Agent Guide. Whole Life 98. Whole Life Insurance The Union Central Life Insurance Company

Transcription

1 Whole Life 98 Agent Guide Whole Life Insurance The Union Central Life Insurance Company LI /06 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

2 Table Of Contents Policy Description Whole Life 98 at a Glance Premiums Dividends Policy Lapse and Lapse Benefits/Non-Forfeiture Options Grace Period Termination Riders and Options Accelerated Death Benefit Rider Accidental Death Benefit Rider Children s Insurance Rider Estate Protection Rider Future Purchase Option Rider One-Year Term Rider Paid-Up Insurance Riders Term Paid-Up Insurance Rider (TPL) Total Disability Benefit Rider Waiver of Premium Rider Loans Client Communications, Rights and Services Getting Your Business Issued For Producer or Broker/Dealer Use Only. Not For Use With Clients.

3 Description A Policy with Strong Guarantees that Last a Lifetime Today s world of financial choices is vast, often complicated and sometimes uncertain. If your clients current priorities include finding a permanent way to protect the long-term financial future of their dependents or business as well as accumulating cash values needed for significant purchases or expenses, Whole Life 98 could be your solution. Whole Life 98 provides life insurance that builds cash value and remains in force throughout the insured s lifetime, provided premiums are paid. Whole Life 98 features premium payments that are guaranteed not to increase, in addition to guarantees for the death benefit, cash value and non-forfeiture options in the policy. Whole Life 98 provides a variety of flexible rider coverage options that can help customize Whole Life 98 to meet your clients financial goals. Product Highlights Guaranteed premiums Guaranteed level death benefit (as long as premiums are paid) Guaranteed cash value (as long as premiums are paid) Guaranteed non-forfeiture options High issue ages Enhanced flexibility through riders Competitive rates Whole Life 98 At a Glance Issue Ages: Sex Distinct or Unisex: Whole Life 98 can be the solution for: Estate preservation needs Key person insurance Charitable gifts Preferred Plus Preferred Select Nontobacco Standard Nontobacco Preferred Tobacco Tobacco 0-19 Juvenile Non-pension: Sex distinct except Montana Pension: Unisex version 1 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

4 Minimum Face Amount: $25,000 - Standard Nontobacco, Tobacco, rated $100,000 - Preferred Plus, Preferred, Select Nontobacco, Preferred Tobacco (Basic coverage plus Term Paid-Up Rider coverage) Guaranteed Cash Value: Based on 1980 CSO Mortality Table, with 4.5% interest rate Modal Premium Factors and Policy Fee Policy Fee* Premium Factor Annual $ Semi-annual $ Quarterly $ Check-o-matic $ *Pension fees: $125.00, $64.00, $32.50 and $10.50 Commissions Base Policy and Supplemental Benefits* 50% first year, 3% years 2-10 TPL Rider* 50% first year; 3% years 2-10 OYT and CR Riders 40% first year, 2% years 2+ EPR Rider 25% first year; 2% years 2+ Paid-Up Insurance Rider (PURC) 3% year 1-10 Paid-Up Insurance Rider (PURS) 3% If the policy lapses in the first 12 months, the entire amount of compensation is charged back. premiums Dividends *QIC paid Whole Life 98 premiums are level, guaranteed and payable every year during the insured s lifetime or until age 98, when the policy is paid up. This policy is defined as a scheduled premium policy. Regardless of the company s investment, expense or mortality experience, these premiums are guaranteed never to increase during the insured s lifetime. A single dividend reflects experience on both the base policy and participating riders. Dividends are paid when the company experiences favorable results with respect to interest, mortality and expenses. Dividends are paid starting at the end of the second policy year. A pro-rata dividend is not paid if a policy is surrendered or lapsed, but is paid upon the death of the insured for inforce policies. 2 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

5 Policy Lapse and Lapse Benefits/ Non-forfeiture Options policy Lapse Extended Term Insurance Dividends may be paid in cash or the policyowner can elect one of the following options: Dividend payments may be used to purchase paid-up additional insurance. Paid-up additions earn dividends. This dividend option must be chosen if the policyowner has supplemented base coverage with the TPL Rider. Dividend payments may be used to reduce payment of premium if the mode is annual, semi-annual or quarterly. List bills and check-o-matics do not apply. Dividends may be left with the company to accumulate interest. A current rate will be declared from time to time, always guaranteed to be no less than three percent. Generally, interest on dividend accumulations is subject to current income tax. Dividends may be used to purchase participating one-year term insurance. The full amount of the dividend is used for the purchase. Dividends may be used to purchase one year term insurance equal to the cash value of the base policy. If the current dividend is more than the amount needed to purchase the one-year term addition, the balance may be applied to any other dividend option. If the dividend is less than the amount needed, it will purchase as much one-year term insurance as it can. Dividends may be used to reduce an outstanding loan. The policy will lapse if a premium is not paid by the end of the grace period (31 days) and the Automatic Premium Loan does not apply. If the cash surrender value is not withdrawn, it is used to continue the policy either as extended term insurance or reduced paid-up insurance. Unless the insured elects otherwise, the automatic option is extended term on standard policies. This is paid-up term insurance for a limited time. The amount of extended term insurance provided as a lapse benefit is equal to: The face amount of the base policy (excluding the term rider), plus Any paid-up additions, plus Any dividend accumulation, minus The amount of any loans or loan interest. The cash surrender value of the policy is applied as a net single premium based on the attained age of the insured. Reduced Paid-Up Insurance This is paid-up insurance for the insured s life offered as a lapse benefit. The cash surrender value of the policy is applied as a net single premium at the attained age of the insured. If the policy is rated or issued within a qualified pension plan, RPU insurance is the automatic option on lapse. Under this option, the policyowner uses the policy s net cash surrender value to purchase paid-up whole life insurance for a reduced amount. The amount of the RPU insurance will be based on the due 3 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

6 date of the unpaid premium and the net single premium for the insured s sex and then current age, adjusted for any loan or dividend transaction on or after that date. Net single premium is based on the 1980 CSO Mortality Tables and 4.5 percent interest. When a policy is under RPU: The policyowner can surrender the policy for its cash value. The policyowner can take policy loans at the same rates as were available on the base policy. The RPU policy is entitled to receive dividends. The policyowner can reinstate the policy. Adverse tax consequences can occur when this option is elected because existing loans are extinguished at that time. The only payment we accept is a loan repayment. Election of this option can cause a contract to become a Modified Endowment Contract (MEC). For more information on MECs, turn to page 23. reinstatement incontestability suicide Misstatement of Age and Sex Election of Paid-Up Policy (or Mature as Endowment) Grace Period Within five years of the lapse date, provided the insured is living, the policy may be reinstated subject to: proof of insurability payment of all overdue premiums with interest, and reinstatement of any loan and loan interest as of the lapse date. Except for accidental death and disability benefits, the policy is incontestable after it has been in force, while the insured is alive, for two years from the issue date. If the insured commits suicide (while sane or insane) during the first two full years from the issue date, no death benefit payment will be made. Premiums paid, less any loan, loan interest and any partial surrender, will be returned. If the insured s age or sex has been misstated, policy benefits and values will be adjusted to those that the premium paid would have purchased at the correct age or sex. The policyowner may request the policy to be endorsed as paid-up whenever the cash value equals or exceeds the net single premium for a paid-up policy. Similarly, the owner may request payment of the amount of insurance in force whenever the cash value equals that amount. (Income tax consequences must be considered.) The grace period is 31 days. During the grace period insurance will continue; however, if the insured dies during that time, the premium due will be subtracted from the proceeds. 4 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

7 termination Whole Life 98 policies may be terminated at any time by sending written notice to The Union Central Life Insurance Company. The policyowner may withdraw the cash surrender value or elect to use the cash surrender value to provide extended term insurance or reduced paid-up insurance described in the Lapse Benefits/Non-forfeiture Options section. The amount that the company will refund is: The cash value of the policy including riders, plus The cash value of any paid-up additions, plus Any dividend accumulations, plus Any due and unpaid dividends, minus Any policy debt as of the date of the surrender. Riders and Options Accelerated Death Benefit Rider/ life Needs OptionSM Description Specifications Policy debts include loans and loan interest. The Accelerated Death Benefit Rider, or Life Needs Option SM, allows policyowners to receive an advance of up to 50 percent of the policy s death benefit (up to $500,000) if they become terminally ill. This benefit can be added to Whole Life 98 policies in approved states. Advanced payment plus accrued interest are treated as a lien against the death proceeds; the balance of the death benefit (less interest on the advanced payment) remains in the policy to be paid out to the beneficiary when the insured dies. To exercise, the insured must have a life expectancy of less than 12 months, as certified by a physician. This rider is not a long-term care policy. Benefits may be taxable and may affect Medicaid eligibility. To attach this rider to a Whole Life 98 policy, policyowners should complete the disclosure statement (UC 8764) at the time of application. This same disclosure statement is required to add the rider at a later date. To exercise the rider, policyowners should contact the agent or the Home Office to determine specific state requirements and procedures. Premiums Accidental Death Benefit Rider Description No premium is charged for this rider. Allows the policyowner to select an amount to be paid (in addition to the face amount of the base policy plus the face amount of the Term Paid-Up Rider) if the insured dies as a result of an accidental injury occurring within 120 days of the injury while the rider is in force. If death results from the insured s travel as a fare-paying passenger on a public conveyance operated by a licensed common carrier for passenger service, the benefit is doubled. Issue Age 0-65 The rider will remain on the policy to age For Producer or Broker/Dealer Use Only. Not For Use With Clients.

8 Premiums The premium for this rider is shown on the policy schedule. It is level and payable to the insured s age 70. Premiums are based on the insured s issue age, sex and underwriting classification. Rider premiums are payable at the same time and interval as the base policy. Amount of Coverage Risks Not Assumed Termination Rider Reinstatement Children s Insurance Rider Description Issue Ages Age Limits Benefit Amount The Accidental Death Benefit Rider is subject to the following limitations: Maximum (All companies Union Central including Issue Age Limit Union Central) 0-20 $50,000 $250, ,000 $250, ,000 $250, ,000 $250,000 There are certain conditions under which the Accidental Death Benefit Rider is not payable. These include suicide, self-inflicted injury and acts of declared and undeclared war while the insured is a member of the armed forces. The rider will terminate under any of the following circumstances: When the policy terminates or lapses, including exercising extended term or reduced paid-up options. On the first monthly date after the policyowner gives notice. On the anniversary the insured is insurance age 70. The Accidental Death Benefit Rider may be reinstated upon reinstatement of the policy. Policyowners may purchase coverage for their children under this rider. Each child must be named on the application or added to the policy if he or she is born after the date of the application. If the child is adopted, the date of the adoption must be after the date of the application and before the child s 18th birthday. Age (parent/policyholder) Age 15 days - 18 years (child) Does not insure any child less than 15 days old or after age 25 (meaning the anniversary date nearest the child s 25th birthday) $25,000 per child 6 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

9 Conversion Privilege The policyowner may convert the insurance on each insured child to any permanent plan without proof of insurability under the following circumstances: The amount of the new policy is at least $25,000 (or the minimum face amount for the product to which it converted) A written application is received in the Home Office The new policy is the same risk class The policyholder may convert the amount of insurance on each child until age 25. At age 25, conversion may be as much as five times the rider amount. estate Protection Rider Description This rider provides an additional benefit if the insured dies during the first four policy years. It is designed to cover the three-year IRS look back period, and provides a full year after the policy is issued for the preparation of an appropriate trust to ultimately own the policy. The IRS look back period is the three-year period after ownership of an insurance policy is transferred to a third party, such as an irrevocable trust. During this period, the life insurance policy is considered part of the insured s taxable estate and is subject to federal estate tax. The face amount of the rider is equal to 122 percent of the base face amount plus the Term Paid-Up Rider. The rider is not available when the mortality rating exceeds 250 percent. Issue Age 0-85 Minimum Benefit Amount $25,000 Premiums Conversion Privilege Dividends Termination Future Purchase Option Rider Description The premium for this rider is shown on the policy schedule. Rider premiums are payable at the same time and interval as the base policy. None None The rider will terminate under any of the following circumstances: When the policy terminates or lapses, including exercising extended term or reduced paid-up options. On the first monthly date after the policyowner gives notice. On the fourth anniversary of the issuance of this rider. The Future Purchase Option Rider (FPOR) allows the policyowner to purchase a new policy on the life of the insured without proof of insurability. Issue Age 0-37 The rider will remain on the policy to age For Producer or Broker/Dealer Use Only. Not For Use With Clients.

10 Option Dates Under the FPOR, a new policy can be purchased on each option date. Option dates are the policy anniversary dates nearest to the insured s 25th, 28th, 31st, 34th, 37th, and 40th birthdays. An option date can be advanced to the date of the insured s marriage, the date of birth of a child of the insured, or adoption of a child by the insured. Option Period Premium Rate New Policy Riders The option period is 60 days before and 31 days after the option date. The option period for an advanced option date begins on the date of the eligible occasion (specified above, under option dates) and lasts 91 days. The premium rate for the new policy will be based on the age of the insured on his or her birthday nearest the policy date. A Waiver of Premium for Total Disability Rider may be issued with the new policy without evidence of insurability if the rider is in force on the existing policy when the new policy is purchased. An Accidental Death Benefit Rider may be issued with the new policy without evidence of insurability if: Such a rider is in force on the existing policy when the new policy is purchased The amount of the Accidental Death Benefit Rider issued with the new policy is not more than the amount of the new policy, and The total amount of the Accidental Death Benefit issued by Union Central on the insured s life does not exceed $150,000. Rider Termination Rider Reinstatement One-Year Term Rider (OYT) Description Issue Ages The rider will terminate under the any of the following circumstances: When the policy terminates or lapses, including exercising extended term or reduced paid-up options. On the first monthly date after the policyowner gives notice. On the anniversary the insured is age 40. The FPOR may be reinstated within five years of lapse, if the policy is in force. To reinstate the rider, we may require evidence of insurability and payment of all overdue premiums and interest. This rider provides the policyowner with the opportunity to purchase coverage for temporary needs. The company will pay the beneficiary the amount of term insurance in force at the time of the insured s death Preferred Plus Preferred Select Nontobacco Standard Nontobacco Preferred Tobacco Tobacco 0-19 Juvenile Renewable to age 98 of the insured 8 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

11 Benefit Amount $25,000 minimum Amount of Insurance Premiums Changes in Coverage Conversion Privilege The maximum amount of one-year term that can be issued is ten times the face amount of the base policy. This 10:1 ratio applies in all years the rider is purchased. The premium for the first rider year is shown on the policy schedule. The premium for subsequent years is shown on a per $1,000 basis and is based on the insured s attained age. Rider premiums are payable at the same time and interval as the base policy. The policyowner can make changes on any rider anniversary after the first anniversary. Term insurance under this rider may be added or renewed for additional term periods. The amount of coverage may be increased or decreased; however, increases or additions in rider coverage may require proof of insurability. The rider may be converted to a permanent plan of insurance, without proof of insurability, under the following circumstances: No premium is in default and this rider is in force on the conversion date. The amount of the new policy is at least $25,000 (or the minimum face amount for the product to which it converted). A written application is received by the Company before the end of the conversion period as shown on the schedule. The insured is not disabled and eligible for benefits under a Total Disability Rider attached to this policy. The OYT Rider may be converted to any permanent plan of insurance issued by Union Central at the time of conversion. The new policy will be in the same risk class and the amount of the new policy may not be greater than the coverage on the rider. The conversion may be made at any time before age 70. Extended Privilege Conversion Dividends Rider Dates Conversion can be extended in special situations when disability begins before age 60 and extends beyond the conversion period. The company will determine the rider s share annually, if any, and include it in the policy dividend. Dividends are expected to be paid starting at the end of the second policy year. The OYT Rider may be issued at the same time as the base policy or at a later date. If the rider is issued after the policy, a supplemental policy schedule is issued reflecting the rider specifications. As applied to the rider, the contestable and suicide periods will be measured from the rider date of issue. Termination The rider will terminate under any of the following circumstances: When the policy terminates or lapses, including exercising extended term or reduced paid-up options. On the first monthly date after the policyowner gives notice. When the rider is converted to a new policy. On the anniversary the insured is insurance age For Producer or Broker/Dealer Use Only. Not For Use With Clients.

12 The OYT Rider may be voluntarily terminated at any time and the company will refund the unused premium. Rider Reinstatement Paid-Up Additions Rider (PURS/PURC) Description The OYT Rider may be reinstated upon reinstatement of the base policy. The Paid-Up Additions Rider - Single (one time deposit) and Paid-Up Additions Rider - Continuous (continuous deposits) allow policyowners to purchase increments of paid-up life insurance. Either of these allow the policy to accumulate additional cash values that can provide funds for emergencies, education or retirement. They can also be used to pay future premiums out of dividends or through cash value withdrawals of the paid-up insurance. At the time of the insured s death, the company will pay the beneficiary any amount of paid-up insurance in force under these riders at the insured s death. These riders will be issued Standard through Table Four. Issue Ages 0-85 Amount of Insurance The amount of paid-up insurance issued under this rider is limited. The amount of paid-up insurance issued under PURS is subject to underwriting approval. The maximum amount of premium that may be used with the PURC is five times base premium plus policy fee (standard premium only). Premiums Changes in Coverage Dividends Rider Dates The premium for this rider is determined by the policyowner, subject to underwriting approval, and is shown on the policy schedule. The purchasing rate for subsequent years is shown on a per $1,000 basis and is based on the insured s attained age, sex and underwriting classification. Rider premiums are payable at the same time and interval as the base policy. If a policyowner decides to change the amount or frequency of premiums, written notice to the Company is required. The policyowner can change the annual amount of paid-up insurance coverage on any rider anniversary after the first anniversary. If coverage is increased over the preceding year, the company reserves the right to request proof of insurability. The policyowner may change the policy on any anniversary so that no paid-up additional insurance is purchased by the rider. Union Central will determine the rider s share annually, if any, and include it in the policy dividend. Dividends are expected to be paid starting at the end of the second policy year. The rider date may or may not be the same as the policy issue date. If this rider is issued after the policy, a supplemental policy schedule will be issued reflecting the rider specifications. As applied to the rider, the contestable and suicide periods will be measured from the rider date of issue. 10 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

13 Termination The right to purchase additional coverage under the rider will terminate under any of the following circumstances: When the policy terminates or lapses, including exercising extended term or reduced paid-up options. On the first monthly date after the policyowner gives notice. Term Paid-Up Rider (TPL) Description The TPL Rider provides additional coverage through the annual purchase of a combination of one-year term insurance and additional amounts of permanent, paid-up whole life insurance. By using the TPL Rider with a Whole Life 98 policy, you can offer prospects the desired amount of insurance coverage with a lower total premium than by using the whole life policy alone. Throughout the life of the contract, the TPL premium is used to purchase an increasing amount of paid-up additions and a decreasing amount of term insurance. It is intended that TPL paid-up additions and policy dividend additions will eventually accumulate to a point where the term portion is no longer needed. This rider allows the policyowner flexibility in determining the death benefit, premium level and the potential for cash value accumulation. Issue Ages 0-75 Underwriting Class Dividends TPL One-Year Term Insurance TPL Paid-Up Additions Availability Premiums Total Death Benefit Minimum Face Amount The underwriting class for this rider is the same as for the base policy. When this rider is chosen, the policy s single dividend option must be paid-up additions. The cost of the one-year term insurance provided by the rider is guaranteed. It is based on the insured s attained age, sex and underwriting classification. The term portion is not convertible. The paid-up additions purchased by the rider are based on the 1980 CSO Mortality Tables at 4.5 percent interest. TPL is only available with a Whole Life 98 policy at issue. It can not be added to the policy after issue. Premiums are leve, payable to age 98, and based on the insured s issue age, sex and underwriting classification. The total face amount created at issue by the base plan plus TPL is called the total death benefit. The total death benefit is equal to: Base policy face amount, plus Dividend additions, plus TPL paid-up additions, plus TPL one-year term insurance, plus The face amount of any paid-up riders, if applicable. The minimum face amount of TPL is $25,000. TPL cannot be used with a Whole Life 98 policy unless the base plan face amount is at least $25, For Producer or Broker/Dealer Use Only. Not For Use With Clients.

14 Maximum Face Amount The maximum face amount is nine times the base policy face amount. Loans Rider Dates Rider Reinstatement how TPL Works Loans are available for policies with TPL under the same conditions that apply to the base plan. This rider has the same issue date as the base policy. This rider may be reinstated upon reinstatement of the policy. TPL is a level premium-paying rider. When the policyowner pays a premium for this rider, the premium load is deducted from the premium amount. After the deduction of the load, the net premium plus dividends are used to purchase a combination of one-year term insurance and paid-up additions. The cost of the one-year term insurance provided under the rider is guaranteed. The paid-up additions provided under the rider are based on 1980 CSO Mortality Tables at 4.5 percent interest. The graph below shows how the mix of whole life, term insurance, paid-up additions and policy dividend additions change throughout the lifetime of the contract. Gradually, the one-year term insurance portion of TPL is expected to be totally replaced by paid-up additions. The point at which all the term insurance is replaced by permanent coverage is known as the crossover point. The cross over point is a function of dividend levels and actual term rates*. After the cross over point, the entire TPL premium will be used to purchase paid-up additions. After the crossover, dividends may be applied using any of the regular dividend options provided these are applied under the same dividend option as that selected on the base policy. Target Death Benefit $200,000 0 *This graph assumes that the current dividend scale is paid. Marketing Whole Life 98 with TPL Using TPL with Whole Life 98 enables you to offer lower premiums as an attractive alternative to term insurance or a flexible premium contract. With TPL you can offer: Permanent insurance at low cost or Substandard coverage at standard cost. 12 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

15 Although a Whole Life 98 policy, when used with the TPL Rider, may have limited benefits - for example, less cash value, eventually reduced coverage, or increased premiums (if the dividend scale is decreased) - when compared to a Whole Life 98 policy alone, the price can be much lower. In cases where the prospect is interested in the benefits of permanent insurance but cannot afford the full premium, TPL may be the solution. Termination of the TPL Rider This rider will terminate under any of the following circumstances: When the policy terminates or lapses, including exercising extended term or reduced paid-up options. The policyowner requests a surrender of the paid-up additions for use other than to pay premium for the policy. The policy is continued after lapse as reduced paid-up or paid-up extended term insurance.** If the dividend option is changed from paid-up additions. When the rider is surrendered for net cash value. ** The amount of paid-up extended term is based on the paid-up portion of TPL. Risks Associated with TPL Obviously, Whole Life 98 with TPL offers you and your clients many benefits through added premium flexibility. Be aware that it offers fewer guarantees than Whole Life 98 alone. Thus, there is more risk involved. 1. As previously stated, TPL net premiums plus dividends are used to purchase a combination of one-year term insurance and paid-up additions. The success of the TPL plan is determined, in part, by how dividends perform. The dividends illustrated cannot be guaranteed, so there is a possibility that actual dividends will not be sufficient to cover the increasing term costs, which are calculated each year on the basis of the insured s attained age. If this occurs: Dividend additions and paid-up additions will grow more slowly, and in some cases, may have to be surrendered to pay one-year term costs. If additional TPL premiums are required to maintain the total death benefit and there are no paid-up additions or dividend additions available for surrender, the client is billed for extra premium. Coverage will be reduced if the additional premium is not paid. 2. Use of cash value for other purposes, including paying policy premium, may have severe consequences when TPL is being used because: Policy loans, as with Whole Life 98 alone, may reduce dividends because of direct recognition. But with TPL, the result of reduced dividends may be a reduction in coverage or an increased premium. Any surrender of paid-up additions or dividend additions will reduce the amount of future dividends to support the total death benefit. As a result, the total death benefit may be permanently reduced or it may cause the plan not to reach the crossover point. 13 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

16 total Disability Rider Description The benefits of this rider are established at the time of policy issue and are credited as premium payments during continued covered disability. Benefits are determined on an annual premium basis, but are credited at the interval of payment in effect when the total disability begins. Issue Age 0-55 The rider will remain on the policy to age 65. If total disability begins 1. Before age 60: the benefit will be credited during that disability. 2. On or after age 60, but before age 63: the benefit will be credited only toward premium due before age 65 and during that disability. 3. On or after age 63, but before age 65: the benefit will be credited only during the two-year period after that disability begins and while it continues. Definition of Total Disability Amount of Benefit Risks Not Assumed/ Exclusions and Limitations Premium Payments Total disability is that which results from bodily injury or disease, lasts for at least six months, begins before age 65 and continuously prevents the insured from participating in an occupation for pay or for profit. After the first 24 months of disability, an occupation means any occupation for which the insured is or becomes reasonably suited by education, training or experience. Occupation for pay or profit includes being a full-time student or homemaker, if that was the insured s regular occupation at the time the disability began. Total disability also includes the total and irrecoverable loss of sight and the use of limbs as provided in the rider. The Total Disability Benefit Rider amount may be for the amount of the total premium for the policy or it may be for less. The minimum rider amount will be equal to the base policy annual premium plus the annual policy fee. The maximum amount that may be issued under this rider is $4,000 per month. (For persons who are not self-supporting from earned income, the limit is $400 per month.) Benefits are not payable if injuries are self-inflicted or if injuries are caused by an act of declared or undeclared war while the insured is a member of the armed forces. If the benefit amount would disqualify the policy as life insurance, or if the policy has been terminated, the benefit will be paid directly to the policyowner. Premiums are payable in full until Union Central has approved a claim for total disability. We will refund any premium paid, or portion thereof, which is later credited under the rider. 14 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

17 Application of Benefit Toward Premium The benefit provided by the Total Disability Benefit Rider will be credited in the following manner. 1. Toward payment of the premium for the policy and any riders other than TPL. 2. Toward payment of premiums for the TPL Rider. 3. If the One-Year Term Rider is the only rider attached to the policy, the benefit applies toward payment of premium for term insurance at the same level of coverage provided by the rider during the policy year immediately preceding the disability. Any remaining premium for the term insurance will be paid in cash. 4. If the Paid-Up Additions Rider is the only rider attached to the policy, the benefit applies toward the purchase of paid-up insurance. Termination Rider Reinstatement Waiver of Premium for Total Disability Rider Description The rider will terminate under any of the following circumstances: When the policy terminates or lapses, including exercising extended term or reduced paid-up options. On the first monthly date after the policyowner gives notice. On the anniversary the insured is age 65. The Total Disability Benefit Rider may be reinstated upon reinstatement of the policy. This rider provides for the premium to be waived on the base policy and all riders except the Paid-Up Insurance Riders, and the policy to remain in force during continued disability. Premiums will be waived at the payment interval in effect when disability begins. Issue Age 0-55 If total disability begins Before age 60: premiums due during that disability will be waived. On or after age 60, but before age 63: only premiums due before age 65 and during that disability will be waived. On or after age 63, but before age 65: only premiums due during the two-year period after that disability begins and while it continues will be waived. Definition of Total Disability Total disability is that which results from bodily injury or disease, lasts for at least six months, begins before age 65 and continuously prevents the insured from participating in an occupation for pay or for profit. After the first 24 months of disability, an occupation means any occupation for which the insured is or becomes reasonably suited by education, training or experience. Occupation for pay or profit includes being a full-time student or homemaker, if that was the insured s regular occupation at the time the disability began. Total disability also includes the total and irrecoverable loss of sight and the use of limbs as provided in the rider. 15 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

18 The amount of premium waived will be equal to the annualized premium on the policy, except for the premium for any Paid-Up Insurance Riders. Premiums Not Waived Premium Payments Termination Rider Reinstatement loans net Loan Value loan Interest Rates Premiums will not be waived on account of intentionally self-inflicted injuries or an act of declared or undeclared war while the insured is a member of the armed forces. Premiums are payable until the company has approved a claim for waiver of premium for total disability. A premium paid and later waived will be refunded. The rider will terminate under any of the following circumstances: When the policy terminates or lapses, including exercising extended term or reduced paid-up options. On the first monthly date after the policyowner gives notice. On the policy anniversary nearest the insured s 65th birthday. (This does not affect an eligible claim occurring before age 65.) The Waiver of Premium for Total Disability Rider may be reinstated upon reinstatement of the policy. After the first year, a policy loan may be taken at any time by submitting written notice to the Home Office. The maximum loan amount a policyowner may borrow is the net loan value. The net loan value of a Whole Life 98 policy is equal to: The cash value of the policy including riders, plus The cash value of any paid-up additions, minus Any premiums that are due or unpaid, minus The amount of any existing loan, minus Loan interest from the date of the loan to the next policy anniversary. Policy loan rates are variable. The company will not change the loan rate more frequently than once per year. The maximum loan interest rate is limited by Moody s Monthly Corporate Bond Yield Average. The rate for the policy year may not exceed the published monthly average for the calendar month ending two months before the policy anniversary at the beginning of the policy year. We can only change the loan rate on policy anniversaries, and we will notify policyowners of the change at least 30 days in advance. When the Moody s Average is at least 0.5 percent lower than the policy loan interest rate in effect from the previous year, we must reduce the rate to no higher than the Moody s Average. We cannot increase the rate until the Moody s Average exceeds the rate in effect from the previous year by at least 0.5 percent. Decreases in the policy loan rate are required. Increases in the loan rate are optional. 16 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

19 loan Repayments The loan may be repaid in full or in part at any time by sending a payment to the Company. Automatic Premium Loan (APL) Direct Recognition Client Communication, Rights and Services free Look Period Annual Reports Getting Your Business Issued Underwriting Preferred Plus and Preferred Underwriting Classifications Any premium not paid before the end of the grace period will be paid by charging it as a loan against the policy, provided there is sufficient net loan value. The policyowner can choose this option at the time of application, or at any time, provided there is no premium in default. Policy loans affect dividends. This effect is referred to as direct recognition. Direct Recognition allows greater flexibility in adjusting for the effect of policy loans on company earnings in a fair manner. The amount of the downward or upward adjustment of dividends depends on a variable loan interest rate and the total amount of the cash value that has been borrowed. If a policyowner is not satisfied with a Whole Life 98 policy, it may be cancelled during the free look period. This period expires 20 days after a policyowner receives the policy. If he or she decides to cancel the policy, the company will refund any premiums paid minus any partial cash surrenders, or the policy value, whichever is greater. The policyowner will receive payment within 10 calendar days. The policy must be returned to the Company or the policyowner s Union Central representative, and it will be deemed void from the beginning immediately after it is mailed back to us. The Company will send an Annual Report to policyowners shortly after each policy anniversary. The report will show the following items: The current cash value of the policy, the premium and the death benefit for the base policy and riders; The dividend, death benefit and cash value of any paid-up additions purchased with dividends; and The amount of any loans. A set of underwriting guidelines may be requested from the Underwriting department. When a policy is approved with a rating, Underwriting will inform you of the rating. A rated policy will not be issued until you approve it, as you are uniquely equipped, through contact with the prospective insured, to redesign the presentation in light of the rating. The Union Central illustration program includes the ability to reflect ratings. Preferred Plus and Preferred classifications are based on mortality assumptions anticipated to be better than standard mortality. Consequently, to qualify for Preferred Plus or Preferred, the proposed insured must not only be a standard risk, but must also meet additional selection criteria designed to achieve the improved mortality. 17 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

20 Preferred Plus Applicant must meet all Preferred Plus criteria in addition to all Preferred criteria. Failure to do so will automatically eliminate the proposed insured from qualifying for Preferred Plus underwriting. If any of the questions below is answered yes, the policy will not be issued Preferred Plus. No exception will be allowed. Have you used any form of tobacco in the last 36 months? Have you participated in any hazardous sport activities or aviation in the last five years? Have you been charged with or convicted of a DWI or DUI in the last 10 years? Have you ever sought or received treatment for alcohol and/or drug abuse? Does your total cholesterol exceed 225 and total cholesterol/hdl ratio exceed 5? Have you experienced significant hypertension in the past, and are current blood pressure readings normal (140/85 or less)? Have you been involved in more then two traffic violations in the last 36 months? Is your current blood panel completely normal? For Preferred Plus, also follow the Preferred guidelines listed below. Preferred If the proposed insured answers yes to any of the following questions, he/she may not be eligible for the Preferred classification. In the event of a yes answer, submit the questionnaire to your Home Office Underwriter with a written explanation outlining details of that answer. If all answers are no and the evidence of insurability submitted with the application is favorable, the policy will be issued as Preferred. Have you used any form of tobacco in the past 24 months? Are you a private pilot with less than 500 solo hours; or do you fly more than 250 hours per year; or do you fly in other than conventional aircraft (jet/prop)? Have you been charged with two or more traffic violations within 24 months or have you been convicted of driving under the influence of alcohol or any other drug within the past five years? Have you sought or received treatment for alcohol or drug abuse within the last 10 years? Has a member of your immediate family died of or been diagnosed with coronary artery, cerebral vascular disease or diabetes prior to age 60? Does your weight exceed the limit for your height according to the Height and Weight Build Chart on page 20? Have you ever had or been told by a doctor that you had cancer, diabetes, heart disease or an abnormal EKG? 18 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

21 Based on your age, does your total cholesterol exceed the following limits? Age Cholesterol mg/dl up 270 Does your total cholesterol/hdl ratio exceed 5.5? Is your blood pressure higher than 140/85? (If over age 55, 150/90?) Select Nontobacco If the proposed insured answers yes to any of the following questions, he/ she may not be eligible for the Select Nontobacco classification. In the event of a yes answer, submit the questionnaire to your Underwriter with a written explanation outlining details of that answer. If all answers are no and the evidence of insurability submitted with the application is favorable, the policy will be issued as Select Nontobacco. Have you used any form of tobacco in the past 12 months? The only exception is the occasional celebratory cigar (not more than 6 cigars per year) with a negative HOS for nicotine finding. Are you a private pilot with less than 350 solo hours; or do you fly more than 250 hours per year; or do you fly in other than conventional aircraft (jet/prop)? Have you been charged with three or more traffic violations within 24 months or have you been convicted of driving under the influence of alcohol or any other drug within the past three years? Have you sought or received treatment for alcohol or drug abuse within the last eight years? Has a member of your immediate family died of or been diagnosed with coronary artery, cerebral vascular disease or diabetes prior to age 60? Does your weight exceed the limit for your height according to the Height and Weight Build Chart on page 20? Have you ever had or been told by a doctor that you had cancer, diabetes, heart disease or an abnormal EKG? Based on your age, does your total cholesterol exceed the following limits? Age Cholesterol mg/dl up 285 Does your total cholesterol/hdl ratio exceed 6.5? Is your blood pressure higher than 150/90? 19 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

22 Height and Weight Build Chart Height Preferred Plus Preferred Select Nontobacco Nontobacco Nontobacco rates are available to those individuals ages who have not used any form of tobacco for the last 12 months. illustrations Whole Life 98 illustration software is included in the Life De$igns SM Product Illustration and Marketing Software application CD-ROM. For more information about the software, contact Product Marketing at All applications must be accompanied by an illustration signed by the client. The signed illustration must reflect values consistent with those in the policy for which the client has applied. When a signed sales illustration is not available, Form UC 8 (Policy Illustration Certification) must be submitted with the application. However, Form UC8 does not replace a signed sales illustration. An illustration consistent with the policy must be presented at policy delivery. It must be signed by the client and returned to the Home Office within 30 days to complete the underwriting process. In the case of rated policies,a new illustration must be prepared, signed on delivery and returned within 30 days to complete the underwriting process. Illustrations should be prepared using the same premium mode as the policy. 20 For Producer or Broker/Dealer Use Only. Not For Use With Clients.

23 Completing the Application Application UC 2550 should be completed using the correct state variation. To expedite the application process, it is important to answer every question, including those in the Agent s Statement. Note any pertinent information in the Remarks section of the application to aid in the underwriting or issue of the policy. Proposed Insured Beneficiary Owner Premium Notice Payment Death Benefit Amount Premium Mode Riders For All Applications Non-Medical Applications on Proposed Insured Non-Medical Applications on Proposed Insured, Spouse or Covered Family Members Complete all information relating to the proposed insured. Indicate the primary and contingent beneficiaries and their relationship to the proposed insured. If multiple beneficiaries are designated, disbursements will be paid equally, unless otherwise specified. Check box indicating whether the proposed insured or someone other than the proposed should be named as owner. If other than proposed insured, indicate their relationship to the proposed insured and Social Security Number or Tax Identification Number. If a successor owner(s) is desired, please indicate in the appropriate area. Check box indicating whether premium notice should be sent to proposed insured s residence, business or someone other than the proposed insured. If other box is checked, indicate appropriate name and address where premium notice should be sent. Premium notices are not to be sent to the agent or agency. Check box indicating if premium was given with application. If yes, indicate the amount and type of payment received and complete the conditional receipt. Cash, Agency/Agent personal account checks, money orders, cashier s or Traveler s Checks are not acceptable to pay premiums for new or in force policies. Indicate requested amount. Check box indicating desired mode. If it is Check-O-Matic (COM), complete form UC 2178 (provided with application) and attach a voided check (or copy). If adding to an existing COM, indicate existing policy number(s) on form UC If adding to an existing salary allotment, provide billing control number. Check box for all riders requested and indicate amounts requested (if applicable). Each question is required to be answered in detail, for all persons proposed for coverage. Complete in detail (if applicable). Refer to Underwriting Guidelines to determine type of medical required. Complete in detail (if applicable) for all persons proposed for coverage. Refer to Underwriting Guidelines to determine medical required. 21 For Producer or Broker/Dealer Use Only. Not For Use With Clients.