PSE Whole Life Illustration

Transcription

1 A Life Insurance Policy Illustration PSE Whole Life Illustration Participating Whole Life Insurance Policy Form PSE-WL-01 Initial Face Amount: $ 100,000 Prepared For: Valued Client STATE PLAN VERSION: Michigan Prepared By: Chuck Ritzke 35W841 Burr Oak Lane West Dundee, IL [email protected] 35W841 Burr Oak Lane West Dundee, IL This illustration is based upon the information you supplied to our representative. Page 1 of 7

2 Policy Illustration Information Participating Whole Life Insurance: The Participating Whole Life Insurance policy that you are considering (PSE-WL-01) offers a guaranteed death benefit to age 121 and guaranteed cash values. The premium is guaranteed level and payable to age 100. The policy also may be credited with non-guaranteed dividends. Underwriting Class : The contract premiums, premium outlay, and values illustrated for this coverage have been calculated assuming this policy is issued in the underwriting class. Actual premiums and values will ultimately depend on the outcome of the underwriting process and may vary from what is shown on this illustration. If so, you will receive a revised illustration with your policy. Death Benefit: The face amount of insurance provided at issue is $ 100,000. The face amount determines the amount payable in the event of death. The actual amount payable may be increased by additional insurance rider benefits and the dividend options chosen. Death benefits are reduced by the withdrawal of accumulated dividend values and any policy loan balances. Cash Value: The Cash Value is the amount available to the policy owner upon surrender of the policy. The Cash Values will be reduced by any policy loan balance and withdrawals. Age: As used in this illustration, "issue age" means your age last birthday on the date the policy is issued. "Attained age" always means the policy anniversary after your birthday each year. Initial Contract Premiums: Details of the initial premiums for the coverage selected are shown in the table below: Covered Benefit To Age $ 100,000 Whole Life Benefit 121 $ 1, Additional Premium Rider (**) 85 Payment Mode Options Premium Annual $ 1, Semi-Annual Quarterly Monthly Total Initial Annual Premium $ 1, (*) Contract premiums are payable to the age shown. These are the initial contract premiums. Premiums in later years may change depending on the coverage selected. See the Illustration and Rider Detail pages for future premiums. The Policy Illustration Details page may show a Premium Outlay lower than the contract premiums due. The illustrated Premium Outlay may be reduced by dividend values used to reduce premiums or due to policy loans and withdrawals of nonguaranteed dividend values. In any event, the Contract Premium must always be paid in some fashion in order to continue coverage to the attained ages shown. (**) Higher or lower Premium Outlays may be illustrated if an Additional Premium Rider has been selected. Premiums in excess of Contract Premiums above are paid into the Additional Premium Rider. Premium Outlays may be reduced by withdrawals from the Additional Premium Rider. See the Rider Details page for more information. Premium Mode: Premiums are assumed to be annual on the Policy Illustration Details page. Page 2 of 7

3 Policy Illustration Information Dividends: Dividends paid are declared by the company annually and based upon company experience, including investment returns, claims rates, and company expenses. Dividends are not guaranteed. Dividends may be more or less favorable than those illustrated. Dividend Options: Dividends may be applied, at your option, in several ways: Paid-Up Additions: You may use dividends to purchase additional paid up whole life benefits each year. Paid-up additions provide an additional cash value. Paid-up addition values may be withdrawn or used to pay future premiums. Dividends on Deposit: Dividends may be left on deposit to accumulate with interest. The current interest rate for Dividends on Deposit is 3.00%. This interest rate is not guaranteed and may be higher or lower. The guaranteed minimum interest rate is 2.0%. Dividends on deposit may be withdrawn at any time or used to pay future premiums. Dividends Reduce Premiums: Dividends may be used to automatically reduce your premium payments for the following year. Any excess dividends over the premium due will be paid to you by check. Dividends Paid in Cash: You may have all dividends paid to you by check. This illustration assumes an initial Dividends buy paid up additions dividend option. See the Illustrations Detail page for ongoing options. Non-Guaranteed Elements: This policy offers guaranteed premiums, cash values, and death benefits. The additional values offered by dividends are not guaranteed and cannot be predicted with absolute certainty. The dividends shown in this illustration are examples of how this policy would perform under currently declared dividend scales. Actual dividends may be more or less favorable. Page 3 of 7

4 Prepared For: Valued Client Male Age 35 Rider Information The following riders are included in this illustration: Additional Premium Rider: This rider provides the option to pay additional premiums. Additional premiums are used to purchase paid-up whole life additions on the insured's life, increasing the death benefit and cash value under the policy. Premiums illustrated for this rider equal the excess of the Premium Outlay illustrated in excess of the required Contract Premiums for this policy (see Illustration Information page). These additions are included in the death benefits illustrated. The cash value of these additions may be borrowed under the Policy Loan provision. The paid-up additions may also be used to reduce future premiums. The additional premiums may equal a single premium at issue (including 1035 premium deposits) or a level additional premium. Any increases in Additional Premiums illustrated after issue may be subject to additional evidence of insurability at the time of the increase. The option to pay Additional Premiums ends at age 85. The paid-up addition death benefits purchased, unless withdrawn, provide a death benefit until age 121. Note that there can be federal income tax consequences due to additional premiums. See the Important Notes page for details. Page 4 of 7

5 Policy Illustration Details Att Age Pol Year Guaranteed Values at End Of Year Premium Outlay Cash Value Death Benefit Premium Outlay Non-guaranteed Values at End of Year Annual Dividend Cash Value Reduced Paid-Up Death Benefit 36 1 $ 3,963 $ 2,673 $ 112,405 $ 3,963 $ 47 $ 2,720 $ 12,624 $ 112, ,963 5, ,665 3, ,662 25, , ,963 9, ,502 3, ,465 41, , ,963 13, ,932 3, ,785 57, , ,963 17, ,967 3, ,317 73, , ,963 21, ,623 3, ,085 90, , ,963 26, ,913 3, , , , ,963 31, ,851 3, , , , ,963 35, ,448 3, , , , ,963 40, ,719 3, , , , ,630 39, ,963 45, ,675 3, , , , ,963 51, ,330 3,963 1,008 57, , , ,963 56, ,695 3,963 1,147 64, , , ,963 62, ,782 3,963 1,290 71, , , ,963 67, ,604 3,963 1,444 78, , , , , ,534 82, , , , , ,632 86, , , , , ,736 90, , , , , ,847 95, , , , , ,969 99, , , ,445 59, , , , , , , , , , , , , , , , , , , , , , , , ,292 Premium Outlay: The initial premium outlay consists of a annual premium of $ 3, Future annual premiums assumed payable for the policy year are shown above. Each premium is assumed to be paid at the beginning of each payment period starting with the issue date. Guaranteed Values: Under the contract guarantees, payment of the Contract Premiums to age 100 guarantee coverage to remain in force to age 121. Under the guaranteed Premium Outlay shown, the insurance coverage will remain in force to age 121. Non-Guaranteed Values: Based upon payment of current dividend scales and the Premium Outlay shown, the insurance coverage is projected to remain in force to age 121. Non-guaranteed values may be less or more favorable than those illustrated. Riders: The premiums for riders are included in the Premium Outlay, but the benefits are not included in the death benefits illustrated. Premiums in excess of Contract Premiums purchase paid-up whole life additional benefits, which are included in the death benefits and values illustrated. See the Rider Information page for details. Page 5 of 7

6 Important Illustration Notes Tax Requirements to Qualify as Life Insurance: In order for the contract to qualify for favorable federal income tax treatment as life insurance, premiums paid and benefits are subject to certain limits/minimums under section 7702 of the Internal Revenue Code. Accumulated cash values, policy loans, partial withdrawals, and benefits may receive more favorable treatment under a tax qualified life insurance policy. The policy being illustrated is designed to automatically qualify as life insurance under the Cash Value Accumulation Test defined in section Tax Treatment of Distributions: In order to receive the most favorable federal income tax treatment for distributions (policy loans and partial withdrawals), a life insurance policy must also satisfy the 7-Pay Premium Test (7-Pay Test) under section 7702A of the Internal Revenue Code: Initial Annual 7-Pay Premium Limit: $ 3, Under the 7-Pay Test, premiums paid during each the first 7 years may not exceed the sum of the 7-Pay Premiums. Policies that do not pass the 7-Pay Test are called Modified Endowment Contracts (MECs). Distributions from a MEC are taxable to the extent there is a gain in the contract. In addition, there is a penalty of 10% of taxable income for distributions from MECs before age 59 1/2, with certain exceptions. In any case, any gain in the policy is taxable upon full surrender. Certain changes to benefits after the policy is issued may change these initial limits and/or re-start another 7-Pay Test period. Based upon the premiums and benefits illustrated, this policy becomes a MEC in year 1. When considering tax issues concerning your life insurance policy, please consult a qualified tax advisor for more information Interest Adjusted Cost Indices: Cost indices may be used to compare the costs of similar policies that offer the same benefits. An explanation of the intended use of these indices is provided in the Life Insurance Buyer's Guide: 10 year 20 year Current Payment Index: $ $ Guaranteed Payment Index: $ $ Current Surrender Index: $ 3.56 $ 2.09 Guaranteed Surrender Index: $ 5.52 $ 5.59 Compliant Illustration: This illustration is designed to comply with the requirements of the NAIC Model Life Insurance Regulation. The accuracy of all values shown, including policy values, tax calculations, and benefits are dependent upon the accuracy of your information provided. Current values are subject to change. This illustration is not a contract. Page 6 of 7

7 Inital face amount: $ 100,000 Initial annual premium: $ 3, Policy Illustration Summary DEFINITIONS: Guaranteed Non-guaranteed Values Values Midpoint Current Cumulative Net Premium Outlay is the total premiums At End of Year 5 for the policy plus any riders less any policy loans and partial withdrawals thru the policy year shown. Cumulative Net Premium Outlay $ 19,815 $ 19,815 $ 19,815 Net Cash Value $ 17,459 $ 17,883 $ 18,317 Net Cash Value is the amount payable upon surrender of the contract. Net Death Benefit $ 158,967 $ 160,678 $ 162,428 Net Death Benefit is the amount payable upon the At End of Year 10 of the policy year shown. insured's death net of any policy loan balances at the end Net Cash Value Cumulative Net Premium Outlay $ 40,776 $ 39,630 $ 42,695 $ 39,630 $ 44,716 $ 39,630 Guaranteed Values show the minimum cash values and Net Death Benefit $ 208,719 $ 215,242 $ 222,114 death benefits payable provided premiums are paid At End of Year 20 under the Premium Outlays illustrated. Cumulative Net Premium Outlay $ 59,445 $ 59,445 $ 59,445 Non-Guaranteed Current Values are the cash values Net Cash Value $ 78,063 $ 88,363 $ 99,980 and death benefits that would be payable assuming the currently declared dividend scale is paid. Net Death Benefit $ 233,900 $ 259,141 $ 287,611 Non-Guaranteed Mid-point Values are the cash values At Attained Age 70 of the currently declared dividend scale is paid. and death benefits that would be payable assuming 50% Net Cash Value Cumulative Net Premium Outlay $ 110,095 $ 59,445 $ 147,272 $ 59,445 $ 195,578 $ 59,445 Age/Year Coverage Ends is the year in which coverage will terminate under the assumptions shown unless additional premiums are paid. Net Death Benefit $ 196,518 $ 256,651 $ 334,784 Age When Coverage Ends Year When Coverage Ends Non-guaranteed dividends paid may be less or more favorable than those illustrated. See Illustration Information page and Illustration Details page for details. Coverage will remain in force to age 121 so long as the Guaranteed Contract Premiums as shown on the Illustration Information page are paid when due and provided that any policy loan balance does not exceed the current Cash Value. See the Rider Information page for details on riders included in this illustration. Receipt of Illustration Statements I have received a copy of this illustration and understand that any non-guaranteed elements illustrated are subject to change and could be either higher or lower. The sales representative has told me they are not guaranteed. Applicant/Owner: Date: I certify that this illustration has been presented to the Applicant/Owner and that I have explained that any non-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. Sales Representative: Date: THIS ILLUSTRATION IS NOT A CONTRACT Page 7 of 7