Endowment at Age 100 Life Insurance

Transcription

1 Endowment at Age 100 PRP Endowment at Age 100 Life Insurance (New York) Product Reference Pamphlet

2 The information contained in this product reference pamphlet is intended for the training and education of The Paul Revere Life Insurance Company employees and benefit counselors who are selling Colonial Life voluntary products underwritten by Paul Revere. Any other use of this information has not been authorized. Do not give or show it to prospective insureds, employers of prospective insureds, or anyone else. This training contains highlights of the actual product benefits. Please see the New York policy for complete details.

3 Contents General Need for Life Insurance...1 Americans Believe in Life Insurance...2 Endowment at Age 100 An Affordable Insurance Solution...3 Quick Product Summary...4 Product Positioning Within the Marketplace...7 Competitive Niche in the Life Insurance Industry...7 Banding Advantages...7 Positioning to Employers...8 Positioning to Employees...9 Product Positioning Within Our Portfolio...11 Sales Opportunities...11 Positioning with Other Types of Life Insurance...12 Cross-selling with Other Paul Revere Product Lines...13 Assessing the Need for Life Insurance Coverage...14 Support Materials Field Supplies...15 Sales Support...15 Applications and Associated Forms...16 Post-sale and Service Support...17 Support Materials ProducerNet...17 Market Conduct Issues...17 Product Testing Procedures...18 Passing Appropriate Product Training Tests...19 Ordering Marketing Material...19 Important Definitions Base Plan Design and Benefits Plan Design Plan Benefits Death Benefit Immediate Claims Payment Accelerated Death Benefit How We Pay the Benefit Taxability of Benefits Guaranteed Purchase Option Exercising an Option Expiration of Option Dates Cash Value Loans and Cash Surrenders Loans Cash Surrenders Additional Benefit Options/Provisions Extended Term Insurance Reduced Paid-Up Life Insurance Automatic Premium Loan...31 General Need for a Group Limited Benefit Medical Plan

4 Optional Riders Spouse Term Riders Conversion Privilege (on the Spouse Term Riders) Waiver of Premium Benefit in the event of Total Disability (as it affects the Spouse Term Riders) Children s Term Rider Conversion Privilege (on the Children s Term Rider) Waiver of Premium Benefit in Event of Total Disability (as it affects the Children s Term Rider) Endorsement of the Children s Term Rider Waiver of Premium Benefit in Event of Total Disability Rider Regulatory Requirements UnumProvident Corporation USA Patriot Act Compliance Program: Anti-Money Laundering Policy and Compliance Statement Anti-Money Laundering Compliance Statement What You Can Do Tip 1: Know Your Customer Tip 2: Beware of Red Flags...41 Tip 3: Use Common Sense...41 Policy Exclusions Base Policy Spouse Term Rider Waiver of Premium Benefit in Event of Total Disability Rider Eligibility Guidelines Account Employee Spouse Individual Policy Spouse Term Riders Dependent Children s Term Rider Waiver of Premium Benefit in Event of Total Disability Rider Aggregating Coverage Aggregation Sales Situations Aggregating Spouse Term Riders Underwriting Guidelines Acceptable Applications Levels of Underwriting Simplified Issue (SI) Simplified Issue Level One (SI1) Full Underwriting Minimum Underwriting Levels Maximum Underwriting Levels Health Questions for Optional Policy Riders Enrollment Methods Signature Guidelines...51 Underwriting Authorization...51 Medical Requirements Payroll-Deduction Sales... 52

5 Height and Weight Chart for Adults Financial Underwriting Medical Requirements for Ordering Procedures Blood Profiles Urinalysis Profile or Home Office Specimen HIV Consent Form Medical Examinations Inspection Reports Motor Vehicle Reports Attending Physician Statements Questionnaires Non-Payroll (Individual) Sales Medical Requirements Non-Payroll (Individual) Sales Policy Increases Non-tobacco User Rates Life App 08-NY Completion Instructions Proposed Insured Section Employee Section Billing Section Spouse and/or Dependent Rider Section Beneficiary Section Plan Section Life Adjustment Section...61 Eligibility Section...61 Replacement Section...61 Application Questions AIDS Section Simplified Issue (SI) Section Simplified Issue Level One (SI1) Section Juvenile Section...64 Full Underwriting Section...64 Health Details Section...65 Additional Data Section...65 Owner Section...65 Agreement Section...65 Agent Section...66 Service Request Guidelines...67 Service for Individual Policies...67 Routine Service Requests...67 Other Service Requests...67 Request for Service Form...67 Requesting a Policy Loan...68 Surrendering a Policy for the Cash Value...68 New Application...69 Adding a Rider...69 Requesting a Section 1035 Exchange...69 Replacing an Endowment Life Policy...70

6 Internal Replacement Process...71 Exercising an Option Under the Guaranteed Purchase Option...72 Request for Service Form and/or Completed Applications...72 Converting a Paul Revere Term Life Policy...72 Converting a Spouse Term Rider or Children s Term Rider...73 Additional Forms...73 Changing a Beneficiary...73 Requesting Change of Ownership...74 Assigning Life Insurance Policy as Collateral...74 Guidelines for Filing Claims...75 Death Benefit Claim...75 Beneficiary Information...75 Immediate Advance Claim Payment Form...76 Accelerated Death Benefit Claim...76 Waiver of Premium Claim...76 Processing Contestable Claims...76 Misstatement of Age...77 Index...78

7 About This Pamphlet The Endowment at Age 100 Product Reference Pamphlet provides comprehensive product and sales-related information for Paul Revere benefit counselors interested in selling this insurance coverage. In addition, we strongly recommend that you review the policy for New York, along with the appropriate product brochure and other support materials.

8 General Need for Life Insurance Most people have insurance coverage on their home or car to help cover losses from unexpected events, but they often neglect to provide the same protection for their lives. The purpose of life insurance is to help surviving family members maintain the standard of living they are accustomed to if a family member dies, as well as provide funds to help pay funeral costs and out-of-pocket medical expenses associated with a death. To maintain a standard of living for the surviving family, people may not realize that they must replace a large percentage of the primary wage earner s salary. In addition, when a stay-at-home or unemployed spouse dies, life insurance is needed to help the family adjust to costs that may not have been necessary previously, such as child care, housekeeping, lawn care, and meal preparation. Insuring an unemployed spouse is equally as important as insuring a primary wage earner. In order to determine the need for life insurance, individuals need to ask themselves these types of questions: 1. How would their loved ones make it financially if they were no longer with them? 2. Would there be enough money for everyday living expenses, such as mortgage payments, food, and outstanding debts? 3. Would there be enough money to pay for final expenses, such as funeral costs or outstanding medical bills? 4. What about their dreams for the future? Would a child be able to attend college? Could a spouse retire comfortably? Life insurance helps provide financial protection to surviving family members when a death occurs. The death benefit may provide enough money to pay off outstanding obligations and help fulfill future financial dreams. Surviving families may be able to use some of their remaining assets as a source of income, although time can play an important role. It takes time to liquidate many types of assets, such as real estate and business interests. But families often need immediate cash. The availability and amount of other funds, such as Social Security benefits, depend on the ages of the children and spouse at the time of a wage earner s death. Social Security benefits are not available during certain periods referred to as blackout periods. During a blackout period, if there are no dependent children present in the home and the spouse has not yet reached age 60, there will be no Social Security income payments. 1

9 In comparison to these other sources of income for a surviving family, life insurance guarantees an immediate, dependable benefit following the death of a wage earner. It helps ensure that an individual s loved ones are not saddled with debt or forced to sell assets to pay outstanding bills or taxes upon his or her death. Americans Believe in Life Insurance According to studies conducted by LIMRA International: Almost 75 percent of families in the U.S. believe that life insurance is the best way to protect against the death of a primary wage earner. 1 Life insurance surpassed all other sources of financial assets or income that Americans expect to use to help pay bills and to maintain their lifestyle if a primary wage earner dies. 1 Although a large majority of Americans do seem to believe in life insurance, the survey also revealed several gaps: Approximately one-third of adults in the U.S. carry no life insurance at all. 2 Today, insured adults are more likely to have only group life insurance that they have obtained through the workplace. Adults with only group coverage carry the lowest amounts of life insurance. 2 Fifty-six percent of married parents believe their current life insurance coverage is inadequate. 3 Endowment life insurance coverage can be kept for the insured s lifetime (to age 100) and provides a payment to a designated beneficiary when the insured dies. It features a guaranteed level death benefit, with an affordable guaranteed level premium. In addition to death benefit coverage, endowment life insurance provides for guaranteed cash value accumulations that can be used in a variety of ways. This guaranteed cash value may be useful for emergencies, college tuition, retirement, or other needs that may develop. 1 Facts About Life 2006, LIMRA International. 2 Generations at Risk, Facts About Life 2008, LIMRA International. 3 Facts About Life 2007, LIMRA International. 2

10 Endowment at Age 100 An Affordable Insurance Solution Our Endowment at Age 100 product is sold on an individual basis in payrolldeduction markets and individual pay groups. It is a very affordable, competitive product because: The premium is guaranteed to remain the same for the life of the policy. A guaranteed cash value builds as the policy ages. The death benefit is guaranteed as long as premiums are paid when due (until the policy endows at age 100). Who is this type of life insurance designed for? It s for individuals who: Have a lifetime need for insurance protection. Prefer the degree of safety provided by the policy s guarantees. Are interested in the policy s ability to build tax-deferred cash values. Like to know their premium will never increase. Endowment at Age 100 includes several benefits that offer more coverage options for the insured at no additional premium charge, such as the Accelerated Death Benefit Provision, Guaranteed Purchase Option, and Immediate Claims Payment. Additionally, family coverage options for spouse and dependent children are also available for an additional premium to extend coverage to the entire family. Three levels of underwriting (that do not require administrative office approval) mean expanded product availability to customers in all accounts. Simplified issue (SI) and simplified issue level one (SI1) are issued with minimal health questions. Full underwriting asks more health questions and is required on face amounts above SI1 guidelines, as well as for non-payroll (individual) sales. 3

11 Quick Product Summary This chart is not state specific. Refer to the policy in your state for exact product details. Coverage Type Base Plan Benefits Optional Riders Target Markets An individual endowment life insurance product that provides affordable, guaranteed cash value insurance protection to individuals in the payroll-deduction market and individual pay groups. Two competitive plan options for the employee and spouse: Paid-Up at Age 65 Plan: $5,000 $100,000 Paid-Up at Age 95 Plan: $5,000 $100,000 Accelerated Death Benefit Provision allows the policyowner to receive an advance of up to 75% of the policy s death benefit, up to $150,000, if the insured is diagnosed with a terminal illness with 12 months or less to live. Guaranteed Purchase Option allows the policyowner to increase coverage at three option dates, with no evidence of insurability. Immediate Claims Payment helps meet a beneficiary s urgent needs with an initial immediate claims payment of $3,000. Spouse Term Rider (two options) - 10-Year Spouse Term Rider: $5,000 $50, Year Spouse Term Rider: $5,000 $50,000 Children s Term Rider: $1,000-$10,000 Waiver of Premium Benefit in Event of Total Disability Rider: Waives all premium for the policy and any riders if the primary insured becomes totally disabled and remains disabled for longer than the six-month elimination period. Designed for use in all markets, unless listed as prohibited in the New Account Manual. Most suitable accounts exhibit stability in their workforce (20 percent or less turnover) and have a minimum of three payers. 4

12 Payment Method Available to both payroll-deduction and individual-pay group (IPG) accounts, following normal payment method guidelines. Does not qualify for pretax treatment. Non-payroll (individual) sales are available on a fully underwritten basis only. Non-Payroll (Individual) Sales Policy Fee Rate Structure Employee Eligibility (Base Policy) Spouse Eligibility Same face amount, issue ages and premiums as with payroll deduction sales. Available as fully underwritten coverage only. Payment methods: monthly bank draft, quarterly, semi-annual or annual billing. $36.00 annually/$3.00 monthly Banded structure for more competitive rates at higher face amounts. Tobacco/non-tobacco Unisex Meet issue age requirements: Paid-Up at Age 65 Plan ages Paid-Up at Age 95 Plan ages 16-79; ages for non-gpo plans. Employed full-time (20+ hours per week). Actively at work on the date of enrollment. Employed with present employer for at least 90 days. Must be the legal spouse of an employee. Individual Policy Must be actively employed, or not disabled or unable to work, at the time of application. Spouse can apply for an individual policy even if the employee does not apply for an Endowment at Age 100 policy. Meet issue age requirements: Paid-Up at Age 65 Plan Paid-Up at age 95 Plan Spouse Term Riders 10-year Spouse Term Rider: Paid-Up at Age 65 Plan - issue ages Paid-Up at Age 95 plan - issue ages year Spouse Term Rider: Paid-Up at Age 65 Plan issue ages Paid-Up at Age 95 Plan issue ages Note: Spouse signature is not required on face amounts up to $50,000 on the policy and rider. 5

13 Dependent Eligibility Waiver of Premium Benefit in Event of Total Disability Rider Eligibility Additional Coverage Options/ Provisions Application Process Portability Children s Term Rider: Issue ages: 14 days 18 years for dependent children. Primary insured issue ages Must meet the definition of insured child. To purchase this rider, applicants must first qualify for a base Endowment at Age 100 policy. Paid-Up at Age 65 Plan: Issue ages Paid-Up at Age 95 Plan: Issue ages May be added to employee and spouse policies at time of issue. Extended Term Insurance Option Allows insured to use the net cash surrender value accumulated in his policy as a net single premium to purchase term life insurance. Length of time is based on the amount of cash value and the insured s attained age. Insureds may purchase the full amount provided under the policy, minus any loans, up to the available cash surrender value amount. Reduced Paid-up Life Insurance Option Allows insured to use the net cash surrender value of the policy as a net single premium to purchase a smaller amount of fully paid-up life insurance that endows at age 100. Paid-up policy must be the same plan as the original policy. Automatic Premium Loan Provision Uses the cash surrender value to automatically pay overdue premiums. Life App 08-NY All payroll-deduction sales. All enrollments through the Harmony enrollment system. Supports employee or spouse as proposed insured for all levels of underwriting, all face amounts, and all optional riders. Life App 08-NY-SI Payroll-deduction sales in which a manual application is required. Supports up to SI1 underwriting amounts only (limited face amounts). Life App 08-NY-F All fully underwritten sales. Ind. App 08-NY All non-payroll (individual) sales. Coverage is portable. 6

14 Product Positioning Within the Marketplace Endowment at Age 100 is a traditional endowment life product that provides a guaranteed death benefit with guaranteed level premiums. In addition to death benefit coverage, it also provides a guaranteed cash value accumulation that grows tax-deferred. Policyowners can have the security of insurance protection for their lifetime (to age 100) and the knowledge their premiums will never increase. Competitive Niche in the Life Insurance Industry The two plan options available with this product are competitive in the endowment life insurance industry. These options provide your customers a choice that will best suit their needs: A plan with a lesser death benefit that will be paid up at age 65, as individuals prepare for retirement; or A plan that offers a greater death benefit for the same premium that extends to a later age. The Guaranteed Purchase Option, included at no charge in the base plan, is either added as an optional rider or not offered at all by our competitors. This option provides the customer with the choice of three dates to purchase additional insurance without providing evidence of insurability, allowing them to increase their protection when it may be needed the most. Endowment at Age 100 includes a benefit for the immediate claims payment of $3,000 to the beneficiary when an insured dies. This payment provides the beneficiary with funds to address immediate expenses. The balance of the death benefit is provided when the claim is processed. The optional Waiver of Premium Benefit in Event of Total Disability Rider helps keep the insured s policy and riders in force if he is totally disabled and the elimination period has been satisfied. Three levels of underwriting, particularly the two levels of simplified underwriting, make the product more attractive in small case markets and public sector accounts. Banding Advantages NY65G and NY95G premiums are more competitive at face amounts of $50,001 and above. If the customer is a good fit for a fully underwritten plan, substantial premium savings can be realized over the lifetime of the policy. 7

15 Positioning to Employers Endowment at Age 100 offers the following competitive advantages within the marketplace for employers. Supplements a group term life offering No participation requirements Extended issue ages Simplified underwriting Family coverage options Easy enrollment Premiums Supplements an employer s existing group term life program by providing portable, permanent life insurance coverage with no participation requirements at no cost to the employer. No account participation requirements (policies are issued based on each applicant s eligibility, regardless of how many employees apply). Extended issue ages of on the Paid-Up at Age 95 Plan allow employers to satisfy a wider range of employees who need this type of insurance coverage. Simplified issue underwriting and simplified issue level one underwriting allow policies to be issued with minimal underwriting requirements, which means more employees may qualify for coverage. Family coverage options are available through the Spouse and Children s Term Riders. An individual spouse policy is also available. Simple plan design is easy for employees to understand and for our benefit counselors to enroll. Less administrative work is required by the employer because premiums are not age-banded and they are conveniently handled through payroll deduction. Premiums are guaranteed for the life of the policy and will not change because an employee gets older. 8

16 Positioning to Employees This product offers the following competitive advantages within the marketplace for employees. Guaranteed death benefit Guaranteed level premiums $3000 immediate claim payment Cash value feature Family coverage Death benefit options The death benefit is guaranteed to age 100. It will not reduce at a later age. Premiums are guaranteed never to increase for the life of the contract. The contract becomes fully paid-up at age 65 or 95, depending on the plan purchased. An immediate claims payment of $3,000 will be made to the beneficiary to help meet critical needs at the time of death. Provides guaranteed cash value accumulation. Family coverage options available through a separate policy or rider for the spouse and a term rider for dependent children. Spouse Term Rider with simplified underwriting. Children s Term Rider with no health questions. No spouse signature required on death benefits up to $50,000, which speeds up the application process for employees. Two death benefit options are available: Paid-Up at Age 65 and Paid-Up at Age 95 The Paid-Up at Age 65 Plan provides insureds with a paid-up policy at age 65, with the policy s original death benefit. Portability The Paid-Up at Age 95 Plan is a good source of life insurance for individuals who need more monthly disposable income. Premiums for this plan are lower than the Paid-Up at Age 65 Plan because insureds have a longer period of time to pay for the policy s original death benefit. Employer-provided group life insurance typically is not portable. Employees can keep their Endowment at Age 100 coverage when they change jobs or retire with no changes to the policy and no increase in premium. 9

17 Positioning to Employees (continued) Guaranteed Purchase Option Waiver of Premium Benefit in Event of Total Disability Rider Additional coverage options/ provisions The policyowner can choose to increase the amount of life insurance on the insured at certain dates, without providing evidence of insurability. This rider helps eligible insureds who become disabled avoid losing their coverage because it waives premiums for the base plan and all riders for the duration of the insured s disability. Extended Term Insurance Option: Allows insureds to use the net cash surrender value accumulated in their policy as a net single premium to purchase term life insurance. Length of time is based on the amount of cash value and the insured s attained age. Insureds may purchase the full amount provided under the policy, minus any loans, up to the available cash surrender value amount. Reduced Paid-up Life Insurance Option: Allows insureds to use the net cash surrender value of the policy as a net single premium to purchase a smaller amount of fully paid-up life insurance that endows at age 100. Paid-up policy must be the same plan as the original policy. Automatic Premium Loan Provision: Uses the cash surrender value to automatically pay overdue premiums. 10

18 Product Positioning Within Our Portfolio Sales Opportunities Endowment at Age 100 has many features that employees may find appealing, including the following: Guarantees This coverage features a guaranteed death benefit, guaranteed level premiums and guaranteed cash value accumulation. Employees will always know the amount of their death benefit and premium payment. Two plan options Paid-Up at Age 65 and Paid-Up at Age 95 plans allow the employee to select the plan that best fits his/her needs. Family coverage Employees can cover a spouse through a separate policy or by a Spouse Term Rider and dependent children through a Children s Term Rider. Access to the policy s cash surrender value If needed, the cash value can be borrowed against for education, retirement, emergencies, or to help meet other financial needs. Employees need to keep in mind that a policy loan will reduce the cash value and death benefit if it is not repaid. Lifetime protection (to age 100) Endowment at Age 100 will be in effect from the day the policy coverage begins until the insured dies or reaches the endowment age of 100, as long as premiums are paid. Portability Employees can keep their coverage for as long as they choose (to age 100) - even if they change jobs or retire. They simply choose one of Paul Revere s convenient individual payment methods. Features with no additional premium Features such as the Accelerated Death Benefit Provision, Guaranteed Purchase Option, and Immediate Claims Payment further enhance an insured s plan benefits at no additional premium. Convenience With payroll deduction, premiums are deducted directly from employees paychecks, with no checks to write, no stamps to buy or payments to mail. Endowment at Age 100 can also help customers balance their resources by coordinating with term or group life insurance to offer broad long-term insurance protection. Our product provides guarantees cash value, premium rates and death benefit that help ensure those benefits will be there when they re needed. 11

19 Positioning With Other Types of Life Insurance Here s how Endowment at Age 100 compares with the two other common types of life insurance coverage term and universal life. Term Life Insurance Offers highest death benefit for lowest cost. Premiums are level for the specified term period. Pays a specified death benefit if the insured dies within the designated term period. Premiums continue for the specified term period. Cash Value Insurance 1 Endowment Life Universal Life Insurance Insurance One of the more expensive forms of insurance coverage because of the guarantees. Premiums are guaranteed level for life of policy. Death benefits are guaranteed. Premiums may be paid up if specified in the contract. More expensive than term, less expensive than endowment life. Less death benefit for same cost as term. Flexible premiums that may increase or decrease, within certain guidelines. Adjustable death benefits. Cash value builds at current interest rates; premium payments may stop. Does not build cash value. Cash value is guaranteed. Insurance continues as long as cash value is sufficient to fund the policy. 1 Cash value insurance (endowment and universal life) is intended to remain in force during the insured s entire lifetime (to the age the policy endows), provided premiums are paid as specified in the policy. It also can build cash value as a result of the policy funding approach. Loans and withdrawals can impact the length of time the coverage stays in force and the amount of cash value. Each type of insurance product has its own distinct advantages. The one that is best suited for your customers varies based on their individual needs. 12

20 Cross-selling with Other Paul Revere Product Lines Endowment at Age 100 can complement the sales of other Paul Revere insurance plans in the following ways. DISABILITY plans CANCER AND CRITICAL ILLNESS plans SUPPLEMENTAL HEALTH plans Endowment at Age 100 helps protect an employee s financial resources against the uncertainties of life so that he can provide for his family s future. An employee may also need to protect his family in the event that he is disabled and unable to earn an income. If you package a disability plan with Endowment at Age 100, an insured can help protect his current income while he s disabled, as well as his family s future income needs if something should happen to him. Our cancer and critical illness plans help offset many of the out-of-pocket expenses related to the treatment of covered catastrophic illnesses, but when cancer or another serious illness takes the life of an insured, Endowment at Age 100 coverage provides family members with a death benefit that can help cover remaining medical expenses, funeral and burial expenses, and the insured s lost income. Accidents and sicknesses are unexpected and may leave a family facing financial hardships. Not only might there be a loss of income, there could also be expenses not covered by a major medical plan, such as deductibles and coinsurance. A supplemental health plan from Paul Revere can help families cope in this type of situation. When an accident or sickness unexpectedly takes the life of an insured, Endowment at Age 100 provides an immediate death benefit to help replace the insured s lost income or help pay for funeral and burial costs, estate taxes, outstanding debts, or final hospital and physician charges related to the accident or sickness. 13

21 Assessing the Need for Life Insurance Coverage The toughest part of buying life insurance for employees is determining how much they need. Since everyone s financial security circumstances and goals are different, there is no rule of thumb that tells how much life insurance to purchase. There are many factors that could affect actual need, such as Social Security benefits and additional income sources that need to be considered. However, it is possible to come up with a good estimate that takes into account your customers specific financial situation. The best way to determine a customer s life insurance needs is to complete a needs assessment. This will take some additional time in the employee meeting, but it will be beneficial to the customer. To begin the assessment, the employee will gather all of his financial information and estimate what his family would need to meet current and future financial obligations. One of the most important factors to consider is whether he has any dependents those who are (or will be) counting on him for support, either partially or fully and the number of dependents. Here are other major factors to consider: The kind of lifestyle he wants to provide for his family. His unemployed spouse, who would not have an income if he died. His working spouse, who would retire to raise his children if he died. Other sources of household income, such as a second paycheck. Any debts that he would want paid off, including a mortgage, car loan or credit card. His dependents college expenses. Any special needs, such as a disabled child or a child who will never be self-supporting. His parents, who may eventually become financially dependent on him. Next, add up all of the resources his surviving family members could draw upon to support themselves. The difference between their needs and the resources in place to meet those needs is the need for additional life insurance. Though this calculation may sound simple, it can become complicated as life events change. To make it simpler, here is an illustration of a simple needs assessment formula. Current and future financial obligations Spouse s earnings, savings, investments and life insurance the customer already owns = Amount of life insurance needed You can find additional life insurance needs assessment tools by logging on to the Life and Health Insurance Foundation for Education web site at 14

22 Support Materials Field Supplies Following are lists of the sales support materials, applications, associated forms, and post-sale and service forms available for Endowment at Age 100. These forms are available from Group Trak via the ProducerNet or Field Supply, extension Sales Support Endowment at Age 100 Product Form Brochure Life Enrollment Poster Form Real LIFE Stories Fliers Form (Melissa Wandall story) Form (Ernesto Hines story) Form (Dennis Danduran story) Life Employee Flier Form Fill-able PDF Endowment at Age 100 Employee Flier Life Pre-approach Insert Form Spanish Life Pre-approach Insert Form Fine Points of Our Life Insurance Form Life Insurance Needs Assessment Flier Form Life Insurance Needs Analysis Worksheet Form Life Insurance Counts for Me Stickers Form Life Employer Flier Form Life Employer Topic Sheet Form Broker Endowment at Age 100 Flier Form Endowment at Age 100 Rate Book Form Paid-Up at Age 65 Rate Sheet Form Sample Death Benefit: Non-tobacco with Waiver of Premium Paid-Up at Age 65 Rate Sheet Form Sample Death Benefit: Tobacco with Waiver of Premium Paid-Up at Age 95 Rate Sheet Form Sample Death Benefit: Non-tobacco with Waiver of Premium Paid-Up at Age 95 Rate Sheet Form Sample Death Benefit: Tobacco with Waiver of Premium Available through the Sales SuccessWriter on ProducerNet 15

23 Paid-Up at Age 65 Rate Sheet Sample Premiums: Non-tobacco Paid-Up at Age 65 Rate Sheet Sample Premium: Tobacco Paid-Up at Age 95 Rate Sheet Sample Premums: Non-tobacco Paid-Up at Age 95 Rate Sheet Sample Premiums: Tobacco Sample Policy and Riders Form Form Form Form Order from the Producer Support Line ( ). Press 2 for Customer Service and then select Account Services. Provide producer name, producer number, state, and plan code. Do not give the sample to applicants. Applications and Associated Forms Life App 08-NY Form Life App 08-NY-SI Form (Manual payroll sales up to SI1 limits only) Life App 08-NY-F Form (Fully underwritten sales only) Ind. App 08-NY Form (Non-payroll sales only) Point-of-Sale Accelerated Death Benefit Form Disclosure Form Definition of a Replacement Form Form (Required at point of sale.) Third Party Notice Form Underwriting Authorization (HIPAA) Form Form HIV Consent Form Form Agent s Report Form number does not apply. Service Guide for Paul Revere Form Policyholders Life Insurance Buyer s Guide Form Fraud Statement Form Form

24 Post-Sale and Service Support Change of Beneficiary Form Request for Service Form Form 97938, regular Form 97941, Spanish Form 98939, regular Form 97942, Spanish Distribute only written materials that Paul Revere s Marketing Communications Department has approved. The materials listed in this section have met that approval. This requirement applies to any written document you prepare, no matter how brief, that describes our business or products. Support Materials ProducerNet Following is a list of support tools available for download from the ProducerNet (coloniallife.com). Competitive Information Employee/Employer Letters Product Overviews Proposal Materials Training Materials Product Frequently Asked Questions Frequently Asked Enrollment Questions State Availability Grid Underwriting Frequently Asked Questions Underwriting Overviews To access these tools on ProducerNet, click on Product > Life > Endowment at Age 100. Market Conduct Issues Remember to consider the following market conduct issues when you sell Endowment at age 100 Life Insurance. Do not conceal or misrepresent that you are an insurance sales representative, because you are and you should never be hesitant to say so. However, as a Paul Revere benefits counselor you do more than just sell insurance products. You help employees to understand the core benefits provided by their employer, identify coverage gaps in those programs, and assist employees in selecting and enrolling in voluntary insurance benefits that meet their needs and fill those gaps. Do not present yourself as a financial planner or retirement specialist or act as such, unless you have the proper qualifications to do so. 17

25 Accurately represent the policy professionally and honestly. Obviously, meeting this market conduct requirement means thoroughly understanding what you sell. For example: On fully underwritten business, do not quote a standard rate on someone who could be rated. Never guarantee that coverage will be issued to an individual. Always explain coverage effective dates accurately. Discuss your state s policy limitations and exclusions in detail with all applicants. Do not position Endowment at Age 100 as a replacement for any existing life insurance coverage. In presenting the product to customers, do not use any printed/audiovisual/ electronic materials or software without first obtaining administrative office review and written authorization from the Marketing Communications Department. These guidelines apply for customers, as well as for colleagues in training sessions and/ or as articles in newsletters. Any communication relating to Paul Revere or its products must be approved in advance by the Marketing Communications Department. Do not denigrate or otherwise speak negatively of competitor s life insurance products to your customers decision makers, brokers, or applicants. Make comprehensive and clear Endowment at Age 100 presentations. Do not position it as a retirement plan or an investment method. It is appropriate to mention the tax-deferred buildup of cash value, but Endowment at Age 100 should first and foremost be presented as death benefit protection, not a tax shelter. While you must carefully explain the tax environment for life insurance premiums and proceeds, do not represent yourself as a tax or legal advisor. Refer clients to their own tax consultants for assistance. Cancellation of a base plan also cancels any attached riders. Product Testing Procedures Paul Revere provides the training you need to feel confident and secure when marketing our products, programs and services to customers. We make a tremendous investment in providing an excellent sales education and training program that offers many learning opportunities to help you become a highperformer. A strong, competent, and professional sales organization gives us a competitive advantage a wonderful story to tell decision makers, brokers, and employees. Ultimately, a well-informed sales organization benefits our customers. To help make sure all benefit counselors and their sales managers are grounded in product knowledge, you must follow these procedures for passing appropriate product tests and ordering marketing material. 18

26 Passing Appropriate Product Training Tests Our policy has always stated that you must pass product mastery tests before you can sign and submit applications during enrollments. If, through audits, we discover that you have signed and submitted applications and have not passed the mastery tests for the products you sold, we will refer you to the Sales Contract Compliance Department. If you do not pass the required tests, the following consequences will apply, in progressive order: 1. You will lose access to the Harmony enrollment system. 2. You will move from advanced commissions to as-earned commissions. (Any advances lost during the period in which advances are turned off will not be retroactively applied to your compensation. There are no exceptions.) 3. You will have your contract terminated if you fail to take the tests in the time frame specified by the administrative office. Please avoid these consequences by making sure you have passed the necessary product tests before soliciting, signing, or submitting applications. Call Field Supply at if you have questions regarding the mastery tests you have passed to date. Ordering Marketing Material Benefit counselors and sales managers may order marketing material online or by phone. We will not send these materials to you unless you have passed the mastery tests for the applicable products. In addition, if you log in to the online ordering system on ProducerNet, you will not be able to view or order marketing materials unless you have already passed the training tests. For additional information on general market conduct issues, refer to the Market Conduct Issues Training Manual. Your Paul Revere contract and the Sales Organization General Policies and Guidelines Manual also address market conduct behavior and issues. (To view or download the manual, visit ProducerNet at Resources + Forms > Support Materials > Tutorials & Manuals > Policies and Guidelines Manual Paul Revere.) 19

27 Important Definitions Before you proceed, review the following important definitions. These definitions may vary by state, if included in the policy. Age Age means the insured s age on his last birthday prior to the premium effective date Applicant The applicant is the person applying for an insurance policy. Attained Age Attained age is the insured s age on the premium effective date, plus the number of years the policy has been in force. Automatic Premium Loan The Automatic Premium Loan provision states if a premium remains unpaid at the end of the grace period, and the automatic premium loan provision is in effect, we will automatically lend the amount needed to pay an overdue premium. The cash surrender value of the policy must be great enough to pay the premiums, plus the interest due on the money to the end of the policy year in which the loan was made. Beneficiary The beneficiary is the person or party who will receive the death benefit of the policy if the insured dies while it is in force. Cash Value Cash value occurs when the amount of premium is more than what is needed to pay the policy s death benefit. The extra money is deposited into a policy account, which earns interest and grows tax-deferred. Cash Surrender Value (also referred to as net cash surrender value) The cash surrender value is the cash value minus any loans and accrued loan interest. It is the amount available if the owner surrenders the policy. It is also the amount used as a net single premium to calculate the amount of reduced paid-up or extended term insurance Contestable Period Contestable period is a period of time during which an insurance company can contest the policy or deny a claim for any material misrepresentations of fact made on the application. The contestable period in Endowment at Age 100 is two years from the policy issue date Coverage Effective Date The coverage effective date is the date when coverage under the policy is put in force. It may precede or be the same as the premium effective date. 20

28 Death Benefit The death benefit is the net amount payable to the beneficiary when the insured dies while the policy is in force. The death benefit may also be called the proceeds of the policy and is equal to the policy s face amount minus any due but unpaid premiums and minus any loans and any accrued loan interest. Endowment Life Insurance Endowment life insurance is a traditional form of cash value insurance that provides guaranteed level premiums, guaranteed cash values, and guaranteed death benefits. It is designed to pay a lump sum after a specified term on its endowment date. Evidence of Insurability Evidence of insurability is any statement or proof of a person s physical condition and/ or other factual information affecting acceptability for insurance. Extended Term Insurance Extended Term Insurance is a nonforfeiture option that allows insureds to use the cash surrender value of their policy as a net single premium to purchase term life insurance. The face amount of the term insurance is equal to the face amount of the endowment life policy minus any loans. The length of the term will be the maximum period of coverage which the cash surrender value will purchase on a net single premium basis using the insured s attained age. Grace Period Grace period is a 31-day period after a premium due date in which to pay any premium due. The policy remains in force during this period. Insured Insured is the person specified in the policy schedule whose life is protected by the policy. 21

29 Insured Child (as it applies to the Children s Term Rider) In order to be considered an insured child, the child must be the insured s: Natural child; Stepchild; Adopted child, including a child placed with the insured for the purpose of adoption; or Any other child related to the insured by blood or marriage (unless either of the child s parents also resides with the insured). On the date we issue the rider, the child must be: At least 14 days of age; Living with the insured in a regular parent-child relationship; Under the age of 19; and Unmarried. After we issue this rider, a new parent-child relationship is established: By a newborn child attaining 14 days of age; By the adoption, including a child placed with the insured for the purpose of adoption, of a child under the age of 19; and When the insured marries and acquires a stepchild who is less than 19 years of age. Each child who meets these conditions becomes an insured child and remains so until reaching age 25. We consider an insured child to be age 25 on the policy anniversary after his 25th birthday. Insured Spouse (as it applies to the Spouse Term Rider) The insured spouse is the person whose life is insured by the policy to which the Spouse Term Rider is attached. Life Event Option Dates (Guaranteed Purchase Option) Life event option dates occur on the date of the insured s marriage, birth of a living child, adoption of a child, or legal divorce. Exercising a life event option date cancels out the next policy anniversary option date. Physician (Accelerated Death Benefit) A physician means a person who: Is licensed by the state to practice a healing art; and Performs services for an insured which are allowed by his license. Physician does not include any insured or owner or anyone related to any insured or owner by blood or marriage, a business or professional partner of any insured or owner, or any person who has a financial affiliation or a business interest with any insured or owner. 22

30 Policy Anniversary The policy anniversary occurs annually on the same date and in the same month as the premium effective date. Policy Anniversary Option Dates (Guaranteed Purchase Option) Policy anniversary option dates occur on the second, fifth and eighth policy anniversaries. Policy Issue Date Policy issue date is the date the policy was released according to the Company s records. Premium Effective Date Premium due dates and policy anniversary dates are measured from the premium effective date. Recurrent Disability A period of total disability due to the same or related cause as that of a prior period of total disability may be a continuation of the prior period. If less than 30 days have passed from the end of the prior period to the date the current total disability began, we will consider it to be a continuation of the prior period. If 30 days or more have passed, we will consider it to be a new period of total disability. Reduced Paid-up Insurance The cash surrender value of the Endowment at Age 100 policy is used to purchase a fully paid-up policy that endows at age 100. The face amount of the paid-up policy will be less than the face amount of the original policy. Rider A rider is an amendment to an insurance policy that becomes part of the insurance contract and expands or limits the benefits payable. Terminal Illness (Accelerated Death Benefit) Terminal illness means an injury or sickness which results in the insured having a life expectancy of 12 months or less and from which there is no reasonable prospect for recovery. Total Disability (Waiver of Premium Rider) During the first two years of disability, total disability means that, due to accidental bodily injury or sickness, the insured is unable to perform the substantial and material duties of his job. 23

31 After two years of disability, total disability means that, due to accidental bodily injury or sickness, the insured is unable to perform any of the substantial and material duties of his job or any other job for which he is or becomes reasonably suited by reason of education, training, or experience. For some conditions, we will consider the insured to be totally disabled as long as the condition continues even if he is able to work. These conditions are the total, permanent and irrecoverable loss of: The sight of both eyes; or The use of both hands or both feet; or The use of one hand and one foot. 24

32 Base Plan Design and Benefits Plan Design We have two competitive plan options available for all payroll-deduction accounts and individual sales: 1. Paid-Up at Age 65 Plan (NY65G). 2 Paid-Up at Age 95 Plan (NY95G). The following plan design guidelines apply for both options. Policy coverage for employee and/or spouse. Tobacco distinct/unisex rates. Two premium bands (based on death benefit). Guaranteed cash value and a guaranteed death benefit. Non-payroll sales with the same rates as payroll, but with stricter underwriting guidelines. Minimum issue amount: $5,000 or $3.00 weekly premium. Maximum issue amount: $100,000. $3,000 Immediate Claims Payment helps meet beneficiary s immediate needs. Policy endows at age 100. Accelerated Death Benefit allows the policyowner to receive an advance of up to 75 percent of the policy s death benefit, up to $150,000. Guaranteed Purchase Option allows the policyowner the right, at specified dates, to purchase additional amounts of insurance without providing evidence of insurability. Extended Term Insurance uses the accumulated net cash value as a net single premium to purchase term life insurance. Life Insurance Option uses the accumulated net cash value as a net single premium to purchase a smaller amount of fully paid-up life insurance that endows at age 100. Automatic premium loan provision uses the cash value to automatically pay overdue premiums. Loans are available and there is no minimum requirement amount and no administrative fee. 25

33 Plan Benefits Death Benefit Endowment at Age 100 provides a minimum face amount of $5,000, to a maximum face amount of $100,000, for employee and/or spouse policies. The face amount is sold in $1,000 increments based on current age. Policyowners can select a death benefit with the knowledge it will remain guaranteed throughout their lifetime (to age 100), as long as the premiums are paid. The death benefit in the endowment life policy cannot be increased. If the policyowner requests additional death benefit coverage, he will need to apply for another Endowment at Age 100 policy and show evidence of insurability. If the policyholder requests additional death benefit coverage and the option dates of the Guaranteed Purchase Option have expired, the policyholder will need to apply for a new Endowment at Age 100 policy. On the policy anniversary following the insured s 100th birthday (the maturity date), the policy will endow and pay the cash surrender value on the maturity date to the owner of the policy. At that date, all coverage under the policy ends Immediate Claims Payment Endowment at Age 100 helps meet urgent financial needs at the death of the insured with an initial immediate payment of $3,000. The designated beneficiary completes the Immediate Advance Claims Payment Form and may either mail or fax it to our administrative office for the payment to be processed. After the claim is received and processed, the balance of the proceeds will be provided to the beneficiary as a lump-sum payment. Accelerated Death Benefit The accelerated death benefit is automatically included with Endowment at Age 100 policies. It provides the option to receive an advance of up to 75 percent of the policy s death benefit if the insured is diagnosed with a terminal illness on or after the coverage effective date and given 12 months or less to live. The benefit amount accelerated may not exceed $150,000. In addition: The Accelerated Death Benefit applies only to the main insured of the base policy, not to spouse or children covered by any riders. Only one accelerated payment per policy is allowed during the insured s lifetime. A $200 administrative fee is deducted from the benefit payment. The policy must have a face amount of at least $5,000. Premiums are waived for the policy and any riders once the accelerated benefit is paid. If the insured is still living after 12 months, we reserve the right to investigate his health condition to determine if the policy should remain on waiver of premium or if premium payments should resume. 26