Preferred Universal Life SM

A new solution for the concerns of a long life. Preferred Universal Life SM M3275-TX Allianz Life Insurance Company of North America

Preferred Universal Life New times demand a new solution. For past generations, traditional life insurance was the solution to the problem of dying too young. Today, we face a new problem living too long. Thanks to medical advances, some people will spend 20, 30, or more years in retirement. Living a long life is ideal, but it does bring new concerns and new needs not addressed by traditional life insurance. Of course, there is no guarantee you will live to retirement age. These new needs demand a new solution. The Preferred Universal Life SM is the solution. Your retirement income may not be sufficient to meet your monthly expenses. You could outlive your savings and exhaust your source of income. You could suffer a disabling illness or injury during your working years. You could suffer a disabling illness or injury after you retire. A new generation of protection against the financial risks of living a long life. Preferred Universal Life is a flexible premium adjustable life insurance policy. The minimum guaranteed interest rate is 4%. Past performance does not guarantee future results. Surrender charges apply for 15 years. To qualify for the Preferred Annuitization Value, renewal premium must be on schedule at each five-year interval and at the preferred annuitization selection date. In addition, a form of life income must be selected after the later of 15 years or age 65. The expiration date to select the Preferred Annuitization Value is the later of the policy anniversary after age 70 or 15 years from the policy date. Preferred Universal Annuity Life issued by Allianz Life Insurance Company of North America (P1000N-TX, PE1014N-TX/1, PE1018N-TX).

Preferred Universal Life SM A new generation of protection The Preferred Universal Life Insurance Policy is a new generation of life insurance offering protection against the financial risks of living a long life. Income sufficient to fund a secure retirement Preferred Annuitization Values provide an enhanced income stream. You need only hold your policy until retirement age and consistently make all planned premium payments on time. Retirement income guaranteed for as long as you live Ironclad written guarantees ensure an income stream that cannot be outlived. You can rely on receiving your payments for the rest of your life. Up to 60% more retirement income if a disabling illness or injury strikes If you suffer a disability during retirement and qualify for benefits, the Preferred Universal Life offers increased income to help with extra expenses. Protection against disability prior to retirement An optional benefit can be chosen that will protect you in the event of a disability prior to age 60. It will pay the premiums to keep your policy current. Protection against early death The Preferred Universal Life provides a benefit for your family, should death occur prior to retirement age. A 10% bonus will be added to the lump-sum death benefit if the survivor takes payments over at least a 10-year period. Your family and loved ones will be protected. Monthly disability income benefit If you suffer a total disability prior to age 60, this optional benefit provides a monthly income benefit of up to $1,000; requires total disability for a period of six months before any benefit is payable. Benefit is not retroactive and continues for the earlier of a period of five years, or until no longer disabled. EXCELerated death benefit Allows you access of up to one-half of your death benefit up to $125,000, prior to death, in the event of terminal illness. Other insured benefit You can provide life insurance protection for applicants in addition to you, such as a spouse or other family member. Child insurance benefit You can provide life insurance protection of $1,000 per unit, up to a maximum of 10 units, on your children between the ages of 15 days through age 18. 1

Preferred Universal Life SM Preferred Universal Life (PUL) and traditional life insurance product comparisons Examples based on a 35 year old, male, nonsmoker paying $100 per month. PUL PUL guaranteed values Death benefit $100,909 $100,909 Cash value at age 65 60,687 46,716 Value available for lifetime income at age 65 PUL Exclusive 88,959 46,716 Monthly lifetime income at age 65 523 275 The policy values shown to the left are based on an assumed current interest rate of 5%, and the guaranteed minimum interest rate is 4%; surrender charges apply for 15 years. The assumed interest rate is not guaranteed and is subject to change. Monthly retirement income benefits shown in all life insurance illustrations are based on the current life & 10-year certain settlement option factor for a male age 65. Postretirement disability income benefit based on total disability as defined by inability to perform Activities of Daily Living. To qualify for monthly income, premium payments must be paid for 15 years or to age 65, whichever comes later. Total monthly income benefit if disabled at age 67 837 440 PUL Exclusive PUL $837/mo. Disabled during your retirement years (Up to 60% more income) $523/mo. Evolutionary benefit Preferred Retirement Income PUL Exclusive Note: Payout is based on life & 10-year certain. Assumes 5% interest and premium paid to age 65. The guaranteed minimum interest rate is 4%. The idea Benefit requires no underwriting. 2

Preferred Universal Life SM Answering your questions Is the PUL an annuity or life insurance? The PUL is a life insurance policy with a death benefit, and full accumulation and surrender values. The policy features the same tax treatment as any other life policy. What is the Preferred Annuitization Value (PAV)? The PAV is an enhanced annuitization amount (not available in a lump sum), used to produce a retirement income that cannot be outlived! If all planned contributions are consistently paid through the life of the contract, you will receive substantially greater values. The PAV is calculated as a bonus on all excess interest credited, from the issue date, and is added to the current accumulation value to determine the PAV. How do I qualify for the PAV? There are only three qualifications to ensure receiving the PAV: (1) You must be living at the retirement date. (2) All planned contributions must be paid until the later of retirement, or the minimum payment period. Payments must be on schedule at each five-year checkpoint from policy issue until retirement. The PAV minimum qualification period is the later of 15 years or age 65. For example, if the initial planned premium is $1,000 per year, at the end of five years, $5,000 of premium must have been paid into the policy in order to qualify for the PAV. At the end of 10 years, a total of $10,000. At the end of 15 years, a total of $15,000. Failure to meet the total premium requirement at any five-year checkpoint will permanently disqualify the policy from the PAV. However, the base universal life policy remains in force with all its benefits and values. The only benefit lost by failing to qualify is the PAV. (3) Elect some form of life income at retirement: life, life & 10 years guaranteed, life & 20 years guaranteed, joint & survivor, etc. Is the option to elect the PAV guaranteed? Yes. The option to elect the PAV is a guaranteed contract feature of the PUL. However, it is not possible to guarantee the specific benefit because the final values depend on the amount of premium paid and interest rates in effect during the life of the policy. Is there an extra charge for the PAV? No. The PAV is a standard feature of the policy and is offered at no charge. 3

Preferred Universal Life SM Answering your questions Are the premiums flexible? Yes. Premium payments are flexible, and can be flexed up or down, within certain limits. Premium payments may not be reduced below the minimum amount required to keep your policy in effect. What happens if I make additional premium payments? Additional premium payments will increase accumulation values. The tax code may require an increase in the death benefit which would require you to show current evidence of insurability. Must the PAV be taken at age 65? As long as you continue to meet every fiveyear planned premium requirement, you have the flexibility to take the value up until age 70, or after the premium payments have been made for 15 years, whichever is later. If the policy requirements are not met for the required number of years, will my policy have any value? Yes. If the policy is terminated, the full cash surrender value accumulated in the policy will be received. The PAV will not be available. Surrender charges apply for the first 15 years. Will I receive notice concerning qualifications for the PAV? Yes. Every year, you will receive a policy statement indicating whether or not the policy is on schedule to qualify for the PAV. Should you fail to meet any five-year checkpoint, notice will be given, along with a 60-day grace period, to make up the premiums due. Are policy loans available? Yes. A portion of the cash accumulation may be taken as a loan at any time with a 1% net interest rate. Will loans against the policy disqualify it from the PAV? No. The PAV is based on premiums paid, not loans. However, not having the full cash value accumulating in the policy affects the amount of the PAV. If there is an outstanding policy loan at the time the PAV is selected, the amount needed to repay the loan is deducted from both values proportionately. What is the idea Benefit? The idea Benefit will increase future payments after any form of life income has been taken for a period of at least two full years and if you are disabled. The increased payments of 30% for partial disability or 60% for total disability will continue for as long as the disability persists. The life income must have begun prior to your 80th birthday in order to be eligible for the increased payments. Total disability is defined as the inability to perform at least five Activities of Daily Living (ADLs) from all three clusters. Partial disability is defined as the inability to perform at least two ADLs from two clusters. Cluster 1 Cluster 2 Cluster 3 Toenails Stairs Medicating Bathing Outside Transference Dressing Ambulation Eating 4

Is there a waiver of planned premium benefit option? Yes. In the event of a disability, this optional benefit will make your planned contributions, following a six-month elimination period. Contributions will be waived until the earlier of the end of your disability or age 65. This rider is available to issue ages 15-55 and expires at age 60. What income options are there if I suffer a disability before retirement? The disability income benefit is an optional rider that provides a cash income of up to $1,000 per month for pre-retirement disability. The benefit will be in effect until the earlier of five years or age 65. Benefits are payable following a six-month elimination period. This benefit is available by rider for issue ages 15-60. How do I request to be billed for additional premium? In the life application, simply complete the blank marked Billed Excess. At retirement, what options does the PUL provide? If qualifications have been met, exercise the PAV provision for a lifetime income including the idea Benefit. Take out a policy loan. Cash surrender the policy and receive the cash value. Leave your PUL as a life policy. What is the difference between the PUL I and III? The PUL I offers the PAV to be selected at age 65 or 15 years, whichever is later, and the policyholder can wait to receive the value as late as age 70. The PUL III offers the PAV to be selected at age 50 or 10 years whichever is later, and the policyholder can wait to receive the value as late as age 80. Both products are issued ages 0-65. What are the qualifications for the EXCELerated death benefit? After the policy has been in force at least two years, this feature will allow the insured access of up to 50% of the death benefit (not to exceed $125,000), if they are diagnosed with a terminal illness and have a life expectancy of 12 months or less. This benefit is available to those policyholders who are 75 years of age or less and have a policy issued standard with a death benefit of at least $25,000.

Our top priority is the safety of your money All policies are issued by Allianz Life Insurance Company of North America, a member of the Allianz Group. With over 700 subsidiaries in more than 70 countries, the Allianz Group is one of the world s leading providers of integrated financial services. Our goal is to provide policyholders with wealth management products that can help meet today s needs and financial objectives, with a product philosophy of offering fair and equitable values on each policy we issue. Foremost in our minds is the safety of the funds you entrust to our care. Allianz Life has consistently been assigned financial strength ratings by Standard & Poor s and A.M. Best that are among the highest available. It is one of a select group of major insurance companies to receive such high ratings. These independent agency ratings are based on an analysis of financial results and evaluation of management objectives and strategies. The ratings do not indicate approval by the analysts and are subject to change. Innovative products, exceptional customer service, and sound financial strength make Allianz Life the place to turn to help meet your retirement objectives. Policies are issued by Allianz Life Insurance Company of North America (form number P1000N-TX, PE1014N-TX/1, PE1018N-TX). Agent name: License number: Allianz Life Insurance Company of North America PO Box 59060 Minneapolis, MN 55459-0060 800/950-1962 www.allianzlife.com Product availability and benefits may vary by state (R-1/2004)