Protect what matters most Your guide to understanding your options for lifetime coverage and its benefits Products and financial services provided by American United Life Insurance Company a OneAmerica company I-24560
Protecting what matters most At the companies of OneAmerica, we take your financial future as seriously as you do. As a valued policyholder, our goal is to help you protect your family now and for many years to come. This guide will walk you through your term conversion rights and the benefits you can receive from permanent life insurance policy ownership. What your current term policy offers you 1. The ability to convert your term coverage to permanent life insurance without providing evidence of good health. 2. The opportunity to convert your term policy to a permanent product, such as whole life insurance, that offers guaranteed level premium payments, guaranteed cash value and a guaranteed death benefit payable to loved ones at your time of death. 3. The opportunity to convert to our CareSolutions product line to address your longterm care insurance needs supported by the guarantees associated with whole life insurance. 2
Options for lifetime coverage Understanding your policy s guaranteed premium payment period and your options for lifetime coverage Term insurance offers specific guaranteed level premium payment periods and does not offer you cash value accumulation. As long as premium payments are made, your loved ones receive the policy s death benefit only if you should die during the years when your policy is in force. Term insurance premiums are level only for a specific period of time - then increase later in life after our level premium payment period ends (example, 10, 15, 20 or 30 years). 10 15 20 30 YEARS YEARS YEARS YEARS $ 10 15 20 30 YEARS YEARS YEARS YEARS $ Whole life insurance provides guaranteed level premium payment periods, guaranteed cash value accumulation and guaranteed death benefit protection. As long as premium payments are made, your loved ones receive the policy s death benefit regardless of when you pass away. YOUR ENTIRE LIFETIME Permanent insurance provides lifetime protection at a guaranteed level amount for the life of your policy. $ YOUR ENTIRE LIFETIME $ Note: All guarantees are subject to the claims paying ability of the issuing insurance company. 3
Meeting today s needs and addressing tomorrow s goals Permanent insurance and term insurance offer different advantages during life s journey. While term insurance coverage is a less-expensive option when you initially purchase coverage, the cost of your insurance will likely increase as you get older. In fact, over your lifetime, term insurance can actually be far costlier than permanent insurance. In many cases, that s why we recommend that you consider converting your term insurance to whole life insurance because of the guarantees and flexibility whole life offers during your lifetime. A whole life policy offers you the opportunity to build tax deferred cash value in your policy. You are also able to earn dividends. Though dividends are not guaranteed, they can provide cash payments or higher death benefits that are above and beyond the guaranteed amount defined in your policy contract. It is important to know that while the companies of OneAmerica have paid dividends consistently since 1877, they are not guaranteed. Whole life insurance is protection you provide to your family offering guaranteed level premiums, guaranteed cash value accumulation and a guaranteed death benefit. The differences between term and whole life insurance Length of coverage The ability to accumulate cash value Term Insurance Provides a tax-free death benefit for a limited time period. A term policy helps protect your family financially in the event that you die while your coverage is in force. Term insurance does not build cash value within your policy. Whole Life Insurance Provides a lifetime, tax-free death benefit as long as your premiums are paid. This death benefit can help protect your family financially for your entire life, as long as the policy remains in force. Accumulates guaranteed cash value over time, which increases each year. Dividend payments Typically, does not receive dividends Is eligible to receive policy dividends, which are a non-guaranteed return of premium that can be taken in cash or used to purchase additional paid-up insurance. The ability to borrow against your policy Policy premiums N/A: There is no cash value to borrow against. Lower priced level-premiums during a specific period of time, covering the cost of insurance. Cash values can help provide you with additional financial security throughout retirement, help you prepare for college expenses, or be used for any purpose you wish. Premiums remain level throughout your entire lifetime. Though higher, permanent life insurance premiums provide additional features and benefits. 4
A lifetime of coverage for life s journey Age 25: John and Mary get married Age 30: They start a family Age 35: Mary gets a great job that moves them to a new city Age 40: Mary has a few health scares but is a-ok Age 45-55: John and Mary send kids off to school and plan for retirement Age 60: John and Mary retire Policy year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Whole Life policy is in force for the rest of her life BOTH JOHN AND MARY PURCHASE $500,000 OF 30-YEAR TERM COVERAGE MARY CONVERTS $250,000 OF HER TERM POLICY TO WHOLE LIFE AT POLICY YEAR SEVEN MARY CONVERTS ANOTHER $250,000 TO WHOLE LIFE AT POLICY YEAR THIRTEEN Mary s Whole Life policy begins to accumulate cash value that she can use to help fund her children s college expenses and prepares for retirement Mary understood that purchasing life insurance in the future might be difficult, so she decided to convert the remaining amount providing lifetime coverage. Her Whole Life policy continues to build cash value to help her provide retirement income and a death benefit for her family at death. Base term policy premiums are guaranteed to remain level during the 30 years of the policy period. John s policy will continue to stay in force offering lifetime protection, if he continues to make premium payments. However, the cost of coverage increases significantly after his guaranteed level premium period ends. Note: All numeric examples listed are hypothetical and all individuals are fictitious and are provided for explanatory purposes only. These examples are not intended to represent typical cost or performance. 5
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Options for lifetime coverage The OneAmerica difference We understand that the reason you originally purchased life insurance is personal and unique - and we understand that as life changes, so do your needs. That s why at the companies of OneAmerica we give you the option to convert your term insurance to permanent life insurance coverage with the following privileges associated with term insurance ownership, options permanent coverage and benefits associated with converting your policy. Understanding your conversion privileges You may convert your term insurance before the expiration of your conversion period without having to re-apply or provide evidence of good health. At the companies of OneAmerica, we believe in making the process of converting to a permanent policy a simple one for our policyholders. Understanding your options You may choose from our complete portfolio of permanent products not just a single product. Many life insurance companies restrict what type of policy you are able to convert your term policy to, but at the companies of OneAmerica, we allow you to select from our full suite of products: Whole life insurance products including our pay to age 100 or page to age 121 policies, and our limited-pay product that gives you the option to pay for your life insurance coverage over a limited number of years, instead of paying premiums for your entire life. Asset-based long-term care product line, which is designed to help you prepare for long-term care expenses using a whole life or annuity product as the foundation. Universal life insurance products Understanding your conversion credit You may receive a conversion credit of your current annual premium amount toward your whole life insurance premium. This one-time benefit helps you offset your initial annual premium payment for your new coverage. Generally, a conversion credit is provided after the first year of term policy ownership. Taking the next step Converting your term policy to permanent insurance is not complicated. In fact, it starts with a simple phone call to your financial professional. Together you and your financial professional will: Discover the numerous benefits of permanent insurance ownership, including the ability to take advantage of your permanent policy s cash value accumulation Discuss what has changed in your life and if the amount of your current life insurance protection is adequate to address your future goals Review our wide array of permanent insurance products and explore which one might best fit your needs Determine if you need to update your beneficiaries or adjust any of your other policy provisions It is difficult to predict how your protection needs will change over time. Converting your term insurance now can assure that you are prepared for life s journey ahead. Talk to your financial professional with the companies of OneAmerica and learn how you can convert to lifetime protection in just a few simple steps. 7
About AUL American United Life Insurance Company (AUL) is the founding member of OneAmerica and is focused on providing a strong portfolio of products for individuals, families and businesses. AUL uses a national network of experienced professionals utilizing an extensive menu of financial products, including life insurance, retirement, annuities and employee benefit plan products. The company helps consumers prepare for tomorrow by helping to protect their financial futures. About State Life The State Life Insurance Company, a OneAmerica company, is focused on providing asset-based long-term care solutions. State Life is a recognized leader in providing these solutions, which utilize life insurance, fixed-interest deferred and immediate annuities. The company s extensive Care Solutions portfolio of products helps consumers prepare for future long-term care needs by helping to protect their assets. About OneAmerica OneAmerica Financial Partners, Inc., is headquartered in Indianapolis, IN. The companies of OneAmerica can trace their solid foundations back more than 130 years in the insurance and financial services marketplace. OneAmerica s nationwide network of companies offers a variety of products to serve the financial needs of their policyholders and other clients. These products include retirement plan products and services; individual life insurance, annuities, long-term care solutions and employee benefit plan products. The goal of OneAmerica is to blend the strengths of each company to achieve greater collective results. The products of the OneAmerica companies are distributed through a network of employees, agents, brokers and other distribution sources that are committed to increasing value to our policyholders by helping them prepare to meet their financial goals. American United Life Insurance Company a OneAmerica company One American Square, P.O. Box 368 Indianapolis, IN 46206-0368 (317) 285-1877 www.oneamerica.com 2012 OneAmerica Financial Partners, Inc. All rights reserved. OneAmerica and the OneAmerica banner are all registered trademarks of OneAmerica Financial Partners, Inc. I-24560 I-24560 12/17/12