Life Insurance to Prepare for Life s Journey!

Transcription

1 Life Insurance to Prepare for Life s Journey! Agent Product and Underwriting Guide Term Life Insurance Policy - Issued by National Western Life Insurance Company Policy Form L-01 and state variations Policy and Riders may not be available in all states. Certain limitations, restrictions, and exclusions apply. National Western Life Insurance Company 850 East Anderson Lane Austin, TX DM-1239 For Agency Use Only.

2 Life Insurance to Prepare for Life s Journey! Living Benefits through Accelerated Benefit Riders (ABRs) The NWL Living Benefit Term Form L-01 and state variation (NWL LBT) not only provides life insurance protection for your client s family in the event of death but also provides an accelerated benefit to protect your client s family from the unexpected events that adversely affect their life expectancy while they are living. This Agent Product and Underwriting Guide provides a description of the specifications and features of a term life insurance product designed to provide death benefit protection plus the additional protection of accelerated benefits if there is an unexpected event of life. Product Specifications Applications Base Term Policy - ICC and state variations Other Insured Term Rider ICC and state variations Initial Term Period 15, 20 and 30 Years Death Benefit Level Death Benefit to Age 95 Premium Guaranteed Level premiums guaranteed for the term period selected Issue Ages 15 Years Years Years Face Amount Minimum - $25,000 Maximum - $250,000 Premium Classes Male/Female Non-Tobacco/Tobacco Rules Based Program Underwriting Renewal Period If the policy is continued beyond the initial level term period, premium will increase annually based on attained age and rate class at the time of issue. Premiums and coverage will terminate at age 95. Page 1

3 Policy Fee Base Insured $50 / Other Insured Rider $25 Premium Modes For modes other than annual, multiply the annual premium by the appropriate factor. Semi-Annual.51 Quarterly.26 Monthly.087 Monthly Premium payments must be made by credit card or preauthorized check. Credit Card Authorization Form DM Preauthorized Check Form SP-8207 Grace Period 31 days Conversion While the policy is in force you may exchange it for a new policy made available for conversion of permanent life insurance on the Insured s life. This may be done any time before the end of the conversion period which is prior to the policy s fifth (5th) anniversary. Evidence of insurability will be required only if the new policy is to include any new rider providing additional benefits. NWL Living Benefit Term may not be available in all states. See the policy for certain limitations, restrictions and exclusions that may apply. Accelerated Benefit Riders Accelerated Death Benefit for Terminal Illness - Form ICC and state variations Benefit This rider is issued on the life of the Insured and any Other Insureds while coverage for the Insured or Other Insured is in force. The benefit is payable one time per Insured upon whom the benefit is determined under the Accelerated Benefit. The Face Amount of the policy will be reduced by the Elected Face Amount if a payment is made under this rider. Accelerated Benefit An Accelerated Benefit will be paid: 1. during the lifetime of the Insured; and 2. upon receipt by us of written proof of loss; and 3. upon determination of a Qualifying Event of the Insured; and 4. upon your election of payment; and 5. in lieu of the Elected Face Amount. The Accelerated Benefit will be determined by the company when written proof of loss is received. The Accelerated Benefit will be equal to the Elected Face Amount less: 1. the actuarial discount, determined by the company; and 2. an administrative fee not to exceed $500. The following factors may be used by the company in the determination of the actuarial discount: 1. the Elected Face Amount; and 2. future premiums payable under the Page 2

4 policy for the Elected Face Amount; and 3. our assessment of the future expected mortality of the Insured; and 4. the Accelerated Benefit Interest Rate in effect. The total of all Face Amounts we will accelerate under this and any other accelerated benefit riders on the policy is $500,000. The Accelerated Benefit provided by this rider is payable only once per Insured regardless of the subsequent occurrence of the same or a different Qualifying Event which would otherwise be covered. If partial benefits are elected under another accelerated benefits rider, eligibility remains for the remaining benefits under this rider. Accelerated Benefit Interest Rate An Accelerated Benefit Interest Rate will be determined on the date written proof of loss is received and will not exceed the greater of: 1. the yield on 90-Day U.S. Treasury Bills on that date; or 2. the maximum adjustable policy loan interest rate allowed by law on that date. Terminal Illness Qualifying Event Definition A Qualifying Event must occur while the policy and this rider are in force. A Qualifying Event is a diagnosis of terminal Illness. No Accelerated Benefit will be paid for any Qualifying Event that results from any self-inflicted injury or attempted suicide. A Terminal Illness is an illness: 1. from which the Insured is not expected to recover; and 2. from which the Insured is expected to live less than twenty-four months after the date payment of the benefit is received in writing. Proof of Loss and Accelerated Benefit Payment Written proof that the Insured has experienced a Qualifying Event must be provided. Written proof must include at least the following: 1. certification from a Physician that the Insured has experienced a Qualifying Event; and; 2. complete records of the Insured s medical history, diagnoses, and treatments. The company reserves the right to require a second opinion or examination of the Insured by a Physician of our choice to determine the Qualifying Event. If a difference of opinion occurs between the Insured s Physician and the company s, a third opinion, agreeable to both the Owner and the company will be the basis for approving or disapproving the request. The cost of any second or third opinion or examination will be at the company s expense. If the claim is determined to be eligible for payment, the company will send to you, to any irrevocable beneficiary, and to any assignee of record a benefit offer and an Effect of Benefit Statement. The Effect of Benefit Statement will demonstrate the impact the Elected Face Amount will have on the policy Face Amount and premium. The Elected Face Amount: 1. must be less than 90% of the Face Amount; and 2. must be greater than $5,000; and 3. must be $500,000 or less; and 4. must leave a remaining Face Amount of not less than $12,500; and 5. must be no greater than the difference between the full benefit and the Elected Face Amount in any prior accelerated benefit rider election, if any. Other Riders Payment of accelerated benefits will have no effect upon any accidental death benefit rider, waiver of premium rider, or children s term life insurance rider. There will be no effect upon any Other Insured Riders unless accelerated benefits are elected on the life of the Other Insured. Reinstatement If the policy terminates for non-payment of premium, the rider may be reinstated under the same conditions as the policy. This rider may not be reinstated unless the policy is in force or is being reinstated at the same time. The reinstated rider will cover a Qualifying Event which is first diagnosed after the date reinstate- Page 3

5 ment is approved by us. Upon the date of reinstatement, the Insured s and the company s rights will be those that were in effect before the rider terminated. Termination This rider will terminate on the earliest of: 1. written request for cancellation of this rider; or 2. the date the policy terminates; or 3. the election of full benefits under any other accelerated benefit rider on this policy; or 4. the election of any benefits under this rider. Rider may not be available in all states. See the rider for certain limitations, restrictions and exclusions that may apply. Accelerated Death Benefit for Chronic Illness Form ICC and state variations Benefit This rider is issued on the life of the Insured and any Other Insureds while coverage for the Insured or Other Insured is in force. The benefit is payable one time per Insured upon whom the benefit is determined under Accelerated Benefit. The Face Amount of the policy will be reduced by the elected Face Amount if a payment is made under this rider. Accelerated Benefit An Accelerated Benefit will be paid: 1. during the lifetime of the Insured; and 2. upon receipt by us of written proof of loss; and 3. upon determination of a Qualifying Event of the Insured; and 4. upon your election of payment; and 5. in lieu of the Elected Face Amount. The Accelerated Benefit will be determined by the company when written proof of loss is received. The Accelerated Benefit will be equal to the Elected Face Amount less: 1. the actuarial discount, determined by the company; and 2. an administrative fee not to exceed $500. The following factors may be used by the company in the determination of the actuarial discount: 1. the Elected Face Amount; and 2. future premiums payable under the policy for the Elected Face Amount; and 3. our assessment of the future expected mortality of the Insured; and 4. the Accelerated Benefit Interest Rate in effect. Page 4

6 The total of all Face Amounts we will accelerate under this and any other accelerated benefit riders on the policy is $500,000. The Accelerated Benefit provided by this rider is payable only once per Insured regardless of the subsequent occurrence of the same or a different Qualifying Event which would otherwise be covered. If partial benefits are elected under this or another accelerated benefits rider, eligibility remains for the remaining benefits under any accelerated death benefit for terminal illness rider. Accelerated Benefit Interest Rate An Accelerated Benefit Interest Rate will be determined on the date written proof of loss is received and will not exceed the greater of: 1. the yield on 90-Day U.S. Treasury Bills on that date; or 2. the maximum adjustable policy loan interest rate allowed by law on that date. Chronic Illness Qualifying Event Definition A Qualifying Event must occur while the policy and this rider are in force. No Accelerated Benefit will be paid for any Qualifying Event that results from any self-inflicted injury or attempted suicide. Activities of Daily Living means bathing, continence, dressing, eating, toileting, and transferring. Qualifying Event means that the Insured has an illness or physical condition for which the Insured: 1. is permanently unable to perform, without Substantial Assistance, at least two (2) Activities of Daily Living; or 2. requires Substantial Supervision to protect the Insured from threats to health and safety due to permanent Severe Cognitive Impairment. Proof of Loss and Accelerated Benefit Payment Written proof that the Insured has experienced a Qualifying Event must be provided. Written proof must include at least the following: 1. certification from a Physician that the Insured has experienced a Qualifying Event; and 2. complete records of the Insured s medical history, diagnoses, and treatments. The company reserves the right to require a second opinion or examination of the Insured by a Physician of our choice to determine the Qualifying Event. If a difference of opinion occurs between the Insured s Physician and the company s, a third opinion, agreeable to both the Owner and the company will be the basis for approving or disapproving the request. The cost of any second or third opinion or examination will be at the company s expense. If the claim is determined to be eligible for payment, the company will send to you, to any irrevocable beneficiary, and to any assignee of record a benefit offer and an Effect of Benefit Statement. The Effect of Benefit Statement will demonstrate the impact the Elected Face Amount will have on the policy Face Amount and premium. The Elected Face Amount: 1. must be less than 90% of the Face Amount; and 2. must be greater than $5,000; and 3. must be $500,000 or less; and 4. must leave a remaining Face Amount of not less than $12,500; Other Riders Payment of accelerated benefits will have no effect upon any accidental death benefit rider, waiver of premium rider, or children s term life insurance rider. There will be no effect upon any Other Insured Riders unless accelerated benefits are elected on the life of the Other Insured. Reinstatement If the policy terminates for non-payment of premium, the rider may be reinstated under the same conditions as the policy. This rider may not be reinstated unless the policy is in force or is being reinstated at the same time. The reinstated rider will cover a Qualifying Event which is first diagnosed after the date reinstatement is approved by us. Upon the date of reinstatement, the Insured s and the company s rights will be those that were in effect before the rider terminated. Page 5

7 Termination This rider will terminate on the earliest of: 1. written request for cancellation of this rider; or 2. the date the policy terminates; or 3. the election of benefits under this or any other accelerated benefit rider on this policy. Rider may not be available in all states. See the rider for certain limitations, restrictions and exclusions that may apply. Accelerated Death Benefit for Critical illness Form ICC and state variations Benefit This rider is issued on the life of the Insured and any Other Insureds while coverage for the Insured or Other Insured is in force. The benefit is payable one time per Insured upon whom the benefit is determined under Accelerated Benefit. The Face Amount of the policy will be reduced by the elected Face Amount if a payment is made under this rider. Accelerated Benefit An Accelerated Benefit will be paid: 1. during the lifetime of the Insured; and 2. upon receipt by us of written proof of loss; and 3. upon determination of a Qualifying Event of the Insured; and 4. upon your election of payment; and 5. in lieu of the Elected Face Amount. The Accelerated Benefit will be determined by the company when written proof of loss is received. The Accelerated Benefit will be equal to the Elected Face Amount less: 1. the actuarial discount, determined by the company; and 2. an administrative fee not to exceed $500. The following factors may be used by the company in the determination of the actuarial discount: 1. the Elected Face Amount; and 2. future premiums payable under the policy for the Elected Face Amount; and 3. our assessment of the future expected mortality of the Insured; and 4. the Accelerated Benefit Interest Rate in effect. The total of all Face Amounts we will accelerate under this and any other accelerated benefit riders on the policy is $500,000. The Accelerated Benefit provided by this rider is payable only once per Insured regardless of the subsequent occurrence of the same or a different Qualifying Event which would otherwise be covered. If partial benefits are elected under this or another accelerated benefits rider, eligibility remains for the remaining benefits under any accelerated death benefit for terminal illness rider. Accelerated Benefit Interest Rate An Accelerated Benefit Interest Rate will be determined on the date written proof of loss is received and will not exceed the greater of: 1. the yield on 90-Day U.S. Treasury Bills on that date; or 2. the maximum adjustable policy loan interest rate allowed by law on that date. Critical Illness Qualifying Event Definition A Qualifying Event must occur while the policy and this rider are in force. No Accelerated Benefit will be paid for any Qualifying Event that results from any self-inflicted injury or attempted suicide. A Qualifying Event is defined as one of the following: 1. Heart Attack (Myocardial Infarction) 2. Stroke (Cerebrovascular Accident) 3. Life Threatening Cancer 4. Kidney Failure 5. Major Organ Transplant 6. Diagnosis of ALS (Amyotrophic Lateral Sclerosis) 7. Paralysis 8. Major Multi-System Trauma 9. Auto-Immune Deficiency Syndrome (AIDS) 10. Severe Central Nervous System Disease 11. Loss of Limbs 12. Alzheimers Page 6

8 13. Dementia 14. Coronary Artery Bypass Surgery 15. Coronary Angioplasty 16. Heart Valve Replacement 17. Aorta Surgery Proof of Loss and Accelerated Benefit Payment Written proof that the Insured has experienced a Qualifying Event must be provided. Written proof must include at least the following: 1. certification from a Physician that the Insured has experienced a Qualifying Event; and; 2. complete records of the Insured s medical history, diagnoses, and treatments. The company reserves the right to require a second opinion or examination of the Insured by a Physician of our choice to determine the Qualifying Event. If a difference of opinion occurs between the Insured s Physician and the company s, a third opinion, agreeable to both the Owner and the company will be the basis for approving or disapproving the request. The cost of any second or third opinion or examination will be at the company s expense. If the claim is determined to be eligible for payment, the company will send a record of a benefit offer and an Effect of Benefit Statement. The Effect of Benefit Statement will demonstrate the impact the Elected Face Amount will have on the policy Face Amount and premium. The Elected Face Amount: 1. must be less than 90% of the Face Amount; and 2. must be greater than $5,000; and 3. must be $500,000 or less; and 4. must leave a remaining Face Amount of not less than $12,500; Other Riders Payment of accelerated benefits will have no effect upon any accidental death benefit rider, waiver of premium rider, or children s term life insurance rider. There will be no effect upon any Other Insured Riders unless accelerated benefits are elected on the life of the Other Insured. Reinstatement If the policy terminates for non-payment of premium, the rider may be reinstated under the same conditions as the policy. This rider may not be reinstated unless the policy is in force or is being reinstated at the same time. The reinstated rider will cover a Qualifying Event which is first diagnosed after the date reinstatement is approved by us. Upon the date of reinstatement, the Insured s and the company s rights will be those that were in effect before the rider terminated. Termination This rider will terminate on the earliest of: 1. written request for cancellation of this rider; or 2. the date the policy terminates; or 3. the election of benefits under this or any other accelerated benefit rider on this policy. Rider may not be available in all states. See the rider for certain limitations, restrictions and exclusions that may apply. Examples Accelerated Death Benefit for Chronic Illness Example The following is an example of the Chronic Illness Benefit: Jane bought a $250, Year LBT Non-tobacco policy when she was age 45. Two years later, she was in a serious accident and now qualifies for an accelerated death benefit using her Chronic Illness Rider. She qualified because she is permanently unable to perform 2 out of 6 activities of daily living. Jane elects to accelerate $200,000 (Elected Face Amount) of her $250,000 LBT policy. Her condition was severe and her life expectancy was determined to be 2.5 years. The accelerated benefit amount was determined to be $175,036. Jane elected to use Settlement Option 1 in the policy that would pay monthly payments of $7,502 for 24 months. If Jane dies before all payments are received, any remaining payments would go to the beneficiary. Page 7

9 Policy at Issue Initial Death Benefit $250,000 Annual Premium $1, Acceleration of a Portion of the Policy Elected Face Amount $200,000 Accelerated Benefit Amount $175,036 Settlement Option 1, monthly payout per $1,000 for 2 years is $42.86 Monthly Payment $7, ( x 42.86) Policy structure after the ABR payment Remaining Death Benefit $50,000 New Premium $ Accelerated Death Benefit for Critical Illness Example The following is an example of the Critical Illness benefit: Joe bought a $125, Year LBT Tobacco policy 5 years ago when he was age 40. Joe recently had a serious heart attack at age 45 and wants to accelerate 90% of his death benefit using the Critical Illness Rider qualification requirements. So, Joe accelerates $112,500 (Elected Face Amount) of his $125,000 policy. It was determined that his life expectancy after the heart attack was 16.2 years. The accelerated benefit amount was determined to be $43,462. Joe elected to take the accelerated benefit payment in a lump sum. Policy at Issue Initial Death Benefit $125,000 Annual Premium $1,306 Acceleration of a Portion of the Policy Elected Face Amount $112,500 Accelerated Benefit Amount $43,462 Policy structure after the ABR payment Remaining Death Benefit $12,500 New Premium $ Additional Optional Coverages and Benefits Accidental Death Benefit Rider Form and state variations Issue Ages Years Benefit This rider provides for an additional benefit if the death of the Insured results from accidental bodily injury occurring while this rider is in force and after the company has received due proof. The Insured must die within 90 days of the accident for this benefit to be payable. Exceptions The company will not pay if death was caused, directly or indirectly, by: 1. intentionally self-inflicted injuries or suicide, while sane or insane; 2. war or any act of war, declared or undeclared; 3. operating, riding in, or descending or falling from or with any kind of aircraft, except as a fare-paying passenger, without duties of any kind, on a regularly scheduled civilian commercial airline; 4. bodily or mental infirmity or disease; 5. service in the military, naval, or air forces of any country, group of countries, or international organization at war, declared or undeclared; 6. participating or engaging in a riot; 7. voluntarily taking poison, except food poisoning, or inhaling gas or fumes, except while conducting one s duties during the course of employment; 8. voluntarily taking drugs or narcotics unless as prescribed by a qualified doctor; or 9. attempting to commit or committing a felony. Termination of Rider This rider shall terminate on the earliest of the following: 1. the Policy Anniversary when the Insured s age is 65; 2. upon written request for cancellation of this rider; or 3. the date the policy terminates or expires. Rider may not be available in all states. See the rider for certain limitations, restrictions and exclusions that may apply. Page 8

10 Waiver of Premium Disability Benefit Rider Form R and state variations Issue Ages Benefit The premium payment for NWL Living Benefit Term will be waived if: 1. the Insured becomes totally and permanently Disabled after Age 14 but prior to Age 60, and 2. such disability has lasted without interruption for at least six (6) consecutive months; and 3. the company receives required proof of Disability; and 4. the rider is in force. If Disability is determined to exist at the end of 6 months, premiums falling due in this period will be waived retroactively. The amount of premium waived will be the premium for the Face Amount of the policy on the date Disability began; plus the rider premium for all riders (including this rider). The Insured will not be considered Disabled at any time during which the Insured does not meet the definition of Disability. Definition of Disability Disability or Disabled, under the terms of this rider, means a condition of the Insured which: 1. is caused by bodily injury incurred or disease first diagnosed after the effective date of this rider; 2. begins prior to the Policy Anniversary when the Insured s age is 60; 3. keeps the Insured from doing work for which the Insured is reasonably suited by education, training, or experience; 4. is a total and permanent loss of the sight of both eyes, or the use of one hand and one foot; and 5. is not described in exceptions. No premium will be waived if Disability results from: 1. intentionally self-inflicted injury; 2. war or any act of war, declared or undeclared; 3. service in the military, naval, or air forces of any country, group of countries, or international organization at war, declared or undeclared; or 4. participating or engaging in a riot. Proof of Disability Proof of Disability must be submitted prior to the Insured s death; while the Insured is disabled; and before one year past the date the Insured became disabled. Termination of Benefit The company will stop waiving premium at the earlier of the date Disability ends; or when the policy terminates or expires. Rider may not be available in all states. See the rider for certain limitations, restrictions and exclusions that may apply. Children s Term Benefit Rider Form and state variations Benefits Level term insurance to age 25 on all Children of the Owner. The life insurance benefit upon the death of a Child is $1,000 for each unit of insurance on this rider paid to the Beneficiary. Premium $6.00 annually per $1,000 (unit) Minimum Amount $5,000 Maximum Amount $20,000 Definitions Beneficiary for this rider means the Insured, if living; otherwise, the Insured s spouse, if living; otherwise the estate of the deceased Child. Child - as used in this rider means each of the Insured s children named in the application for this rider who are at least 15 days old and not yet 18 years old at the date of the application. Also, each child who is born or legally adopted by the Insured and the Insured s spouse after the date of application for this rider who is at least 15 days old, and not yet 18 years old at the date of the adoption. Insured and Owner mean the Insured and Owner as defined in the policy. Page 9

11 Insurance Benefit The life insurance benefit upon the death of a Child is $1,000 for each unit of insurance on this rider. The death must occur: 1. while the policy and this rider are in force; and 2. before the rider anniversary when the Child is age 25. Continuation of Term Insurance In Event of The Death of the Insured Upon receipt of due proof of the death of the Insured while the policy and this rider are in force, we will continue, on a fully paid-up basis, term insurance on each Child in the amount of $1,000 for each unit. This coverage will continue until the rider anniversary when the Child s age is 25. There will be no charge for coverage. Conversion While this rider is in force, the insurance on each child may be converted into a new individual policy. The conversion date is the earliest of the Child s 25th birthday, the Policy Anniversary when the Insured is 65 or the death of the Insured. Proof of insurability may not be needed. Rider Premium If the rider premium is paid after this rider terminates, the company s only liability will be to return the amounts paid. The rider cost will not change as the number of Insured Children changes. Termination This benefit will terminate at the earliest of any of the following: 1. on the rider anniversary when the Insured is 65 years old; or 2. when the policy terminates; or 3. upon the death of the Insured, subject to the Continuation of Term Insurance In Event of the Death of the Insured provision; or 4. on the Policy Anniversary following receipt of written request cancel this rider. Insurance on a Child stops on the rider anniversary when the Child is 25 years old unless it stops earlier in accordance with the above. Rider may not be available in all states. See the rider for certain limitations, restrictions and exclusions that may apply. Other Insured Term Life Insurance Rider Form Issue Ages Same as base coverage Benefit The Insurance Benefit in force on the life of the Other Insured during a particular rider year is shown on Specification Page 3 of the policy. This Insurance Benefit will be paid when we receive due proof of the death of the Other Insured subject to the continuation of the policy and this rider. Payment will be made to the Insured, if living; otherwise, the estate of the Other Insured. Definitions Insured - as used in this rider means the Insured under the policy to which this rider is attached. Other Insured as used in this rider means the Other Insured person named in the application. Minimum Benefit Amount $25,000 Maximum Benefit Amount $250,000, but no greater than the base face amount of the policy. Benefits Available to the Other Insureds Accelerated Benefit Riders Conversion While this rider is in force, the life insurance may be converted into a new policy without evidence of insurability. However, evidence of insurability may be required for any riders applied for on the new policy. 1. The conversion must be prior to age 65 of the Other Insured, but not after the conversion period shown on Specification Page 2 of the policy. Conversion will be allowed within 90 days after the death of the Insured. 2. The amount of insurance of the new policy may not be more than the Insurance Benefit on the conversion date. 3. The new policy must be a permanent plan of insurance provided by us for the purpose of conversions. 4. We must receive an application and the Page 10

12 first premium prior to conversion. 5. The new policy will start on the later of: (a) the date the application is signed; of (b) the date the first premium is paid 6. The new policy will start only if the Other Insured is living. 7. The premium class of the new policy will be the same as the premium class of the Other Insured on the date of conversion. 8. The incontestable and suicide provision for the life insurance benefit of the new policy will be operative from the effective date of this rider. If riders are added to the new policy, subject to evidence of insurability, then the operative date of these provisions will be the conversion policy date. Death of Other Insured During Grace Period If the Other Insured dies during the grace period, the Insurance Benefit of this rider will be paid, but we will deduct from it the premium needed through the monthly policy anniversary in which the Other Insured died. Rider Premium Coverage is provided under the rider in return for payment of the rider premium. The rider premium will be included in the policy premium while this rider in force. The rider premium is shown on Specification Page 3 of the policy. Termination of Rider This rider will terminate at the earliest of any of the following: 1. on the rider anniversary when the Other Insured is 95 years old; or 2. when the policy terminate for any reason; or 3. upon the death of the Insured, subject to the Temporary Insurance provision; or 4. upon written request for cancellation of this rider. Rider may not be available in all states. See the rider for certain limitations, restrictions and exclusions that may apply. Agent Guidelines for NWL Living Benefit Term Rules Based Program Easy step by step process: 1. Agent and Applicant agree that applicant will apply for insurance National Western Life Insurance Company (NWL ). 2. Agent completes the application. (a) The Proposed Insured must be a U.S. citizen or Permanent U.S. Resident with a Green Card. (b) If the Proposed Insured is not a U.S. Citizen, please forward a copy of the Proposed Insured s Green Card with the application. (c) Print clearly using black ink. (d) Any corrections must be initialed and dated by the Proposed Insured/Owner. (e) Complete the Medical/HIPAA authorization and send to NWL with the application. (f) Complete the Medical Information Bureau (MIB) Pre-Notice, Privacy Notice, Fair Credit Reporting Act Notice and leave it with the Proposed Insured. (g) Explain and review the appropriate state fraud warning, since it will be reviewed in the phone interview. (h) If the owner is other than the Proposed Insured, make sure to provide the full name, date of birth, Social Security #, telephone number, address and relationship to the Proposed Insured. There must be an Insurable Interest between the Owner and the Proposed Insured and a purpose or reason for the insurance. (i) If the Owner is a trust, complete and submit the Trust Information Form DM Agent calls Elite Sales Processing, Inc. (ESP) at ESP is a Professional insurance services company that provides outsourced rules based telephone verification and decision. Page 11

13 4. The ESP interviewer talks with the NWL agent first and obtains agent Information, applicant information and asks the agent for permission to record the interview information. 5. The interviewer then asks the agent to place the applicant on the telephone. 6. The interviewer greets applicant and thanks them for placing their trust with NWL and asks for the applicants permission to record the conversation and authorization for MIB (Medical Information Bureau) and IntelliScript (Prescription History). IF No the interviewer will ask to speak with the agent. Interviewer informs agent that if we can not obtain authorization, applicant will not qualify for the rules based program. 7. The interviewer will ask applicant identifying data for the recording and re-ask the permission question so that is on the recording. The Medical/MIB/IntelliScript authorization is read to applicant and when finished applicant is asked if they agree with authorization. If Yes MIB/IntelliScript search is initiated so that the interviewer will have the result back during the interview. If No, application can not processed. 8. The interviewer will ask the applicant if they have read or been informed of the fraud statement that pertains to their state of residence. If No, fraud statement will be read to applicant. 9. The interviewer will then ask all of the medical questions and additional information on the application. If any medical question is a Yes, MIB, IntelliScript or Height and Weight is not within the NWL guidelines, interview with the application will stop and the interviewer will thank the applicant and inform them that is all of the questions and ask to speak with the agent. Interviewer informs agent that the application does not qualify based on a Yes answer to the question or due to confidential information. The interviewer can not tell the agent what was discussed with the applicant or confidential information from MIB and IntelliScript based on privacy laws. The agent is told to submit the application to NWL and a letter will be sent to the applicant explaining the declination. 10. If all questions are No in the medical history section, MIB, IntelliScript and Height and Weight are within NWL guidelines, the application is accepted. The interviewer will inform the applicant that is all of the questions and will ask to speak to the agent. The interviewer will inform the agent that the applicant has qualified on a tobacco or non-tobacco basis. 11. If there are Other Insured s applied for, the process will be repeated for the Other Insured. 12. If accepted, the interviewer completes agent check list with the agent. 13. The agent is informed to send the application to NWL if accepted or declined to complete the processing. (a) The agent needs to review the application for completeness. (b) Make sure beneficiaries are complete along with relationship and if multiple beneficiaries, indicate the percentage share of each. (c) If this is a replacement, surrender or partial surrender of another life or annuity policy, complete and submit the appropriate state replacement forms. These must be submitted with the application (d) If this is a life 1035 Exchange, also complete and submit Transfer Form SA (e) If accepting payment with the application, explain the Temporary Insurance Agreement and leave the receipt with the Owner. (f) We do not accept cash or agent/agency checks. All checks must be made payable to National Western Life Insurance Company. 14. ESP notifies NWL Home Office of the decision and forwards interview for processing. Page 12

14 Quick Guide to Rules Based Program National Western Life Insurance Company has contracted with Elite Sales Processing, Inc. (ESP), a national consumer- reporting agency with extensive life insurance experience, to provide point-of-sale interviews. ESP interviewers are trained to accurately and confidentially verify application information. Elite Sales Processing Monday Thursday 8:00 a.m. 9:30 p.m. (CST) Friday 8:00 a.m. 5:00 p.m. (CST) After the sale is made and the application is completed Agent and Applicant call ESP During business hours After Business Hours Agent calls ESP with the applicant at point of sale. Applicants that require an interpreter ESP will handle at time of call. Agent will leave a voice message at Indicate agent name and applicants full name and telephone numbers for both agent and applicant. ESP will call applicant next business day. The agent identifies themselves and is asked a few questions by ESP. Interviewer will then ask to speak to Applicant. ESP will obtain applicant s permission to record the interview and authorization to check MIB and IntelliScript (Prescription History). Both MIB and IntelliScript will be completed during the interview. Agent will be told if the application is Accepted or Declined. The Agent will be contacted by ESP during regular business hours and informed of the application decision. If the applicant is accepted, the agent sends to National Western the application, payment, and any other required forms. If the applicant is declined, Agent sends to National Western the application only indicating that application was declined. 1. Agent and Applicant agree that applicant will apply for insurance with NWL (Review all point of sale plan guidelines in agent guide prior to sale). 2. Agent Completes application including the Medical/MIB/HIPAA authorizations, informs applicant of applicants state fraud statement, informs applicant of the MIB Pre-Notice, FCRA Notice and gives applicant notices. 3. Agent calls Elite Sales Processing, Inc. (ESP) ESP is a professional insurance services company that provides outsourced rules based telephone verification and decision. 4. The ESP Interviewer talks with the NWL agent first and obtains Agent information, Applicant information and asks the agent for permission to record the interview information. 5. Interviewer then asks the agent to place the applicant on the telephone. Page 13

15 6. Interviewer greets applicant and thanks them for placing their trust with National Western Life and asks for applicants permission to record the conversation and authorization for MIB and IntelliScript (Prescription History). If No interviewer will ask to speak with agent. Informs agent that if we can not obtain authorization applicant will not qualify for rules based program. 7. Interviewer will ask applicant identifying data for the recording and re-ask the permission question so that it is on the recording. The Medical/HIPAA/MIB/IntelliScript authorization is read to applicant and when finished applicant is asked if they agree with authorization. If Yes, MIB/IntelliScript search is initiated so that the interviewer will have the result back during the interview. If No, Application can not be processed. 8. Interviewer will ask the applicant if they have read or been informed of the fraud statement that pertains to their state of residence. If No, Fraud Statement will be read to applicant. 9. The interviewer will then ask all of the medical questions and additional information on the application. If any medical question is a Yes, MIB, IntelliScript, or Height and Weight is not within NWL guidelines, interview with applicant will stop and interviewer will thank the applicant and inform them that is all of the questions and ask to speak with the agent. Interviewer informs agent that application does not qualify based on a Yes answer to the question or confidential information. Interviewer can not tell the agent what was discussed with applicant or confidential information from MIB and IntelliScript based on privacy laws. Agent is told to submit application to NWL and a letter will be sent to applicant explaining the decline. 10. If all questions are No in the medical history section, MIB, IntelliScript and Height and Weight are within NWL guidelines the application is accepted. The interviewer will inform the applicant that is all of the questions and will ask to speak to the agent. Interviewer will inform agent that applicant has qualified on a tobacco or non tobacco basis. 11. If accepted, Interviewer completes agent check list with agent. 12. Agent is informed to send application to NWL if accepted or declined. 13. Agent informs the applicant the application has not been accepted. The application will be submitted to NWL to complete processing of appropriate letters and for record keeping purposes. 14. ESP notifies NWL of the decision and forwards interview to home office for processing. Settlement Options How Much Monthly Income for a Given Face Amount? Monthly Income for the Number of Years Stated Face No. of Years of Monthly Income Amount , , ,000 1, ,000 1, ,000 2,686 1,441 1, ,000 3,582 1,922 1,374 1, ,000 4,477 2,402 1,717 1,377 1,177 1, ,000 5,373 2,883 2,061 1,653 1,413 1, ,000 7,164 3,844 2,748 2,204 1,884 1, ,000 8,955 4,805 3,435 2,755 2,355 2,090 How Much Face Amount for a Desired Monthly Income? Face Amount necessary to provide for a Monthly Income for the Number of Years Stated Monthly No. of Years of Monthly Income Income ,113 36,298 42,463 47, ,218 43,669 54,447 63,695 71, ,624 58,225 72,596 84,926 95, ,918 52,030 72,781 90, , , ,877 78, , , , ,426 1,000 55, , , , , ,235 For Agent Use Only Page 14

16 About the Company National Western Life Insurance Company is a Colorado corporation with executive offices in Austin, Texas. The Company offers a full line of life insurance and annuity products (both on an individual and group basis), through independent agents, brokers and national marketing organizations (NMOs) in 49 states, the District of Columbia, Puerto Rico, Guam, the Virgin Island and accepts applications form residents of several foreign countries. Visit our website for all current financial information. National Western has consistently ranked in the top 100 companies in the industry by total admitted assets and capital & surplus. Since its start in 1956, National Western has emphasized financial strength for the protection of its policyholders. As a legal reserve insurance company, National Western must set aside a portion of its assets equal to reserves required by law. Annually, a financial statement is filed with each state s insurance department. These departments have the authority to verify, through reviews and audits, that the appropriate reserves are maintained. Rating Information Rating agencies continue to recognize the strengths of National Western and the positive steps we are taking to make this a company that is responsive to both our policyholders and stockholders. Standard and Poor s has rated National Western A (Strong), while A.M. Best Company s rating is A (Excellent). A.M. Best s ratings evaluate company factors in order to provide an opinion of the company s financial strength, operating performance and ability to meet its obligations to policyholders. Ratings range from A++ (superior) to F (in liquidation). A Standard & Poor s rating is an opinion of a company s financial security with respect to its ability to pay on its insurance policies and contracts in accordance with their terms. Ratings range from AAA (extremely strong) to CC (extremely weak) and R (regulatory supervision). Page 15