Whole Life Insurance Marketing Guide PRESTIGE SERIES Prestige Value iii l Prestige 100 l Prestige 10 Pay l Prestige Max
Contents Marketing Whole Life Insurance to Your Prospects... 1 Guaranteed Death Benefit...1 Guaranteed Cash Value...1 Dividends...1 Dividend Payment Options...2 Policy Loans and Dividends...3 Financial Strength and Ratings...3 Table: How do the products rank by premium?...3 Products and Features... 4 PRESTIGE VALUE III...4 PRESTIGE 100...5 PRESTIGE 10 PAY...6 PRESTIGE MAX...7 Blending Whole Life with the Plus Rider...8 Modified Endowment Contracts (MECs) and Additional Paid-Up Insurance (API)...8 Table: Prestige whole life portfolio at a glance...8 Optional Riders... 9 Additional Paid-Up Insurance (API) Riders...9 Family Term Rider...10 Plus Rider...10 Waiver of Premium for Total Disability (WPD) Rider... 10 Accidental Death Benefit (ADB) Rider...10 Lifetime Advantage Rider (LAR)...10 Guaranteed Insurability Option (GIO) Rider...11 Business Exchange Rider...11 Accelerated Benefit Rider (ABR)...12 Specifications and Optional Riders... 13 NOT A DEPOSIT NOT FDIC INSURED NOT GUARANTEED BY ANY BANK NOT INSURED BY ANY GOVERNMENT AGENCY MAY LOSE VALUE
Marketing Ohio National s Whole Life Life Portfolio Insurance to Your Prospects The key to whole life insurance is its guarantees. Guaranteed premium payments, guaranteed death benefits and guaranteed cash value, combined with the potential for dividends, make whole life a unique product. Guaranteed Premiums Premiums for a whole life policy are based upon conservative mortality, investment, and expense assumptions. They cannot increase regardless of fluctuations in interest rates or changes in mortality. Unlike other types of cash value life insurance, your prospects can be sure that the cost of their policy is fixed from the moment they buy it. This guarantee sets up a solid foundation for lifetime coverage that can help make other financial options a reality. Guaranteed Death Benefit A death benefit at mortality may help your prospects financial strategy reach its full potential. For many, the certainty of knowing that a death benefit will be available to their heirs no matter when they die is the primary reason for purchasing a whole life policy. Without a guaranteed life insurance death benefit, many retired individuals feel restricted to spending only the growth in their retirement assets because they want to hold on to the principal in an attempt to create a legacy. In trying to protect their principal, those same people may end up investing more conservatively, ultimately lowering their retirement income. With a guaranteed life insurance death benefit in place, retired individuals don t have to feel restricted about their spending or miss out on investment opportunities to protect their principal. The certainty of knowing that their heirs will receive a death benefit no matter when they die gives them permission to spend more freely and take advantage of other investment opportunities if they choose. Guaranteed Cash Value Guaranteed cash value, structured early or later in the policy, can give your prospects control over their financial planning. A high early guaranteed cash value is attractive for prospects looking for liquidity in their financial planning over time. Policies that return as much as 100 percent of paid premium in a guaranteed increase in cash value create liquid money pools that can be tapped for emergencies, or even as a planned loan. For prospects planning for retirement, the cash value illustrated in later years becomes more credible when guaranteed cash represents a significant portion of the asset. Values that are predicated almost solely on a policy dividend structure are more subject to swings in interest rates. Because projected dividends are not guaranteed, a sizable guaranteed cash value in 20 or 30 years can be an attractive feature. Dividends Dividends provide the potential for accelerated financial growth and strong guarantees. When declared, dividends give policyholders the ability to share in a company s surplus. As dividends accrue in a policy, they typically provide increased levels of cash value and death benefit, making the policy more valuable as time goes on. Importantly, while dividends are not guaranteed, once they are paid, they are guaranteed to remain in the policy, providing higher death benefits and more cash value until spent by the policyholder. Note: Any dividend credit for the first year is not earned until the premium for the full second year has been paid. 1
Dividends (continued) Dividends are the driving force behind the long-term performance of a whole life policy and are based on: 1. The level of premium paid; 2. Interest earnings on money in Ohio National s General Account; 3. Mortality Experience (claims the company incurs); and 4. Operating Expenses. Premium Level Dividends are defined as a return of excess premium to the policyholder. Therefore, the higher the premium the policyholder has paid, the higher the level of dividends they should receive relative to someone of the same age and risk class that has paid a lower premium. Ohio National s whole life portfolio has products that range up and down the premium scale. Prestige Max s annual premium is set at the maximum non-mec premium level. With a high premium comes a high level of dividends. Under the current scale, Prestige Max policies pay dividends beginning in the first policy year and remain high throughout the premium-paying years. Prestige Value III is the exact opposite. With the lowest premium in the portfolio, there is little excess for dividends. Under the current dividend scale, Prestige Value III is not projected to pay a dividend until the 11th policy year and continues to be relatively low throughout the policy s life. Prestige 100 has a moderate premium level and pays significant dividends in later years. Prestige 10 Pay is a different policy altogether. While it has a high premium, the dividends are more similar to Prestige 100 than Prestige Max. Why? Because the bulk of the premium is being used to meet the guaranteed payment structure. Therefore, less is available for dividends. Interest Earnings Interest earnings on Ohio National s General Account represent the largest portion of a dividend today. The amount of interest paid as part of the dividend depends on the spread between the dividend crediting rate and the guaranteed interest rate in the policy. The larger the spread, the larger the interest rate component will be. Mortality Product guarantees are based on the underlying CSO Mortality Table (2001). This table represents a conservative estimate of mortality in the insured public and, to the extent that we are able to accurately select risk classification, mortality should be better. The improved mortality experience over the underlying table provides another dividend component. Operating Expenses Operating expenses are the smallest component of a dividend. Products are priced using assumed expense levels. If our operating expenses are lower than the expected levels, then a third dividend component is created. Dividend Payment Options Ohio National offers a number of different payment options on any declared dividends. These options are variations on the five basic ways dividends can be used: 1. Paid-Up Additional Insurance Dividends are used to purchase paid-up additional life insurance every year. This additional insurance may also generate dividends in future years. 2. Premium Reduction Dividends are used to reduce the premium as much as possible each year. Any excess balance of dividends over the premium can be applied in a variety of ways. 3. Cash Dividends are sent to the policyholder at the end of every policy year in which they are declared. 4. Accumulate with Interest Dividends are credited to an interest-bearing account with Ohio National. Taxes must be paid on interest earned on these credits. 5. Purchase of Term Insurance Dividends purchase extra term life insurance on the primary insured.* *Available with Plus Rider on Prestige 100 only. 12
Policy Loans and Dividends Generally, companies use one of two different types of dividend scales when determining dividend distributions. One method, called direct recognition, credits a different interest rate factor to policies that have loans against them, complicating an already poorly understood aspect of whole life. Unlike many other companies, we do not use direct recognition to determine dividends. Policy loan or no policy loan, all Ohio National whole life insurance policyholders receive the same dividend scale. Financial Strength and Ratings Whole life insurance offers security through its guarantees. To be confident about those guarantees, your prospects need to know that a company with a history of strong financial ratings stands behind each policy. Ohio National is rated: A+ (Superior) from A.M. Best Company (based on balance sheet strength, operating performance and business profile), its second-highest ranking out of 16 categories. AA- (Very Strong) from Standard & Poor s (for financial security characteristics), its fourth-highest ranking on a 21-part scale. A1 from Moody s Investors Service (for insurance financial strength), its fifth-highest ranking on a 21-part scale. How do the products rank by premium? HIGH PRESTIGE MAX Paid-up at age 65 Cash-flow oriented Preferred loan Premiums PRESTIGE 10 PAY PRESTIGE 100 Guaranteed 10-pay solution Very strong 10-year cash values Strong dividends Foundational whole life policy Strong long-term values All riders available LOW PRESTIGE VALUE III Low guaranteed premiums High guaranteed cash value Highest guaranteed death benefit 3
Products and Features PRESTIGE VALUE III Low Premiums Prestige Value III is among the lowest-priced participating whole life insurance policies in the marketplace today. It s a great fit for premium-sensitive prospects and for those more interested in guaranteed values than current values (dividends). Because Prestige Value III s premium is so low (approximately 35 percent less than Prestige 100) there is very little excess premium for dividends. In fact, Prestige Value III is not projected to pay a dividend until after the 10th policy anniversary. However, it does have extremely strong guaranteed cash value. For the healthiest individuals (Preferred and Super Preferred classes) increases in guaranteed cash value equal or exceed premiums paid as early as the third (age 45+) and fourth (under age 45) years. The increases continue that pattern for a long time afterwards and may result in a positive internal rate of return (IRR) on guaranteed cash value in as little as 11 years. This can make it an attractive option for any individual needing permanent life insurance and wanting more security on their cash values. Finally, the low premium structure makes Prestige Value III the best choice for a guaranteed death benefit. Guaranteed IRR at life expectancy is approximately 3.00 percent after-tax. If dividends are paid, the rate of return will be higher. Issue ages 0-17 Standard* 18-80 All classes Premium bands $ 50,000 $250,000 Premiums vary by underwriting class Dividend band $50,000 Maturity (continues beyond maturity with extended endowment) Policy fee (annual) $75 Age 121 with premiums paid through age 120 *Policy will automatically convert to smoker rates at age 18. Compare Prestige Value III s guarantees to those of some major competitors in the marketplace today. Male, Age 40, Best Class, $250,000 Face Amount Ohio National Prestige Value III Guardian L121 MassMutual Whole Life Legacy 100 MetLife Promise Whole Life 120 New York Life AD 113 Custom Whole Life Northwestern Mutual Adjustable Comp Life Annual Premium Guaranteed Cash Value Year 10 Internal Rate of Return Year 10 Guaranteed Cash Value Year 20 Internal Rate of Return Year 20 $2,882 $26,940-1.23% $69,645 1.77% $3,243 $27,335-3.13% $70,435 0.78% $3,770 $28,900-4.90% $73,008-0.31% $3,235 $27,000-3.32% $69,750 0.71% $3,705 $30,495-3.57% $72,988-0.14% $4,045 $29,892-5.58% $72,032-1.12% Source: Company software believed to be accurate as of 6/10/14. Prestige Value III has excellent long-term values on a current basis, as well. In the example above, the 30-year current death benefit rate of return is 7.42 percent for Prestige Value III. 14
PRESTIGE 100 Foundational Whole Life Prestige 100 is the building block, the foundation, of Ohio National s life insurance portfolio. As a base policy, Prestige 100 provides strong long-term values for the client in both cash value and death benefit. Values are delivered through a strong dividend stream that builds both cash and death benefit when used to purchase paidup additional insurance (PUAs). PUAs not only add to cash value and death benefit, but they are able to generate additional dividends for the policy over time. When combined with various riders, Prestige 100 can be modified to a lower premium policy (using the Plus rider), a cash accumulation oriented policy (API rider) or even a non-guaranteed short pay policy. Issue ages 0-17 Standard 18-75 All classes Premium bands $ 25,000 Dividend bands $ 25,000 $500,000 Maturity (continues Age 121, premiums through age 99 beyond maturity with extended endowment) Policy fee (annual) $48 With its long-term outlook, Prestige 100 is an excellent solution for prospects interested in having the highest potential death benefit at life expectancy and a competitive combination of guaranteed and current cash values. It also functions well as a retirement cash flow product when overfunded with an optional API rider. In the table below, Prestige 100 delivers competitive values at 20, 30, and 40 years with regard to the competition. The rate of return on the cash value indicates Prestige 100 s ability to fund future cash flows, and the competitive death benefit return represents the products value as a pure lifetime protection policy. One more area where Prestige 100 works well is in the blended whole life arena. When you add the optional Plus rider to the base policy you can provide a low, level premium death benefit solution that provides some of the guarantees of whole life insurance. Conceivably an aggressive blend could reduce the premium by as much as 50 percent. While the lower premium can be attractive, bear in mind that the guarantees of whole life will only apply to the base policy, and the overall sustainability of the premium is subject to dividends being paid as projected. Choosing a higher premium will create stronger guarantees for the client. Male, Age 45, Best Class, $1,000,000 Face Amount Ohio National Prestige 100 Guardian L99 MassMutual Whole Life Legacy 100 MetLife Promise Whole Life New York Life AD 113 Custom Whole Life Compare Prestige 100 s internal rates of return with some major competitors. Premium 20-Year Current Cash Value 30-Year Current Cash Value 40-Year Current Death Benefit $19,608 3.69% 4.28% 5.31% $18,800 3.13% 3.77% 4.86% $18,860 3.43% 4.55% 5.73% $18,900 3.52% 4.54% 5.54% $19,220 2.52% 3.54% 4.62% Northwestern Mutual $19,870 2.84% 3.71% 4.84% Adjustable Comp Life Source: Company software believed to be accurate as of 6/10/14. 5
PRESTIGE 10 PAY Guaranteed 10-pay Solution Prestige 10 Pay is priced near the Modified Endowment Contract (MEC) limit at all ages. The bulk of the higher premium is used to guarantee the 10-year payment structure, with significant values left over for dividends. The end result is a contract that generates high rates of return on cash values in the early years of the policy (years 10-15) and maintains a competitive rate of return in the future. Because the guaranteed 10-year payment structure limits the amount of total premium that can be paid into the policy, 10 Pay will generally not accumulate as much in total dollars as policies that have a longer payment cycle, even though the internal rates of return will be competitive. Issue ages 0-17 Standard 18-54 All classes Premium bands Dividend bands $500,000 Maturity Age 121, premiums for first 10 years Policy fee (annual) $30 With its short payment structure Prestige 10 Pay is ideal for those clients that are uninterested in relying on future dividends to pay policy premiums. A 10 Pay policy will guarantee a payment period of no more than 10 years, with the potential of a shortened premium payment based upon dividends. This can be a powerful discussion to have with parents of young children, with grandparents interested in gifting during their lifetime, or with anyone that wants a short, certain payment period. In the table below, you can see that there is little differentiation based upon premium. All 10 pay products will have high premiums in order to guarantee the shortened payment structure. The Prestige 10 Pay policy falls in the middle with regard to premiums, but delivers significantly higher values in the early years of the policy. This becomes an important feature for clients looking to get back their money as quickly as possible. The high early cash values increase liquidity in your clients overall asset pool, provide stability in times of economic turmoil and can serve as a source of emergency cash in times of personal financial stress. Beyond the first 10 years the Prestige 10 Pay policy continues to provide competitive returns throughout the clients life. While overall accumulation will be less than a policy with a longer payment structure, the client with a 10 Pay policy can use future premium dollars in another asset perhaps even another Prestige 10 Pay. Male, Age 35, Best Class, $1,000,000 Face Amount Ohio National Prestige 10 Pay Guardian 10 Pay Whole Life MassMutual Legacy 10 Pay MetLife Promise Whole Life Select 10 New York Life AD 113 Custom Whole Life Northwestern Mutual 10 Pay Life Compare the Prestige 10 Pay internal rates of return with other, similar products. Premium 10-Year Current Cash Value 20-Year Current Cash Value 30-Year Current Cash Value $29,570 3.07% 4.63% 4.97% $28,890 2.47% 4.03% 4.34% $28,510 1.91% 4.80% 5.37% $29,800 1.25% 3.74% 4.54% $34,330 0.68% 4.33% 4.84% $30,430 1.60% 4.60% 5.20% Source: Company software believed to be accurate as of 6/10/14. 16
High Dividends and Paid-Up at 65 Prestige Max is a high premium, high cash flow product. The annual premium is set at the maximum non-mec premium payable for a policy. This design should lead to a high dividend flow beginning in the first year and continuing throughout the life of the policy. Issue ages PRESTIGE MAX 0-17 Standard* 18-75 All classes Premium bands $ 25,000 Dividend bands $ 25,000 $250,000 Maturity (continues Age 121 beyond maturity with extended endowment) Policy fee (annual) $30 *Policy will automatically convert to smoker rates at age 18. The high annual premium also allows for the policy to be contractually paid-up at age 65 or 10 years after issue, whichever is later. The combination of those two features, plus a preferred loan feature, make Prestige Max attractive anytime your client wants to generate cash flow in retirement; this is why Prestige Max is often used in the executive benefit arena. With no premium required in retirement, and the ability to get money out of the policy at a reduced loan rate, the Max product will typically have more cash flow than any other whole life policy offered by Ohio National. This is particularly true when the funding period is of a short duration (10-15 years). Male Age 40, Best Class, $10,000 premium years 1-25. Maximum cash flow years 26-45, carry to age 100.* Ohio National Prestige Max Guardian Life Paid Up at 65 MassMutual Whole Life Legacy 65 Metropolitan Life Promise Whole Life Select 65 New York Life AD 113 Custom Whole Life Northwestern Mutual 65 Life Current Cash Value in Year 25 Cash Flow Years 26-45 Current Cash Value at age 100 $445,299 $35,578 $118,024 $404,551 $26,359 $25,137 $453,262 $37,026 $73,472 $421,179 $29,233 $217,336 $446,046 $32,190 $106,695 $418,322 $23,700 $88,847 Source: Company software believed to be accurate as of 6/10/14. The table above shows how powerful the Prestige Max contract can be. By the 25th year, it has similar cash value as other policies, but is able to generate more cash flow. This is because there is no required premium to be paid once the insured is age 65 (or 10 years after issue, whichever is later). With no ongoing premium drain, all the cash value can be focused on providing cash flow to your client. Remember, it s not always how much is in the policy, many times it s how much your clients can use. 7
Prestige whole life portfolio at a glance Prestige Value III Prestige 100 Prestige 10 Pay Prestige Max Product Strength One of the lowest-priced par WL policies available Long-term performance Guaranteed 10-year payment structure Paid-up at age 65 Business Markets Personal Markets Buy-Sell Split-Dollar Key Person Early death benefit Highest guaranteed death benefit High level of guaranteed cash value Ideal for use with Flexible API Rider Buy-Sell Split-Dollar Key Person Long-term death benefit Good cash flow at moderate funding Blended WL for lower premium Deferred Comp Executive Bonus Known payment period Competitive cash values Stackable policies Deferred Comp Executive Bonus Minimum Face $50,000 $25,000 $25,000 High cash flow Highest potential dividend flow for 20 years Guaranteed Premiums Guaranteed Cash Value Potential Dividends Low Moderate Moderate Maximum non-mec High throughout Low early; moderate late Low early; moderate late Low throughout Low early; high long-term Moderate throughout Very high during premium payment Low Blending Whole Life with the Plus Rider Available on Prestige 100. Blended whole life policies are created using the Plus Rider. They are designed to provide level death benefits through a combination of the face amount of the base policy, one-year term life insurance and paid-up additional life insurance. The policies are structured so that, over time, the term portion of the policy is replaced by paid-up additions. Blended policies reduce the premiums for a given level of death benefit by providing a mix of one-year term insurance and the base policy coverage. The full death benefit of a blended policy is guaranteed although the premium is not. If dividend rates decrease, or term insurance rates increase, the projected premium may not fund the coverage to maturity. The Plus Rider is convertible for the term amount then in force on the day before the conversion date. It is convertible on the first day of any policy year until the insured s 60th birthday. This privilege may be valuable protection for an insured whose health has deteriorated during the policy period. Modified Endowment Contracts (MECs) and Additional Paid-Up Insurance (API) A MEC is created when the amount of premium paid into a policy is greater than the amount the government allows for the death benefit. This level of premium is determined by the Internal Revenue Code and, if exceeded, has certain negative tax consequences for a life insurance policy. Normally, money may be withdrawn from a life insurance policy on a first in, first out (FIFO) basis. If a policy enters MEC status, the money is treated on a last in, first out (LIFO) basis, making any withdrawal or loan taxable to the extent there is gain in the policy. The annual premium for a whole life policy will not cause it to become a MEC. MECs can occur when additional premiums are paid through the use of an API rider or if changes are made later to the policy. Your illustration software will tell you when a policy design creates a MEC. You can continue with that design or go back and reduce the API premium. 18
Optional Riders Additional Paid-Up Insurance (API) Riders API Riders are fully underwritten at the time of rider issue and the amount of API premium may be reduced after the effective date. Flexible-Premium API Rider Available on Prestige Value III and 100. Not available with Level API or Plus riders. This rider is available only at issue. It allows the policyholder to change the premium, within limits, and without additional underwriting after the rider has been inforce for one year. This rider may not be used with the Plus Rider. The Flexible-Premium API Rider allows the policyholder to adjust the rider premium payments up and down during the life of the policy according to the following guidelines: 1. The scheduled premium for the Flexible API rider may not exceed three times the base policy premium. 2. The scheduled rider premium must be paid for the first year of the rider. 3. After the first year, the rider s annual premium may be reduced to as low as $100. 4. The rider premium may be increased, without underwriting, up to the highest scheduled premium paid within five years of the last decrease in the scheduled premium. The policyholder may make unscheduled lump-sum premium payments three times during the life of the rider, in addition to a scheduled premium. Again, no additional underwriting is required. Only one unscheduled premium may be made in a policy year. Unscheduled premiums may not exceed one times the highest scheduled premium paid in the last five years. Unscheduled premiums may not be made after the policy anniversary nearest the insured s age 65. Waiver of Premium for Total Disability applies to the rider s scheduled premiums only. If the scheduled premium is reduced, the waiver reduces. If the scheduled premium increases, the Flexible-Premium API Rider premium will no longer be covered by the Waiver of Premium rider. Waiver of Premium on the base policy will continue. Changes to the rider s scheduled premium may only occur on policy anniversaries up to age 65. No changes to scheduled premiums are allowed after age 65. Issue ages 0-65 Minimum annual premium Maximum scheduled annual premium Maximum unscheduled annual premium $10 per $1,000 base policy amount, or $100 (whichever is less) $20 per $1,000 base policy face amount, or three times the base policy premium. One times the highest scheduled premium paid in the last five years. Level-Premium API Rider Available on Prestige Value III and 100. This rider stipulates that rider premiums will be used to buy participating paid-up life insurance on the first day of each policy year. Paid-up death benefits are purchased at guaranteed rates. May not be issued with Flexible- Premium API. Issue ages Minimum annual premium Maximum annual premium Same as the base policy $10 per $1,000 base policy face amount, or $100 (whichever is less); with the Plus Rider, minimum is $10. $20 per $1,000 base policy face amount, or three times the base policy premium. Single-Premium API Rider Available on all products. Only available on 1035 exchange with Prestige Max and Prestige 10 Pay. A single premium purchase of additional paid-up insurance may be made in the first policy year. Single- Premium API may be issued with either Level-Premium or Flexible-Premium API. Issue ages Minimum annual premium Maximum annual premium Same as the base policy $10 per $1,000 base policy face amount or $100 (whichever is less); with the Plus Rider, minimum is $50. 12X (combined API) base policy premium Note: Using API riders can create a Modified Endowment Contract (MEC). MECs may trigger unfavorable tax implications. 9
Family Term Rider Available on all products except Prestige Max. This rider provides specified term death benefits for children of the primary insured up to $1,000 for every $5,000 of the base policy death benefit. The coverage expires on the day before the child s 25th birthday, or the policy anniversary date nearest the insured s 65th birthday, if earlier. Issue ages of 16-50 primary insured Issue ages of children 15 days up to age 21 Minimum face amount $1,000 Maximum amount $1,000 per $5,000 of the base policy face amount, up to a maximum of $25,000 Convertibility A child may convert his or her coverage to any available permanent life insurance policy issued by Ohio National. The new policy s face amount may be up to five times the coverage amount of the rider, but no more than $50,000. Conversion must occur prior to the expiration of the term life insurance coverage. Plus Rider Available on Prestige 100 only. May not be used with the Flexible-Premium API Rider. The Plus Rider is designed to provide a level of total death benefit at a lower, non-guaranteed, level premium. The Plus Rider purchases one-year term life insurance in an amount equal to the total face amount, less the base policy face amount and the death benefit provided by any dividend additions or paid-up insurance provided by the Level API Rider. Over time, the amount of the one-year term is expected to decrease as paid-up additions replace the term life insurance portion of the policy. Issue ages 18-65 Minimum face amount $10,000 Maximum face amount Nine times the base policy face amount Convertibility Guaranteed to age 60 Waiver of Premium for Total Disability (WPD) Rider This rider provides continuation of life insurance protection without payment of premiums in the event of total disability of the primary insured. Premiums are waived only on the due dates, not during grace periods. Issue ages 0-55 Maximum face amount Elimination period $5 million per life; total combined face amount (by company practice) Six months Disability is defined as own occupation for the first two years and any occupation after two years. If disability occurs on or after the policy anniversary nearest age 60, then premiums are waived only to the anniversary nearest age 65. This rider may be added after issue subject to underwriting. It is not available for ratings above Table D. Accidental Death Benefit (ADB) Rider Available on all products except Prestige Max This rider provides a supplemental death benefit if the insured s death results directly from accidental bodily injury within 180 days of an accident. This rider is not available for ratings above Table D and coverage expires at the end of the primary insured s policy anniversary date nearest age 70. The supplemental death benefit amount is doubled if the insured dies while a passenger on a public conveyance. Issue ages 0-60 Minimum face amount $2,000 Maximum face amount $200,000 Lifetime Advantage Rider (LAR) Approved only in states where the Accelerated Benefit Rider is not available. This rider allows for payment of an accelerated death benefit to terminally ill insureds. The policyholder may receive up to 50 percent of the policy s death benefit subject to a $250,000 maximum. This rider is available upon request and at no additional charge. Clients should consult with their tax advisers regarding the implications of receiving benefits under this rider. 10
Guaranteed Insurability Option (GIO) Rider This rider guarantees the insured s right to buy additional coverage at prescribed points in the future without providing evidence of insurability. It is not available on rated insureds and is available only at issue. Additional insurance can be purchased on the specified dates shown below. The periodic option date is the policy anniversary nearest the insured s age. Periodic Option Date Issue ages (Policy anniversary nearest the insured s age) Under 25 25 28 31 34 37 40 25-27 28 31 34 37 40 28-30 31 34 37 40 31-33 34 37 40 34-36 37 40 37-39 40 Business Exchange Rider While this rider is in force, the policy may be exchanged for a new whole life policy on a new insured. The new insured must be underwritten, and all existing riders will be canceled, although riders may be added to the new policy subject to insurability and availability. This rider is advantageous because the cash value of the existing policy will transfer to the new policy. Therefore, a business will be able to maintain key-person or buy-sell insurance and not be concerned about having accrued dividends and cash value disappear with a change of insured. Note: Any gain in the policy may be taxable at the time of exchange. In addition, your client can exercise the GIO Rider 90 days after the insured marries or becomes a parent. Exercising this option will take the place of the next periodic option date. Issue ages 0-39 Minimum face amount $10,000 Maximum face amount 11
Accelerated Benefit Rider (ABR) Available on all Prestige Value III, 10 Pay, 100 and Max products with an original issued date after 12/31/12. It is not currently available with policies converted from term life insurance. For Chronic Illness This rider accelerates a portion of the death benefit if the insured is defined as chronically ill under the rider. A client is considered chronically ill if a physician certifies that they cannot perform two of six Activities of Daily Living without substantial assistance, or is permanently, severely, cognitively impaired similar to Alzheimer s or other dementia. There is both a lifetime limit to the benefit and an annual limit to the chronic illness benefit. The annual limit is the lesser of 25 percent of total death benefit and the per diem IRS limitation multiplied by the number of days remaining in the calendar year that the insured has been certified as being chronically ill. The lifetime limit for the chronic illness benefit is determined at the time of first claim. It is the sum of all cash value plus a percentage of the Net Amount at Risk (NAR) that varies by age. The percentage of NAR is given in the table below. Attained Age % of NAR Attained Age % of NAR 65 or younger 20% 76 53% 66 23% 77 56% 67 26% 78 59% 68 29% 79 62% 69 32% 80 65% 70 35% 81 68% 71 38% 82 71% 72 41% 83 74% 73 44% 84 77% 74 47% 85 or older 80% 75 50% If there is an outstanding loan on the policy, proceeds from the benefit paid will be apportioned on a pro-rata basis to reduce the outstanding loan. The ABR may be added after issue, with no underwriting. There is no charge for the rider other than a $200 administrative fee at the time of first claim. If the ABR is available for a policy, then the LAR is unavailable. This rider is intended to provide tax free benefits under section 101(g) of the Internal Revenue code. Your clients should consult their tax advisor before accessing benefits under the rider. The rider does not waive the requirement that the policyholder continue to pay the required premium. The rider is not available if the insured is table rated C or higher, has a flat higher than 5, or any combination of table and flat. For Terminal Illness This rider accelerates a portion of the death benefit if the insured is defined as terminally ill under the rider. A client is considered terminally ill if a physician certifies that they have an illness or physical condition which can reasonably be expected to result in death within 12 months. The Lifetime limit for terminal illness is the sum of all cash value plus 80 percent of NAR. There is no annual limit for terminal illness. All other features of the rider are substantially similar to the Chronic Illness ABR. If benefits are taken under either rider provision, a lien against the death benefit is created. This lien incurs carrying charges and reduces the death proceeds of the policy. 12
Specifications and Optional Riders Prestige Value III Prestige 100 Prestige 10 Pay Prestige Max Sales Product Strength Low premiums High dividends later Guaranteed 10-year payment structure Sales Support & Literature Paid-up at age 65 For Career/PPGA Distribution, call 877.665.2468 (Option 3). For Securities Brokerages and Banks, call 888.744.7355. Minimum Issue $50,000 (Select NS, Preferred NS, Super Preferred NS and Select SM) $25,000 (Select NS, Preferred NS, Super Preferred NS and Select SM) all classes $25,000 (Select NS, Preferred NS, Super Preferred NS and Select SM) Issue Ages 0-17 Standard; 18-80 all classes 0-17 Standard; 18-75 all classes 0-17 Standard; 18-54 all classes Maturity Age 121 Age 121 Age 121 Age 121 0-17 Standard; 18-75 all classes Protection Premiums Paid through Underwriting Classes Age 120 Age 99 10 years Age 64 or 10 years Super Preferred NS Preferred NS Select NS Standard NS Select Smoker Smoker Super Preferred NS Preferred NS Select NS Standard NS Select Smoker Smoker Dividend Bands $50,000 $25,000 $500,000 Super Preferred NS Preferred NS Select NS Standard NS Select Smoker Smoker $500,000 Super Preferred NS Preferred NS Select NS Standard NS Select Smoker Smoker $25,000 $250,000 Premium Bands $50,000 $99,999 $249,999 $250,000+ Premiums vary by underwriting class $25,000 Not banded by face amount Premiums vary by underwriting class Not banded by face amount Cash Value Policy Fee Maximum Substandard P-500% P-500% F-250% with Plus Rider P-500% Interest Rate 4.0% 4.0% 4.0% 4.0% P-500% Dividend Options All Options All Options* All Options All Options Annual Policy Fee $75 $48 $30 $30 Optional Riders Plus Rider Flexible-Premium API Rider Level-Premium API Rider Waiver of Premium for Total Disability (WPD) Rider Additional Riders Available for Prestige 100 only at issue; purchases one-year term life insurance as defined in the rider; convertibility guaranteed to age 60; issue ages 18-65. Available on Prestige Value III and Prestige 100; flexible premium is used to buy participating paid-up insurance on the first day of the policy year. Issue ages: 0-65. Allows for changes in premium without underwriting. Subject to certain guidelines. Available at issue only. Level premium or single premium is used to buy participating paid-up insurance on the first day of the policy year. Issue ages: same as base policy; available at or after issue. (Single premium only available on 1035 exchange with Prestige Max and Prestige 10 Pay.) Waives premium upon full disability as defined in the rider; available at or after issue for issue ages 0-55. Family Term Rider; Lifetime Advantage Rider (LAR); Business Exchange Rider (BER); Accidental Death Benefit (ADB) Rider (not available with Prestige Max); Guaranteed Insurability Option (GIO) Rider; Accelerated Benefit Rider (ABR) * With Plus Rider, only Term Dividend Option (TDO) and Paid-Up Additional Insurance (PUA) are available.
Questions? Contact the FASTeam at 877.665.2468 (Option 3). The Ohio National Life Insurance Company Ohio National Life Assurance Corporation One Financial Way Cincinnati, Ohio 45242 Telephone: 513.794.6100 www.ohionational.com Form 2963 Rev. 6-14 2014 Ohio National Financial Services, Inc. Product comparisons based upon data obtained through Full Disclosure for Windows 4.1, Whole Life, 2013. Full Disclosure provides comparison data concerning premiums and guaranteed cash values and benefits for 31 participating whole life products. Not all participating whole life products may be included within Full Disclosure 4.1. All ratings information is according to reports published on: www.standardandpoors.com, www.ambest.com/ ratings and www.moodys.com/insurance. Ratings are accurate as of 9/12/13. For the most current ratings, see www.ohionational.com. Whole life insurance is issued by The Ohio National Life Insurance Company. Product, product features and rider availability vary by state. Dividends are not guaranteed. Issuer not licensed to conduct business and products not distributed in AK, HI and NY. for representative use ONLY. NOT FOR USE WITH the General PUBLIC.