Product and Underwriting Reference Guide

Transcription

1 Product and Underwriting Reference Guide UPDATE

2 TABLE OF CONTENTS Life Product Guides Term Life... Pg. 1-4 Universal Life... Pg. 5-8 Whole Life...Pg Worksite Sensible Benefits...Pg Rider Guides Rider and Benefit Definitions...Pg Additional Rider and Benefit Information...Pg Grange Life is committed to making your experience selling our products even easier. This guide is designed to give you a comprehensive view of the products, riders and underwriting guidelines for the Grange Life products you re offering your clients. Underwriting Guide Underwriting Requirements... Pg. 22 Underwriting Risk Class Guidelines...Pg Build Chart...Pg Financial Underwriting Guidelines... Pg. 27 Financial Letters Sample Agent Cover Letters...Pg CPA Letter... Pg. 31 Billing and Initial Premium Payment Options...Pg.32

3 Term Life Select Choice Annual Renewable Term (ART) Select Choice Annual Renewable Term (ART) Target Audience - Markets Clients looking for smaller policies for less than 10 years Clients looking for affordable coverage for a specific time period Ratings Beneficiary Designations Table A-H and Flat Extra Beneficiary selections are reviewed in underwriting to verify insurable interest; designations must include name, relationship, SSN and portion of death benefit each should receive Product Description Guaranteed level premium coverage for 1 year; policy renews each year at a new rate with no additional underwriting required Guaranteed level premium coverage for 10, 15, 20, 25 or 30 years; then renews each year at Yearly Renewable Term (YRT) premiums with no additional underwriting required Required Application (use state-specific versions of paper forms) Riders and Benefit Options* L-3-55 (full-length application), L-3-67 (short-form Snap Ticket) or apply online Accelerated Death Benefit (for terminal illness), Accidental Death Benefit, Children s Term, Waiver of Premium Accidental Death Benefit, Children s Term, Waiver of Premium (Accelerated Death Benefit for terminal illness is automatically included in the base contract) Minimum/Maximum Face Amounts and Issue Ages (as of last birthday) $50,000 $150, Face Amount Bands Band 1: $50,000 $99,999 Band 2: $100,000 $150,000 Underwriting Classes $50,000/No official maximum Ages 18 70: 10-year Ages 18 65: 15-year Ages 18 60: 20-year Ages 18 55: 25-year Ages 18 50: 30-year Band 1: $50,000 $99,999 Band 2: $100,000 $249,999 Band 3: $250,000 $499,999 Band 4: $500,000 $999,999 Band 5: $1,000,000+ Preferred Plus Non-tobacco, Preferred Non-tobacco, Standard Plus Non-tobacco, Standard Non-tobacco, Preferred Tobacco, Standard Tobacco; $100,000 minimum face amount for preferred classes and Standard Plus Non-tobacco Policy Fee $60 (commissionable) $75 (commissionable) Premium Guarantee 1 year Won t exceed premiums listed in the policy; YRT premiums guaranteed YRT Coverage Max. Age 95 Modes Annual, Semi-Annual, Quarterly, Monthly Easy Pay Conversion Privileges Reinstatement Rules Underwriting Class Change Grace Period Prohibited before 1st policy anniversary and after the anniversary following the insured s 70th birthday; cannot increase face amount or change risk class; no conversion to SPUL * Accelerated Death Benefit not available on Annual Renewable Term in Illinois. Prohibited before 1st policy anniversary and after end of level term or the anniversary following the insured s 70th birthday, whichever is earlier; cannot increase face amount or change risk class; no conversion to SPUL Allowed within 3 years of due date of unpaid premium; requires reinstatement application and payment of premium with annual interest from date of reinstatement to next due date + cost of any coverage provided in Grace Period; subject to underwriting approval; must qualify for original risk class Allowed after first policy year; subject to underwriting approval 31 days (policy remains in force as long as all premiums due are paid by end of Grace Period) Conditional Receipt Available up to $150,000 Available up to $250,000 Accelerated Death Benefit For terminal illness must be selected For terminal illness automatically included Worksite Availability Not available Available at $100,000+ with full underwriting; monthly billing mode only Quoting Available on GAINWeb Life under Quote Continued Ownership Rules Unlimited ownership arrangements as necessary but parent/grandparent ownership of policy on a child age 26 or older strongly discouraged 1 2

4 Term Life First Step First Step Target Audience - Markets Parents/grandparents looking for a low-cost policy for children/ grandchildren; limit one First Step policy per child Riders and Benefit Options Waiver of premium included on all insureds age 15 years+ Product Description Guaranteed level premium coverage to age 30 Minimum/Maximum Face Amounts and Issue Ages (as of last birthday) Face Amount Bands $25,000 Ages 15 days - 17 years Limit one First Step policy per child Conversion Privileges Reinstatement Rules May convert to a permanent plan with up to $50,000 of coverage subject to product minimums; must occur no later than insured s 30th birthday or the date specified on the contract; no evidence of insurability needed Allowed within 3 years of due date of unpaid premium; requires reinstatement application and payment of premium with annual interest from date of reinstatement to next due date + cost of any coverage provided in Grace Period; subject to underwriting approval; must qualify for original risk class Underwriting Classes Standard only Policy Fee None Premium Guarantee $70 Annual or $35.70 Semi-Annual Maturity Age 30 Underwriting Class Change Grace Period Conditional Receipt Worksite Availability 31 days (policy remains in force as long as all premiums due are paid by end of Grace Period) Not available Not available Modes Annual, Semi-Annual Quoting Ownership Rules Minors can own a policy on themselves as allowed in their state; insureds become owners at age 21 unless specified otherwise Ratings None Beneficiary Designations Beneficiary selections are reviewed in underwriting to verify insurable interest; designations must include name, relationship, SSN and portion of death benefit each should receive Required Application (use state-specific versions of paper forms) L-3-73 (juvenile application) or apply online 3 4

5 Universal Life Accumulation Universal Life Accumulation Universal Life Target Audience - Markets Clients who want permanent protection and have the ability to fund the policy for its cash value growth potential; parents/grandparents who want to provide children permanent protection and cash to launch them into adulthood Ownership Rules Unlimited ownership arrangements as necessary but parent/grandparent ownership of policy on a child age 26 or older strongly discouraged Product Description Issue Ages (as of last birthday) Minimum/Maximum Face Amounts Face Amount Bands Band 1: $50,000 $99,999 Band 2: $100,000 $249,999 Band 3: $250,000 $999,999 Band 4: $1,000,000+ Universal life product with adjustable death benefit, flexible premiums and cash value; increasing Cost of Insurance (COI) and policy charges must be met each year until the month following the insured s 121st birthday 0 85; varies by underwriting class; see ages below in Underwriting Classes category $50,000 (all underwriting classes except Preferred Plus) - No official maximum $100,000 (Preferred Plus) - No official maximum Underwriting Classes Preferred Plus Non-tobacco (18 85), Preferred Non-tobacco (18 85), Standard Plus Non-tobacco (18 85), Standard Non-tobacco (0 85), Preferred Tobacco (18 75), Standard Tobacco (18 85) Policy Fee Death Benefit Guarantee Maturity Age 121 $7.50 monthly through insured s age 121 (non-commissionable) Guaranteed for first 10 policy years if cumulative minimum premium is paid Ratings Beneficiary Designations Required Application (use state-specific versions of paper forms) Riders and Benefit Options Reinstatement Rules Table A-H and Flat Extra Beneficiary selections are reviewed in underwriting to verify insurable interest; designations must include name, relationship, SSN and portion of death benefit each should receive L-3-55 (full-length application), L-3-67 (short-form Snap Ticket) or apply online All juvenile cases use L-3-55 or apply online Accidental Death Benefit, Children s Term, Long Term Care, Other Insured, Waiver of Monthly Deduction (Accelerated Death Benefit for terminal illness is automatically included in the base contract) Allowed within 3 years of date coverage ended; reinstatement application and payment to cover all past due costs of insurance/monthly deductions + enough premium to keep policy in force 3 months required; policy loans must be paid or reinstated with interest due; subject to underwriting approval; must qualify at original risk class Note: Grange Life will only reinstate policies one time during each policy year Modes 1035 Exchanges/ Lump Sum Death Benefit Option Annual, Semi-Annual, Quarterly, Monthly Easy Pay Allowed Option A Level: specified amount Option B Increasing: cash value + specified amount Underwriting Class Change Grace Period Conditional Receipt Available up to $250,000 Accelerated Death Benefit Allowed after 1st policy year; subject to underwriting approval 61 days; begins when cash value is insufficient to make monthly deductions (policy remains in force if required premium paid before end of Grace Period) For terminal illness automatically included Guaranteed Interest Rate 2% Surrender Charge Loans Partial Withdrawals/ Surrenders 15-year declining schedule expressed as a dollar amount per thousand of specified amount Available for up to 90% of current net surrender value; loans adversely affect policy s guarantees and performance; 8% interest charged in arrears; 6% crediting rate; after 10 years the rate for both is 8% Available after first policy year; cash value may never drop below $500; policy specified amount must remain above minimum level for client s risk class; a surrender charge will apply 7702 Compliance Guideline Premium Test or Cash Value Accumulation Test; client selection at issue cannot be changed for the duration of the policy Guaranteed Lapse Protection Catch-up Provision SureTrack Guarantee Tracker Worksite Availability Quoting Policy guaranteed not to lapse in first 10 years as long as cumulative Minimum Lapse Protection Premium is paid Available for $50,000+ with full underwriting; only on monthly billing mode Available on GAINWeb Life under Quote Continued 5 6

6 Universal Life Single Premium Universal Life (SPUL) Single Premium Universal Life (SPUL) Target Audience - Markets Product Description Issue Ages (as of last birthday) Minimum/Maximum Premium Maximum Face Amounts (subject to premium limits) Face Amount Bands Underwriting Classes Policy Fee Middle-age and older clients with a lump sum of money looking for a wealth transfer solution with access to the entire deposit if needed; those looking for a safe, tax-free alternative to low-interest vehicles like CD s Single Premium Universal Life product that requires no underwriting and is guaranteed until age 121 provided there are no policy loans taken Maturity Age 121 Modes 1035 Exchanges/ Lump Sum Death Benefit Option Guaranteed Interest Rate Surrender Charge Guaranteed Cash Surrender Value Loans $25,000 $100,000 maximum per insured (subject to net amount at risk maximums) Face amount is calculated from premium and Cash Value Accumulation Test (CVAT) factors Maximum Face: Ages total premium + $250,000; Ages total premium + $150,000 Single Premium no additional payments can be deposited after issue Allowed Option A Level: specified amount 2% 10-year declining percentage of account values; subject to guaranteed cash value table and return of premium Yes, based upon guaranteed cash value table and return of premium Available for up to 100% of current net surrender value; loans adversely affect policy s guarantees and performance; 8% interest charged in arrears; 6% crediting rate; after 10 years the rate for both is 8% Ratings Beneficiary Designations Required Application (use state-specific versions of paper forms) Riders and Benefit Options Post Issue Changes Reinstatement Rules Underwriting Class Changes Grace Period Beneficiary selections are reviewed in underwriting to verify insurable interest; designations must include name, relationship, SSN and portion of death benefit each should receive L-3-71 (Single Premium Universal Life application) or apply online None available (Accelerated Death Benefits for chronic and terminal illness are automatically included in the base contract) Not allowed Allowed within 3 years of the end of the Grace Period provided that the policy has not been Surrendered for Cash Value or is past the Maturity Date; reinstatement is subject to a Supplemental Application demonstrating that the insured still satisfies the requirements for the policy and repayment of any Outstanding Loan Balance and Accrued Loan Interest, compounded annually, from the end of the Grace Period to the date of the reinstatement Conditional Receipt Available up to $250,000 Accelerated Death Benefit Guaranteed Lapse Protection Catch-up Provision Sure Track Guarantee Tracker Worksite Availability Quoting 61 days (policy remains in force if required loan amount is paid before the end of the Grace Period) Automatically included for chronic and terminal illness Yes, provided there are no policy loans Not available Available on GAINWeb Life under Quote Partial Withdrawals/ Surrenders Not allowed 7702 Compliance Cash Value Accumulation Test Ownership Rules Unlimited ownership arrangements as necessary 7 8

7 Whole Life Select Security Whole Life Select Security Whole Life Target Audience - Markets Clients looking for traditional permanent coverage; parents/grandparents wanting to give children/grandchildren lifelong coverage Beneficiary Designations Beneficiary selections are reviewed in underwriting to verify insurable interest; designations must include name, relationship, SSN and portion of death benefit each should receive Product Description Whole life product with guaranteed premiums and guaranteed cash values Issue Ages (as of last birthday) Minimum/Maximum Face Amounts Ages 0 80 Ages 0 17: $10,000 $100,000 Ages 18 80: $15,000+ Face Amount Bands Band 1: $10,000 $99,999 Band 2: $100,000 $249,999 Band 3: $250,000+ Underwriting Classes Preferred Plus Non-tobacco (18 80), Preferred Non-tobacco (18 80), Standard Plus Non-tobacco (18 80), Standard Non-tobacco (0 80), Preferred Tobacco (18 80), Standard Tobacco (18 80); $100,000 minimum face amount for preferred classes and Standard Plus Non-tobacco Underwriting class for level term rider based on rider amount. Can be different than base underwriting class. Policy Fee Premium Guarantee Maturity Age 121 $60 (commissionable) Base premium guaranteed; Other Insured and Primary Insured at YRT rates (not guaranteed) Required Application (use state-specific versions of paper forms) Riders and Benefit Options* Reinstatement Rules Underwriting Class Change L-3-55 (full-length application), L-3-67 (short-form Snap Ticket) or apply online All juvenile cases use L-3-73 or apply online Accidental Death Benefit, Children s Term, Guaranteed Insurability Option, Other Insured, Primary Insured, Waiver of Premium (Accelerated Death Benefits for chronic and terminal illness are automatically included in the base contract) The other insured and primary insured rider provide level term coverage for a selected duration of either 10- or 20-years. Level term rider issue ages: (10-year level); (20-year level) Allowed within 3 years after due date of unpaid premium; requires reinstatement application and payment of premium from date of reinstatement to next premium due date + premium for any coverage in the Grace Period; subject to underwriting approval; must qualify at the original risk class Note: Grange Life will only reinstate Select Security Whole Life policies one time during each policy year Allowed after 1st policy year; subject to underwriting approval Modes 1035 Exchanges/ Lump Sum Payment Options Annual, Semi-Annual, Quarterly, Monthly Easy Pay, Single Premium Available for Single Premium only Level Lifetime, Single Premium, 20-pay Grace Period Non-Forfeiture Options 61 days (policy remains in force if required premium paid before end of Grace Period) Surrender for Cash Value, Reduced Paid Up Death Benefit Loans Partial Withdrawals/ Surrenders Ownership Rules Ratings Specified amount Available for up to 90% of current cash value; loans adversely affect policy s guarantees; 6% interest charged Not available Unlimited arrangements as necessary except ownership by parent/grandparent for a child age 26 or older strongly discouraged Table A-H and Flat Extra Table ratings not available on Single Pay or 20-pay Accelerated Death Benefit Conditional Receipt Available up to $250,000 Worksite Availability Quoting Automatically included for chronic and terminal illness Available for $150,000+ with full underwriting; only on monthly billing mode Available on GAINWeb Life under Quote * Guaranteed Insurability Option is the only optional rider selection available for single premium and juvenile whole life policies. Continued 9 10

8 Whole Life Final Expense Whole Life Graded Final Expense Whole Life Final Expense Whole Life Graded Final Expense Whole Life Target Audience - Markets Mature clients wanting permanent coverage for final expenses Mature clients who can t qualify for regular final expense policy Beneficiary Designations Beneficiary selections are reviewed in underwriting to verify insurable interest; designations must include name, relationship, SSN and portion of death benefit each should receive Product Description Issue Ages (as of last birthday) Modest whole life product with guaranteed premiums and guaranteed cash values Modest whole life policy with guaranteed premiums and cash values for harder-toinsure clients Required Application (use state-specific versions of paper forms) L-3-50 (Final Expense application) or apply online Minimum/Maximum Face Amounts $3,000 $25,000 Face Amount Bands Band 1: $3,000 $25,000 Underwriting Classes Insureds may purchase more than one Final Expense WL or Graded Final Expense WL policies; the combined total coverage for final expense products per insured cannot exceed $25,000 Standard Non-tobacco, Standard Tobacco Riders and Benefit Options Reinstatement Rules Allowed within 3 years after due date of unpaid premium; requires reinstatement application and payment of premium from date of reinstatement to next premium due date + premium for any coverage in the Grace Period; subject to underwriting approval; must qualify at the original risk class Policy Fee $50 (commissionable) Premium Guarantee Premium guaranteed Maturity Age 121 Modes Annual, Semi-Annual, Quarterly, Monthly Easy Pay Underwriting Class Change Grace Period Non-Forfeiture Options Allowed after 1st policy year; subject to underwriting approval Not allowed 61 days (policy remains in force if required premium paid before end of Grace Period) Surrender for Cash Value, Automatic Premium Loan, Reduced Paid Up 1035 Exchanges/ Lump Sum Payment Options Level Lifetime Death Benefit Specified amount After 2nd policy year, specified amount; in 1st 2 policy years, return of premium Conditional Receipt Worksite Availability Quoting Available Available on GAINWeb Life under Quote Loans Partial Withdrawals/ Surrenders Ownership Rules Available Not available Unlimited arrangements as necessary Ratings 11 12

9 Worksite Sensible Benefits Worksite Term Worksite Term Target Audience - Markets Product Description Issue Ages Minimum/Maximum Face Amounts (as of last birthday) Companies looking to enhance their employee benefits with life insurance at little cost to them Level term for 10 or 20 years Ages 18 70: 10-year Ages 18 60: 20-year Ages 18 70: $25,000 - $100,000 Face Amount Bands Band 1: $25,000 $49,999 Band 2: $50,000 $100,000 Underwriting Classes Unisex Standard Non-smoker, Unisex Standard Smoker Guaranteed and simplified issue basis. See the Sensible Benefits Agent Guide for more details. Grace Period Coverage for Spouse or Adult Children (Ages 18-25) Portable Coverage Product Rate Sheets Quoting 31 days (policy remains in force if required premium paid before end of Grace Period) Available subject to simplified underwriting Spouse or adult children applying for more than $50,000 in coverage must sign the application Upon termination of employment, client can continue policy by switching to Annual, Semi-Annual, Quarterly or Monthly Easy Pay mode Available Available on GAINWeb Life under Quote Continued Policy Fee $35 (commissionable) Premium Guarantee YRT Coverage Max. Age 95 Modes Ownership Rules Ratings Beneficiary Designations Required Application (use state-specific versions of paper forms) Guaranteed level for 10 or 20 years; then renews at YRT premiums with no additional underwriting required Monthly, 13-Pay Unlimited ownership arrangements as necessary Table A-H and Flat Extra Beneficiary selections are reviewed in underwriting to verify insurable interest; designations must include name, relationship, SSN and portion of death benefit each should receive L-3-45 (Sensible Benefits application) Riders and Benefit Options Conversion Privileges Accidental Death Benefit, Children s Term Conversion limited to worksite whole life product. Prohibited before 1st policy anniversary and after end of level term or the anniversary following the insured s 70th birthday, whichever is earlier; can t increase face amount or change risk class Reinstatement Rules Underwriting Class Change Allowed within 3 years of due date of unpaid premium; requires reinstatement application and payment of premium with annual interest from date of reinstatement to next premium due date + premium for any coverage provided in Grace Period; subject to underwriting approval; must qualify for original risk class 13 14

10 Worksite Sensible Benefits Worksite Whole Life Worksite Whole Life Target Audience - Markets Product Description Issue Ages Minimum/Maximum Face Amounts (as of last birthday) Companies looking to enhance their employee benefits with life insurance at little cost to them Whole life product with guaranteed premiums and guaranteed cash values $3,000 $100,000 Face Amount Bands Band 1: $3,000 $24,999 Band 2: $25,000 $100,000 Grace Period Non-Forfeiture Options Coverage for Spouse or Adult Children (Ages 18-25) Portable Coverage Product Rate Sheets 61 days (policy remains in force if required premium paid before end of Grace Period) Surrender for Cash Value, Automatic Premium Loan, Reduced Paid Up Available subject to simplified underwriting Spouse or adult children applying for more than $50,000 in coverage must sign the application Upon termination of employment, client can continue policy by switching to Annual, Semi-Annual, Quarterly or Monthly Easy Pay mode Available Underwriting Classes Unisex Standard Non-smoker, Unisex Standard Smoker Guaranteed and simplified issue basis. See the Sensible Benefits Agent Guide for more details. Quoting Available on GAINWeb Life under Quote Policy Fee $35 (commissionable) Premium Guarantee Guaranteed level Maturity Age 121 Modes Monthly, 13-Pay Death Benefit Level or Increasing Loans Ownership Rules Ratings Beneficiary Designations Required Application (use state-specific versions of paper forms) Riders and Benefit Options Conversion Privileges Reinstatement Rules Underwriting Class Change Level - specified amount Available Unlimited ownership arrangements as necessary Table A-H and Flat Extra Beneficiary selections are reviewed in underwriting to verify insurable interest; designations must include name, relationship, SSN and portion of death benefit each should receive L-3-45 (Sensible Benefits application) Accidental Death Benefit, Children s Term Allowed within 3 years of due date of unpaid premium; requires reinstatement application and payment of premium with annual interest from date of reinstatement to next premium due date + premium for any coverage provided in Grace Period; subject to underwriting approval; must qualify for original premium class 15 16

11 Grange Life Rider and Benefit Definitions All riders and benefits are void upon termination of policy. In most cases riders may be added or removed after issue. Riders added are subject to product eligibility, age eligibility and underwriting approval. Accelerated Death Benefit (for terminal illness) This no cost benefit provides early payment of a portion of the death benefit if the insured is terminally ill. Benefit eligibility begins with a written certification by a licensed physician that the insured is terminally ill with a life expectancy of 12 months or less. Terminal Illness Benefit is automatically included on Accumulation Universal Life, Single Premium Universal Life, Level Term and Select Security Whole Life contracts and accelerates 100% of the base policy death benefit. On Annual Renewable Term the benefit must be selected at contract issue and accelerates 50% of the base policy death benefit up to a maximum of $250,000. Accelerated Death Benefit (for chronic illness) Provides an annual maximum benefit up to 25% of the death benefit each year and is subject to the HIPAA limit per diem amount X 365. The total benefit available is 100% of the death benefit amount (minus any policy indebtedness). Benefit eligibility begins with a written certification by a licensed physician that the insured is considered permanently chronically ill and can no longer perform 2 of the 6 Activities of Daily Living (ADLs) or is cognitively impaired requiring substantial supervision to protect the insured and others from threats to health and safety. There's no charge for this benefit unless there's a claim, and the charges are deducted from the benefit. The charges are a $500 administration fee and an actuarial adjustment factor based on the present value of the benefit being paid. Chronic Illness Benefit is automatically included in the Single Premium Universal Life and Select Security Whole Life contracts. It is not available on any other products. Accidental Death Benefit Pays an increased death benefit in case of accidental death. Benefit terminates at age 70. Children s Term Rider Provides coverage for all eligible dependent children in amounts of $1,000 - $10,000. All eligible children (aged 15 days to 17 years) are covered under one premium charge based on amount of coverage. Future-born or adopted children of the base insured may be added once the children are 15 days old. Once insured, the child is covered until the earlier of their age 25 or base insured s age 65, at which time the child may purchase 5x the amount of the rider in permanent insurance without providing evidence of insurability. Conversion is available beginning at the child s age 18. Guaranteed Insurability Option Guarantees the base insured the right to purchase additional life coverage without evidence of insurability when the insured attains ages 25, 28, 31, 34, 37 and 40. Special option dates are available at marriage and birth or adoption of a child. Use of a special option will cancel next regular option date. At marriage the insured/owner may transfer the special option to the spouse to permit the spouse to buy insurance up to option amount without providing evidence of insurability. Long Term Care (LTC) Rider Provides a monthly benefit for qualifying incurred LTC expenses up to 4% of the LTC benefit amount selected at time of issue; total payout is 100% of the LTC benefit amount (minus any policy indebtedness) for the base insured as long as the policy and rider are in force. The rider has a built-in waiver to cover policy charges once the account value reaches zero. Benefit eligibility begins with a licensed health care practitioner s certificate for a plan of care due to the insured s inability to perform, without substantial assistance from another, at least 2 of 6 Activities of Daily Living (ADLs) for a period expected to last at least 90 days or due to severe cognitive impairment requiring substantial supervision to protect the insured and others from threats to health and safety. LTC includes care in a nursing home, an assisted-living facility or at home. 17 Other Insured Rider Allows a family member (spouse or adult child) to be included on the base insured s policy. Select Security Whole Life Other Insured Rider provides 10- or 20-year level term coverage that ends after the level term period. Other Insured Rider provides coverage that ends at the earlier of the other insured s or base insured s age 95. Primary Insured Rider Adds 10- or 20-year level term coverage to the base insured s permanent plan of insurance. Rider terminates at the end of the level term period. Waiver of Monthly Deduction Waives the payment of monthly deductions due while the primary insured is totally and permanently disabled. Disability must begin by age 60. Waiver of Premium Waives the payment of all premiums due while the primary insured is totally and permanently disabled. Disability must begin by age 60. Waiver includes all coverages on the policy. 18

12 Additional Rider and Benefit Information Accelerated Death Benefit (for terminal illness) Accelerated Death Benefit (for chronic illness) Accidental Death Benefit Children s Term Rider Guaranteed Insurability Option Long Term Care Rider Other Insured Rider Primary Insured Rider Waiver of Monthly Deduction Waiver of Premium Rider/ Product Availability Select Choice Level Term* * SPUL* Select Security Whole Life* *included in contract SPUL* Select Security Whole Life* *included in contract Select Security Whole Life excluding Juvenile, 20-pay and Single Premium Worksite Term and Whole Life Select Security Whole Life - excluding Juvenile, 20-pay and Single Premium Worksite Term and Whole Life Select Security Whole Life Select Security Whole Life excluding Juvenile and Single Premium Select Security Whole Life - excluding Juvenile and Single Premium Select Choice Level Term Select Security Whole Life excluding Juvenile and Single Premium Issue Age Term SPUL 0 80 Select Security Whole Life SPUL 0 80 Select Security Whole Life (base insured age) (base insured age ) 15 days 17 years (child) : 10-year level 18 60: 20-year level (rider age Whole Life) (rider age ) 18 70: 10-year level 18 60: 20-year level Base insured age 18+ Coverage Amount 100% of death benefit on, SPUL, Level Term and Select Security Whole Life ART up to 50% of current death benefit amount ($250,000 maximum) Up to 25% of the death benefit each year (less actuarial adjustment and administrative fee); total benefit available is 100% of the current death benefit (less indebtness) $25,000 to lesser of base face amount or $250,000 $1,000 $10,000 $15,000 $25,000 Greater of 10% of base coverage or $10,000 up to base coverage amount. Monthly benefit up to 4% of LTC Rider (minus any policy indebtedness) $50,000+ (Whole Life) $50,000+ up to base face amount (Universal Life) 50,000+ Equal to face amount Substandard Availability Available through table D including flat extras Not available on a substandard base plan Available through table B Available when base plan is rated. The rider can be rated independently of base insured. Rating must equal the base plan rating Available through table D including flat extras Cost Basis No cost Actuarial adjustment and $500 admin. fee per claim $0.96 per thousand for UL $0.95 per thousand all other $5.00 per thousand Varies by age and gender Varies by issue age, gender and risk class Varies by age, gender and risk class Depends upon product May vary by age, gender and risk class Conversion Privileges At child age or base insured s age 65, whichever is earlier, child can purchase up to 5X the amount of rider in permanent coverage without evidence of insurability Conversion must occur at the earlier of the policy anniversary following the insured s 70th birthday or at the end of the level term period; cannot increase face amount or change risk class; no conversion to SPUL Convertible if not disabled at the time of the conversion Coverage Expiration At base policy termination At base policy termination The earlier of base insured s age 70 or at base policy termination The earlier of child attaining age 25 (policyowner must notify company when this occurs) or base insured s age 65, or at base policy termination At the policy anniversary following the base insured s 40th birthday or at base policy termination At base policy termination At termination of base contract, or the earlier of the base insured s or the other insured s age 95 on Accumulation UL; the end of the level term period on Select Security Whole Life At the end of the level term period or at termination of base contract Base insured s age 60 or at base policy termination In most cases riders may be added or removed after issue. Riders added are subject to product eligibility, age eligibility and underwriting approval. 19 In most cases riders may be added or removed after issue. Riders added are subject to product eligibility, age eligibility and underwriting approval. 20

13 Grange Life Underwriting Requirements Age Face Amount $3,000 through $49,999 Non-medical Non-medical Non-medical 2 $50,000 through $99,999 (all products except ) $50,000 through $99,999 (Accumulation UL only) Non-medical Non-medical Short Form $100,000 through $250,000 Expedited Underwriting Please do not order requirements as they may not be necessary to underwrite the case. Underwriting will contact you if requirements are needed. ( at $250,000 3 ) $250,001 through $499,999 $500,000 through $2,000,000 $2,000,001 and over General Financial Requirements $1,500,001 Inspection Report, Financial Questionnaire (L-21-22) $3,000,000 $3,000,001+ Inspection Report, Financial Questionnaire (L-21-22), cover letter and third party verification of income and net worth Please consult with an underwriter prior to submission Additional underwriting requirements may be ordered, including an Attending Physician s Statement (APS), at the underwriter s discretion at any face amount The SPUL product is non-medical 1 Policies are underwritten based on total amount of life insurance in force with Grange Life on the proposed insured + the pending new amount 2 Underwriting is non-medical for final expense policies 3 is required for face amounts of $250,000 in this band ($100,000 $250,000; ages 51 60); face amounts of $249,999 or less in this band do not require an Ages 0 17 are non-medical for coverage amounts up to $100,000; for amounts greater than $100,000, please contact the home office for requirements Questions? Call Life Underwriting at (800) , options 1, 2. 22

14 Underwriting Risk Class Guidelines Preferred Tobacco Standard Standard Tobacco/Smoker*** Preferred Plus Preferred Standard Plus Minimum Face Amount Varies by product Minimum Face Amount Tobacco/ Nicotine Use* Build Varies by product No use in last 48 months No use in last 24 months No use in last 12 months See Build Chart Blood Pressure To age 60: 135/85 61+: 140/90 To age 60: 140/90 61+: 150/90 Total Cholesterol Cholesterol/ HDL Ratio Driving Record Within 5 years: No DUI or reckless driving citations Within 2 years: No more than 1 moving violation Within 5 years: No DUI or reckless driving citations Within 2 years: No more than 2 moving violations 150/90 Within 3 years: No DUI or reckless driving citations Within 2 years: No more than 2 moving violations Tobacco/ Nicotine Use* Build Currently using No use in last 12 months Currently using See Build Chart Blood Pressure To age 60: 140/90 61+: 150/90 Subject to underwriter review Total Cholesterol 250 Subject to underwriter review Cholesterol/ HDL Ratio Driving Record Aviation/ Avocation 5.5 Subject to underwriter review Within 5 years no DUI or reckless driving citations Within 2 years: no more than 2 moving violations Private aviation only with Aviation Exclusion; no ratable avocation Within 2 years: No DUI or reckless driving citations Private Aviation allowed Aviation/ Avocation Personal History Private aviation only with Aviation Exclusion; no ratable avocation No history of diabetes, coronary artery disease, stroke or cancer (other than some skin varieties) Private Aviation allowed No history of diabetes, coronary artery disease, stroke or cancer (some cancers may be allowed after 10 years) Personal History Family History** (applies to parents, siblings and children) No history of diabetes, coronary artery disease, stroke or cancer (other than some skin varieties) No death from cardiovascular disease or cancer before age 60 Subject to underwriter review Subject to underwriter review Family History** (applies to parents, siblings and children) No cardiovascular disease or cancer before age 60 No death from cardiovascular disease or cancer before age 60 No more than 1 death from cardiovascular disease or cancer before age 60 Other Considerations No substance abuse in past 10 years; treatment for blood pressure and cholesterol OK No substance abuse in past 5 years; treatment for blood pressure and cholesterol OK Other Considerations Product Availability No substance abuse or treatment for blood pressure; treatment for cholesterol OK No substance abuse in past 10 years; treatment for blood pressure and cholesterol OK No substance abuse in past 5 years; treatment for blood pressure and cholesterol OK Product Availability First Step Select Security WL Final Expense WL Graded Final Expense WL Worksite Term Worksite WL Select Security WL Final Expense WL Graded Final Expense WL Worksite Term Worksite WL *Tobacco/nicotine use includes any form of tobacco or nicotine including cigarettes, cigars or pipes, patch or gum, electronic cigarettes or any form of smokeless tobacco. **Family history of cardiovascular disease not applicable if applicant is over age 65. Questions? Call Life Underwriting at (800) , options 1, *Tobacco/nicotine use includes any form of tobacco or nicotine including cigarettes, cigars or pipes, patch or gum, electronic cigarettes or any form of smokeless tobacco. **Family history of cardiovascular disease not applicable if applicant is over age 65. ***Smoker class only applies to Worksite products and is defined as cigarette use only. 24

15 Build Charts Male Preferred Plus Preferred & Preferred Tobacco Standard Plus Standard & Tobacco Female Preferred Plus Preferred & Preferred Tobacco Standard Plus Standard & Tobacco Height Maximum Weight (LBS) Height Maximum Weight (LBS) Questions? Call Life Underwriting at (800) , options 1, 2. Questions? Call Life Underwriting at (800) , options 1,

16 Financial Underwriting Guidelines Type of Coverage Maximum Face Amount Personal Ages X income Ages X income Ages X income Ages X income Ages X income Ages 66+ 5X income Non-working Spouse Dependent Children College Students Parents Purchasing Coverage on Adult Children $500,000 if working spouse carries equal or greater amount; cases for more than $500,000 will be considered on a case-by-case basis; maximum of $1,000,000 $100,000 as long as the parents carry equal or greater amount and all siblings are similarly insured; ideally, parents will have 3-4 times as much coverage as their children $250,000; individual consideration can be made for grad students or pre-law, pre-medicine, etc. to a maximum of $500,000 Generally not allowed (exceptions for mental impairment and/or disability) Collateral Up to 75% of the loan, depending on amount and purpose; minimum term of loan should be 5 years Buy-Sell & Stock Repurchase Should be directly related to the proposed insured s ownership percentage and company s fair market value and net earnings of the business; all partners should be similarly insured Key Person Up to age 65 10X income Ages 66+ 5X income Present the financial underwriting information in the form of a cover letter and include copies of the needs/estate planning analysis and available financial statements. Cover letters are particularly useful for: Collateral coverage explain loan history and intentions regarding future loans and expansion Buy/Sell and stock repurchase policies document the proposed insured s ownership percentage, company s fair market value and net earnings and amount of insurance on partners Key person insurance note the key person s value to the company, how coverage type/amount determined and whether the proposed insured has ownership in the company Questions? Call Life Underwriting at (800) , options 1, 2. 27

17 Letters Sample Agent Cover Letters: Sample 1 Sample Agent Cover Letters: Sample 2 March 21, 2012 Grange Life Insurance Company 671 South High Street PO Box Columbus, OH Grange Life Insurance Company 671 South High Street PO Box Columbus, OH Attention: Grange Life Underwriting or named Underwriter Attention: Grange Life Underwriting or named Underwriter Re: Life application for Mr. Shawn Black Re: Life application for Mary Smith Grange Life Underwriting: Grange Life Underwriting: Enclosed please find the following in regard to Life Insurance coverage for Mr. Shawn Black: This cover letter is a brief summary regarding the coverage amount needed for the proposed applicant Mary Smith. A Grange Life application on the life of Mary Smith for $1,000,000 is enclosed. Mary is getting married to John Brown on John Brown is a current Grange Life customer and also has his home and auto insured with Grange Insurance. The need for this face amount is family protection. Mary has a 10-year-old son and, upon marriage to John in June, she will have a step-daughter and a step-son. In the event of her premature death, the death benefit will provide financial protection for her husband John and children. This coverage is needed to replace Mary s responsibilities such as child care service and housekeeping. Mary s occupation is a fitness instructor and, previously, a fashion designer. Her intention is to return to the fashion industry next year. Loss of income and future educational expenses are also a concern. John is the owner/operator of a long-time successful manufacturing company. His combined personal and business life insurance policies total approximately $2.5 million of coverage. A buy-sell agreement with his partner is also in place. If you have any questions or need further information regarding this application, please contact me. Application for a $2,000, year level term policy Signed numeric summary Signed HIPAA compliance release Medical Examiners report Resting CPA letter addressing the need for insurance Financial questionnaire The blood work is complete and sent to your laboratory. Mr. Black has the following insurance in force: American States Insurance $2,000,000 Grange Life Insurance $2,000,000 Mass Mutual $2,000,000 The American States policy is assigned to a bank as additional collateral for a long term loan. The Grange and Mass Mutual policies are structured to cover the income tax per the accountant s letter. The purpose of this policy would be to provide financial support for Mr. Black s spouse. Respectfully, Tom Davis XYZ Insurance Agency Respectfully, Tom Davis XYZ Insurance Agency Questions? Call Life Underwriting at (800) , options 1, Questions? Call Life Underwriting at (800) , options 1, 2. 30

18 Letters Billing and Initial Premium Payment Options Sample Cover Letters: Sample 3 CPA letter Monthly Easy Pay Direct Mode Annual, Semi-Annual, Quarterly or Single Premium (UL and WL only) First Premium Payment Options for selected mode Grange Life Insurance Company 671 South High Street PO Box Columbus, OH Attention: Grange Life Underwriting or named Underwriter Re: Life application for Mr. Shawn Black Grange Life Underwriting: This letter is being sent on behalf of the referenced proposed insured regarding his need for additional life insurance. Option 1 Include payment for the first premium with the application; check the box on the application stating you are sending payment; complete the account information section of the application for future withdrawals Option 2 To withdraw first premium, don t include payment for initial premium; complete the account information section on the application and Grange Life will withdraw the first premium Option 1 Include payment for the first premium with the application Option 2 Collect payment at delivery (COD) Option 3 E-Pay (for one-time-only electronic charge to your bank account or credit card not for recurring payments) 31 As CPA for this individual and his corporations for the past 27 years, I have worked closely with his financial and insurance requirements for his estate. Mr. Black is a 50% owner in two long-distance trucking corporations. The other 50% owner is his spouse. The operation of these corporations require ongoing purchases of new equipment, which require them to be leveraged in debt to various lending institutions. The nature of the transportation industry allows the corporations to take rapid depreciation on its fixed assets (namely three years and five years). Therefore, upon the death of Mr. Black, the corporate assets will be either sold or liquidated and the total debt of the estate is expected to be retired in its entirety. The amount of estimated proceeds from such sale or liquidation will not be enough to pay both the debt and the recapture of income taxes due to accelerated depreciation taken on these assets. Accordingly, it is necessary to have the proper amount of life insurance in place at the time of death to accomplish repaying estate and income tax liability upon sale or liquidation for his spouse. If you have any questions with respect to any matters concerning Mr. Black s need for this coverage, please contact me. Respectfully, Ryan Jones ABC Certified Public Accountants Questions? Call Life Underwriting at (800) , options 1, 2. Note: There is no advance notification for when funds will be withdrawn from the bank accounts or when credit cards will be charged. Please maintain a sufficient account balance to cover quoted premium. Please review the Billing and Initial Premium Payment section of the application carefully when completing an application for life insurance. If the applicant requires a withdrawal date other than the effective date, one additional month of premium will be required. These billing modes do not apply to worksite products. First Step policies must use Annual or Semi-Annual mode. Generally Grange Life policies will not be issued for people who have: Gone through alcohol or drug treatment within the past 3 years A non-discharged Chapter 7 bankruptcy or Chapter 13 with more than 18 months remaining Been diagnosed with cancer (most types) within the last year, except for basal cell carcinoma Chronic lung disease with continued smoking Coronary artery disease combined with either diabetes or tobacco use Been hospitalized for mental illness within the past 2 years Received an organ transplant Active probation or parole sentences or who are currently incarcerated Suffered a stroke with smoking combination No personal physician and are over age 65 Two or more DUI s (unless they quit drinking over 5 years ago) An inability to comprehend the product he or she is applying for (for non-english speaking applicants, the applicant must provide a qualified interpreter for the tele-interview). Questions? Call Life Underwriting at (800) , options 1,

19 The information herein is for agent reference purposes. The information in no way alters the Grange Life policy contracts. Please refer to the entire policy contract for additional product information. All life policies are underwritten by Grange Life Insurance Company, Columbus, OH, and are subject to underwriting approval. Guarantees and protections are subject to the claims paying ability of the issuer. Not available in all states. L (3-2017) 671 South High Street Columbus, Ohio 43206