frequently asked questions

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1 Athena Indexed Universal Life SM frequently asked questions 1 2 What is Athena Indexed Universal Life SM? This is a non-registered, flexible premium universal life insurance policy with index-linked interest options. It provides you the opportunity to, within the limits stated in the policy prospectus: Make premium payments at any time and in any amount; Change your Face Amount of insurance or switch your death benefit option; and Accumulate cash value through allocations to equity index-linked interest options and a Guaranteed Interest Account. The product combines the long-term protection guarantees of universal life insurance with the cash value accumulation potential of equity index-linked interest options. What interest crediting options are available in Athena Indexed Universal Life SM? Your premiums may be allocated to the Guaranteed Interest Account and to four index-linked interest options. The Guaranteed Interest Account earns interest at rates that are declared periodically, similar to the crediting rate structure you would see with a traditional universal life product. There are four index-linked interest options.* The interest rate credited for the indexed options is linked to the return of selected indices, subject to the Growth Cap Rate and Participation Rate for each option. The four indexed options are: S&P 500 Price Return index Index-Linked Interest Option with One-Year Segment Term Russell 2000 Price Return index Index-Linked Interest Option with One-Year Segment Term MSCI EAFE Price Return index Index-Linked Interest Option with One-Year Segment Term S&P 500 Price Return index Index-Linked Interest Option with Three-Year Segment Term 1 *See descriptions of indices on last page of this flyer. 1 Not available in New York. Life Insurance: Is Not a Deposit of Any Bank Is Not FDIC Insured Is Not Insured by Any Federal Government Agency Is Not Guaranteed by Any Bank or Savings Association

2 3 What indices are used in the indexed options? The index-linked interest options currently available in this product are tied to three different indices. We reserve the right to add, substitute, or discontinue indices. S&P 500 Price Return index The S&P 500 is a passively managed index of 500 stocks of leading companies from a broad range of industries considered to be representative of the U.S. stock market in general. The S&P 500 is a large cap index, meaning that the companies in the index have higher market capitalization, about $10 billion or more. The S&P Price Return index refers to the index, which does not include dividends. The S&P 500 Price Return index is used in both one-year term and three-year term equity index-linked options. Russell 2000 Price Return index The Russell 2000 is a free-float, capitalization-weighted index of small-cap stocks. It tracks the bottom 2,000 stocks in the Russell 3000 index. It is a widely quoted measure of the overall performance of small-cap to mid-cap company shares. Average market capitalization for a company in the index is around $530 million. The median market cap is around $410 million. The market cap of the largest company in the index is around $1.4 billion. The Russell 2000 Price Return index refers to the index, which does not include dividends. MSCI EAFE Price Return index MSCI EAFE is a free-float, capitalization-weighted stock market index designed to measure the equity market performance of foreign developed markets. It is maintained by MSCI. The EAFE acronym stands for Europe, Australasia, and Far East. As of June 2010, the index includes a selection of stocks from 22 developed markets but excludes those from the U.S. and Canada. It is a common benchmark for foreign stock funds. The MSCI EAFE Price Return Index refers to the index, which does not include dividends. 4 What is a Segment? A Segment is a portion of the total net premium paid into Athena Indexed Universal Life SM that is associated with a specific index-linked interest option, Segment Start Date and Segment Maturity Date. Segments are generally established when an amount is transferred from the Holding Account into a Segment, provided the requirements explained in Question 9 are met. The Segment Term is one calendar year or three calendar years depending on the indexed option selected. 5 Each individual Segment has a current Growth Cap Rate that will not change during the Segment Term, although the Growth Cap Rate may vary for each Segment. What are the Holding Accounts and how do they work? Any amount that is requested to be allocated to an equity index-linked interest option will first be deposited into the corresponding Holding Account. The value in the Holding Account will then be transferred into a new Segment of the corresponding indexed option on the next available Segment Start Date, subject to requirements described in Question 9. Amounts in the Holding Accounts are credited with interest at the same rate as the Guaranteed Interest Account. frequently asked questions 2

3 6 When are Segments created? Each Segment will have a start date that is generally the 15th of the calendar month. If you request a transaction (e.g., premiums and transfer requests), it must be received by the Service Center no later than 4:00 p.m. ET on the Business Day before the Segment Start Date, which is known as the Segment Cut-Off Date, to have those transactions reflected in the next Segment. We reserve the right to impose maximum limits and minimum amount requirements on amounts that may be transferred into an index-linked interest option or Segment. 7 How are premium payments allocated? On the policy application, you will specify desired initial premium allocation percentages. Unless changed, those percentages will also apply to subsequent premium allocations and loan repayments. Premium allocation percentages must be zero or a whole number not greater than 100%. You can also make changes to future premium allocation percentages by written notice to AXA Equitable s Service Center: 8 AXA Equitable Service Center P.O. Box 1047 Charlotte, NC How do premium payments affect the establishment of new Segments? It is important to note that the policy s Register Date is entirely independent of Segment Start Dates, since Segment Start Dates are generally established on the 15th of each calendar month. However, the timing of premium payments will affect the number of Segments established in a year, as follows: Annual Payments If you pay premiums annually, new Segments will be established from the annual premium, in line with your premium allocation, and remain in effect for the selected Segment Term. Semi-Annual Payments If you pay premiums semi-annually, new Segments will be established with each premium payment, in line with your premium allocation, and remain in effect for the selected Segment Term. Therefore, Segments with up to two different Segment Start Dates may be established in the policy year following the first premium payment. Quarterly Payments If you pay premiums quarterly, new Segments will be established with each premium payment, in line with your premium allocation, and remain in effect for the selected Segment Term. Therefore, Segments with up to four different Segment Start Dates may be established in the policy year following the first premium payment. Monthly Payments If you pay premiums monthly, new Segments will be established with each premium payment, in line with your premium allocation, and remain in effect for the selected Segment Term. Therefore, Segments with up to twelve different Segment Start Dates may be established in the policy year following the first premium payment. You may also transfer amounts to the Holding Accounts for the index-linked interest options, which will then be transferred into a new Segment. frequently asked questions 3

4 9 What are the necessary requirements that must be satisfied to start a new Segment? Before each Segment is established and the amount in the Holding Account is swept into a Segment, several requirements must be satisfied: The annual interest rate currently credited to the Guaranteed Interest Account, compounded for the number of years in a Segment Term, must be less than the current Growth Cap Rate. The amount that is transferred must meet the Segment minimum amount, if any. Currently, there is no specified minimum amount. The total amount allocated to Segments must be less than the equity index-linked option maximum limit, if any. There is currently not a specified maximum limit. The policy must not be in a grace period. If any of the above conditions are not met, no transfers will occur. Any amounts not transferred will remain in the Holding Account What is the Growth Cap Rate? The Growth Cap Rate is the maximum rate of return that an individual Segment can earn during the Segment Term. Will the Growth Cap Rate change? Growth Cap Rates are set at the start of a Segment and will not vary during the Segment Term. However, each Segment may have a different Growth Cap Rate. The minimum Growth Cap rate is 3% for the one-year indexed options and 10% for the three-year indexed option. 12investment conditions How is the Growth Cap Rate determined? The Growth Cap Rate for new Segments will be set on a monthly basis by the company, based on current When is the current Growth Cap Rate declared? The current Growth Cap Rate is declared on each Segment Start Date, which is generally the 15th of each calendar month. The Company may choose to announce rates in advance of the Segment Start Date but is not obligated to do so, and reserves the right to change the Segment Growth Cap up until the Segment Start Date. You can obtain information about recently established Growth Cap Rates by contacting AXA Equitable s service center at (800) When is the performance of a Segment determined? The performance of a Segment is determined at the Segment Maturity Date. No portion of the Index-Linked Credit is provided prior to the Segment Maturity Date. Accordingly, money removed from a Segment before the Segment Maturity Date due to surrender, death benefit payment, or lapse (even if the policy is later reinstated) will not be credited with any interest based on index performance during that Segment. Money removed due to partial withdrawals or loans is credited with interest on a pro rata basis. frequently asked questions 4

5 How is the performance of the index determined for the Segment Term? The performance of the index is determined using the Point-to-Point method. The Point-to-Point method compares the change in the value of the index at two discrete points in time, in this case, the Segment Start Date and the Segment Maturity Date. What is the Index Performance Rate? The percentage change in the index between the Segment Start Date and the Segment Maturity Date is called the Index Performance Rate. What is the Participation Rate? The Participation Rate is the percentage of the Index Performance Rate that is used to calculate the Index-Linked Credit. The Participation Rate is guaranteed to be at least 100%. What is the Index-Linked Rate of Return? How is it different from the Index Performance Rate? The Index-Linked Rate of Return reflects the change in the value of the index during the Segment Term (i.e., the Index Performance Rate), subject to the Growth Cap Rate and the Participation Rate. The Index-Linked Rate of Return is also net of any guaranteed interest that may have already been credited during the Segment Term. The Index-Linked Rate of Return may be positive, negative, or zero, resulting in an increase, decrease, or no change to the Policy Account. How Athena Indexed Universal Life SM Works A Hypothetical Example The Growth Cap Rate can vary, but it is guaranteed not to be lower than 3% for the one-year index-linked interest options (10% for the three-year index-linked interest option). For this example, assume a hypothetical Growth Cap Rate of 12%, a Participation Rate of 100%, and a Guaranteed Minimum Interest Rate of 0%: If the selected index has: Athena Indexed Universal Life SM Rate of Return: A positive rate of return that is above 12% Equals 12% A positive rate of return equal to or below 12% Equals the Index-Linked Rate of Return A negative rate of return Equals 0% 19 How is the Segment Maturity Value determined? The Segment Maturity Value is the Segment Value including the Index-Linked Credit. The Index-Linked Credit is calculated by multiplying the Index-Linked Rate of Return by the Average Monthly Balance. The Average Monthly Balance is the average of the ending monthly Segment Values (excluding interest) for the duration of the Segment Term. frequently asked questions 5

6 20 What is the 2% Interest Guarantee Endorsement and how does it differ from the 0% Guaranteed Minimum Interest Rate? Both features are automatically a part of your policy and are a source of protection, at no cost. The 2% Interest Guarantee Endorsement provides protection in certain situations. The 0% Guaranteed Minimum Interest Rate provides protection at the maturity of the indexed option Segment. The Endorsement provides a minimum accumulation value using an annual interest rate of 2%. This value is calculated independent of the indexed options. This minimum value, if higher than the Net Policy Account Value, is used to determine: a) the adequacy of your policy value to cover monthly deductions to prevent policy lapse, b) your cash surrender value for a full surrender, c) your death benefit, and d) the amount you have available for a policy loan. The 0% Guaranteed Minimum Interest Rate is part of the indexed options and provides downside protection for each 1- or 3-year Segment. If the index loses value over the 1- or 3-year Segment, the interest credit would equal 0% for the portion of the policy account allocated to that crediting strategy. Your policy value cannot decrease except due to the effect of monthly deductions and any unpaid loan interest. 21 What is the advantage of using the Average Monthly Balance in the calculation of the Index-Linked Credit? By using the Average Monthly Balance rather than just the Segment ending value in the calculation of the Index-Linked Credit, you receive a pro rata credit for amounts in the policy during the Segment Term that were removed due to a partial withdrawal, loan or monthly deduction prior to the Segment Maturity Date, as shown in the hypothetical illustration below. Average Monthly Balance Gives Credit for Time Served Partial Distribution 100% % 50% = End of Base Period 75% = Average Monthly Base 0 Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Average Monthly Balance A pro rata credit is provided only for policies continuously in force during the Segment Term. As discussed previously, amounts removed prior to the Segment Maturity Date due to surrender, death benefit payment, or lapse (even if the policy is later reinstated) are not eligible for an Index-Linked Credit. 22 Can I transfer among the Holding Accounts and the Guaranteed Interest Account? With a written request, you can transfer amounts from the Guaranteed Interest Account into one or more Holding Accounts. In addition, amounts can be transferred from a Holding Account into one or more other Holding Accounts or the Guaranteed Interest Account. frequently asked questions 6

7 23 Can I transfer out of a Segment at any time? No transfers from a Segment are permitted on or after the Segment Start Date until the Segment Maturity Date. 24 What are the product charges? Athena Indexed Universal Life SM has a 6% front-end load that is deducted from all premiums paid on both a guaranteed and current basis The following charges are deducted on a monthly basis: Monthly administrative charge Monthly per $1,000 of Face Amount charge Cost of Insurance (COI) charge Temporary and permanent flat extras Additional benefit rider costs Athena Indexed Universal Life SM has a 20-year declining surrender charge. How are charges and deductions allocated? Deductions will first be taken from the Guaranteed Interest Account. In the event that the value in the Guaranteed Interest Account is insufficient to fully cover the deduction, then the deduction will be taken as outlined below: a) As much as possible will be taken pro rata from each Holding Account, based on the current value of the Holding Accounts. b) If the values in the Guaranteed Interest Account and each Holding Account are insufficient to cover the deduction, the remaining amount will then be taken from any Segments then in effect on a pro rata basis, based on the current Segment Values of those Segments. What types of loan options are available in Athena Indexed Universal Life SM? Traditional loans are available with Athena Indexed Universal Life SM. Can I specify where to allocate the deductions for loans and partial withdrawals? All deductions, including monthly deductions, partial withdrawals, and loans, will be taken according to the hierarchy previously outlined. We also reserve the right to establish a 12-month lock-out period during which amounts would not be transferred into new Segments while withdrawals were occurring. How are loan repayments allocated? You can specify how to allocate loan repayments. If a loan repayment allocation is not specified, loan repayments will be allocated in accordance with the premium allocation percentages then in effect. How will I be notified of the current status of my Segments? The Annual Report sent to you will include information about all values held in the policy during the past year, including information regarding individual Segment Maturity Dates and interest credited. Notices will not be sent during the year regarding individual Segments approaching maturity, but you can contact AXA Equitable s service center at (800) to get updated reports. frequently asked questions 7

8 30 What happens at Segment Maturity? At Segment Maturity, all or a portion of the Segment Value is transferred in accordance with your directions. You can direct amounts to the Guaranteed Interest Account, the Holding Account for the same indexed option, the Holding Account for another index-linked interest option, or the Holding Accounts for a combination of indexed options. These Segment maturity allocations are part of the application and can be revised at any time. A separate allocation can be specified for each indexed option. If you do not provide directions, the Segment Maturity Value will be transferred into a new Segment of the corresponding index-linked interest option on the next available Segment Start Date, subject to the requirements previously described. 31 What is the timing between Segment Maturity and new Segment creation? Segments generally mature on the 14th day of the calendar month in which the Segment Term ends. While Segments generally mature on this date, new Segments are generally established on the 15th of the calendar month. Maturing values will remain in the respective Holding Account and earn interest during the period between the Segment Maturity Date and the next Segment Start Date (generally one day). *S&P, Standard & Poor s, S&P 500 and Standard & Poor s 500 TM are trademarks of Standard & Poor s and have been licensed for use by AXA Equitable. Athena Indexed Universal Life SM is not sponsored, endorsed, sold or promoted by Standard & Poor s and Standard & Poor s does not make any representation regarding the advisability of investing in the product. The Russell 2000 index is a trademark of Russell Investments and has been licensed for use by AXA Equitable. Athena Indexed Universal Life SM is not sponsored, endorsed, sold or promoted by Russell Investments and Russell Investments makes no representation regarding the advisability of investing in the product. The product referred to herein is not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such product or any index on which such product is based. The policy contains a more detailed description of the limited relationship MSCI has with AXA Equitable and any related products. This FAQ is not a complete description of all material provisions of Athena Indexed Universal Life SM. The Athena Indexed Universal Life SM product brochure and fact card must accompany this FAQ. Please refer to your actual policy and policy illustration for more complete details. The product fact card contains more complete information about the Athena Indexed Universal Life SM. Please read the product brochure and fact card and consider the information carefully before purchasing a policy. Please be advised that this material is not intended as legal or tax advice. Accordingly, any tax information provided in this Q&A is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Athena Indexed Universal Life SM is a flexible premium universal life insurance policy with index-linked interest options. These policies have limitations. Certain types of policies, features and benefits may not be available in all jurisdictions or may be different. For costs and complete details of coverage please contact your financial professional. Athena Indexed Universal Life SM is a service mark of AXA Equitable Life Insurance Company, New York, NY In the state of New Jersey, Athena Indexed Universal Life SM is referred to as flexible premium universal life insurance with equity index-linked interest options. Athena Indexed Universal Life SM is issued by AXA Equitable Life Insurance Company (AXA Equitable), New York, NY, and distributed by AXA Network, LLC and its subsidiaries and AXA Distributors, LLC. AXA Equitable, AXA Network and AXA Distributors are affiliated companies and do not provide tax or legal advice AXA Equitable Life Insurance Company. All rights reserved Avenue of the Americas, New York, NY 10104, (212) G26181 GE (2/11) Cat. # (2/11)