSW Life Insurance Policy when addressing your mortgage protection needs. 17 American Heart Association, Heart Disease & Stroke Statistics 2012 Update.

15 This year, about 1.2 million Americans will have a coronary attack. 17

16 Die Too Soon Become Ill Live Too Long Life Changes. Protect It. LSW Foundation Universal Life Insurance [form series 8640/8640ID] LSW ProtectorLife Whole Life Insurance [forms series 20064, ICC , 20065, ICC ], along with LSW Level Term Life Insurance [form series 8119, ICC , 8120, ICC , , 8119] and applicable riders are underwritten by Life Insurance Company of the Southwest, Addison, Texas. We currently limit the amount of death benefi t that may be accelerated under all accelerated benefi t riders applying to the same insured. We reserve the right to change this limit in the future, however the limit will never be less than $500,000. National Life Group is a trade name representing various affiliates, which offer a variety of fi nancial service products. Life Insurance Company of the Southwest is a member of National Life Group. Centralized Mailing Address: One National Life Drive, Montpelier, VT Home Office: Addison, TX