A Self Owned Life & Retirement (S.O.L.A.R.) Insurance Arrangement is an arrangement where an executive purchases a Voya Indexed Universal Life-Global Choice (Voya IUL-Global Choice) policy, issued by Security Life of Denver Insurance Company, to provide death benefit protection and to help accumulate funds for retirement. The arrangement can be funded through employer contributions (as a §162 bonus plan), through after-tax contributions from the executive, or a combination of both. While premium payments must be treated as ordinary income, the executive can borrow money from the Voya IUL-Global Choice life insurance policy to pay income taxes. The executive can use the policy as a source of supplemental retirement income, as a source of survivorship benefits, or both.
Insurers' journeys to build a mastery in the IoT usage
Self-Owned Life & Retirement Insurance Arrangement (S.O.L.A.R.)
1. Self-Owned Life and Retirement (S.O.L.A.R.) Insurance Arrangement
Voya Indexed Universal Life-Global Choice
A Flexible Premium Adjustable Life Insurance Policy
(Standard Form #1186-09/12; may vary by state) SLR-74
Security Life of Denver Insurance Company
Designed for:
Mr. Valued Client
Presented by:
Mr. Valued Agent
Security Life of Denver Insurance Company
8055 East Tufts Avenue, Suite 650
Denver, CO 80237
This analysis is for illustration purposes and is not guaranteed. It is not a
financial plan and does not address all areas of financial concern. This
analysis is based upon information provided by the client. The Voya Life
Companies and their agents and representatives do not give tax or legal
advice. Please consult with your attorney, accountant, or tax advisor for
additional information.
2. Using Voya Indexed Universal Life-Global Choice with
Self-Owned Life and Retirement (S.O.L.A.R) Insurance Arrangement
The Voya Indexed Universal Life-Global Choice product is a flexible premium,
universal life insurance product designed to provide a death benefit and allow for cash
values. It includes an Indexed Strategy with 3 different crediting options where index
credits are linked in part to increases, if any, in outside indexes. The S&P 500® 1 Year
Point to Point Index Strategy is subject to an annual minimum and maximum index
credit rate. The 2 and 5 Year Global Indexed Strategies are linked to weighted changes
in three indexes – the S&P 500® Index, the EURO STOXX 50® Index, and the Hang
Seng Index - and calculates an index credit under a formula employing a look back
strategy where a portion of the better performing two out of three indexes is used, and is
subject to a Guaranteed Minimum Interest Rate.
While the policy values may be affected by external indexes, the policy does not directly
participate in any index fund, stock or equity investments, and all policy guarantees are
based solely on the financial strength and claims-paying ability of Security Life of
Denver Insurance Company. The product is not a variable product or any type of
investment contract. See IMPORTANT INDEX DISCLAIMERS for more
information about each index.
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3. A Self-Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangement is an arrangement where an
executive purchases a cash value life insurance policy to provide death benefit protection and to help
accumulate funds for retirement. The arrangement can be funded through employer contributions as IRC § 162
bonuses, through after-tax contributions from the executive, or a combination of both. While premium
payments must be treated as ordinary income, the executive can borrow money from the Voya IUL-Global
Choice life insurance policy to pay income taxes. The executive can use the policy as a potential source of
supplemental retirement income, as a source of survivorship benefits for his or her family, or both.
Key Considerations - Potential Advantages and Disadvantages
For the Executive For the Employer
· Supplemental Retirement Income 1-- Bonuses are
used to purchase a life insurance policy which
accumulates cash values.
· Reduce "Out-of-Pocket Costs" 1-- By taking a policy
loan to pay income taxes, the S.O.L.A.R. Insurance
Arrangement can reduce the current costs to the
executive.
· Tax-Deferred Growth -- No income tax is payable
while money is accumulating inside the life insurance
policy.
· Tax-Free Income 1-- Provided the life insurance
policy is not structured as a modified endowment
contract (“MEC”), the executive will be able to attain
tax-free income through a combination of policy
withdrawals and loans.
· Income Tax-Free Death Benefit 2-- The life
insurance policy provides protection for the
executive's family in the event of death.
· No IRS Distribution Requirements or Penalties --
Policy distributions from a S.O.L.A.R. Insurance
Arrangement can occur before age 59 ½ without a
premature distribution penalty from the IRS, and there
are no required minimum distributions at age 70 ½ or
thereafter.
· Immediate Taxation -- Bonus payments made by the
employer are taxable income to the executive under
IRC § 61.
· Immediate Tax Deduction -- Bonus payments made by the
employer are income tax deductible under I.R.C. § 162 (so
long as the executive’s total compensation is considered
reasonable).
· Flexible Contributions -- There is no required schedule for
contributions to a S.O.L.A.R. Insurance Arrangement.
Premiums can be designed to meet the changing needs of
the employer.
· Selective Benefit -- A S.O.L.A.R. Insurance Arrangement
can be offered on a selective basis. Unlike qualified
retirement plans, there is no requirement that the benefit be
available on a nondiscriminatory basis.
· Simple Administration -- Some nonqualified benefits can
require significant plan administration (maybe even
requiring a third-party administrator). A S.O.L.A.R.
Insurance Arrangement is a potentially simple arrangement
requiring little or no plan administration.
· No “Golden Handcuffs” -- Although the bonus may be an
incentive for the executive to remain with the company, the
executive may choose to keep the policy after termination
of employment.
· No Cost Recovery to the Employer -- The employer has
no rights to policy values or death benefits as
reimbursement for the after-tax cost of the bonus.
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4. Mr. Valued Client
Age: 39
Retirement Age: 65
Policy Loan Type: Select Loans
Summary of Values
A Self-Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangement allows your employer to
provide you with death benefit protection for your family and a potential source of supplemental
retirement income1 by paying premiums into an IUL-Global Choice life insurance policy that you own.
The premium payments by your employer are treated as taxable bonuses. However, you may borrow
funds from the IUL-Global Choice policy to pay the income tax associated with these bonuses.
Furthermore, cash values may grow inside the policy tax-deferred, and cash value accumulation can
provide you a source of tax-free income through a combination of policy withdrawals and loans.1
BENEFITS AT RETIREMENT
Based on the current assumptions used in the accompanying
illustration, your S.O.L.A.R. Insurance Arrangement is projected to
provide total supplemental retirement benefits of : $1,801,870
TOTAL OUT-OF-POCKET COSTS
Based on the current assumptions used in the accompanying
illustration, your net out-of-pocket costs for this benefit is projected
to be:
$0
DEATH BENEFIT
In addition, if you die at or before your projected retirement age
your family would be protected in the event of your premature death
with death benefits of at least: $1,439,860
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5. Summary of Values, continued
You should also keep in mind that the S.O.L.A.R. Insurance Arrangement is your policy. You are the
owner of the life insurance policy at all times and you can choose when to take distributions from the
policy's cash values. There are no IRS requirements that you leave cash in the policy until retirement age
or that you begin taking policy distributions at any particular time. The policy distribution schedule
illustrated here is just a sample of what might happen. When and whether you take distributions from the
policy is entirely up to you.
COST TO EMPLOYER
Premium Bonuses Paid Over 10 Years: $300,000
Tax Savings (34% Tax):** $102,000
Net Cost to Employer: $198,000
COST TO YOU
Premiums Paid Over 10 Years: $300,000
Less Premium Bonuses Received from Employer: $300,000
Plus Tax Incurred on Premium Bonuses (28% Tax): $84,000
Less Policy Loans To Pay Tax: $84,000
Plus Interest on Loans Paid in Cash: $0
Net Cost to You: $0
SUPPLEMENTAL RETIREMENT
BENEFITS FROM POLICY DISTRIBUTIONS
Age to Start Cash Value Distribution*: 65
Available Net Surrender Value at Age 65: $512,580
Annual Cash Value Distributions for 35 years: $51,482
Total Cash Value Distributions: $1,801,870
Cash Value at Age 121: $16,175,654
DEATH BENEFIT
Year 1 Net Death Benefit: $1,729,096
Available Net Death Benefit at Age 65: $1,439,860
Available Net Death Benefit at Age 121: $16,175,654
The values illustrated are not guaranteed. They assume that the illustrated non-guaranteed elements of the policy will continue unchanged for
all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown. This page must be
accompanied by the accompanying personalized policy illustration, which includes the guaranteed elements of the policy and other important
information.
*The policyowner must request all policy distributions from the company.
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6. Select Loans have the risk that policy performance may be lower than projected in the illustration if the amount credited to the account value
in the Fixed Strategy and/or Indexed Strategy is less than the fixed 6% interest charged on the policy loan. Detailed additional information
about policy loans is located in the accompanying personalized policy illustration.
**IRC § 162 states a bonus paid to an employee is generally deductible in the year paid if the employee's total compensation (including the
bonus) is reasonable and is paid for personal services actually rendered. Compensation is regarded as "reasonable" if it is an amount as would
ordinarily be paid for like services by like enterprises under like circumstances. The amount of compensation a public-held corporation may
deduct for reasonable compensation paid to a covered employees is limited to $1,000,000.
The tax rates illustrated are assumptions based on information furnished by the employer and executive about their respective federal (and
state, if included) income tax rates. The actual tax rates experienced at any time may be more or less than those illustrated.
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7. A Self-Owned Life And Retirement (S.O.L.A.R.)
Insurance Arrangement can be used by an
employer for the executive's purchase of life
insurance. It is a simple and straightforward
method of rewarding an executive over and
above the traditional salary and other benefits.
A S.O.L.A.R. Insurance Arrangement funded
with a Voya IUL-Global Choice policy can be a
valuable selective benefit. It is selective
because the business can legally offer it to some
employees but not to others.
How it Works
1. The company and the executive agree that personal life insurance protection and the related cash value accumulation are
important components of the executive's overall compensation package. Depending on the relationship between the
parties, this understanding may be formalized through an optional employment agreement.
2. The Executive acquires a Voya IUL-Global Choice policy insuring his or her life.
3. The company makes the premium payments on this policy, which are taxed as additional compensation to the
executive and create a current deduction for the employer. Optionally, the company may provide an additional cash
bonus to the executive to cover the income tax associated with the premium payment.
4. The executive pays income taxes on the bonused premium payments either by having the taxes due withheld by
payroll deduction or by borrowing money from the Voya IUL-Global Choice policy utilizing Select Loans. Select
Loans have the risk that policy performance may be lower than projected in the following illustration if the amount
credited to the account value in the Fixed Strategy and/or Indexed Strategy is less than the fixed 6% interest charged
on the policy loan. 1 The executive who receives a bonus through payroll with taxes withheld may choose to take a Net
Loan to replace the premium amount equal to the taxes paid. The Net Loan allows the executive to apply the loan
proceeds directly to their policy as an additional premium payment. Once the net loan is processed and is on the
policy, it acts just like the current Traditional or Select Loan.
5. The policy cash values are available to supplement the executive's retirement income through withdrawals and loans.1
The policy death benefit will be paid income tax free to the executive's beneficiaries.2
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8. Employer Objectives
A Self-Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangement is a simple tool employers can use to reward their most
valued employees. The S.O.L.A.R. Insurance Arrangement can be offered selectively as a benefit to encourage the retention of
executives the business can't afford to lose.
Tool to Recruit, Reward and Retain Key Executives
Employers today are faced with increased competition for talented key executives. In the past, employers attracted, motivated and
retained their more talented executives by offering a combination of salary, incentive bonus, and qualified retirement benefits.
Unfortunately, these traditional compensation strategies fail to address several important issues:
· The cost of replacing key executives is getting higher;
· Salary increases and bonuses have short-lived impact
on long-term job satisfaction and loyalty to the
business.
· Salary increases and bonuses force executives to pay
taxes on income now even though the funds may not be
needed until later; and
· ERISA makes it difficult to single out and reward
highly-compensated executives using qualified
retirement plans.
Key Considerations
Potential Advantages Potential Disadvantages
· Immediate Tax Deduction -- Bonus payments made
by the employer are income tax deductible under IRC §
162 (so long as the executive's total compensation is
considered reasonable.)
· Flexible Contributions -- There is no required
schedule for contributions to a S.O.L.A.R. Insurance
Arrangement. Premiums can be designed to meet the
changing needs of the employer.
· Selective Benefit -- A S.O.L.A.R. Insurance
Arrangement can be offered on a selective basis.
Unlike qualified retirement plans, there is no
requirement that the benefit be available on a
nondiscriminatory basis.
· Simple Administration -- Some nonqualified benefits
can require significant plan administration (maybe even
requiring a third-party administrator). A S.O.L.A.R.
Insurance Arrangement is a simple arrangement
requiring little or no plan administration.
· No "Golden Handcuffs" -- The policy is owned and
controlled by the executive. Although the employer
premium bonus may be an incentive for the executive
to remain with the company, the executive may choose
to keep the policy after termination of employment.
· No Cost Recovery to the Employer -- The employer
has no rights to policy values or death benefits to
reimburse for the after-tax cost of the bonus.
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9. Executive Retirement Needs
A Self-Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangement offers today's executive a
solution to one of life's most intimidating challenges: preparing adequately for retirement. American
professionals expect to spend up to one-third of their lives in retirement.* Longer retirements can be
attributed to two major factors:
1. People are generally living longer; and
2. People are retiring earlier to enjoy the fruits of their labor.
In addition to living longer, there are several other challenges for executives who want to prepare
for a comfortable retirement:
· Social Security Shortfall -- As more and more "baby boomers" reach retirement age and with
fewer workers available to pay Social Security taxes, government projections indicate the
resources of the system will shrink and reductions in benefits may be necessary.
· Premature Death -- Retirement security means protecting both the executive and his or her family
during working and retirement years. If the executive dies prematurely, his or her loved ones may
be left without resources needed to cover expenses now or during retirement. A comprehensive
retirement strategy will include protection for premature death.
· Reverse Discrimination -- Qualified retirement plans may offer the best savings opportunity for
retirement-- contributions are not taxed to employees until withdrawn from the plan and employer
contributions are tax deductible. But there is a limit to how much a participant can contribute to a
qualified plan ($18,000 annually for 401(k), 403(b), and 457(b) plans in 2015). The effect of this
limitation is to discriminate against highly paid executives.
Example: A highly paid executive who participates in a qualified retirement plan fails to receive the same
ratio of before-to-after retirement income as the average worker. For example, an employee making
$50,000 a year can contribute up to 36.00% of his or her income to a qualified plan whereas an executive
making $200,000 can only contribute 9.00% of income.
Salary Maximum Pre-Tax Deferral Percentage
$50,000 36.00%
$100,000 18.00%
$150,000 12.00%
$200,000 9.00%
$250,000 7.20%
$300,000 6.00%
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10. A S.O.L.A.R. Insurance Arrangement provides a potential source of supplemental retirement income that
is not affected by qualified plan contribution limits and which also provides protection for an executive's
loved ones in the event of premature death.
*Voya Retirement Readiness & Middle America Survey, 2004.
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11. Key Considerations for the Executive
Potential Advantages Potential Disadvantages
· Supplemental Retirement Income1 --
Bonuses are used to purchase a life insurance
policy which accumulates cash values.
· Reduce "Out-of-Pocket Costs" 1 -- By taking
a policy loan to pay income taxes, the
S.O.L.A.R. Insurance Arrangement can
reduce the current costs to the executive.
· Tax-Deferred Growth -- No income tax is
payable while money is accumulating inside
the life insurance policy.
· Tax-Free Income 1 -- Provided the life
insurance policy is not structured as a
modified endownment contract ("MEC"), the
business owner will be able to attain tax-free
income through a combination of policy
withdrawals and loans.
· Income Tax-Free Death Benefit 2 -- The life
insurance policy provides protection for the
executive's family in the event of death.
· No IRS Distribution Requirements or
Penalties -- Policy distributions from a
S.O.L.A.R. Insurance Arrangement can occur
before age 59 ½ without a premature
distribution penalty from the IRS, and there
are no required minimum distributions at age
70 ½ or thereafter.
· Immediate Taxation to Executive -- Bonus
payments made by the employer are taxable
income to the executive under IRC § 61.
1 A portion of the policy’s surrender value may be available as a source of supplemental retirement income through policy loans and
withdrawals. Income tax free policy distributions may be achieved by policy loans or withdrawing to the cost basis (usually premiums paid).
This assumes the policy qualifies as life insurance, is not a modified endowment contract and is not lapsed or surrendered with an outstanding
loan. Policy loans and withdrawals may reduce or eliminate index credits, generate an income tax liability, reduce available surrender value
and reduce the death benefit, or cause the policy to lapse. Additionally, loans may limit your ability to make elections to the Indexed
Strategy; if a loan results in amounts being deducted from a block prior to its block maturity date, no elections from the Fixed Strategy to the
Indexed Strategy will be processed in the 18 months following the loan. Select Loans have the risk that policy performance may be lower
than projected in the following illustration if the amount credited to the account value in the Fixed Strategy and/or Indexed Strategy is less
than the fixed 6% interest charged on the policy loan. Detailed additional information about policy loans is located in the accompanying
personal policy illustration.
2 Death benefit proceeds from a life insurance policy are generally income tax-free, and if properly structured, may be free from estate tax.
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12. The Voya Life Companies and their agents and representatives do not give tax or legal advice. This information is general in nature and not
comprehensive; the applicable laws change frequently and the strategies suggested may not be suitable for everyone. You should seek advice
from your tax and legal advisors regarding your individual situation.
These materials are not intended to and cannot be used to avoid tax penalties; and they were prepared to support the promotion or marketing
of the matter addressed in this document. Each taxpayer should seek advice from an independent tax advisor.
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13. SELF-OWNED LIFE AND RETIREMENT INSURANCE ARRANGEMENT - COMBINED VALUES
Single Bonus
The purpose of this supplemental illustration is to show a Voya Indexed Universal Life-Global Choice policy using the Single Bonus
Plan and the corresponding affect on cash value and death benefit. The values illustrated are not guaranteed. An asterisk indicates the
year the policy would lapse assuming that since policy issue the minimum guaranteed interest was credited and the maximum
guaranteed costs were deducted.
Prepared for:
Employer
Tax Rate: 34%
Mr. Valued Client
Male 39 Standard No Tobacco
Tax Rate: 28%
State of Issue: California
Initial Total Face Amount: $1,738,000
Initial Death Benefit Option: 1 (Level)
Initial Annual Premium: $30,000.00
Premium Election:
Allocation Hypothetical Index
Strategy Type Percentage Credit/Interest Rate
S&P 500® 1 Year Point to Point Indexed Strategy 25% 6.67%
2 Year Global Indexed Strategy 50% 7.93%
5 Year Global Indexed Strategy 25% 7.62%
Policy Loan Type: Select Loans
EMPLOYER COSTS EXECUTIVE COSTS EXECUTIVE BENEFITS
End Total Bonus After-Tax Executive Net Net Net
of Yr Policy to Cost Of Premium Tax on Annual Retirement Surrender Death
Yr Age Premium Executive Bonus Outlay Bonus Outlay Benefits Value Benefit
1 40 30,000 30,000 19,800 0 8,400 0 0 0 1,729,096
2 41 30,000 30,000 19,800 0 8,400 0 0 8,100 1,719,658
3 42 30,000 30,000 19,800 0 8,400 0 0 20,619 1,709,653
4 43 30,000 30,000 19,800 0 8,400 0 0 34,623 1,699,048
5 44 30,000 30,000 19,800 0 8,400 0 0 50,563 1,687,807
150,000 150,000 99,000 0 42,000 0 0
6 45 30,000 30,000 19,800 0 8,400 0 0 68,160 1,675,892
7 46 30,000 30,000 19,800 0 8,400 0 0 92,783 1,663,261
8 47 30,000 30,000 19,800 0 8,400 0 0 122,114 1,649,873
9 48 30,000 30,000 19,800 0 8,400 0 0 152,054 1,635,682
10 49 30,000 30,000 19,800 0 8,400 0 0 185,806 1,620,638
300,000 300,000 198,000 0 84,000 0 0
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
A Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 13 of 64
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16. EMPLOYER COSTS EXECUTIVE COSTS EXECUTIVE BENEFITS
End Total Bonus After-Tax Executive Net Net Net
of Yr Policy to Cost Of Premium Tax on Annual Retirement Surrender Death
Yr Age Premium Executive Bonus Outlay Bonus Outlay Benefits Value Benefit
71 110 0 0 0 0 0 0 0 4,784,462 4,784,462
72 111 0 0 0 0 0 0 0 5,399,322 5,399,322
73 112 0 0 0 0 0 0 0 6,110,144 6,110,144
74 113 0 0 0 0 0 0 0 6,844,309 6,844,309
75 114 0 0 0 0 0 0 0 7,646,913 7,646,913
300,000 300,000 198,000 0 84,000 -1,801,870 1,801,870
76 115 0 0 0 0 0 0 0 8,540,221 8,540,221
77 116 0 0 0 0 0 0 0 9,580,298 9,580,298
78 117 0 0 0 0 0 0 0 10,663,096 10,663,096
79 118 0 0 0 0 0 0 0 11,896,945 11,896,945
80 119 0 0 0 0 0 0 0 13,117,777 13,117,777
300,000 300,000 198,000 0 84,000 -1,801,870 1,801,870
81 120 0 0 0 0 0 0 0 14,606,023 14,606,023
82 121 0 0 0 0 0 0 0 16,175,654 16,175,654
83 122 0 0 0 0 0 0 0 18,594,904 18,594,904
84 123 0 0 0 0 0 0 0 20,260,025 20,260,025
85 124 0 0 0 0 0 0 0 22,023,895 22,023,895
300,000 300,000 198,000 0 84,000 -1,801,870 1,801,870
86 125 0 0 0 0 0 0 0 23,700,397 23,700,397
300,000 300,000 198,000 0 84,000 -1,801,870 1,801,870
* Year 12, Month 8
Based on the maximum guaranteed costs, the assumed premium election, and the guaranteed minimum interest credit rate of
0.00% credited to the Indexed Strategy, and no index credit, the policy would lapse and cannot be illustrated beyond the year
shown. Additional premiums would be required to continue the coverage.
The employer pays a bonus to the executive equal to the employer paid portion of the illustrated policy premium. The bonus is
tax deductible to the employer and results in taxable income to the executive.
The tax rates illustrated are assumptions based on information furnished by the employer and executive about their respective
federal (and state, if included) income tax rates. The actual tax rates experienced at any time may be more or less than those
illustrated.
The Total Policy Premium illustrated is the amount of premium which will be billed to the policyowner. It also includes loan
interest paid by the policyowner, if any.
The Executive Premium Outlay is the amount of policy premium paid by the executive and is not included in any bonus from
the employer.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
A Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 16 of 64
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17. The Retirement Benefits represent the amount of cash distributed to the executive from the policy. It could include withdrawals
and policy loans. Policy loans and partial withdrawals may vary by state, reduce available surrender value and death benefit or
cause the policy to lapse. Generally, policy loans and partial withdrawals will not be income taxable if there is a withdrawal to
the cost basis (usually premiums paid), followed by policy loans (but only if the policy qualifies as life insurance, is not a
modified endowment contract and is not lapsed or surrendered).
The values illustrated are based on the illustrated policy interest rate, index credit rate and current cost assumptions.
The values illustrated are not guaranteed. They assume that the illustrated non-guaranteed elements of the policy will continue
unchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown.
This page must be accompanied by the basic Policy Illustration, which includes the guaranteed elements of the policy and other
important information.
Select Loans have the risk that policy performance may be lower than projected in the illustration if the amount credited to the
account value in the Fixed Strategy and/or Indexed Strategy is less than the fixed 6% interest charged on the policy loan.
Detailed additional information about policy loans is located in the accompanying personalized policy illustration.
The net death benefit will generally be received income tax free. The net death benefit will be subject to estate tax at the death
of the insured, if the insured was the owner of the policy at death, or if the insured possessed any ownership rights in the policy
within three years of death. Loans and withdrawals will reduce the policy's death benefit and available cash values.
The Voya Life Companies and their agents and representatives do not give tax or legal advice. This information is general in
nature and not comprehensive; the applicable laws change frequently and the strategies suggested may not be suitable for
everyone. You should seek advice from your tax and legal advisors regarding your individual situation.
These materials are not intended to and cannot be used to avoid tax penalties; and they were prepared to support the promotion
or marketing of the matter addressed in this document. Each taxpayer should seek advice from an independent tax advisor.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
A Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 17 of 64
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18. EMPLOYER LEDGER
Single Bonus
The purpose of this supplemental illustration is to show a Voya Indexed Universal Life-Global Choice policy using the Single Bonus
Plan and the corresponding affect to the Employer.
Prepared for:
Employer
Tax Rate: 34%
Mr. Valued Client
Tax Rate: 28%
State of Issue: California
End Total After
of Yr Policy Bonus Tax Tax
Yr Age Premiums Paid Savings Cost
1 40 30,000 30,000 10,200 19,800
2 41 30,000 30,000 10,200 19,800
3 42 30,000 30,000 10,200 19,800
4 43 30,000 30,000 10,200 19,800
5 44 30,000 30,000 10,200 19,800
150,000 150,000 51,000 99,000
6 45 30,000 30,000 10,200 19,800
7 46 30,000 30,000 10,200 19,800
8 47 30,000 30,000 10,200 19,800
9 48 30,000 30,000 10,200 19,800
10 49 30,000 30,000 10,200 19,800
300,000 300,000 102,000 198,000
11 50 0 0 0 0
12 51 0 0 0 0
13 52 0 0 0 0
14 53 0 0 0 0
15 54 0 0 0 0
300,000 300,000 102,000 198,000
16 55 0 0 0 0
17 56 0 0 0 0
18 57 0 0 0 0
19 58 0 0 0 0
20 59 0 0 0 0
300,000 300,000 102,000 198,000
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
A Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 18 of 64
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21. End Total After
of Yr Policy Bonus Tax Tax
Yr Age Premiums Paid Savings Cost
81 120 0 0 0 0
82 121 0 0 0 0
83 122 0 0 0 0
84 123 0 0 0 0
85 124 0 0 0 0
300,000 300,000 102,000 198,000
86 125 0 0 0 0
300,000 300,000 102,000 198,000
The employer pays a bonus to the executive equal to the employer paid portion of the illustrated policy premium. The bonus is tax
deductible to the employer and results in taxable income to the executive.
The tax rates illustrated are assumptions based on information furnished by the employer and executive about their respective federal
(and state, if included) income tax rates. The actual tax rates experienced at any time may be more or less than those illustrated.
The Voya Life Companies and their agents and representatives do not give tax or legal advice. This information is general in nature and
not comprehensive; the applicable laws change frequently and the strategies suggested may not be suitable for everyone. You should
seek advice from your tax and legal advisors regarding your individual situation.
These materials are not intended to and cannot be used to avoid tax penalties; and they were prepared to support the promotion or
marketing of the matter addressed in this document. Each taxpayer should seek advice from an independent tax advisor.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
A Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 21 of 64
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22. EXECUTIVE LEDGER
Single Bonus
The purpose of this supplemental illustration is to show a Voya Indexed Universal Life-Global Choice policy using the Single Bonus
Plan and the corresponding affect on cash value and death benefit.
Prepared for:
Employer
Tax Rate: 34%
Mr. Valued Client
Male 39 Standard No Tobacco
Tax Rate: 28%
State of Issue: California
Initial Total Face Amount: $1,738,000
Initial Death Benefit Option: 1 (Level)
Initial Annual Premium: $30,000.00
Premium Election:
Allocation Hypothetical Index
Strategy Type Percentage Credit/Interest Rate
S&P 500® 1 Year Point to Point Indexed Strategy 25% 6.67%
2 Year Global Indexed Strategy 50% 7.93%
5 Year Global Indexed Strategy 25% 7.62%
Policy Loan Type: Select Loans
Employer
End Total Bonus Policy Net Net
of Yr Policy to Tax on Value Net Annual Surrender Death
Yr Age Premium Executive Bonus Distributed Outlay Value Benefit
1 40 30,000 30,000 8,400 8,400 0 0 1,729,096
2 41 30,000 30,000 8,400 8,400 0 8,100 1,719,658
3 42 30,000 30,000 8,400 8,400 0 20,619 1,709,653
4 43 30,000 30,000 8,400 8,400 0 34,623 1,699,048
5 44 30,000 30,000 8,400 8,400 0 50,563 1,687,807
150,000 150,000 42,000 42,000 0
6 45 30,000 30,000 8,400 8,400 0 68,160 1,675,892
7 46 30,000 30,000 8,400 8,400 0 92,783 1,663,261
8 47 30,000 30,000 8,400 8,400 0 122,114 1,649,873
9 48 30,000 30,000 8,400 8,400 0 152,054 1,635,682
10 49 30,000 30,000 8,400 8,400 0 185,806 1,620,638
300,000 300,000 84,000 84,000 0
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
A Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
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25. Employer
End Total Bonus Policy Net Net
of Yr Policy to Tax on Value Net Annual Surrender Death
Yr Age Premium Executive Bonus Distributed Outlay Value Benefit
71 110 0 0 0 0 0 4,784,462 4,784,462
72 111 0 0 0 0 0 5,399,322 5,399,322
73 112 0 0 0 0 0 6,110,144 6,110,144
74 113 0 0 0 0 0 6,844,309 6,844,309
75 114 0 0 0 0 0 7,646,913 7,646,913
300,000 300,000 84,000 1,885,870 -1,801,870
76 115 0 0 0 0 0 8,540,221 8,540,221
77 116 0 0 0 0 0 9,580,298 9,580,298
78 117 0 0 0 0 0 10,663,096 10,663,096
79 118 0 0 0 0 0 11,896,945 11,896,945
80 119 0 0 0 0 0 13,117,777 13,117,777
300,000 300,000 84,000 1,885,870 -1,801,870
81 120 0 0 0 0 0 14,606,023 14,606,023
82 121 0 0 0 0 0 16,175,654 16,175,654
83 122 0 0 0 0 0 18,594,904 18,594,904
84 123 0 0 0 0 0 20,260,025 20,260,025
85 124 0 0 0 0 0 22,023,895 22,023,895
300,000 300,000 84,000 1,885,870 -1,801,870
86 125 0 0 0 0 0 23,700,397 23,700,397
300,000 300,000 84,000 1,885,870 -1,801,870
The employer pays a bonus to the executive equal to the employer paid portion of the illustrated policy premium. The bonus is tax
deductible to the employer and results in taxable income to the executive.
The tax rates illustrated are assumptions based on information furnished by the employer and executive about their respective federal
(and state, if included) income tax rates. The actual tax rates experienced at any time may be more or less than those illustrated.
The Total Policy Premium illustrated is the amount of premium which will be billed to the policyowner. It also includes loan interest
paid by the policyowner, if any.
The Policy Value Distributed represents the amount of cash distributed to the executive from the policy. It could include withdrawals
and policy loans. Policy loans and partial withdrawals may vary by state, reduce available surrender value and death benefit or cause the
policy to lapse. Generally, policy loans and partial withdrawals will not be income taxable if there is a withdrawal to the cost basis
(usually premiums paid), followed by policy loans (but only if the policy qualifies as life insurance, is not a modified endowment
contract and is not lapsed or surrendered).
The values illustrated are based on the illustrated policy interest rate, index credit rate and current cost assumptions.
The values illustrated are not guaranteed. They assume that the illustrated non-guaranteed elements of the policy will continue
unchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown. This page
must be accompanied by the basic Policy Illustration, which includes the guaranteed elements of the policy and other important
information.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
A Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 25 of 64
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26. Select Loans have the risk that policy performance may be lower than projected in the illustration if the amount credited to the account
value in the Fixed Strategy and/or Indexed Strategy is less than the fixed 6% interest charged on the policy loan. Detailed additional
information about policy loans is located in the accompanying personalized policy illustration.
The net death benefit will generally be received income tax free. The net death benefit will be subject to estate tax at the death of the
insured, if the insured was the owner of the policy at death, or if the insured possessed any ownership rights in the policy within three
years of death. Loans and withdrawals will reduce the policy's death benefit and available cash values.
The Voya Life Companies and their agents and representatives do not give tax or legal advice. This information is general in nature and
not comprehensive; the applicable laws change frequently and the strategies suggested may not be suitable for everyone. You should
seek advice from your tax and legal advisors regarding your individual situation.
These materials are not intended to and cannot be used to avoid tax penalties; and they were prepared to support the promotion or
marketing of the matter addressed in this document. Each taxpayer should seek advice from an independent tax advisor.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
A Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 26 of 64
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27. Income Tax Free Death Benefit~
Life insurance death proceeds help your family remain financially secure without generally being subject to
federal income taxation. Death proceeds will generally be subject to estate taxation.
Tax Deferred Growth
No income taxes are payable while your money is accumulating.
Tax Free Income^
At retirement, you may obtain tax free income^ through a combination of policy withdrawals and loans.
Loans and withdrawals may generate an income tax liability if not properly structured. Income tax free
distributions are achieved by withdrawing to the cost basis (premiums paid) then using policy loans, or simply
using policy loans and no withdrawals. These tax advantages may apply as long as the policy qualifies as life
insurance and does not lapse. If the policy lapses or is surrendered, the IRS will tax distributions received
over the life of the policy and at termination that are in excess of total premiums paid. Policy withdrawals and
loans will reduce the policy cash value and the death benefit payable to your beneficiaries. They may also
reduce or eliminate index credits and cause the policy to lapse.
Flexible Contributions
Premium payments can be designed around the changing needs of your life. After the policy's first year, you
have the option to pay more or less than the stated premium, and make payments more or less often than stated
in the initial policy. If your financial priorities change, you can skip premium payments or stop paying
premiums provided your policy has built a sufficient cash surrender value.
Of course, stopping premiums will affect policy values. Policy values will also fluctuate based upon changes
in interest rates and changes in index credits. Consequently, it may be necessary to pay additional premiums
to achieve your financial goals. If the policy lapses, there may be significant tax consequences. The policy
will remain in force as long as policy values are sufficient to support the monthly deduction or the death
benefit guarantee remains active. All claims are based on the financial ability of Security Life of Denver
Insurance Company to pay those claims.
No IRS Distribution Requirements or Penalties^
Distributions can occur before age 59-1/2 without penalty, and there is no required minimum distribution at
age 70-1/2.
Complete Control of the Policy
You, not your employer or the government, decide how and when money goes into or comes out of your
policy.
Will not affect Social Security
Wages after retirement could cause you to lose Social Security Benefits, or to be taxed on them; income from
life insurance will not affect these benefits.
^ Tax free income is achieved by withdrawing from the policy cash value an amount equal to the total premiums paid (your cost basis), then using policy loans
for the balance. If the policy is allowed to lapse with a loan outstanding, the amount of the loan in excess of your cost basis will be taxable as ordinary
income. If the policy is a Modified Endowment Contract (IRC Section 7702 A), distributions from the policy (by loan or withdrawal) will be taxable as
ordinary income to the extent of the gain in the policy, and may be subject to a 10% income tax penalty prior to age 59-1/2.
~ The life insurance policy death benefit will generally be received income tax free. The death benefit may be subject to estate tax at the death of the insured, if
the insured was the owner of the policy at death, or if the insured possessed any ownership rights in the policy within three years of death.
07/22/2015 10:27 PM
What Are the Potential Advantages of Life Insurance? Page 27 of 64
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28. You choose with Voya IUL-Global Choice!
The power of Voya Indexed Universal Life-Global Choice is the valuable death benefit protection supported by policy cash values
calculated under a Fixed Strategy and your choice of three Indexed Strategies. You have the option to choose any of these strategies or a
combination of them to accumulate cash values and provide the protection you need.
Fixed Strategy
· Current fixed interest rate is 4.25% effective for 12 months.
· At each policy anniversary, the rate may be adjusted for the next year.
· Interest rate credited will never be less than 2.00%
Indexed Strategies
S&P 500® 1 Year Point to Point Indexed Strategy
· Simple strategy with a short time horizon
· Annual reset so index credits, if any, are locked in every year
· Based on a U. S. index that is easily tracked
· 100% current participation rate (Guaranteed Minimum!); 13% current cap
2 Year Global Indexed Strategy
· Built in global diversification by using three indexes from around the world
· Only the best two-out-of-three indexes are used in interest crediting
· Benefit of a multi-index strategy, but with ability to lock in index credits, if any, every two years vs. five years
· 65% current participation rate and no current cap on index credits
5 Year Global Indexed Strategy
· Built in global diversification by using three indexes from around the world
· Only the best two-out-of-three indexes are used in interest crediting
· Has potential to produce higher returns over long time horizon
· 90% current participation rate and no current cap on index credits
No matter what strategy or combination of strategies you select, you can choose with confidence knowing that all of them have a 0%
Guaranteed Minimum Interest Rate. Meaning even if the Indexes have negative performance the resulting Index Credit Rate will never
be less than 0%.
Experience the Power of Choice 07/22/2015 10:27 PM
Life insurance offered by Security Life of Denver Insurance Company Page 28 of 64
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Version P2 M3 2015.06.03, Released 07/20/2015,
29. Global Index Strategies
The Global Index Strategies are based on the finishing positions of the following three indexes:
S&P 500® Index (S&P 500®) - An index of stock performance of 500 publicly traded companies. It does not reflect
dividends payable on the underlying stocks.
EURO STOXX 50® Index (EURO STOXX 50®) - An index of blue-chip stocks that are represented by 50 stocks covering
the largest sector leaders in the EURO STOXX 50® Index. It does not reflect dividends payable on the underlying stocks.
Hang Seng Index - An index of the largest and most liquid stocks listed on the Stock Exchange of Hong Kong. It does not
reflect dividends payable on the underlying stocks.
See the Explanation of Policy Illustration to learn more about how the Indexed Strategy works and the IMPORTANT INDEX
DISCLAIMERS for more information about each index.
The Value of Hindsight
Hindsight, as they say, is 20/20 and quite valuable. Voya IUL-Global Choice with both a two-year and a five year look-back period is
designed to provide the benefit of this hindsight. It calculates the index credit under a formula using a weighted portion of each index
change rate, where the weighting favors the two better performing of three indexes, as follows:
· 75% of the highest index change rate, plus
· 25% of the next highest index change rate, plus
· 0% of the lowest index change rate
In essence, at the end of each two or five-year period, the index change rate for each index is determined and then weighted, with the
result subject to an index cap and a minimum of 0%. This means that a portion of the top two indexes are used in the calculation and the
index with the lowest change rate is not used. There is no need to try and predict the better performing indexes in the beginning. The
result of this calculation is subject to a participation rate. Accordingly, once the index change rates are determined for each of the three
indexes, the index credit can then be calculated for that block. This continues for each 2 or 5-year block as long as the policy remains in
force. For each block, the participation rate and the index cap are set on a block’s start date and are guaranteed not to change for that
block. The policy must be in force when a block matures to receive any index credit.
Please Note: While policy values may be affected by external indexes, this policy is not an investment in the stock market and does not
participate in any index fund, stock or equity investments. Voya IUL-Global Choice is not a variable product or any type of
investment contract.
The Effect of Using Three Indexes 07/22/2015 10:27 PM
Life insurance offered by Security Life of Denver Insurance Company Page 29 of 64
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30. The graphs below show the number of times each of the Indexes has finished 1st, 2nd and 3rd for hypothetical two-year and five-year
blocks maturing during the period indicated. This information shows that the EURO STOXX 50®, S&P 500® and Hang Seng Indexes
have each demonstrated volatility over the periods shown. The 2 Year and 5 Year Global Indexed Strategies attempt to minimize that
volatility by using three indexes under a weighted formula.
These unmanaged indexes are not intended to represent specific investments. This product is not a variable contract or any type of investment contract
where cash value is based upon performance of client selected variable investment options. While your policy values may be affected by external
indexes, your policy is not an investment in the stock market and does not directly participate in any index fund, stock equity investment. Past index
performance does not represent future performance of these indexes. The finishing positions for each index were determined based on the changes in
the value of each hypothetical index block between the block maturity date and the same date two or five years earlier. The percentages shown reflect
the number of times that each index had the highest (1st place), second highest (2nd place), and lowest (3rd place) 2-year or 5-year index change rate
during the period. The data provided provides only a comparison of the indexes to each other and provides no information relative to the performance
of the indexes during the period shown.
The Effect of Using Three Indexes 07/22/2015 10:27 PM
Life insurance offered by Security Life of Denver Insurance Company Page 30 of 64
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31. Strategy Results - Block Maturity Historical Returns
The following graphs were developed using historical index data and current non-guaranteed index parameters that are reflected below
for three indexed strategies and the hindsight index crediting methodology used in the Voya IUL-Global Choice policy. The uneven line
reflects what the annualized index credit rate could have been for each index strategy based on the block maturity date shown and the
indexed strategy assumptions listed below.
S&P 500® 1 Year Point to Point
Simple Strategy - Blocks Mature Annually
Guaranteed Minimum Interest Rate: 0%
Current Index Cap: 13%
Current Participation Rate: 100%
2 Year Global
Diversification – Blocks Mature Every Two Years
Guaranteed Minimum Interest Rate: 0%
Current Index Cap: Unlimited
Current Participation Rate: 65%
5 Year Global
Diversification – Blocks Mature Every Five Years
Guaranteed Minimum Interest Rate: 0%
Current Index Cap: Unlimited
Current Participation Rate: 90%
Historical Returns and Percentiles 07/22/2015 10:27 PM
Life insurance offered by Security Life of Denver Insurance Company Page 31 of 64
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32. Long term strategy results – 20 Year Historical Returns
The following graphs show the hypothetical annualized returns over 20 years periods ending in the month and year shown assuming
sequential hypothetical index blocks for each indexed strategy. Percentiles are used to give some idea of the variability of historical
index returns when measured in 20 year segments within a 34 year overall timeframe. For example, the line drawn at the 80th percentile
on each graph shows the point at which approximately 80% of the 20 year segment results calculated over this 34 year period equaled or
exceeded that annualized rate over the period shown. Note that due to the significant overlap in measurement periods used in
developing 20 year returns, historical percentile returns should not be used to provide any confidence concerning the stability or
level of future index crediting rates. Nor does the percentile information reflect the higher volatility returns likely to be
experienced on individual blocks.
Historical Percentile
100th
90th
80th
70th
60th
50th
Average
Rate
6.67%
7.41%
7.62%
7.79%
7.96%
8.11%
8.11%
Historical Percentile
100th
90th
80th
70th
60th
50th
Average
Rate
7.93%
10.03%
10.81%
11.32%
11.78%
12.33%
12.41%
Historical Percentile
100th
90th
80th
70th
60th
50th
Average
Rate
7.62%
9.37%
10.28%
11.48%
12.34%
13.01%
12.75%
These rates are based on historical information and should not be used as an indication of future performance.
Historical Returns and Percentiles 07/22/2015 10:27 PM
Life insurance offered by Security Life of Denver Insurance Company Page 32 of 64
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33. EXPLANATION OF POLICY ILLUSTRATION
A Narrative Summary
Policy Introduction: The Voya Indexed Universal Life-Global Choice product illustrated on the accompanying
pages is a flexible premium adjustable life insurance policy which can provide a lifetime
death benefit. The death benefit is adjustable and may depend on the account value in the
policy. The account value is based on the timing and amount of your premiums, policy and
rider charges, the index credit rate, index credit, if any, and the interest credited to the policy.
This illustration assumes all premiums are received by the Company on the first day of each
illustrated year. This product is offered by Security Life of Denver Insurance Company, a
member of the Voya™ family of companies, and is filed as Policy Form Series #1186-09/12
(which may vary by state).
This product has two strategies: a Fixed Strategy and an Indexed Strategy. Premiums paid,
minus any premium expense charges (the net premiums) are initially credited to the Fixed
Strategy. Thereafter, amounts in the Fixed Strategy can be elected to the Indexed Strategy.
The Indexed Strategy is made up of three strategies: S&P500® 1 Year Point to Point, 2 Year
Global and 5 Year Global. This illustration assumes 25% of the premium is elected to the
S&P 500® 1 Year Point to Point Indexed Strategy, 50% of the premium is elected to the 2
Year Global Indexed Strategy, and 25% of the premium is elected to the 5 Year Global
Indexed Strategy. This product is not a variable contract or any type of investment contract
where cash value is based upon performance of client selected variable investment options.
While your policy values may be affected by external indexes, your policy is not an
investment in the stock market and does not directly participate in any index fund, stock or
equity investment. This product is not meant to be an investment vehicle. Voya Indexed
Universal Life-Global Choice is not a variable product or any type of investment
contract.
This illustration is not the actual life insurance policy you will receive nor is it part of the
contract. This illustration is intended only to show you how the life insurance policy might
react based on the interest rate, index credit rate, index credit, if any, and premium payment
assumptions contained in the illustration. Due to your individual circumstances, your policy,
upon issue, may differ from what is illustrated. In that event, the terms of your policy control.
Following is a description of some of the key terms and features of this life insurance product.
Guaranteed Values:
0.00% Guaranteed Minimum
Interest Rate Indexed Strategy
The guaranteed values are the minimum values that will accrue, assuming you pay the
premiums as illustrated. These values are calculated based on the guaranteed minimum
interest rate of 0.00% on the Indexed Strategy, no index credit, the guaranteed maximum cost
of insurance rates, and the guaranteed maximum expenses in the policy.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
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Designed for Mr. Valued Client Page 33 of 64
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34. Non-Guaranteed Values:
Illustrated Hypothetical
Annualized Index Credit Rate(s):
6.67% S&P 500® 1 Year
Point to Point
7.93% 2 Year Global
7.62% 5 Year Global
The non-guaranteed values are based on the illustrated hypothetical index credit rate(s),
current index cap(s) and participation rate(s), current cost of insurance rates, and current
expense charges. The actual amount credited to the policy will vary based on the strategy
described below. The cost of insurance rates, policy expense charges, index cap(s), index
credit(s), participation rate(s), and the interest crediting rate are subject to change. This
illustration assumes that the illustrated non-guaranteed elements will continue
unchanged for all years shown. This is not likely to occur, and actual results will be
more or less favorable than those shown. Security Life of Denver Insurance Company
reserves the right to change the non-guaranteed benefits and values of this illustration.
Fixed Strategy: The Fixed Strategy credits interest on a portfolio interest rate basis. This means that your
entire account value in the Fixed Strategy is credited at the same interest rate.
The Fixed Strategy offers a guarantee of both principal and interest at a minimum annual rate
of return of 2.00%. The current credited interest rate declared by Security Life of Denver
Insurance Company for the Fixed Strategy is 4.25% and is in effect for the first 12 months.
After the first 12 months, this rate is subject to change, but changes may not occur to your
contract more frequently than annually. Policy charges are deducted first from the Fixed
Strategy until depleted and then on a pro rata basis from each of the Indexed Strategy blocks.
You may elect amounts from the Fixed Strategy to the Indexed Strategy on the election date.
Your illustration is based on your initial election of premiums between the Fixed Strategy and
the Indexed Strategy. Details on election restrictions are contained in your policy.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
A Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
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35. Indexed Strategy: The Indexed Strategy is a strategy available under the policy through which the policyowner
may elect to have all or part of the Account Value receive Index Credits based in part on
changes in the values of the Indexes. The available indexed strategies are the S&P 500® 1
Year Point to Point Indexed Strategy, 2 Year Global Indexed Strategy, and 5 Year Global
Indexed Strategy. The value of the Indexed Strategy equals the sum of the values of the
indexed strategies.
On each block maturity date, an index credit, if any, is added to the value of the block(s). The
index credit is subject to an index cap and is based on the index change rate or weighted index
change rate for each index, the participation rate, and guaranteed minimum interest rate of
each indexed strategy.
The S&P 500® 1 Year Point to Point Indexed Strategy is based on the performance of the
S&P 500® Index, which is an index of stock performance of 500 publicly traded companies.
It does not reflect dividends payable on the underlying stocks.
The 2 Year Global and 5 Year Global Indexed Strategies are comprised of an index crediting
formula that takes into consideration three different indexes: EURO STOXX 50® Index,
Hang Seng Index, and S&P 500® Index. EURO STOXX 50® Index is an index of blue-chip
stocks that are represented by 50 stocks covering the largest sector leaders in the EURO
STOXX 50® Index. It does not reflect dividends payable on the underlying stocks. Hang
Seng Index is an index of the largest and most liquid stocks listed on the Stock Exchange of
Hong Kong. It does not reflect dividends payable on the underlying stocks. S&P 500® is an
index of stock performance of 500 publicly traded companies. It does not reflect dividends
payable on the underlying stocks.
See IMPORTANT INDEX DISCLAIMERS for more information about each index.
Index Change Rate: The index change rate for each index is equal to (b) minus (a), divided by (a), where:
(a) is the value of the Index at the close of business on the block start date, and
(b) is the value of the Index at the close of business on the block maturity date.
For the S&P 500® 1 Year Point to Point Indexed Strategy only, the Index Change Rate will
never be less than zero and will never be more than the Index Cap.
Weighted Index
Change Rate:
The weighted index change rate is only applicable to the 2 Year Global Indexed Strategy and
5 Year Global Indexed Strategy. The weighted index change rate equals the lesser of the
index cap and (a) plus (b) plus (c), where:
(a) is the highest index change rate multiplied by 75%; and
(b) is the next highest index change rate multiplied by 25%; and
(c) is the lowest index change rate multiplied by 0%.
The weighted index change rate is guaranteed not to be less than zero and will never be more
than the applicable Index Cap.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
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36. Index Cap: The index cap is a limit on the index change rate for the S&P 500® 1 Year Point to Point
Indexed Strategy and a limit on the weighted index change rate for the 2 and 5 Year Global
Indexed Strategies. The index cap for each block is set on the block start date and will not
change for that block. The index cap can be changed by us at any time for new blocks,
subject to any guaranteed minimum index cap.
Indexed Strategy Guaranteed Current
S&P 500® 1 Year 3.5% 13%
2 Year Global 10% Unlimited
5 Year Global 100% Unlimited
Participation Rate: The participation rate is the percentage of the index change rate on the S&P 500® 1 Year
Point to Point Indexed Strategy and the weighted index change rate that will be recognized in
the calculation of the index credit for the 2 and 5 Year Global Indexed Strategies. For each
block, the participation rate will be the participation rate on the block start date and it will not
change for that block.
Indexed Strategy Guaranteed Current
S&P 500® 1 Year 100% 100%
2 Year Global 20% 65%
5 Year Global 15% 90%
Index Credit Rate: The index credit rate equals:
· The index credit rate for the S&P 500® 1 Year Point to Point Indexed Strategy and
the weighted index change rate for the 2 and 5 Year Global Indexed Strategies;
multiplied by
· The applicable participation rate.
Index Credit: An index credit is calculated and added to a block at the close of business on the block
maturity date only. The index credit on the block maturity date is equal to (a) divided by (b)
multiplied by (c), where:
(a) is the index credit rate calculated on the block maturity date;
(b) is the index credit calculation rate times the index crediting period; and
(c) is the total index credit calculation interest calculated on the block from
the block start date to the block maturity date, prior to the addition of
the index credit.
Index Credit Calculation Interest is calculated on the daily value of each Block for purposes
of calculating the index credit only. The Index Credit Calculation Interest is not added to the
Block.
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37. Hypothetical
Annualized Index
Credit Rate:
The non-guaranteed policy values shown in this life insurance illustration are based on
hypothetical index credit rates that are selected for each index that may not exceed the
maximum hypothetical index credit rate for each respective indexed strategy. The current
maximum hypothetical annualized credit rate for the S&P 500® 1 Year Point to Point
Indexed Strategy is 8.08% The current maximum hypothetical index credit rate for the 2 Year
Global Indexed Strategy is 18.81%, which corresponds to an annualized rate of 9.00%. The
current maximum hypothetical index credit rate for the 5 Year Global Indexed Strategy is
61.05%, which corresponds to an annualized rate of 10.00%. Index credits, if any, are
applied to an index block at block maturity.
This illustration assumes that non-guaranteed illustrated elements, including the
hypothetical index credit rate, current index caps and current participation rates will
continue for all years shown. This is not likely to occur, and actual results will be more
or less favorable than those shown. In addition, hypothetical rates cannot be relied upon
as an indication of future performance and there is no guarantee that future index
performance will generate index credits. The actual index credit rate for any particular
index block under the policy may vary from the hypothetical index credit rates allowed
to be shown in this illustration. Actual future credits depend on future index
performance, performance caps, and participation rates applicable to future index
blocks.
To be sure this is the right type of life insurance product for you, you should consider
alternative scenarios using multiple hypothetical index credit rates below the maximums
including variation in short term and long term performance to see the effect that changing
hypothetical index credit rate assumptions will have on the policy’s Account Value, Net
Surrender Value, Net Death Benefit and the premiums required to continue your insurance
coverage.
Premium Outlay: The premium outlay is the net annualized outlay to the policyowner. It is equal to scheduled
premium payments and loan repayments less any partial withdrawals and policy loans. In
general, a negative value in this column indicates that more money was distributed from the
policy, either as a loan or partial withdrawal, than was paid as premium in that year.
First-Year Scheduled
Premium: $30,000.00
The scheduled premiums are shown in the yearly detail of this illustration. Note that
coverage may end at different times under guaranteed and non-guaranteed illustrated
assumptions.
Guideline Level Premium:
$24,734.67
The guideline level premium is the maximum premium that can be paid into the policy, based
on current tax law, if level premiums are paid each year. This guideline level premium will
change if any coverage increases, decreases, or changes are made to the policy.
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38. Minimum Monthly
Premium: $1,099.78
The minimum monthly premium is the minimum premium required to issue the policy. The
minimum monthly premium must be paid during each of the first 9 policy years to qualify for
the special continuation period. The special continuation period guarantees that your policy
will not lapse if the following two conditions are met: the policy account value less any policy
loan must be positive and the sum of the premiums paid since the policy date, less all partial
withdrawals, and less any policy loans, must be equal to or greater than the sum of the
Minimum Monthly Premiums. This minimum monthly premium does not include, if
applicable, scheduled increases and will change if increases or decreases are made in any of
the policy benefits. Following this period, premium payments higher than this minimum
premium may be required to keep the policy in force. Paying only the minimum premium
does not guarantee continuation of the policy. In addition, you may be foregoing the
advantage of potentially building the policy's account value.
Rider Benefits
Included:
Listed below are rider benefits illustrated on this policy illustration. Charges for these
benefits, unless otherwise stated, reduce the account value.
Accelerated Benefit Rider: The Accelerated Benefit Rider allows a portion of the death benefit to be paid to the
policyowner prior to the death of the insured in the event the insured becomes terminally ill or
in the event of other catastrophic Qualifying Conditions. There is no cost associated with this
rider unless the option to accelerate the death benefit is exercised. For additional details
please see the accompanying Accelerated Benefit Rider Disclosure Form.
Overloan Lapse Protection
Rider:
The Overloan Lapse Protection Rider is designed to keep your policy in force when loan
balances approach 100% of the account value. There is no cost for this rider unless the option
is exercised. This illustration assumes that the Overloan Lapse Protection Rider was not
exercised.
Net Death Benefit:
Initial Stated Death Benefit:
$1,738,000
The proceeds are the amount paid to the beneficiary upon the death of the insured. The initial
stated death benefit amount is the death benefit at issue. The death benefit amounts illustrated
are shown as of the end of the year and reflect the stated death benefit provided by the policy
less any outstanding policy loans and accrued loan interest, minus policy charges incurred,
but not yet deducted.
Under Option 1 (Level), the death benefit is equal to the stated death benefit. Under Option 2
(Increasing), the death benefit is equal to the stated death benefit plus the account value.
Under both options, a greater death benefit will apply if the minimum death benefit to qualify
as life insurance based on the Death Benefit Qualification Test exceeds the amounts described
above. The initial Death Benefit Option assumed in this illustration is 1 (Level).
After attained age 121, only Option 1 will be available. All policies will be converted to
Option 1 policies and the stated death benefit will be equal to the death benefit immediately
prior to the policy anniversary nearest to attained age 121.
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39. Account Value: The account value is the sum of the Fixed Strategy, the Indexed Strategy, and the policy loan
account. Deductions from the account value are made every month throughout the life of the
policy until attained age 121, regardless of whether premiums are paid or not paid.
Deductions are subtracted from the Fixed Strategy until depleted and then on a pro rata basis
from each of the Indexed Strategy blocks. The account value will vary based on the timing
and amount of your premiums, policy and rider charges, index credit, if any, and the interest
credited to the policy. See your policy for details.
This policy also has an Alternate Guaranteed Account Value. The Alternate Guaranteed
Account Value is the value that, if greater than the account value, is used instead of the
account value only at the time of death or surrender in the calculation of the base death
benefit or surrender value. The Alternate Guaranteed Account Value is calculated in the same
manner as the account value except that it uses a cumulative Alternate Guaranteed Account
Value Interest Rate of 1.00% per year. See your policy for details. The Alternate Guaranteed
Account Value is not reflected in this illustration's Account Value or Surrender Value.
However, it is reflected in the net death benefit amount when applicable.
Net Surrender Value: The net surrender value is equal to the account value of the policy reduced by the amount of
any surrender charges and any outstanding policy loan amounts including accrued but unpaid
policy loan interest, less any unpaid monthly deductions. This is the amount payable on
surrender. Because the index credit is applied on the block maturity date, upon surrender,
blocks that have not matured will not receive an index credit. A portion of the net surrender
value may also be available for partial withdrawals or policy loans.
Policy Loans:
This illustration includes
a proposed loan using the
Select Loans.
Two types of policy loans are available; Traditional Loans and Select Loans. These are
available anytime on or after the first policy month. Policy loans will reduce the policy’s
available net surrender value. The annual interest expense is charged in arrears. If loan
interest is not paid in cash, it is added to the outstanding loan amount. The unpaid loan
interest will then increase the amount borrowed and, in turn, result in increased loan interest
charges. If the insured dies while there is an outstanding loan, the loan amount will be
deducted from the death proceeds.
The policy may only have one loan type at a time. The loan type is selected the first time a
policy loan is requested and each time Select Loans are requested. Once the owner chooses
Traditional Loans, the owner may never change to Select Loans. The owner may switch from
Select Loans to Traditional Loans only one time during the life of the policy, but may never
change back to Select Loans. See Select Loans below for additional detail on changing the
loan type.
Policy loans (and withdrawals) may reduce or eliminate index credits, generate an income tax
liability, reduce available surrender value and reduce the death benefit, or cause the policy to
lapse.
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40. Select Loans: Select Loans are policy loans in which an amount equal to each new loan or loan interest due
is added to the loan amount while the account value remains in the Fixed Strategy and/or
Indexed Strategy as elected by the policyowner. With Select Loans the loan amount is not
added to the Policy Loan Account. The interest rate charged on the outstanding loan amount
is fixed at 6% per year in arrears, regardless of the indexed credits earned and/or the credited
interest rates. The loan interest charge accrues daily. Interest is credited to the Fixed Strategy
on a daily basis. Index Credits, if any, are applied when blocks mature creating a timing
mismatch between accrual of loan interest and potential index credits. Please note that this
mismatch is greater when premiums are allocated to index blocks with longer Index Crediting
Periods.
Select Loans have the risk that policy performance may be lower than projected in the
following illustration if the amount credited to the account value in the Fixed Stategy and/or
Indexed Strategy is less than the fixed 6% interest charged on the policy loan. Policy
performance may be higher or lower than projected. If the policy performance is lower than
projected the policy could lapse without additional premium or loan interest payments.
For Select Loans the maximum difference between the amount credited to the account value
and the interest charged on the policy loan each year is 6%. For Traditional Loans the
guaranteed maximum difference is 1%.
With Select Loans, the result of having a policy loan varies depending on the index credits
earned and/or the credited interest rates, and if you pay loan interest in cash or allow it to
accrue. For example, if the account value grows over time at an annualized average of 9%,
the cost of Select Loans is a net gain of 3% (6% charged rate less 9% annualized earned rate).
On the other hand, if the account value grows over time at the guaranteed annual rate of 0%,
the net cost of Select Loans is 6% (6% charged rate less 0% earned rate).
This is a hypothetical example and not intended to represent the actual financial impact of
Select Loans.
The straight line in the following graph shows the 6% level loan interest rate which will be
charged to the policy loan amount for Select Loans. The uneven line represents what the
index credit rate would have been for the S&P 500® 1 Year Point to Point Indexed Strategy,
including the current index cap. The dark shaded areas below the 6% line show when loan
interest charged for Select Loans would have been more than would have been credited to the
indexed strategy on a current basis. See the Historical Returns and Percentiles page of this
illustration for more detail about the assumptions underlying the graph. These rates are
based on historical information and should not be used as an indication of future
performance. The actual amount credited to the policy will vary.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICE
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41. The owner may switch from Select Loans to Traditional Loans only one time during the
policy but may never change back to Select Loans. If switching from Select Loans to
Traditional Loans results in amounts being deducted from a Block prior to its Block Maturity
Date, elections from the Fixed Strategy to the Indexed Strategy will not be allowed in the 18
months following the switch. All premium payments will be applied to the Fixed Strategy in
the 18 months following the switch.
If the policy is in force when the insured reaches attained age 121 Select Loans will be
converted to Traditional Loans regardless of the loan selection.
Traditional Loans: Traditional Loans may be taken from the policy by securing the loan amount with the cash
value in the life insurance policy in the policy loan account. Once the owner chooses
Traditional Loans, the owner may never change to Select Loans.
The loan interest expense on the loan is charged in arrears at the rate of 2.75% years 1-10
(3.00% guaranteed), and 2.00% thereafter (2.15% guaranteed). The policy loan account
values are credited with interest at a current and guaranteed rate of 2.00% in all years.
If a Traditional Loan results in amounts being deducted from a Block prior to its Block
Maturity Date, elections from the Fixed Strategy to the Indexed Strategy will not be allowed
in the 18 months following the loan. All premium payments will be applied to the Fixed
Strategy in the 18 months following the loan.
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42. IMPORTANT INDEX DISCLAIMERS
EURO STOXX 50® Index – An index of blue-chip stocks that are represented by 50 stocks covering the largest sector leaders in the
EURO STOXX 50® index. It does not reflect dividends payable on the underlying stocks. STOXX Limited, Zurich, Switzerland and its
licensors (the “Licensors”) have no relationship to Security Life of Denver Insurance Company (“Security Life”), other than the
licensing of the EURO STOXX 50® index and the related trademarks for use in connection with the Voya Indexed Universal
Life-Global Choice (“Voya IUL-Global Choice”) insurance policy. STOXX and its Licensors do not: (1) Sponsor, endorse, sell or
promote the Voya IUL-Global Choice policy; (2) Recommend that any person invest in the Voya IUL-Global Choice policy or any
securities; (3) Have any responsibility or liability for or make any decisions about the timing, amount or pricing of the Voya IUL-Global
Choice policy; (4) Have any responsibility or liability for the administration, management or marketing of the Voya IUL-Global Choice
policy; or (5) Consider the needs of the Voya IUL-Global Choice policy or the owners of the Voya IUL-Global Choice policy in
determining, composing or calculating the EURO STOXX 50® index or have any obligation to do so.
STOXX and its Licensors will not have any liability in connection with the EURO STOXX 50® index. Specifically, STOXX and
its Licensors do not make any warranty, express or implied and disclaim any and all warranty about: (1) The results to be
obtained by the Voya IUL-Global Choice policy, the owner of the Voya IUL-Global Choice policy or any other person in
connection with the use of the EURO STOXX 50® index and the data included in the EURO STOXX 50® index; (2) The
accuracy or completeness of the EURO STOXX 50® index and its data; or (3) The merchantability and the fitness for a
particular purpose or use of the EURO STOXX 50® index and its data. STOXX and its Licensors will have no liability for any
errors, omissions or interruptions in the EURO STOXX 50® index or its data. Under no circumstances will STOXX or its
Licensors be liable for any lost profits or indirect, punitive, special or consequential damages or losses, even if STOXX or its
Licensors knows that they might occur. The licensing agreement between the Security Life and STOXX is solely for their benefit
and not for the benefit of the owners of the Voya IUL-Global Choice policy or any other third parties.
The Hang Seng Index (the “Index”) is published and compiled by Hang Seng Indexes Company Limited pursuant to a license from Hang
Seng Data Services Limited. The mark and name "Hang Seng Index” are proprietary to Hang Seng Data Services Limited. Hang Seng
Indexes Company Limited and Hang Seng Data Services Limited have agreed to the use of, and reference to, the Index by Security Life
of Denver Insurance Company (“Security Life”) in connection with this indexed universal life insurance policy (the “Policy”), BUT
NEITHER HANG SENG INDEXES COMPANY LIMITED NOR HANG SENG DATA SERVICES LIMITED WARRANTS OR
REPRESENTS OR GUARANTEES TO ANY BROKER OR HOLDER OF THE POLICY OR ANY OTHER PERSON (i) THE
ACCURACY OR COMPLETENESS OF THE INDEX AND ITS COMPUTATION OR ANY INFORMATION RELATED THERETO;
OR (ii) THE FITNESS OR SUITABILITY FOR ANY PURPOSE OF THE INDEX OR ANY COMPONENT OR DATA COMPRISED
IN IT; OR (iii) THE RESULTS WHICH MAY BE OBTAINED BY ANY PERSON FROM THE USE OF THE INDEX OR ANY
COMPONENT OR DATA COMPRISED IN IT FOR ANY PURPOSE, AND NO WARRANTY OR REPRESENTATION OR
GUARANTEE OF ANY KIND WHATSOEVER RELATING TO THE INDEX IS GIVEN OR MAY BE IMPLIED. The process and
basis of computation and compilation of the Index and any of the related formula or formulae, constituent stocks and factors may at any
time be changed or altered by Hang Seng Indexes Company Limited without notice. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NO RESPONSIBILITY OR LIABILITY IS ACCEPTED BY HANG SENG INDEXES COMPANY LIMITED
OR HANG SENG DATA SERVICES LIMITED (i) IN RESPECT OF THE USE OF AND/OR REFERENCE TO THE INDEX BY
SECURITY LIFE IN CONNECTION WITH THE POLICY; OR (ii) FOR ANY INACCURACIES, OMISSIONS, MISTAKES OR
ERRORS OF HANG SENG INDEXES COMPANY LIMITED IN THE COMPUTATION OF THE INDEX; OR (iii) FOR ANY
INACCURACIES, OMISSIONS, MISTAKES, ERRORS OR INCOMPLETENESS OF ANY INFORMATION USED IN
CONNECTION WITH THE COMPUTATION OF THE INDEX WHICH IS SUPPLIED BY ANY OTHER PERSON; OR (iv) FOR
ANY ECONOMIC OR OTHER LOSS WHICH MAY BE DIRECTLY OR INDIRECTLY SUSTAINED BY ANY BROKER OR
HOLDER OF THE POLICY OR ANY OTHER PERSON DEALING WITH THE POLICY AS A RESULT OF ANY OF THE
AFORESAID, AND NO CLAIMS, ACTIONS OR LEGAL PROCEEDINGS MAY BE BROUGHT AGAINST HANG SENG
INDEXES COMPANY LIMITED AND/OR HANG SENG DATA SERVICES LIMITED IN CONNECTION WITH THE POLICY IN
ANY MANNER WHATSOEVER BY ANY BROKER, HOLDER OR OTHER PERSON DEALING WITH THE POLICY. Any
broker, holder or other person dealing with the Policy does so therefore in full knowledge of this disclaimer and can place no reliance
whatsoever on Hang Seng Indexes Company Limited and Hang Seng Data Services Limited. For the avoidance of doubt, this disclaimer
does not create any contractual or quasi-contractual relationship between any broker, holder or other person and Hang Seng Indexes
Company Limited and/or Hang Seng Data Services Limited and must not be construed to have created such relationship.
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43. The S&P 500 Index is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by Security Life of Denver
Insurance Company. “Standard & Poor’s®”, “S&P®”, “S&P 500®” are registered trademarks of Standard & Poor’s Financial Services
LLC (“S&P”) and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Security Life of Denver
Insurance Company. This indexed universal life insurance policy (this “Policy”) is not sponsored, endorsed, sold or promoted by SPDJI,
S&P, any of their respective affiliates and none of such parties make any representation regarding the advisability of paying premiums
for the Policy nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.
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44. NUMERIC SUMMARY
Prepared for:
Mr. Valued Client
Male 39 Standard No Tobacco
State of Issue: California
Assumed Policy Date: 07/21/2015
Initial Stated Death Benefit: $1,738,000
Initial Death Benefit Option: 1 (Level)
Premium Mode: Annual
Initial Annual Premium: $30,000.00
Premium Election:
Allocation Hypothetical Index
Strategy Type Percentage Credit/Interest Rate
S&P 500® 1 Year Point to Point Indexed Strategy 25% 6.67%
2 Year Global Indexed Strategy 50% 7.93%
5 Year Global Indexed Strategy 25% 7.62%
Policy Loan Type: Select Loans
Rider Benefits Included:
Accelerated Benefit Rider
Overloan Lapse Protection Rider
This summary is based on the premium outlay in the life insurance policy illustration. The Net Surrender Value and Net Death Benefit are shown as of
the end of the year. This illustration assumes that the illustrated non-guaranteed elements will continue unchanged for all years shown. This is not
likely to occur, and actual results will be more or less favorable than those shown.
GUARANTEED
0% Index Strategy Interest Rate,
No Index Credit, Maximum Charges
NON-GUARANTEED
MIDPOINT
Interest and charges
halfway between
guaranteed and
non-guaranteed
NON-GUARANTEED
ILLUSTRATED
Hypothetical Rate
Rate Information Listed Above,
Current Charges
Year 5, Age 44
Net Surrender Value: 15,124 31,759 50,563
Net Death Benefit: 1,687,807 1,687,807 1,687,807
Year 10, Age 49
Net Surrender Value: 32,478 100,237 185,806
Net Death Benefit: 1,620,638 1,620,638 1,620,638
Year 20, Age 59
Net Surrender Value: 0 0 343,645
Net Death Benefit: 0 0 1,527,823
Year 31, Age 70
Net Surrender Value: 0 0 416,316
Net Death Benefit: 0 0 1,031,400
Projected Age when
Net Death Benefit Ends: 50 57 Does not end
You may adjust your payment amounts, within limits, to extend or increase the cash value and death benefit.
By signing this form, you agree that you have read, understand, and agree to the following statements:
(1) I have received a copy of this illustration and understand that any non-guaranteed elements illustrated are subject to change
and could be either higher or lower. The agent has informed me they are not guaranteed. Policy performance
may be lower than projected if the amount credited to the account value in the Fixed Strategy and/or Indexed
Strategy is less than projected. The policy could lapse without additional premium or loan interest payments.
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