When Can a Prepayment Be Collected from the Proposed Insured? I certify and affirm that no person(s) proposed for coverage has:

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1 CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS Guide To Understanding and Completing the Limited Insurance Agreement (LIA) What Is the Limited Insurance Agreement (LIA)? The Limited Insurance Agreement (LIA) is an agreement between the company and the proposed policyowner that provides limited life insurance coverage on the proposed insured, in accordance with the terms and conditions of the agreement, during the period of time the application is being considered. The LIA will go into effect only if a prepayment can be accepted with the application according to the terms outlined in the LIA. The LIA provides coverage only during the periods specified in the agreement. It is important to note the LIA does not guarantee that coverage will be provided under the policy being applied for based on the health of the proposed insured on the date of the agreement. When Can a Prepayment Be Collected from the Proposed Insured? A prepayment can be collected under the LIA when the proposed insured can certify the following two statements are true*: Health Certification I certify and affirm that no person(s) proposed for coverage has: (1) Within the past 90 days been hospitalized or been advised by a member of the medical profession that he or she needs hospitalization for any reason (other than for normal pregnancy or wellbaby care). (1) Hospitalized means in-patient (overnight) hospital care. Do not collect a prepayment from proposed insureds who have received in-patient (overnight) hospital care within the past 90 days. It is acceptable to collect a prepayment from proposed insureds who have received out-patient hospital care and/or have visited the emergency room within the past 90 days. If you have any questions about collecting a prepayment, contact Underwriting before doing so. (2) Within the past 12 months received treatment or advice from a member of the medical profession for heart disease, chest pain, stroke, or cancer (except skin). (2) Treatment typically refers to an event. If an event related to heart disease, chest pain, or stroke occurred within the past 12 months, then a prepayment cannot be collected. (2) However, if, for example, the proposed insured had a heart attack 3 years ago, but visits the doctor every 6 months for regular check-ups, then a prepayment can be collected because the actual event (the heart attack) happened 3 years ago. With a history of cancer (except skin), if there has been an occurrence or treatment of cancer within 12 months, prepayment should not be collected. *On the Kansas LIA, these certifications appear in question format, under Part 1, Agent Instructions. The Prudential Insurance Company of America, Newark, NJ Prudential Financial, Inc. and its related entities. NOT FOR CONSUMER USE Ed. 01/2017 Exp. 01/25/2019

2 Proposed Face Amount and Prepayments Provided the proposed insured can certify the prior attestations, is 75 or younger and has not been declined coverage with Prudential within the past 12 months, a prepayment may be accepted on face amounts applied for up to and including $5,000,000 either as a single $5,000,000 application, as multiple applications on the same individual totaling no more than $5,000,000, or a $5,000,000 survivorship application. In the event of an approved LIA claim on multiple prepaid policies with face amounts in excess of $1,000,000, the total benefit payable is $1,000,000.* This payment will be divided among the LIAs based on the percentage that each policy face amount represents of the total face amount applied for. Completing the Agreement The following annotations correspond with the stand-alone LIA. These annotations provide important information about the LIA. Please note: It is important to review the agreement with your clients and complete the form in its entirety. 1 Enter the name of the proposed insured. 2 Enter the face amount of the policy being applied for. The amount of limited life insurance coverage provided under the LIA is equal to the amount of insurance requested in this section up to a maximum of $1,000,000*. 3 Enter the prepayment amount. Upon payment of the amount stated here, the company agrees to provide limited life insurance coverage, under the terms and conditions of the agreement. The amount collected should equal the amount of the full first modal premium. Important Considerations: T he proposed insured must meet the health certification stated above. If he/she does not meet the health certification, prepayment should not be collected. Remember: a prepayment cannot be collected if the proposed insured is over age 75 or has been declined coverage with Prudential in the past 12 months. I f the LIA has been signed and the prepayment collected, the forms and the prepayment must be dated the same and sent to the Home Office together, even if the client requests the case be withdrawn. If the LIA is being submitted electronically, the check must be mailed to Prudential immediately. I f the form is not properly completed, any money sent to Prudential will be returned and the application will be considered on a COD basis.* P remium can only be collected in conjunction with the LIA at the point of sale (when the application is signed and/or the worksheet and MIB authorization are completed/signed) or upon policy delivery. *Note: State-specific guidelines apply in Kansas. Refer to the Kansas LIA for details. 2

3 Limited Insurance Agreement Coverage Effective Date Information (Part 2, Section A) 4 Limited insurance starts on the date all of the following requirements have been met: A payment equal to the full first required premium is received at our Administrative Office within the lifetime of the person proposed for coverage under this Agreement. A payment will be considered to be received only if one of the following valid items is received at our Administrative Office: (i) A check in the amount of the full first required premium; (ii) A completed and signed payment form for the first full premium; or (iii) Any other form of payment acceptable to the company. The form of payment submitted is honored. If payment is made by credit card (if allowed for your Distribution Channel) or automatic bank draft, no premium is considered to be honored until the company actually receives the funds unless otherwise provided by applicable law. All application information [including, but not limited to, all information necessary to complete parts 1 & 2 of the application (long form completed by the producer or during the client interview) and any questionnaires and supplements to the application] is provided and received at our Administrative Office and any medical examinations and tests required by the company are completed and received at our Administrative Office. T his agreement has been fully completed, signed, and dated by the policyowner, proposed insured (if different from the policyowner), and producer. If a covered proposed insured dies from accidental injury within 30 days of the date payment is honored and before any exams or tests are completed, a death benefit will be paid under the terms of the agreement. Note: State-specific guidelines apply in Kansas. Refer to the Kansas LIA for details. Limited Insurance Agreement End Date Information (Part 2, Section B) 5 LIA coverage ends when ANY of the following occurs: A policy is issued as applied for and the application is signed. policy is issued and delivered other than as applied for, regardless of whether the policy A is accepted. The client is sent a letter notifying him/her that coverage has been declined or will not be provided on a prepaid basis.* Sixty days have passed since the effective date of coverage.* *Note: State-specific guidelines apply in Kansas. Refer to the Kansas LIA for details. 3

4 Amount of Coverage (Part 2, Section C) 6 The total death benefit payable under an LIA is the amount requested, up to a maximum of $1,000,000*. In the event of an approved LIA claim on multiple prepaid policies with face amounts in excess of $1,000,000, the total benefit payable is $1,000,000*. This payment will be divided among the LIAs based on the percentage that each policy face amount represents of the total face amount applied for. Special Limitations (Part 2, Section D) 7 The terms and conditions of the agreement are: The total death benefit under all the LIAs combined is the amount requested, up to the maximum total of $1,000,000* ($2,000,000 for survivorship). LIA does not include any supplemental benefits. The insurance is subject to the terms, limitations, and exclusions of the policy requested from the company. The benefit under this agreement will be paid to the beneficiary designated to the company. A few states have a state-specific LIA. They are Kansas, Missouri, New Jersey, New York, and Washington.1 Be sure to check your state version for any differences. In the state of Washington, when the proposed insured is under the age of 18, the state specific Limited Insurance Agreement on a Juvenile form must be used. When any product is sold in the state of Washington, and the proposed insured is over the age of 18, the generic form should be used. 1 4

5 Signature Requirements (Part 2, Section E) 8 Signature Requirements. All signatures must be secured here. The form must be signed and dated by: The proposed insured. The policyowner (if different from proposed insured/ Parent or Guardian when proposed insured is less than age 18). The producer. If the form is not signed and dated appropriately, any money sent to Prudential will be returned and the application will be considered on a COD basis. In situations where the policyowner is not the proposed insured AND: If the policy is individually owned: O ne individual that individual must sign. J oint individuals all owners must sign. If the policy is owned by a trust: O ne trustee the trustee must sign with the title trustee as well as the name and date of the trust e.g., John Doe, trustee of the ABC Trust dated June 7, M ultiple trustees All trustees must sign unless the terms of the trust agreement or any applicable state law provides otherwise. The trustees must sign with the title trustee after each name and also include the name and date of the trust e.g., John Doe, trustee, Mary Doe, trustee of the ABC Trust dated June 7, If the policy is owned by a business: S ole Proprietorship The owner must sign, followed by the company name, e.g., John Doe, DBA John Doe Contracting. Partnership A general partner must sign with the title general partner after the name. e.g., Jones and Smith, John Jones, general partner. Corporation An authorized officer of the company e.g., president or vice president, must sign with the title after his or her name, e.g., ABC Corporation, John Smith, President. L imited Liability Company The individual or individuals authorized under the terms of the articles of organization and/or operating agreement must sign with the title after the name. If the company is managed by managers, the manager who has authority to act must sign. If the company is membermanaged, any manager can act. Also indicate if the company is managed by managers or membermanaged. For example, ABC Group LLC, John Smith, Manager (manager-managed). All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. Policy guarantees and benefits are not backed by the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company. NOT FOR CONSUMER USE. 5