AG Secure Lifetime GUL II Form (ICC13-1346) A Flexible Premium, Adjustable Life Insurance Policy May 14, 215 Designed for Valued Client Issue State: Alabama Presented by Illustration Desk 281 Townsgate Rd. Suite 35 Westlake Village, CA 91361 8-35-219 License # 1111111 Quotation Description Issuing Company Please read your quotation carefully. It is designed to aid your understanding of the policy by demonstrating how policy benefits and premiums are affected by different assumptions. This quotation is not a contract and is not intended to predict actual performance. No current values have been used in this quotation. All values shown are guaranteed. American General Life Insurance Company 2727-A Allen Parkway Houston, TX 7719 American General Life Insurance Company (the Company ) is the sole issuer of AG Secure Lifetime GUL II Policies. American General Life Insurance Company is a subsidiary of American International Group, Inc. (AIG). AIG is a leading international insurance organization with approximately 63, employees in more than 13 countries serving customers around the globe. AIG companies are leading providers of life insurance and retirement services in the United States. Your policy, if issued, will be your contract with the Company and establishes the terms and conditions which must be satisfied for the underlying guarantees to remain in force. Contents Important Information About Your Quotation...2 Premium Outlay... 2 Policy Features And Options...2 Key Terms...8 Policy Quotation... 9 Supplemental Quotation - Lifestyle Income Solution...12 Signature Confirmation...15 Important Information About Your Policy... 15 Tax and Compliance... 15 May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 1 of 16
Important Information About Your Quotation Guaranteed Values Periodic Review Assumptions and Changes in Assumptions This quotation projects that the proposed policy, if issued as quoted, would not lapse and the death benefit of $ through Policy Year 55, Insured Age 1 would be paid upon the Insured s death provided: The Owner timely pays the scheduled premiums due as quoted; The Owner does not elect to take policy loans or withdrawals of cash values not otherwise quoted; and The Owner makes no material policy changes (e.g., increase of the death benefit, add/terminate any riders). An in-force quotation may be produced at any time after the policy has been in force for one year. This quotation assumes the Company receives all premiums in time to be processed on the first day of each modal period, starting with the Date of Issue. This is not likely to occur. Policy values and benefits may also be affected by the Owner s decisions to change elements, such as but not limited to: amount of premium paid, timing of premium payments, lapse and reinstatement loans, full surrenders, addition/termination of riders, and/or any other Ownerinitiated contractual changes such as increasing or decreasing the death benefit. Actual policy results will be more or less favorable. The death benefit is subject to certain policy exclusions such as the suicide or contestability provisions. Any deviations from the outlined conditions may cause the stated values to no longer be in effect. Refer to the Assumptions and Changes in Assumptions section below. Refer to the policy for more information about the Continuation Guarantee Account. You should always consider a periodic review of your insurance coverage with your insurance producer. You may request quotations with different assumptions to better understand how the changes affect policy values and benefits. Changes to your policy could result in distributions that are subject to tax penalties or limit the amount of future premiums that can be paid into the policy. Refer to thetax and Compliance section. Premium Outlay Initial Premium Initial Benefit Duration of Benefit Total Initial Premium $1,889.4 $ 56 Years Lifestyle Income Solution * $581.18 N/A See Rider Section Accelerated Access Solution SM* Chronic Illness Accelerated Death Benefit Rider $546.9 $118,8. 56 Years Terminal Illness Rider* N/A N/A See Rider Form Enhanced Surrender Value Rider* N/A See Rider Form See Rider Form Total First Year Premium $1,889.4 Annual Premium Outlay $1,889.4 *Refer to the Rider Descriptions flyer AGLC14653 that is available from your insurance producer. It has detailed information about the riders selected Policy Features And Options Continuation Guarantee Account Your policy s Continuation Guarantee can prevent the policy from lapsing when the Cash Surrender Value falls to zero. This is shown on the quotation in years where the Cash Surrender Value shown is zero, but the Death Benefit is not zero. This quotation assumes that the Company receives all premiums by the beginning of each modal period, starting with the Date of Issue. Any premium received within the 28-day period following its due date ( Monthly Deduction Day ) will be applied to the Continuation Guarantee Account as if the premium had been received on the Monthly Deduction Day. Any deviations from the amount, frequency, or timing of premium payments or policy elements shown in the quotation may cause the policy not to continue as quoted. The quotation will show a zero for the Death Benefit if the Cash Surrender Value is zero and the criteria outlined in the Continuation Guarantee Provisions and other policy provisions are not met. The Continuation Guarantee is not used to determine policy values, and does not add value to the Death Benefit Proceeds or the policy. Refer to the policy for more information about the initial premium. Refer to the Important Information About Your Policy section for detailed information about your initial premium and 135 exchanges. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 2 of 16
The Enhanced Surrender Value Rider is a no cost rider that provides a one-time option for a sixty day period following the end of policy year 2 to surrender your policy and receive back up to a maximum of 5% of all premiums you have paid. Lifestyle Income Solution (Form #13972) Guaranteed Withdrawal Benefit Rider (Lifestyle Income Solution) allows the owner to receive a portion of the death benefit while the Insured is still living provided certain eligibility requirements as defined below have been met, Minimum Eligibility Period: 15 Years: Withdrawal Benefit Basis: 1.% of Initial Specified Amount Withdrawal Benefit Factor: Varies based on the policy year in which the Initial Election Date occurs see rider for details. Guaranteed Monthly Withdrawal Benefit Percentage:.83% The cost for this rider will vary by issue age, gender and underwriting class. Note: Benefits paid under this rider may be taxable. Any withdrawals that are not withdrawals of basis may be taxable to the policyowner. If so, you may incur a tax obligation. You should consult a tax advisor. Refer to the rider form for qualifications, limitations and termination. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 3 of 16
This Benefit will Provide a minimum of 12 Monthly Withdrawal Benefit Payments Subject to the terms and conditions of the rider and after the expiration of the Minimum Eligibility Period, this rider pays a Guaranteed Withdrawal Benefit Amount each policy month while the rider is in force, as long as the Withdrawal Benefit Balance is greater than zero. The Benefit Eligibility Test must be met for any Guaranteed Withdrawal Benefit Amount to be payable. All of the following conditions must be satisfied for the Benefit Eligibility Test to be met: (a) The policy has been in force for at least the Minimum Eligibility Period; and (b) The policy s Continuation Guarantee Account value immediately prior to the Initial Election Date is sufficient to provide for all the Continuation Guarantee Account Monthly Deductions due beginning on the Initial Election Date until the deduction day immediately prior to the Continuation Guarantee Target Date Shown on the Rider Schedule when the insured attains age 1; and (c) The Death Benefit Option in effect is Benefit Option 1; and (d) There is no indebtedness on the policy; and (e) Payment of the Guaranteed Withdrawal Benefit Amount beginning on the Initial Election Date and during each policy month thereafter, until the Withdrawal Benefit Balance is reduced to zero, does not cause the policy to fail to meet the definition of life insurance under Internal Revenue Code (IRC) Section 772; and (f) The policy is not a Modified Endowment Contract under Section 772A of the IRC; and (g) The policy is not within seven years of a material change as defined by Section 772A of the IRC; and (h) No benefits under any accelerated death benefit rider attached to the policy are acknowledged by the Company as payable to you; and (i) No claim is pending as to any accelerated death benefit rider attached to the policy Condition (b) of the Benefit Eligibility Test must be satisfied without regard to any waiver of benefits provided under any rider attached to the policy. The Withdrawal Benefit Basis and the Initial Withdrawal Benefit Balance are used in the calculation of the Guaranteed Withdrawal Benefit Amount under this rider. The Initial Withdrawal Benefit Balance is determined on the Initial Election Date. The initial Election Date is the policy anniversary date on which you elect to begin receiving Guaranteed Withdrawal Benefits under this rider. The Initial Election Date must occur on or after the first policy anniversary following the expiration of the Minimum Eligibility Period. The Initial Withdrawal Benefit Balance is equal to: (a) The Withdrawal Benefit Basis on the Initial Election Date; multiplied by (b) The applicable Withdrawal Benefit Factor shown on the rider schedule. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 4 of 16
The Guaranteed Withdrawal Benefit Amount is determined on the Initial Election Date and is equal to: (a) The Initial Withdrawal Benefit Balance; multiplied by (b) The Guaranteed Withdrawal Benefit Percentage. You may request to receive withdrawal benefit payments of less than the Guaranteed Withdrawal Benefit Amount, subject to the Company rules then in effect for such payments. You may request a suspension of Guaranteed Withdrawal Benefit Amount payments by notifying the Company in writing. Payment of the Guaranteed Withdrawal Benefits Amount may be resumed if the Benefit Eligibility Test is met and the then-current Withdrawal Benefit Balance is greater than zero. You may not request payment of a withdrawal benefit that exceeds the lesser of the Guaranteed Withdrawal Benefit Amount or the Withdrawal Benefit Balance under this rider. Each withdrawal benefit payment will reduce the Withdrawal Benefit Balance by the amount of such withdrawal benefit payment. The Withdrawal Benefit Basis will be reduced in the same proportion as the reduction in the Withdrawal Benefit Balance. The Specified Amount of the policy will be reduced by the same amount as the reduction in the Withdrawal Benefit Basis The Accumulation Value, Cash Surrender Value, Cash Value and Continuation Guarantee Account value of the policy will be reduced in the same proportion as the reduction in the Specified Amount of the policy. If you are in overall good health and/or are a non-user of tobacco and/ or otherwise have a reasonable expectation of longer life, your premium for this rider may be higher than the premium for someone whose overall health condition is not as good and/or who uses tobacco, because of the greater potential that you may receive benefits under the rider. We may increase or decrease the proposed premium for the Lifestyle Income Solution based upon your potential utilization of the rider in the future as reflected in the underwriting information about you that we will consider. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 5 of 16
Accelerated Access Solution SM Chronic Illness Accelerated Death Benefit Rider (Form #ICC13-136) The Accelerated Access Solution is an accelerated death benefit rider that allows the owner/ insured to accelerate a portion of the death benefit over a period of time when the insured becomes chronically ill (per rider definition) following the completion of a 9-day elimination period. The Accelerated Benefit is 5%. The Monthly Benefit Amount is 2% of Accelerated Benefit Amount Chronically III means the insured has been certified by a licensed health care practitioner within the preceding 12-month period as: Being permanently unable to perform, without substantial assistance from another person, at least two activities of daily living for a period equal or greater than the Elimination Period shown on the rider schedule due to a loss of functional capacity; or Requiring substantial supervision to protect the insured from threat to health and safety due to a severe cognitive impairment. Severe Cognitive Impairment means a loss or deterioration in intellectual capacity that is comparable to (and includes) Alzheimer s disease and similar forms of irreversible dementia; and is measured by clinical evidence and standardized tests that reliably measure impairment in the person s: Short-term or long-term memory; Orientation as to people, places or time; and Deductive or abstract reasoning. Activities of Daily Living (ADLs). The term Activities of Daily Living means the following self-care functions: Bathing: Washing oneself by sponge bath, or in either a tub or shower, including the task of getting into or out of the tub or shower. Continence: The ability to maintain control of bowel and bladder functions; or, when unable to maintain control of bowel or bladder functions, the ability to perform the associated personal hygiene (including caring for catheter or colostomy bag). Dressing: Putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs. Eating: Feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table), or by feeding tube, or intravenously. Toileting: Getting to and from the toilet, getting on and off the toilet and performing associated personal hygiene. Transferring: Moving into or out of a bed, chair, or wheelchair. Before any accelerated benefit is paid under this rider, We will require you to provide proof, satisfactory to us, that the Insured is chronically ill. Benefits are payable at a monthly amount based on the desired purchased accelerated benefit amount. There will be a monthly cost of insurance charge for this rider. The charge for this rider will be added to the Monthly Deduction and CGA Monthly Deduction if applicable. The rider provides a waiver benefit that will waive the amount necessary to prevent the policy from entering into a grace period beginning on the initial election date for withdrawal benefits and while eligibility requirements under the rider continue to be met (i.e. waive the amount needed to provide for the monthly deduction against the policy cash surrender value or monthly deduction for the policy CGA). Any benefit paid under this rider will impact the policy. The specified amount, policy values and loan values will be reduced if an accelerated death benefit is paid. You should contact your personal tax advisor for specific advice before exercising this benefit. Payments received under this chronic illness accelerated death benefit rider are not part of a health, long term care, or nursing home insurance policy and may not be sufficient to cover medical, nursing home or other bills. All provisions of the policy that do not conflict with this rider apply to this rider. Where there is any conflict between the rider provisions and the policy provisions, the rider provisions prevail. You should consider that receiving or having the contractual right to receive any Accelerated Benefit payment may affect your eligibility for Medicaid, Social Security Income (SSI), or other government benefits or entitlements. You are advised to contact the Medicaid Unit of your local Department of Public Welfare and the Social Security Administration for more information. Benefits may be subject to taxation and may impact eligibility for Medicaid or other public assistance programs. Consult your legal and tax adviser for more information and refer to the rider for qualifications, limitations and fees. Although payments made under this rider generally are intended to qualify for favorable tax treatment under section 11 (g) of the internal revenue code, payments under this rider may be taxable. The owner should consult a competent tax advisor to determine the current tax consequences before requesting any accelerated death benefits. This rider is not intended to be a health contract, qualified long term care insurance contract under section 772B(b) of the Internal Revenue Code or a non-qualified long term care insurance contract. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 6 of 16
Any benefit paid under any of the three options above reduces the benefits available under the other options. If the insured dies, there will be no additional AAS or LIS benefit available. If any AAS or LIS benefit is paid, benefits available under the other rider will be reduced, as will the death benefit. If benefits are paid from the LIS rider prior to the insured reaching age 85, the death benefit and the AAS benefit will be reduced by more than $1 for every $1 of LIS benefit paid. Please read the policy and rider for more information. *The ability to accelerate all or a portion of the death benefit is a function of the amount of benefit selected, the death benefit of the policy, and prevailing IRS limitations at the time the benefit is paid. **Based on the 214 maximum per-diem benefit of $33, which may be different in the year that benefits are claimed. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 7 of 16
Option to Extend Coverage Option to Reset Date of Issue Key Terms Cash Surrender Value Death Benefit Premium Outlay Withdrawals The benefit allows the Owner to elect to extend the policy past the original maturity date. If the Insured is still living on the original maturity date and the Owner has elected to extend the policy, coverage will continue until the date of the Insured s death. Within twenty calendar days of the date the initial premium is paid, the Owner may elect to have the policy s Date of Issue reset to the date the initial premium was paid. Such an election must be made in writing. In the event the Owner elects to have the Date of Issue reset and the date of the initial premium payment was either the 29th, 3th or 31st calendar day of the month, the Date of Issue will be reset to the 1st day of the month following the month in which the initial premium was paid. The Cash Surrender Value is the amount available to the Owner when the policy is terminated for a reason other than the Insured s death. This is equal to the Cash Value less policy loans and accumulated interest. The death benefit is the amount of money payable to the beneficiary if the Insured dies while the policy is in force. The Initial Amount is specified in the policy at issue and the Specified Amount may be changed subject to the policy s provisions. Premium outlay is the amount the Owner plans to pay. It is equal to planned premium payments and loan repayments. This represents the amount withdrawn from the policy. Reset Example: Initial premium received on May 31st and Owner elects to reset; the Date of Issue will be reset to June 1st. This quotation shows the Cash Surrender Value at the end of each quoted policy year. Fees and/or charges may apply when changing the Specified Amount and it may have adverse tax consequences. Refer to the Tax and Compliance section of this quotation and consult your legal and tax advisor for more information. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 8 of 16
Policy Quotation Assumptions in Coverage AG Secure Lifetime GUL II Initial Death Benefit (Specified Amount): $ Valued Client, Male, 45, Preferred Non-Tobacco Initial Annual Premium: $1,889.4 Issue State: Alabama Premium Mode: Annual The Enhanced Surrender Value Rider is a no cost rider that provides a one-time option for a sixty day period following the end of policy year 2 to surrender your policy and receive back up to the maximum of 5% of all premiums you have paid. Year Age Premium Outlay* Withdrawals Guaranteed at 2.% Refund Upon Surrender Death Benefit Cash Surrender Value 1 46 1,889 2 47 1,889 3 48 1,889 4 49 1,889 5 5 1,889 891 6 51 1,889 6,998 7 52 1,889 11,938 8 53 1,889 16,612 9 54 1,889 2,987 1 55 1,889 24,951 18,89 11 56 1,889 31,83 12 57 1,889 35,75 13 58 1,889 39,76 14 59 1,889 44,331 15 6 1,889 48,322 16 61 1,889 5,583 17 62 1,889 52,922 18 63 1,889 54,97 19 64 1,889 53,923 2 65 1,889 18,89 5,278 21 66 34,861 22 67 17,328 23 68 14,687 24 69 2,434 25 7 26,66 26 71 33,25 27 72 4,229 28 73 47,678 29 74 55,554 3 75 63,855 31 76 72,582 * The Owner may need to continue or increase premium payments on account of some events, such as skipping a premium or paying a premium late. **The Option to Extend Coverage is a policy feature that permits coverage to continue until the Insured s death. It is available on the original maturity date if the Insured is still living and the Owner has elected to extend the policy. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 9 of 16
Year Age Premium Outlay* Withdrawals Guaranteed at 2.% Refund Upon Surrender Death Benefit Cash Surrender Value 32 77 81,734 33 78 91,313 34 79 11,317 35 8 11,629 36 81 118,924 37 82 127,189 38 83 133,942 39 84 141,95 4 85 146,441 41 86 149,695 42 87 148,757 43 88 142,963 44 89 131,615 45 9 17,276 46 91 15,744 47 92 11,173 48 93 95,766 49 94 86,775 5 95 79,464 51 96 69,76 52 97 57,112 53 98 4,161 54 99 21,149 55 1 56 11 57 12 58 13 59 14 6 15 61 16 62 17 63 18 64 19 65 11 66 111 67 112 68 113 69 114 7 115 * The Owner may need to continue or increase premium payments on account of some events, such as skipping a premium or paying a premium late. **The Option to Extend Coverage is a policy feature that permits coverage to continue until the Insured s death. It is available on the original maturity date if the Insured is still living and the Owner has elected to extend the policy. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 1 of 16
Year Age Premium Outlay* Withdrawals Guaranteed at 2.% Refund Upon Surrender Death Benefit Cash Surrender Value 71 116 72 117 73 118 74 119 75 12 76 121** 77 122 78 123 79 124 8 125 81 126 82 127 83 128 84 129 85 13 86 131 * The Owner may need to continue or increase premium payments on account of some events, such as skipping a premium or paying a premium late. **The Option to Extend Coverage is a policy feature that permits coverage to continue until the Insured s death. It is available on the original maturity date if the Insured is still living and the Owner has elected to extend the policy. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 11 of 16
Supplemental Quotation - Lifestyle Income Solution Guaranteed Withdrawal Benefit Rider (Lifestyle Income Rider) allows the insured to receive a portion of the Death Benefit while they are still living provided certain eligibility requirements as defined below have been met, Minimum Eligibility Period: 15 Years: Withdrawal Benefit Basis: 1. % of Initial Specified Amount Withdrawal Benefit Factor: Varies based on the policy year in which the Initial Election Date occurs see rider for details. Guaranteed Withdrawal Benefit Percentage:.83% This Benefit will Provide at least 12 Monthly Withdrawal Benefit Payments Year Age Premium Outlay Lifestyle Income Benefit Amount Death Benefit Guaranteed at 2.% Cash Surrender Value 1 46 1,889 2 47 1,889 3 48 1,889 4 49 1,889 5 5 1,889 891 6 51 1,889 6,998 7 52 1,889 11,938 8 53 1,889 16,612 9 54 1,889 2,987 1 55 1,889 24,951 18,89 11 56 1,889 31,83 12 57 1,889 35,75 13 58 1,889 39,76 14 59 1,889 44,331 15 6 1,889 48,322 16 61 1,889 5,583 17 62 1,889 52,922 18 63 1,889 54,97 19 64 1,889 53,923 2 65 1,889 5,278 21 66 34,861 22 67 17,328 23 68 14,687 24 69 2,434 25 7 26,66 26 71 33,25 27 72 4,229 28 73 47,678 29 74 55,554 3 75 63,855 *The Lifestyle Income Benefit Amount shown above is illustrated as an annual outlay however;the benefit will be paid in monthly increments. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 12 of 16
Year Age Premium Outlay Lifestyle Income Benefit Amount Death Benefit Guaranteed at 2.% Cash Surrender Value 31 76 59,76 9,4 65,353 32 77 59,76 8,8 65,453 33 78 59,76 71,2 64,28 34 79 59,76 61,6 6,952 35 8 59,76 52, 56,97 36 81 59,76 42,4 48,348 37 82 59,76 32,8 38,918 38 83 59,76 23,2 27,513 39 84 59,76 13,6 14,76 4 85 59,76 4, 593 41 86 2,4 42 87 43 88 44 89 45 9 46 91 47 92 48 93 49 94 5 95 51 96 52 97 53 98 54 99 55 1 56 11 57 12 58 13 59 14 6 15 61 16 62 17 63 18 64 19 65 11 66 111 67 112 68 113 69 114 *The Lifestyle Income Benefit Amount shown above is illustrated as an annual outlay however;the benefit will be paid in monthly increments. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 13 of 16
Year Age Premium Outlay Lifestyle Income Benefit Amount Death Benefit Guaranteed at 2.% Cash Surrender Value 7 115 71 116 72 117 73 118 74 119 75 12 76 121** 77 122 78 123 79 124 8 125 81 126 82 127 83 128 84 129 85 13 86 131 *The Lifestyle Income Benefit Amount shown above is illustrated as an annual outlay however;the benefit will be paid in monthly increments. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 14 of 16
Signature Confirmation I have received a copy of this quotation and understand it is not a contract. I have been advised to consult with my own tax or legal advisors regarding the tax effects of the proposed coverage. I further understand the guarantees provided are directly affected by the amount and timing of premiums paid. Owner's Signature Date Joint Owner's Signature Date I certify that this quotation has been presented to the applicant and that I have explained that the Owner should consult with his or her legal or tax advisor. I have made no statements that are inconsistent with the quotation. Insurance Producer's Address Insurance Producer's Signature Date 281 Townsgate Rd., Suite 35, Westlake Village, CA 91361 Important Information About Your Policy External Rollovers a) Accumulation Value. This quotation assumes your External Rollover premium, if any, is received on the Date of Issue. An External Rollover is cash surrender value from a policy issued by another company that qualifies under Internal Revenue Code section 135. If the External Rollover premium is not received by then, your cash value will be affected and the policy will not continue as quoted. b) Continuation Guarantee Account. If a source of the premium is from an External Rollover and it is paid to the Company within 12 months of the Date of Issue, it will be applied to the Continuation Guarantee Account as if received on the Date of Issue. Premium from another company s policy that is received later than the stated 12 months will be treated as regular premium. Refer to Internal Code section 135 for more information about 135 exchanges. You should also obtain your own legal and tax advice. Effect of Premium Payments on Your Continuation Guarantee Account and Accumulation Value a) Your Initial Premium If Paid on a Timely Basis. This quotation assumes the initial premium is received by the Company within 28 days following the Date of Issue. If it is, the policy s Continuation Guarantee Account will be credited as if the premium had been paid on the Date of Issue. This means that the Continuation Guarantee Account will be assessed all policy charges and credited with interest from the Date of Issue, and the policy s guarantees will remain intact. b) Your Initial Premium if Paid Later than 28 days Following the Date of Issue. If the initial premium is received more than 28 days following the Date of Issue, both the Accumulation Value and the Continuation Guarantee Account will be assessed all policy charges from the Date of Issue, but will be credited with interest only from the date the initial premium is paid and all other delivery requirements are completed. Because of the potentially significant impact of late payment (the policy s cash values and guarantees will be impacted), a new quotation will be provided to you upon payment of your initial premium to demonstrate the effect the timing of premium payments has on the policy's Accumulation Value and Continuation Guarantee Account in future policy years. The new quotation will display the effect upon the policy s Continuation Guarantee Account and Accumulation Value of: (i) assessing all policy charges from the Date of Issue; and (ii) crediting interest only from the Monthly Deduction Day that immediately follows the date you paid the initial premium and all other delivery requirements were completed. Death Benefit coverage will begin only upon payment of the initial premium to the Company and all other delivery requirements are completed, as is outlined in your application for insurance and if issued, the policy documents. c) Subsequent Premiums and Continuation Guarantee Account. For purposes of the policy s Continuation Guarantee Account only, each subsequent modal premium you pay within 28 days following its due date will be credited as if the premium had been paid on its due date. This means that the Continuation Guarantee Account will be assessed all policy charges and credited with interest from the applicable due date, and the policy s guarantees will remain intact. Tax and Compliance d) Subsequent Premiums and Accumulation Value. Your policy s Accumulation Value will also be assessed all charges as of the due date and interest will be credited only from the date you paid the modal premium. Guideline Premium Test Under current federal tax law, the policy will qualify as life insurance only if: (a) the sum of premiums paid, less partial surrenders, at any time does not exceed the greater of the guideline single premium or the sum of the guideline level annual premiums at such time and (b) the death benefit under the policy at any time is not less than the minimum required so that the policy falls within the cash value corridor as prescribed in section 772(d) of the Internal Revenue Code. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 15 of 16
Initial Guideline $17,619.85 Initial Guideline $2,478.54 Seven Pay $46,695.42 Level Premium Single Premium Premium Modified Endowment Contract Replacement of Existing Insurance Policy Loans, Surrenders and Specified Amount Reductions Company not Providing Legal or Tax Advice The Technical and Miscellaneous Revenue Act of 1988 ( TAMRA ), which is effective for policies issued after June 21, 1988, classifies certain policies as Modified Endowment Contracts ( MEC ). A life insurance policy becomes a MEC, as defined in section 772A of the Internal Revenue Code, if at any time during the first seven policy years, the actual premiums paid exceeds the sum of an annually paid "7-Pay Premium". If a policy violates the 7-Pay Premium test, it may be classified as a MEC retroactively to the time that it was issued. The 7-Pay Premium is the level annual premium that could fund all future benefits without regard to loads and expenses under the policy in seven years. All distributions, including loans, from a MEC may be taxable to the extent there is a gain in the policy. In addition, such distributions prior to age 59 1/2 may be subject to an additional 1.% penalty. Changes made at any time to a policy will affect the TAMRA 7-Pay Premium. If appropriate, the Owner should discuss the transaction with his insurance, legal, and/or tax advisors. The policy, as quoted, is not a MEC at its date of issue. Any material changes to the policy could result in the policy being reclassified as a MEC retroactively to its date of issue. Changes in the premium payments could also cause the policy to be classified as a MEC. The Owner should ask the Company to recalculate the 7-Pay Premium before making any change to the policy, including changes that are shown in this quotation. The TAMRA 7-Pay Premium indicated in the Premium Outlay section is based upon the lowest specified amount in the first seven years. If the Owner is purchasing a new life insurance policy that will replace an existing policy or if the Owner is using the funds from one policy to pay all or part of the premiums on a new policy, make sure that these actions are in the Owner s best interest. Many times it will be in the Owner s best interest to keep or modify an existing policy. Depending upon the type of policies involved, the Owner should gather information to compare such things as: premiums, guaranteed interest rates, surrender charges, policy fees and expenses, cash surrender values, contract provisions, company financial strength, and tax consequences. Ultimately, it is the Owner s decision whether to proceed with the transaction. Generally, surrenders from a policy that is not a MEC are not taxable until the amount surrendered exceeds the total of the premiums paid, which represents the Owner s basis in the policy. However, when there is a reduction in the Specified Amount as a result of a partial surrender or at the Owner s request, there may be a taxable event. A portion of the amount withdrawn may be taxable under the Recapture Ceiling Test described under section 772(f)(7) of the Internal Revenue Code even if the surrender does not exceed the Owner s basis in the policy. Reductions in the Specified Amount may force a distribution of cash from the policy, a portion of which may be taxable. The Owner should verify whether a tax is incurred before taking surrenders or requesting a reduction in the Specified Amount during the first 15 policy years. Loans are not taxable as long as the policy is not a MEC and remains in force. If a policy lapses or is surrendered, any outstanding loans will be treated as if they were distributions and will be subject to income tax to the extent they exceed the Owner s basis in the policy. This material is not intended or written by the Company to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties imposed on the taxpayer. This material is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by this material. Any taxpayer should seek advice based on the taxpayer s particular circumstances from an independent tax advisor. Although the information contained in this quotation is based on our understanding of the Internal Revenue Code and on certain tax and legal assumptions, it is not intended to be tax or legal advice. Such advice should be obtained from your own counsel or other tax advisor. Tax laws or interpretations of tax laws can change. This may cause the performance and underlying tax assumptions of this policy, including any riders, to be different than quoted. For example, tax law changes may result in distributions that are more or less than quoted. In some cases, these changes could result in a decrease in policy values or lapse. After the first policy year, you should periodically request an in-force quotation from your insurance producer to monitor your policy s performance in light of any tax law changes. Your actual taxes may be different from what is quoted. Policy Changes and Extending Coverage The Company will not permit a change to the policy that would result in the policy not meeting the definition of life insurance under section 772 of the Internal Revenue Code. The 21 CSO Mortality Tables provide a stated termination date of age 121. The Option to Extend Coverage, described in this quotation, allows the policy to continue beyond age 121. The tax consequences of extending the Maturity Date beyond the age 121 termination date of the 21 CSO Mortality Tables are unclear. The Owner should consult with a personal tax advisor about the effect of any changes to the policy as it relates to section 772 and the termination date of the Mortality Tables. May 14, 215 FCU1,. FCP9,475. RD92613 / Winflex Web / Rev. 1214 / Rel. 215.3.3 Page 16 of 16
Life Insurance Quotation Initial Death Benefit $ Name: Valued Client Male Age : 45-PreferredNonTobacco Date: 5/14/215 Initial Payment $1,889 Guaranteed Interest Rate 2.% Tax Bracket 35% Year Age Net Annual Outlay Cumulative Net Outlay Annual Cash Value Incr / Decr Net Surrender Value Net Death Benefit 1 46 1,889 1,889 2 47 1,889 21,778 3 48 1,889 32,667 4 49 1,889 43,556 5 5 1,889 54,445 891 891 T@ 5 54,445 54,445 891 891 6 51 1,889 65,334 6,17 6,998 7 52 1,889 76,223 4,94 11,938 8 53 1,889 87,112 4,674 16,612 9 54 1,889 98,1 4,375 2,987 1 55 1,889 18,89 3,964 24,951 T@ 55 18,89 18,89 24,951 24,951 11 56 1,889 119,779 6,132 31,83 12 57 1,889 13,668 4,622 35,75 13 58 1,889 141,558 4,54 39,76 14 59 1,889 152,447 4,571 44,331 15 6 1,889 163,336 3,991 48,322 T@ 6 163,336 163,336 48,322 48,322 16 61 1,889 174,225 2,261 5,583 17 62 1,889 185,114 2,338 52,922 18 63 1,889 196,3 1,175 54,97 19 64 1,889 26,892-174 53,923 2 65 1,889-3,645 5,278 T@ 65 5,278 5,278 V2.51. C2.26.3. This is a supplemental life insurance quotation. It must be accompanied by a(n) AG Secure Lifetime GUL II (Form ICC13-1346) basic quotation from American General Life Insurance Company which contains guaranteed elements and other important information. Any non-guaranteed elements quoted are subject to change and can be either higher or lower. American General Life Insurance Company, its employees, agents and representatives do not render legal or tax advice and this quotation should not be construed as such. You should contact your own tax or legal advisor regarding the tax and consequences which may result from alternatives shown in this quotation. Presented by: Illustration Desk Page 1 of 5
Life Insurance Quotation Initial Death Benefit $ Name: Valued Client Male Age : 45-PreferredNonTobacco Date: 5/14/215 Initial Payment $1,889 Guaranteed Interest Rate 2.% Tax Bracket 35% Year Age Net Annual Outlay Cumulative Net Outlay Annual Cash Value Incr / Decr Net Surrender Value Net Death Benefit 21 66-15,417 34,861 22 67-17,533 17,328 23 68-2,641 14,687 24 69 5,747 2,434 25 7 6,173 26,66 T@ 7 26,66 26,66 26 71 6,598 33,25 27 72 7,24 4,229 28 73 7,45 47,678 29 74 7,876 55,554 3 75 8,31 63,855 T@ 75 63,855 63,855 31 76 8,727 72,582 32 77 9,153 81,734 33 78 9,578 91,313 34 79 1,4 11,317 35 8 9,312 11,629 T@ 8 11,629 11,629 36 81 8,295 118,924 37 82 8,265 127,189 38 83 6,754 133,942 39 84 8,7 141,95 4 85 4,491 146,441 T@ 85 146,441 146,441 V2.51. C2.26.3. This is a supplemental life insurance quotation. It must be accompanied by a(n) AG Secure Lifetime GUL II (Form ICC13-1346) basic quotation from American General Life Insurance Company which contains guaranteed elements and other important information. Any non-guaranteed elements quoted are subject to change and can be either higher or lower. American General Life Insurance Company, its employees, agents and representatives do not render legal or tax advice and this quotation should not be construed as such. You should contact your own tax or legal advisor regarding the tax and consequences which may result from alternatives shown in this quotation. Presented by: Illustration Desk Page 2 of 5
Life Insurance Quotation Initial Death Benefit $ Name: Valued Client Male Age : 45-PreferredNonTobacco Date: 5/14/215 Initial Payment $1,889 Guaranteed Interest Rate 2.% Tax Bracket 35% Year Age Net Annual Outlay Cumulative Net Outlay Annual Cash Value Incr / Decr Net Surrender Value Net Death Benefit 41 86 3,254 149,695 42 87-938 148,757 43 88-5,794 142,963 44 89-11,348 131,615 45 9-24,339 17,276 T@ 9 17,276 17,276 46 91-1,533 15,744 47 92-4,571 11,173 48 93-5,48 95,766 49 94-8,991 86,775 5 95-7,311 79,464 T@ 95 79,464 79,464 51 96-1,388 69,76 52 97-11,964 57,112 53 98-16,951 4,161 54 99-19,12 21,149 55 1-21,149 T@ 1 56 11 T@ 11 V2.51. C2.26.3. This is a supplemental life insurance quotation. It must be accompanied by a(n) AG Secure Lifetime GUL II (Form ICC13-1346) basic quotation from American General Life Insurance Company which contains guaranteed elements and other important information. Any non-guaranteed elements quoted are subject to change and can be either higher or lower. American General Life Insurance Company, its employees, agents and representatives do not render legal or tax advice and this quotation should not be construed as such. You should contact your own tax or legal advisor regarding the tax and consequences which may result from alternatives shown in this quotation. Presented by: Illustration Desk Page 3 of 5
Life Insurance Quotation Column Description Page May 14, 215 Net Annual Outlay Cumulative Net Outlay Annual Cash Value Incr / Decr Net Surrender Value Net Death Benefit American General Life Insurance Company Page 4 of 5
Quotation Concept: Life Insurance Quote Concept Information Page May 14, 215 The Guaranteed Ledger concept illustrates guaranteed values only. The net annual premium outlay column includes total quoted annual premium for the base policy and any riders less any loans, dividends and/or surrenders of other policy values, plus any tax consequences that might result from situations such as a Modified Endowment Contract. Please refer to the Basic Ledger and Supplemental Ledger for a complete description of guaranteed values including definitions of cash value and death benefit columns. American General Life Insurance Company Page 5 of 5
Messages May 14, 215 Name: Valued Client M/45 Company/ Product: AG - American General/ AG Secure Lifetime GUL II Product Warning(s) LIS can only be quoted in conjunction with the AAS Rider, therefore the AG Asset Protector option has been enabled. Terminal Illness has been automatically selected. The Monthly Benefit selected exceeds the IRS maximum per-diem amount prescribed by the IRS. The maximum monthly benefit may not exceed the per-diem amount in effect at the time you make your claim for benefits. However, the total aggregated benefit will not be reduced. Target criteria could not be met. Page 1 of 1 5/14/15 2:25 PM
Client Input Summary Company: American General Life Insurance Company Product: AG Secure Lifetime GUL II May 14, 215 2.51., 7.26.3 Insured Client Name Valued Client Sex Male Date of Birth Age 45 Class Preferred Non-Tobacco Table Rating Temporary Flat Extra State of Issue Alabama Backdate No Assumed Issue Date Assumed Month of Issue Calculate Lump Sum Solve For Solve For Living Benefit Solutions Living Benefit Option Lifestyle Income Solution (LIS) Solve Options Guaranteed Premium Face Amount 1 Premium Amount Years/Age to Pay Premium @65 Guarantee to Age/Year @1 LIS Monthly Benefit Amount LIS Start Age 75 LIS Benefit Percentage 1 AAS Death Benefit Percentage Monthly Benefit Payout Amount Disbursements Disbursements No Policy Options Death Benefit Option Level Premium Payment Mode Annually Death Benefit Compliance Test Guideline External 135 Amount Internal 135 Amount External Lump Sum Amount 1 to 121 - Internal Lump Sum Amount 1 to 121 - Revised Quote? No Financial Institution? No Page 1 of 3
Client Input Summary Company: American General Life Insurance Company Product: AG Secure Lifetime GUL II May 14, 215 2.51., 7.26.3 Riders Riders Living Benefit Solution/AG Asset Protector Rider Y/N Waiver of Monthly Deduction Waiver Rating Terminal Illness Rider Enhanced Surrender Value Rider [ROP] Accidental DB Accidental DB Amount Child Insurance Benefit Number of CIB Units Age to End CIB Rider Spouse/Other Insured Term Rider Spouse/OI Term Units Spouse/OI Term Age to End Spouse/OI Sex Spouse/OI Age Spouse/OI Smoker Spouse/OI Table Rating Yes No No No No No Reports Quote? IRR Report? Policy Information Statement? Policy Summary? Disclosure Page? Quote IRA Strategy IRA Concept? Prior Year End IRA Value Hypothetical Annual Growth Rate % Beneficiary Hypothetical Tax Rate % IRA Owner's Hypothetical Tax Rate % Withdraw Excess Premium from IRA? Yes No No Agent Info Agent Name Illustration Desk Agent Company Advantage Insurance Network Agent Address1 281 Townsgate Rd. Agent Address2 Suite 35 Agent Address3 Page 2 of 3
Client Input Summary Company: American General Life Insurance Company Product: AG Secure Lifetime GUL II May 14, 215 2.51., 7.26.3 Agent Info - Cont'd Agent City Westlake Village Agent State California Agent Zip Code 91361 Agent Phone 8-35-219 Agent Fax Agent Email Agent License # 1111111 Access Access Code Access Code Access Code Access Code Access Code LIROPTIONS Guaranteed Ledger Title Line Tax Bracket 1 to 12-35 Page 3 of 3