An Overview Guide for Individuals Design your whole life policy A guide to whole life insurance riders Insurance Strategies
Contents 3 Disability protection with Waiver of Premium 4 Increase coverage no questions asked with the Guaranteed Insurability Rider 5 Enhance your policy values with The Additional Life Insurance Rider 6 Balance coverage and cost with the Life Insurance Supplement Rider 6 Grow into whole life with the Renewable Term Rider 7 Other available riders When you buy whole life insurance, you re helping to protect the financial security of your family or your business. In addition to the basic life insurance coverage that your policy provides, there are additional benefits provided by riders that can enhance your coverage and provide greater flexibility. Riders are usually added when you purchase your policy. However, some can be added at a later time to help your coverage keep pace with your changing protection needs. Most of the riders in this guide require additional premiums, while others have administrative fees that are assessed only if those riders are exercised. There are certain restrictions and limitations associated with these riders. Your financial professional can provide complete information about these valuable supplemental benefits. The information provided here is not intended or written as specific tax advice and may not be relied on for purposes of avoiding any federal tax penalties. You are encouraged to seek advice from a qualified tax advisor. NOT A BANK OR CREDIT UNION DEPOSIT OR OBLIGATION NOT FDIC OR NCUA INSURED NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT GUARANTEED BY ANY BANK OR CREDIT UNION
Disability protection with Waiver of Premium Waiver of Premium ensures that your life insurance protection will stay in place and your cash value will continue to grow during a time when you, as the insured, are totally disabled and may not be able to pay the premiums. This rider is available for an additional premium when you purchase your policy or it can be added at a later time, through attained age 59. Most people do not realize that they are far more likely to suffer a long-term disability than die during their working years. According to recent studies, 3 of every 10 workers will experience a period of disability before reaching retirement. 1 In addition, medical problems contributed to 62% of all personal bankruptcies filed in the U.S. in 2007. 2 The Waiver of Premium Rider is a feature that can be of tremendous value during a period of time when your income may be reduced, and other expenses begin to take a toll on your savings. If you, as the insured, become totally disabled, the Waiver of Premium Rider will pay the premiums on your whole life policy, along with the premiums due on the Life Insurance Supplement, Guaranteed Insurability and Renewable Term Riders. The annual cost for Waiver of Premium will depend on your health and age when the rider is issued, but will never increase. Waiver of Premium coverage ends at attained age 65, unless you are totally disabled at that time. If you become disabled prior to attained age 60, premiums will be waived as long as you remain disabled. However, if you become disabled at or after attained age 60 but before attained age 65, premiums will be waived while you are disabled and until you reach attained age 70. 1 2010 Council for Disability Awareness Long-Term Disability Claims Review. 2 The American Journal of Medicine, June 4, 2009 Medical Bankruptcy in the United States. 3
Increase coverage with no questions asked with the Guaranteed Insurability Rider The Guaranteed Insurability Rider (GIR) guarantees you the right to purchase additional life insurance without having to provide medical information at specified dates in the future. The additional insurance may be an increase to the face amount on your existing whole life policy, or the purchase of a new whole life, universal life or variable universal life policy available for sale when you exercise an option. This rider is available for an additional premium when you purchase your policy, or it can be added at a later time, through attained age 40. GIR is an excellent way to lock in insurability if you anticipate needing more coverage in the future. This can be beneficial on policies for juveniles or young adults who may want their policy to grow with them throughout their lifetime. It can also be an advantage in business planning situations. Adding the GIR option allows business owners to increase their insurance coverage as the value of their business increases. On set Option Dates, the policy owner may purchase specific amounts of additional life insurance. The Option Dates occur every three years between the insured s ages 25 and 46. You can also accelerate an available option date after marriage or the birth or legal adoption of a child. 4
Enhance your policy values with the Additional Life Insurance Rider The Additional Life Insurance Rider (ALIR) allows you to make payments, in addition to your base premiums, to increase your policy s death benefit and accumulate additional cash value. ALIR allows you to purchase additional coverage and achieve greater cash value growth based on your need for more coverage over time. You can use non-regular sources of income, such as annual bonuses or tax refunds, to boost your cash values and death benefit coverage. The payments made with ALIR can be scheduled or unscheduled. However, unscheduled payments may require you to provide current medical information. The additional cash values can be used for any purpose you choose, including to pay future policy premiums. ALIR allows you to purchase paid-up additional insurance, also called paid-up additions. No further premiums are required on the paid-up additions purchased by each ALIR premium payment. ALIR payments may be increased, decreased or skipped and caught up within certain limits. Catch up payments and some increases can be made without providing evidence of insurability. ALIR gives you the flexibility to fund the rider on your terms. Your ALIR cash value can be surrendered at any time and for any purpose. 3 The additional life insurance purchased with ALIR premiums is also eligible to earn dividends. 4 A 7.5% expense charge will be deducted from each ALIR payment made. 3 Distributions under the policy (including cash dividends and partial/full surrenders) are not subject to taxation up to the amount paid into the policy (cost basis). If the policy is a Modified Endowment Contract, policy loans and/or distributions are taxable to the extent of gain and are subject to a 10% tax penalty. Access to cash values through borrowing or partial surrenders will reduce the policy s cash value and death benefit, increase the chance the policy will lapse and may result in a tax liability if the policy terminates before the death of the insured. 4 Dividends are not guaranteed. 5
Balance coverage and cost with the Life Insurance Supplement Rider The Life Insurance Supplement Rider (LISR) provides affordable additional life insurance protection funded by both rider premiums and policy dividends. 4 This rider can be added when you purchase your policy or on a policy anniversary, subject to issue age limits. Although the premiums for LISR coverage are not guaranteed, it can help you tailor your policy premium to fit your budget. You can add LISR to your whole life policy to provide the total amount of coverage that you need, at a premium you can afford. The combination of a whole life insurance policy with LISR can offer protection at a lower premium than whole life insurance alone. It provides many of the guarantees of whole life insurance, but a portion of the coverage depends upon non-guaranteed elements, which may impact your rider benefits or premiums. In addition to your basic whole life coverage, you select a LISR coverage amount that is within certain limits. Your policy will be a combination of permanent and term insurance. Each year, as the policy earns dividends 4 and you make the recommended LISR premium payments, the permanent life insurance within LISR builds and the term insurance portion is reduced. At some point, the LISR becomes all permanent insurance. However, your recommended premiums may change during this process based on changes in the dividend scale and the LISR term charges, neither of which are guaranteed. Grow into whole life with the Renewable Term Rider The Renewable Term Rider (RTR) is designed to provide affordable term life insurance protection to help meet temporary coverage needs, and may be converted to permanent life insurance for a certain period of time. This rider is only available when you purchase your policy. RTR allows you to grow into your whole life coverage as your budget permits. RTR is pure term insurance that you can convert to whole life insurance based on your needs over time. The premiums for RTR increase annually and the rider can be converted in whole or in part after the first policy year until the insured has attained age 65, or within the first 10 policy years whichever is later. If you decide at any time that you no longer need the additional coverage that RTR provides, you can drop the rider from your policy. The term portion of the LISR coverage can be converted, in whole or in part, after the first coverage year until your attained age 65 or within the first 10 coverage years, whichever is earlier. An 8% expense charge will be deducted from each LISR purchase payment made. 6
Other available riders Accelerated Death Benefit Rider (ABR): ABR allows the policy owner to receive an advance of the policy death benefit if the insured has a terminal illness that is expected to result in death within 12 months. The proceeds may be used for any purpose, such as paying medical and living expenses. There is no additional premium for this rider. However, a fee is charged when the rider is exercised. Transfer of Insured Rider (TIR): TIR allows you to transfer or exchange the original policy for a new policy on the life of another person. This rider is especially useful for business owners who insure the lives of their key employees. If a key employee leaves your company, you may exchange the policy to provide coverage on another employee. However, the employee you are transferring the coverage to must be age 75 or younger, and you will be required to provide evidence that they are in good health. There is no additional premium for this rider. However, a fee is charged when the rider is exercised. 7
MassMutual. We ll help you get there. There are many reasons to choose a life insurance company to help meet your financial needs: protection for your family or business, products to provide supplemental income and the confidence of knowing you will be prepared for the future. At Massachusetts Mutual Life Insurance Company (MassMutual), we operate for the benefit of our participating policy owners. We stand strong in the fundamental belief that every secure future begins with good decisions. And when choosing a life insurance company, ownership, strength and stability matter. Learn more at www.massmutual.com/mutuality Securities offered through registered representatives of MML Investors Services, Member SIPC, 1295 State Street, Springfield, MA 01111, or a broker-dealer that has a selling agreement with MML Distributors, LLC, Member SIPC, Springfield, MA 01111-0001. Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and its subsidiaries, CM Life Insurance Company and MML Bay State Life Insurance Company, Enfield, CT 06082. 2010 Massachusetts Mutual Life Insurance Company, Springfield, MA. All rights reserved. www.massmutual.com. MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. LI1712 1210 CRN201212-142687