Zurich s Index UL. Living Benefit Solutions. Accelerated Death Benefit Riders for Chronic and Terminal Illness

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1 TM Zurich s Index UL Living Benefit Solutions Accelerated Death Benefit Riders for Chronic and Terminal Illness Offered by Zurich American Life Insurance Company For agent and broker information only. Not for use with clients or the public.

2 Living Benefit Solutions for your Clients Falling ill is not something that clients plan to happen. However, financial security can quickly erode if faced with an unexpected illness. The Zurich Index UL offers riders that deliver living benefit solutions by providing an acceleration of death benefit if an insured is certified as chronically ill or has been stricken with a terminal illness. The riders come with eligible policies at no additional charge. If your clients need the coverage, the rider can be exercised. If your clients never need the coverage, no charges are incurred. The client is eligible to receive benefits under this rider if a licensed Physician certifies in writing that during all of the ninety (90) consecutive calendar days immediately preceding the certification (and is expected to continue to meet at least one of such conditions afterwards permanently), the client has been permanently unable to perform at least two of the six Activities of Daily Living (bathing, continence, dressing, eating, toileting and transferring) without substantial assistance from another person, or requiring substantial supervision due to permanent Severe Cognitive Impairment. This rider is an indemnity rider, and there are no restrictions on the use of the payment. Lifetime Maximum: 100% of the Eligible Death Benefit can be accelerated up to $2,000,000 if the insured is diagnosed with a permanent chronic illness. Annual Maximum: The lesser of 25% of the Eligible Death Benefit on the Initial Approval Date or $500,000 Minimum Accelerated Death Benefit Amount: At each election is the smaller of 5% of the Eligible Death Benefit on the Initial Approval Date or $50,000 2

3 Rider specifications Issue Ages Costs Underwriting Waiting Period Elimination Period Maximum Lifetime Benefit Amount Payout Options 1 Payment Amount Loans Cost of Insurance Charges Re-Certification Rider Restrictions 18-75, Age nearest birthday No monthly rider charge; discount applied at acceleration of benefits and a maximum administrative fee of $300 for each election The insured is generally eligible for the rider if rated a Table 4 or better on the base policy Benefits become immediately available at issue Benefit election can be made once every twelve (12) months The Insured must be chronically ill for 90 consecutive days before the rider is eligible for use The smaller of 100% of the Eligible Death Benefit up to $2,000,000 Policy owner will receive benefit in a lump sum Policy owner specifies the portion of the policy s Death Benefit to accelerate Policy debt will be reduced by the same proportion that the Specified Amount is reduced After an acceleration, charges will be calculated based upon the reduced policy values following approval Annual re-certification is required Not available after accelerating benefits under the Accelerated Death Benefit Rider for Terminal Illness Hypothetical Example Here is an example of how the might work: Example for a policy with an acceleration of 20% of the Death Benefit* Immediately Prior to Initial Election Specified Amount $1,000,000 $800,000 Death Benefit $1,000,000 $800,000 Account Value $250,000 $200,000 Surrender Charge $50,000 $40,000 Policy Debt Outstanding $20,000 $16,000 Net Cash Surrender Value $180,000 $144,000 Accelerated Death Benefit Payment $135,700 * Policy Assumptions: Death Benefit Option: A Risk Discounting Factor: 60%, Administrative Fee: $300 Immediately After the Initial Election 3

4 Accelerated Death Benefit Rider for Terminal Illness The client is eligible to receive benefits under this rider if a licensed Physician certifies in writing that the insured has twenty-four (24) months 1 or less of life expectancy. Lifetime Maximum: $2,000,000, for an insured diagnosed as terminally ill. Minimum Accelerated Death Benefit Amount: The lesser of 25% of the Eligible Death Benefit or $50,000 1 Unless state variation is required. 4

5 Rider specifications Accelerated Death Benefit Rider for Terminal Illness Issue Ages Costs Underwriting Waiting Period Maximum Lifetime Benefit Amount Payout Options 1 Cost of Insurance Charges Rider Restrictions 1 Unless state variation is required , Age nearest birthday No monthly rider charge; discount applied at acceleration of benefits and a maximum administrative fee of $300 All insureds are eligible for the rider Benefit is available at issue $2,000,000 Policy owner will receive benefit in a lump sum After an acceleration, charges will be calculated based upon the reduced policy values following approval Acceleration of this benefit will terminate the Accelerated Death Benefit Rider for Chronic Illness No charges are incurred for the riders unless an election is made. The cost of exercising the rider is that the death benefit is reduced by an amount greater than the rider benefit payment itself to reflect the early payment of the death benefit. Additionally, policy values, loan values, cost of insurance charges and death benefits will be reduced if your client receives an accelerated benefit. Receipt of the accelerated death benefits may affect eligibility for public assistance. The accelerated death benefits may be taxable. Hypothetical Example Here is an example of how the Accelerated Death Benefit Rider for Terminal Illness might work: Accelerated Death Benefit Rider for Terminal Illness 2 Example for a policy with an acceleration of 60% of the Death Benefit* Immediately Prior to Election Specified Amount $1,000,000 $400,000 Death Benefit $1,000,000 $400,000 Account Value $250,000 $100,000 Surrender Charge $50,000 $20,000 Policy Debt Outstanding $20,000 $8,000 Net Cash Surrender Value $180,000 $72,000 Accelerated Death Benefit Payment * Policy Assumptions: Death Benefit Option: A Risk Discounting Factor: 95%, Administrative Fee: $300 Immediately After Election $565,200 5

6 Zurich American Life Insurance Company Administrative Office: 7045 College Boulevard, Overland Park, KS The terms and conditions for the Flexible Premium Adjustable Life Insurance Policy with Index-Linked Interest Options are set forth in policy form number ICC11-IUL or applicable state variation. The terms and conditions for the and Accelerated Death Benefit Rider for Terminal Illness are set forth in policy form number ICC14-IULCIR-01 and ICC14-IULTIR-01 or applicable state variation. The policy is issued by Zurich American Life Insurance Company, an Illinois domestic life insurance company, located at its registered home address of 1400 American Lane, Schaumburg, IL The policy is subject to the laws of the state where it is issued. This material is a summary of the product features only. Please read the policy carefully for details. Certain coverages may not be available in all states and policy provisions may vary by state. 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 Accelerated Death Benefit Rider for Chronic Illness. The Rider does not provide long-term care insurance subject to California longterm care insurance law. The Rider is not a California Partnership for Long-Term Care program policy. The Rider is not a Medicare supplement (policy or certificate). This is intended for favorable tax treatment under Section 101(g) of the Internal Revenue Code (26 U.S.C. Sec. 101(g)). Receiving accelerated death benefits greater than the amount that would be tax qualified under the Internal Revenue Code may have tax consequences for you. We cannot give you advice about this. You may wish to obtain advice from a tax professional or an attorney before you decide to receive accelerated benefits from a life insurance policy. If the insured is diagnosed with a permanent chronic illness a portion of the death benefit may be paid before the death of the insured. There are no restrictions on the use of this payment, but the maximum amount payable on an annual basis is the lesser of 25% of the eligible death benefit (as defined in the rider) or $500,000. The maximum lifetime benefit payable pursuant to this rider is $2,000,000. Long-term care insurance policies typically reimburse policyholders for services to assist them with activities of daily living such as bathing, dressing, or eating. Comparatively, accelerated death benefits are typically a single lump-sum advance on future life insurance benefits paid in the case of chronic or terminal Zurich American Life Insurance Company A A (07/14)