Universal Life Product Description

Transcription

1 Universal Life Product Description Product Description: (2011) is a single life universal life product with Indexed Options. It was designed for clients looking for permanent life insurance with the potential for accumulation and income. There are three indexed accounts available in addition to the Fixed Account. The Fixed Account corresponds to the account value on a regular universal life policy. The Indexed Interest is non-guaranteed interest based on fluctuation of an outside index that will be credited to the Indexed Accounts at the end of each segment year. The interest rate is guaranteed to never go below 1.00%. Policy Form Number: UL 5062 Data Pages: F5162-A (2011) Issue Ages/Underwriting Classes (Fully Underwritten): Preferred Plus: Preferred Non-tobacco: Standard Non-tobacco: 0-85 Preferred Tobacco: Standard Tobacco: Simplified Issue: Standard Non-Tobacco: Standard Tobacco: Guaranteed Issue: Standard Non-Tobacco: Standard Tobacco: Policy Premium Load: Yrs. 1-15: 5% of all premiums, current and guaranteed Yrs. 16+: 3.5% of all premiums, current and guaranteed Monthly Administrative Charges: Policy Monthly Fee: $6/mo ($72 annual) Per $1000 of Initial Specified Amount: Level for the first 7 policy years from the date of issue or increase. Fixed Account Interest Crediting on Borrowed or Unborrowed Funds: Current: 3.90% Guaranteed: 1.00% before age % after age 100 Policy Form Number: UL 5041 Data Pages: F5141-A Issue Ages/Underwriting Classes (Fully Underwritten): Preferred Plus: Preferred Non-tobacco: Standard Non-tobacco: 0-85 Preferred Tobacco: Standard Tobacco: Simplified Issue: Standard Non-Tobacco: Standard Tobacco: Guaranteed Issue: Standard Non-Tobacco: Standard Tobacco: Policy Premium Load: Yrs. 1-10: 10% of all premiums, current and guaranteed Yrs. 11+: 5% of all premiums, current and guaranteed In PA current and guaranteed is 10%. Monthly Administrative Charges: Policy Monthly Fee: $6/mo ($72 annual) Fixed Account Interest Crediting on Borrowed or Unborrowed Funds: Current: 3.90% Guaranteed: 1.00% before age % after age 100 For Agent/Broker Use Only. 1 of 5

2 (2011) Indexed Accounts Interest Crediting on Borrowed or Unborrowed Funds: Interest credited at the end of 12-month segment period and only on funds that have remained there for the entire period. Minimum guaranteed interest on borrowed or unborrowed funds: 1.00% 1-Year Point to Point: Provides interest linked to the percentage change in the S&P 500 Index for the segment year. The account earns the full percentage increase of the S&P 500 Index up to an index interest cap declared at the Minimum guaranteed cap: 3.00% Current cap: 13% 1-Year Monthly Cap: Provides interest linked to the sum of the 12 consecutive monthly change percentages in the S&P 500 Index. A positive monthly change percentage can be no greater than the monthly indexed cap declared at the Minimum guaranteed cap: 1.00% Current cap: 3.20% 1-Year Monthly Average: Provides interest linked to the sum of the closing values of the index at the end of each segment month divided by 12, divided by the closing value of the index at the beginning of the segment minus the index spread rate declared at the Minimum guaranteed spread: 9.00% Current spread: 6.00% All deductions, including monthly deductions and withdrawals, are taken from the Fixed Account until it is exhausted, then from the most recently opened Indexed Segment(s). Any deductions that deplete an Indexed Segment will result in the loss of any Indexed Interest that might otherwise have been credited. Policy Loan Charged Rate: Before age 100: Years 1-10: 6% guaranteed Years 11+: 5% guaranteed After attained age 100: 3% guaranteed Indexed Accounts Interest Crediting on Borrowed or Unborrowed Funds: Interest credited at the end of 12-month segment period and only on funds that have remained there for the entire period. Minimum guaranteed interest on borrowed or unborrowed funds: 1.00% In PA, the guaranteed rate is 2.00% 1-Year Point to Point: Provides interest linked to the percentage change in the S&P 500 Index for the segment year. The account earns the full percentage increase of the S&P 500 Index up to an index interest cap declared at the Minimum guaranteed cap: 3.00% Current cap: 12% 1-Year Monthly Cap: Provides interest linked to the sum of the 12 consecutive monthly change percentages in the S&P 500 Index. A positive monthly change percentage can be no greater than the monthly indexed cap declared at the Minimum guaranteed cap: 1.00% Current cap: 3.20% 1-Year Monthly Average: Provides interest linked to the sum of the closing values of the index at the end of each segment month divided by 12, divided by the closing value of the index at the beginning of the segment minus the index spread rate declared at the Minimum guaranteed spread: 9.00% Current spread: 6.00% All deductions, including monthly deductions and withdrawals, are taken from the Fixed Account until it is exhausted, then from the most recently opened Indexed Segment(s). Any deductions that deplete an Indexed Segment will result in the loss of any Indexed Interest that might otherwise have been credited. Policy Loan Charged Rate: Before age 100: 5% guaranteed After attained age 100: 3% guaranteed For Agent/Broker Use Only. 2 of 5

3 (2011) Index Bonus: The guaranteed Index Bonus is designed to eliminate the need to allocate premiums to the Fixed Account for the purpose of covering Monthly Deductions. Each month an Index Bonus will be credited if the Monthly Deduction reduces the value of any Indexed Segment and the Policy Value is greater than zero. The amount credited will equal the total reduced value of all Indexed Segments multiplied by a factor that approximates the interest that would have been credited if that value had been in the Fixed Account. The Index Bonus will be credited to the most recently opened Index Segment with a value greater than zero. Surrender Charge Period: 9 Years Surrender Charges for Face Amount Decreases: Per $1000 charge times the number of 1000 s in the decrease during the surrender period. Guaranteed Cost of Insurance Charges: Based on 2001 CSO Tables. Extended Maturity: As long as the policy is in force at the insured s Attained Age 100, the Death Benefit Option is changed to level, and thereafter the Death Benefit Option and Specified Amount may not be changed. All monthly deductions cease. Account value, if any, continues to earn interest. Any money in the Indexed Accounts would finish its 12-month period but at the segment anniversary, all funds would be transferred to the Fixed Account at that time. No additional transfers will be allowed at Attained Age 100. Interest on any loan would continue to accrue and the policy will continue in force for the life of the insured. Coverage Protection: There is a 10-year minimum premium period during which the policy will remain in force even if the cash surrender value is insufficient to cover the monthly deduction, as long as the cumulative premium requirement is met. Minimum Specified Amount: $100,000 for Full/Simplified Underwriting; $25,000 for Guaranteed Issue. Maximum Specified Amount: Subject to underwriting guidelines Index Bonus: N/A Surrender Charge Period: 9 Years Surrender Charges for Face Amount Decreases: Per $1000 charge times the number of 1000 s in the decrease during the surrender period. Guaranteed Cost of Insurance Charges: Based on 2001 CSO Tables. Extended Maturity: As long as the policy is in force at the insured s Attained Age 100, the face amount is set equal to the account value and the Death Benefit Option is changed to level. All monthly deductions cease. Account value, if any, continues to earn interest. Any money in the Indexed Accounts would finish its 12-month period but at the segment anniversary, all funds would be transferred to the Fixed Account at that time. No additional transfers will be allowed at Attained Age 100. Interest on any loan would continue to accrue and the policy will continue in force for the life of the insured. Coverage Protection: There is a 5-year minimum premium period during which the policy will remain in force even if the cash surrender value is insufficient to cover the monthly deduction, as long as the cumulative premium requirement is met. There is also a 20-year no-lapse death benefit guarantee period for issue ages 0-70, or to age 90 for issue ages 71+, based on a specified premium level. Minimum Specified Amount: $100,000 for Full/Simplified Underwriting; $25,000 for Guaranteed Issue. Maximum Specified Amount: Subject to underwriting guidelines For Agent/Broker Use Only. 3 of 5

4 Death Benefit Options: (2011) Option I greater of : Specified Amount Option II greater of : Specified Amount + Account Value Specified Amount x 115% Withdrawals: Minimum: $500 Fee: 0% current (guaranteed to be no higher than $25) Maximum: Cash Surrender Value minus $500. Premium Deposit Fund: Allows the policyholder to provide in advance for payment of future premiums. Minimum Deposit: $250 Maximum Deposit: 10 times annual premium Guaranteed interest credited on deposit: 1% This benefit is targeted to be available Nov Riders and benefits are only available on fully underwritten policies unless noted otherwise. Supplemental Coverages: - Accidental Death Benefit Rider 1,4 - Children s Insurance Rider 1,4 - Guaranteed Insurability Rider 1 - Disability Waiver of Monthly Deductions Benefit Rider 1 - Disability Waiver of Specified Premium Rider 1 - Accelerated Benefits Rider (with critical illness benefit) 2,3,4 - Accelerated Benefits Rider 2,3,4 - Supplemental Term Insurance Rider on Primary Insured 1 - Supplemental Term Insurance Rider on Other Insured 1 - Change of Insured Rider 4 - Exec Rider 1,5,6 Targeted to be available Nov Overloan Protection Endorsement 3,5 1 There is an additional premium for this Rider. 2 There is no charge for this Rider until it is exercised. 3 There is a charge for this at the time it is elected to take effect. 4 Available with Simplified Issue. 5 Available with Simplified Issue and Guaranteed Issue. 6 Compensation is spread please see the product reference guide for details. Death Benefit Options: Option I greater of : Specified Amount Option II greater of : Specified Amount + Account Value Withdrawals: Minimum: $500 Fee: 0% current (guaranteed to be no higher than $25) Maximum: Cash Surrender Value minus $500. Premium Deposit Fund: Allows the policyholder to provide in advance for payment of future premiums. Minimum Deposit: $250 Maximum Deposit: 10 times annual premium Guaranteed interest credited on deposit: 1% Riders and benefits are only available on fully underwritten policies unless noted otherwise. Supplemental Coverages: - Overloan Protection Endorsement 3,5 - Accidental Death Benefit Rider 1,4 - Children s Insurance Rider 1,4 - Guaranteed Insurability Rider 1 - Disability Waiver of Monthly Deductions Benefit Rider 1 - Disability Waiver of Specified Premium Rider 1 - Accelerated Benefits Rider (with critical illness benefit) 2,3,4 - Accelerated Benefits Rider 2,3,4 - Supplemental Term Insurance Rider on Primary Insured 1 - Supplemental Term Insurance Rider on Other Insured 1 - Change of Insured Rider 4 - Exec Rider 1,5,6 1 There is an additional premium for this Rider. 2 There is no charge for this Rider until it is exercised. 3 There is a charge for this at the time it is elected to take effect. 4 Available with Simplified Issue. 5 Available with Simplified Issue and Guaranteed Issue. 6 Compensation is spread please see the product reference guide for details. For Agent/Broker Use Only. 4 of 5

5 (2011) Life Insurance Tax Qualification Test: Guideline Premium Test (GPT) or Cash Value Accumulation Test (CVAT). The policy owner decides which test is used and cannot change after issue. If no selection is made, the default will be GPT. Internal Replacements: 2.5% premium load, except for FL, NV, and TX which are the full 5%. Compensation: Rolling target for 5 years Compensation Chargeback on Requested Specified Amount Decreases: Policy months 7-12: 75% of impacted commissions Policy months 13-24: 50% of impacted commissions Compensation Chargeback on Decrease due to Full Surrender/Withdrawal/Lapse: Policy months 7-12: 50% of impacted commissions Note: This information does not apply when Exec Rider is used. See the Product Reference Guide for complete details of compensation on the Exec Rider. Life Insurance Tax Qualification Test: Guideline Premium Test (GPT) or Cash Value Accumulation Test (CVAT). The policy owner decides which test is used and cannot change after issue. If no selection is made, the default will be GPT. Internal Replacements: 5% premium load, except for FL, NV, and TX which are the full 10%. Compensation: Rolling target for 5 years Compensation Chargeback on Requested Specified Amount Decreases: Policy months 7-12: 75% of impacted commissions Policy months 13-24: 50% of impacted commissions Compensation Chargeback on Decrease due to Full Surrender/Withdrawal/Lapse: Policy months 7-12: 50% of impacted commissions Note: This information does not apply when Exec Rider is used. See the Product Reference Guide for complete details of compensation on the Exec Rider. Standards & Poor s and S&P 500 are trademarks of Standard & Poor s Financial Services, LLC, a subsidiary of The McGraw-Hill Companies, Inc. and have been licensed for use by The Lincoln National Life Insurance Company. Lincoln s Products are not sponsored, endorsed, sold or promoted by Standard & Poor s and Standard & Poor s makes no representation regarding the advisability of purchasing this Product. (2011) is issued on policy form UL5062 and state variations by The Lincoln National Life Insurance Company, Fort Wayne, IN. Product and features subject to state availability. Limitations and exclusions may apply. Contractual obligations are backed by the claims-paying ability of The Lincoln National Life Insurance Company. Lincoln Financial Group is the marketing name for Lincoln Financial Corporation and its affiliates. Affiliates are separately responsible for their own financial and contractual obligations. For Agent/Broker Use Only. 5 of 5