cat.no. 64281 · buying life insurance when you buy life insurance, you want coverage that fits...

Cat.No. 64281

Prepared by the National Association of Insurance Commissioners

The National Association of Insurance Commissioners is an association of state insurance

regulatory officials. This association helps the various insurance departments to coordinate

insurance laws for the benefit of all consumers.

This guide does not endorse any company or policy.

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Life Insurance Buyer’s Guide

1©1997, 2007 National Association of Insurance Commissioners

Important Things to Consider

1. Review your own insurance needs and circumstances.Choose the kind of policy that has benefits that most closelyfit your needs. Ask an agent or company to help you.

2. Be sure that you can handle premium payments. Can youafford the initial premium? If the premium increases later andyou still need insurance, can you still afford it?

3. Don’t sign an insurance application until you review itcarefully to be sure all the answers are complete andaccurate.

4. Don’t buy life insurance unless you intend to stick with your plan. It may be very costly ifyou quit during the early years of the policy.

5. Don’t drop one policy and buy another without a thorough study of the new policy and theone you have now. Replacing your insurance may be costly.

6. Read your policy carefully. Ask your agent or company about anything that is not clear toyou.

7. Review your life insurance program with your agent or company every few years to keep upwith changes in your income and your needs.

Buying Life Insurance

When you buy life insurance, you want coverage that fits your needs.

First, decide how much you need—and for how long—and what you can afford to pay. Keep inmind the major reason you buy life insurance is to cover the financial effects of unexpected oruntimely death. Life insurance also can be one of many ways you plan for the future.

Next, learn what kinds of policies will meet your needs and pick the one that best suits you.

Then, choose the combination of policy premium and benefits that emphasizes protection incase of early death, or benefits in case of long life, or a combination of both.

This guide can help you when you shop for life insurance. It discusses how to:

• Find a Policy That Meets Your Needs and Fits Your Budget• Decide How Much Insurance You Need• Make Informed Decisions When You Buy a Policy

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2 ©1997, 2007 National Association of Insurance Commissioners

It makes good sense to ask a life insurance agent or company to help you. An agent can helpyou review your insurance needs and give you information about the available policies. If onekind of policy doesn’t seem to fit your needs, ask about others.

This guide provides only basic information. You can get more facts from a life insurance agentor company or from your public library.

What About the Policy You Have Now?

If you are thinking about dropping a life insurance policy, here are some things you shouldconsider:

• If you decide to replace your policy, don’t cancel your old policy until you have received the new one. You then have a minimum period to review your new policy and decide if it is what you wanted.

• It may be costly to replace a policy. Much of what you paid in the early years of the policy you have now, paid for the company’s cost of selling and issuing the policy. You may pay this type of cost again if you buy a new policy.

• Ask your tax advisor if dropping your policy could affect your income taxes.• If you are older or your health has changed, premiums for the new policy will often be

higher. You will not be able to buy a new policy if you are not insurable.• You may have valuable rights and benefits in the policy you now have that are not in the

new one.• If the policy you have now no longer meets your needs, you may not have to replace it.

You might be able to change your policy or add to it to get the coverage or benefits you now want.

• At least in the beginning, a policy may pay no benefits for some causes of death covered in the policy you have now.

In all cases, if you are thinking of buying a new policy, check with the agent or company thatissued you the one you have now. When you bought your old policy, you may have seen anillustration of the benefits of your policy. Before replacing your policy, ask your agent orcompany for an updated illustration. Check to see how the policy has performed and whatyou might expect in the future, based on the amounts the company is paying now.

How Much Do You Need?

Here are some questions to ask yourself:

• How much of the family income do I provide? If I were to die early, how would my survivors, especially my children, get by? Does anyone else depend on me financially, such as a parent, grandparent, brother or sister?

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3© 1997, 2007 National Association of Insurance Commissioners

• Do I have children for whom I’d like to set aside money to finish their education in the event of my death?

• How will my family pay final expenses and repay debts after my death?• Do I have family members or organizations to whom I would like to leave money?• Will there be estate taxes to pay after my death?• How will inflation affect future needs?

As you figure out what you have to meet these needs, count the life insurance you have now,including any group insurance where you work or veteran’s insurance. Don’t forget SocialSecurity and pension plan survivor’s benefits. Add other assets you have: savings,investments, real estate and personal property. Which assets would your family sell or cash into pay expenses after your death?

What is the Right Kind of Life Insurance?

All policies are not the same. Some give coverage for yourlifetime and others cover you for a specific number of years.Some build up cash values and others do not. Some policiescombine different kinds of insurance, and others let youchange from one kind of insurance to another. Some policiesmay offer other benefits while you are still living. Your choiceshould be based on your needs and what you can afford.

There are two basic types of life insurance: term insuranceand cash value insurance. Term insurance generally haslower premiums in the early years, but does not build up cashvalues that you can use in the future. You may combine cashvalue life insurance with term insurance for the period ofyour greatest need for life insurance to replace income.

Term Insurance covers you for a term of one or more years. Itpays a death benefit only if you die in that term. Terminsurance generally offers the largest insurance protection foryour premium dollar. It generally does not build up cash value.

You can renew most term insurance policies for one or more terms even if your health haschanged. Each time you renew the policy for a new term, premiums may be higher. Ask whatthe premiums will be if you continue to renew the policy. Also ask if you will lose the right torenew the policy at some age. For a higher premium, some companies will give you the rightto keep the policy in force for a guaranteed period at the same price each year. At the end ofthat time you may need to pass a physical examination to continue coverage, and premiumsmay increase.

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4 ©1997, 2007 National Association of Insurance Commissioners

You may be able to trade many term insurance policies for a cash value policy during aconversion period—even if you are not in good health. Premiums for the new policy will behigher than you have been paying for the term insurance.

Cash Value Life Insurance is a type of insurance where the premiums charged are higher atthe beginning than they would be for the same amount of term insurance. The part of thepremium that is not used for the cost of insurance is invested by the company and builds upa cash value that may be used in a variety of ways. You may borrow against a policy’s cashvalue by taking a policy loan. If you don’t pay back the loan and the interest on it, the amountyou owe will be subtracted from the benefits when you die, or from the cash value if you stoppaying premiums and take out the remaining cash value. You can also use your cash value tokeep insurance protection for a limited time or to buy a reduced amount without having topay more premiums. You also can use the cash value to increase your income in retirementor to help pay for needs such as a child’s tuition without canceling the policy. However, tobuild up this cash value, you must pay higher premiums in the earlier years of the policy. Cashvalue life insurance may be one of several types; whole life, universal life and variable life areall types of cash value insurance.

Whole Life Insurance covers you for as long as you live if your premiums are paid. Yougenerally pay the same amount in premiums for as long as you live. When you first take outthe policy, premiums can be several times higher than you would pay initially for the sameamount of term insurance. But they are smaller than the premiums you would eventually payif you were to keep renewing a term policy until your later years.

Some whole life policies let you pay premiums for a shorter period such as 20 years, or untilage 65. Premiums for these policies are higher since the premium payments are made duringa shorter period.

Universal Life Insurance is a kind of flexible policy that lets you vary your premium payments.You can also adjust the face amount of your coverage. Increases may require proof that youqualify for the new death benefit. The premiums you pay (less expense charges) go into apolicy account that earns interest. Charges are deducted from the account. If your yearlypremium payment plus the interest your account earns is less than the charges, your accountvalue will become lower. If it keeps dropping, eventually your coverage will end. To preventthat, you may need to start making premium payments, or increase your premium payments,or lower your death benefits. Even if there is enough in your account to pay the premiums,continuing to pay premiums yourself means that you build up more cash value.

Variable Life Insuurance is a kind of insurance where the death benefits and cash valuesdepend on the investment performance of one or more separate accounts, which may beinvested in mutual funds or other investments allowed under the policy. Be sure to get theprospectus from the company when buying this kind of policy and STUDY IT CAREFULLY. Youwill have higher death benefits and cash value if the underlying investments do well. Yourbenefits and cash value will be lower or may disappear if the investments you chose didn’t doas well as you expected. You may pay an extra premium for a guaranteed death benefit.

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5© 1997, 2007 National Association of Insurance Commissioners

Life Insurance Illustrations

You may be thinking of buying a policy where cash values, death benefits, dividends orpremiums may vary based on events or situations the company does not guarantee (such asinterest rates). If so, you may get an illustration from the agent or company that helps explainhow the policy works. The illustration will show how the benefits that are not guaranteed willchange as interest rates and other factors change. The illustration will show you what thecompany guarantees. It will also show you what could happen in the future. Remember thatnobody knows what will happen in the future. You should be ready to adjust your financialplans if the cash value doesn’t increase as quickly as shown in the illustration. You will beasked to sign a statement that says you understand that some of the numbers in theillustration are not guaranteed.

Finding a Good Value in Life Insurance

After you have decided which kind of life insurance is bestfor you, compare similar policies from differentcompanies to find which one is likely to give you the bestvalue for your money. A simple comparison of thepremiums is not enough. There are other things toconsider. For example:

• Do premiums or benefits vary from year to year?• How much do the benefits build up in the policy?• What part of the premiums or benefits is not

guaranteed?• What is the effect of interest on money paid and

received at different times on the policy?

Remember that no one company offers the lowest cost at all ages for all kinds and amounts ofinsurance. You should also consider other factors:

• How quickly does the cash value grow? Some policies have low cash values in the early years that build quickly later on. Other policies have a more level cash value build-up. A year-by-year display of values and benefits can be very helpful. (The agent or company willgive you a policy summary or an illustration that will show benefits and premiums for selected years.)

• Are there special policy features that particularly suit your needs?• How are nonguaranteed values calculated? For example, interest rates are important in

determining policy returns. In some companies increases reflect the average interest earnings on all of that company’s policies regardless of when issued. In others, the returnfor policies issued in a recent year, or a group of years, reflects the interest earnings on that group of policies; in this case, amounts paid are likely to change more rapidly when interest rates change.

Notes

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National Association of Insurance Commissioners

2301 McGee St

Suite 800

Kansas City, MO 64108-2604

(816) 842-3600

© 1997, 2007 National Association of Insurance

Commissioners

LSW FlexLifeINDEXED UNIVERSAL LIFE – BUYER’S GUIDE

Products issued by

Life Insurance Company of the Southwest®

TC84130(0415)3 Cat No 64332 (0415)

Lifetime protection,

fl exibility and income distribution

performance.

I have read and the agent has explained the in for ma tion presented on this page. _________________________ (initial)_________________________ (initial)_________________________2TC84130(0415)3

I have read and the agent has explained the in for ma tion presented on this page. _________________________ (initial)_________________________ (initial)_________________________

Introduction

Whether you are growing your career, family or business, nearing retirement or already enjoying your retirement years, fi nancial security is always a high priority. And while everyone’s personal fi nances and goals diff er, we all share the same concerns.

• What would happen to my children if I were to die prematurely?

• How can I maintain my lifestyle, meet obligations, set money aside for emergencies and still save for retirement?

• If anything happened to me, would my family be able to stay in our home?

• Would there be enough money for my family to maintain their lifestyle?

• Will I be able to aff ord to send my kids to college?

• How do I save enough towards retirement?

• Will I outlive my retirement savings?

• With changes to government programs like Social Security and Medicare, how much will my assets be eroded by the cost of health care expenses such as nursing home or home health care?

• How can I leave the greatest legacy and protectmy estate from signifi cant taxes and settlement costs at death?

There is a strategy that can help you address your present and future fi nancial goals. Indexed Universal Life (IUL), the fl exibility to meet multiple planning needs with a single contract, off ering:

• Income tax-free1 death benefi t for your benefi ciaries following your death.

• Potential for tax-deferred accumulation of cash value.

• Five index crediting strategies to choose from, four based on the S&P® 500 index, and one based on the MSCI Emerging Markets index.

• Option to earn a guaranteed2 fi xed interest rate

• Tax-free distribution of cash value through loans and withdrawals.3

• Potential to guarantee a stream of lifetime income at retirement through the Lifetime Income Benefi t Rider (LIBR)4 once qualifi cations are met and the rider is exercised.

1 Internal Revenue Code § 101(a)(1). There are some exceptions to this rule. Please consult a qualifi ed tax professional for advice concerning your individual situation.

2 Guarantees are dependent upon the claims-paying ability of the insurer.

3 Contract loans and withdrawals will reduce the contract’s cash value and death benefi t and may result in a taxable event. Withdrawals up to the basis paid into the contract and contract loans thereafter may not create an immediate taxable event, but substantial tax ramifi cations could result upon contract lapse or surrender. This would not be true if the contract were classifi ed as a Modifi ed Endowment Contract (MEC), as all loans and withdrawals would be considered taxable income.

4 Assuming necessary parameters are met. See page 11 for parameters. Receipt of rider benefi ts will reduce the policy’s cash value and death benefi t, may result in a taxable event and may reduce or eliminate other policy features and benefi ts.

Required for all Applicants in the state of ArkansasThis Buyer’s Guide reviews important points to consider when purchasing FlexLife Indexed Universal Life (IUL). Please read this document carefully. There are many diff erent types of life insurance to choose from and we want to make sure you understand how your IUL product will work along with what benefi ts you can expect. After you have read this Buyer’s Guide, and should you decide to buy, please initial each page then sign and date the last page to acknowledge that you understand this product. Your signature also confi rms your agent has explained how FlexLife works and has answered any questions you may have.

3TC84130(0415)3


NAR

Flexibility Highlights • Premium fl exibility

• Death benefi t fl exibility

• Flexible interest crediting strategies

• Easy access to policy values

• Living benefi ts

Indexed Universal Life gives you the fl exibility to adjust both premium payments and the amount of insurance coverage you need.

Life insurance is the only fi nancial tool that creates an immediate reservoir of funds that, at the death of the insured, can be used to pay off debt, replace lost income, and allow your loved ones to continue to maintain their lifestyles.

Indexed Universal Life Insurance is considered to be one of the most fl exible types of life insurance available in the marketplace today. Indexed Universal Life allows you to adjust the amount of insurance coverage and the premiums paid to meet your changing insurance needs.5 You also have the potential to build cash value in your policy – income tax-deferred – that can be accessed during your lifetime to meet unexpected emergencies, take advantage of opportunities, or to supplement retirement income.6

Premium PaymentsIndexed Universal Life off ers a fl exible premium payment structure. You can make regular, level payments; change payment amounts; or you can skip payments altogether (subject to the contract’s minimums and maximums). It is important to remember, however, that you need to make premium payments suffi cient to keep the contract in force. Paying higher premiums than are necessary (or required) can result in signifi cant tax-deferred cash value growth and ultimately, greater premium payment fl exibility down the road.

Death Benefit Options

As your death benefi t needs change over time, your policy’s death benefi t can be adjusted to meet those needs. As your survivor protection needs grow, Indexed Universal Life provides the ability to increase your death benefi t within your policy, thereby eliminating the need for multiple policies. Additionally, as your needs shift towards accumulating assets for retirement, you may decrease your death benefi t protection and direct your premiums more toward cash value build-up.

Indexed Universal Life off ers two death benefi t options, Level Death Benefi t, where the death benefi t remains level throughout the contract, and Increasing Death Benefi t, an option that allows the death benefi t to increase as the accumulated cash value increases.

Should your needs change after you’ve selected a death benefi t option, you may switch options.

IUL offers two death benefit options:

Option B: Increasing Death Benefi t - Under Option B, your death benefi t increases as your accumulated cash value increases.

NAR

The Net Amount at Risk (NAR) remains level Cash Value

As Cash Values increase and the Net Amount at Risk remains level, the total

Death Benefi t increases

Option A: Level Death Benefi t - Under Option A, your death benefi t remains level for the life of the contract.

As Cash Values increasethe Net Amount at Risk decreases,resulting in a Level Death Benefi t

Cash Value

5 It is possible that coverage will expire when either no premiums are paid following the initial premium, or subsequent premiums are insuffi cient to continue coverage.

6 Policy loans and withdrawals reduce the policy's cash value and death benefi t and may result in a taxable event. Surrender charges may reduce the policy's cash value in early years.

The Net Amount at Risk (NAR)decreases over time

as the cash value growsas the cash value grows

Increasing Death Benefi t

Level Death Benefi t

4TC84130(0415)3


Indexed Universal Life is a form of permanent life insurance which combines pure insurance protection with cash value accumulation. Premiums paid in excess of the insurance cost accumulate interest, tax-deferred. These values can be accessed during your lifetime through withdrawals or loans.

With Indexed Universal Life you have options regarding how interest is credited to your cash value. You can choose to have a fi xed interest rate applied or have interest credited based on changes in a major market index. This kind of interest crediting strategy allows you to take advantage of changes in the market index without the risk of stock market losses. Minimum interest guarantees built into your contract ensure that your cash value will not decline due to decreases in the index. It’s a concept we call “upside potential with downside protection.”

With your Indexed Universal Life policy, you have the option of choosing to allocate the net premium (premium after insurance and administrative charges have been deducted) among fi ve index crediting strategies, four based on the S&P® 500 index, and one based on the MSCI Emerging Markets index.

Purchasing an Indexed Universal Life contract is not equivalent to investing directly in the stock market. The insuring company invests the premiums received in the following manner:

• A large portion is directed to a portfolio of government bonds, corporate bonds and mortgages. This portion of the investment of premium dollars is used to provide policy guarantees.

• A smaller portion purchases stock options. It is this portion of the investment of premium dollars that provides crediting potential.

Based on the options purchased, the company establishes the Participation Rate and Cap that will be applied to the changes of the S&P 500® and the MSCI Emerging Markets Index. For information about Participation Rates and Caps, see ‘Calculating Earnings’ on page 6.

Why the S&P 500® Index?The S&P 500® is widely regarded as the best single gauge of the U.S. equities market. This world-renowned index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Although the S&P 500® focuses on the large-cap segment of the market it is also an ideal proxy for the total market.

Why the MSCI Emerging Markets Index?The MSCI Emerging Markets Index captures large and mid cap representation across Emerging Market countries and off ers the opportunity to capitalize on the growth of emerging markets.

Historical ValuesDec. 21 of Year

S&P 500 Index

1 Year Change

MSCI Emerging Markets Index

1 Year Change

2007 1484.46 +4.66% 1215.99 +36.20%

2008 887.88 -40.19% 582.06 -52.13%

2009 1114.05 +25.47% 946.42 +62.60%

2010 1254.60 +12.62% 1124.34 +18.80%

2011 1243.72 -0.87% 916.20 -18.51%

2012 1430.15 +14.99% 1043.03 +13.84%

Historical performance is not indicative of future results.

Interest Crediting (Upside Potential)

Basic StrategyAll premiums are fi rst paid into the Basic Strategy account. Once enough premium has been paid to cover the monthlyinsurance deductions for the coming year, all additional premium dollars will be allocated to the interest crediting strategy allocation of your choice. Premiums are allocated to the interest crediting strategies on the 21st of each month. The interest crediting rate for the Basic Strategy is guaranteed to be not less than 2.5% per annum.

Your Indexed Universal Life policy off ers six choices of interest crediting options. They include a Fixed-Interest crediting strategy and fi ve indexed crediting strategies.

Upside Potential with Downside Protection

5TC84130(0415)3


Interest Crediting Strategies1. Fixed-Interest Strategy

2. Point-to-Point, Cap Focus Index Strategy, based on the S&P 500® Index

3. Point-to-Point, Participation Rate Focus Index Strategy, based on the S&P 500® Index

4. Point-to-Point, No Cap Index Strategy, based on the S&P 500® Index

5. Point-to-Average Index Strategy, based on the S&P 500® Index

6. Point-to-Point, Cap Focus Index Strategy, based on the MSCI Emerging Markets Index

Fixed-Interest StrategyPremiums allocated here earn an interest rate declared by the company, credited on a daily basis, and guaranteed for one year. The minimum annual interest rate credited to funds in the Fixed-Interest Strategy is 2.5%.

Index Interest StrategiesPremiums allocated to the Index Interest Strategies have interest credited based on changes in the particular Index. Interest Credits will be based on the Index Growth, Participation Rate, and Cap, for your chosen strategy. Your Indexed Universal Life policy off ers three Point-to-Point Strategies and one Point-to-Average Strategy based on the S&P 500® Index and one Point-to-Point Strategy based on the MSCI Emerging Markets Index.

Calculating Index Growth

Point-to-Point Strategy – Index Growth equals the diff erence between the Index beginning value and Index ending value, such diff erence divided by the Index beginning value.

For example: Index beginning value = 1000, Index ending value (on the same date one year later) = 1150, Index Growth = 15% [(1150 -1000 = 150) / 1000 = 15%].

Point-to-Average Strategy – Index Growth equals the diff erence between the Index beginning value and daily average, such diff erence divided by the Index beginning value. (To fi nd daily average, calculate daily average over the 12-month period.)

For example: Index beginning value = 1000, daily average = 1100, Index Growth = 10% [(1100 - 1000 = 100) /1000 = 10%].

These examples are hypothetical only and do not represent actual index changes, Participation Rates,or Caps.

Calculating EarningsOnce the Index Growth Percentage has been calculated, a Participation Rate and Cap may be applied to determine how much will actually be credited to account values. The Participation Rate is the maximum percentage of the IndexGrowth that may be credited. For example if the Index Growth is 10% and the Participation Rate is 100%, the full 10% may be used to determine interest earned.

If the Participation Rate is 80%, 8% is used in the calculation of interest earned [10% x 80% = 8%].

The Cap is the maximum earnings percent that will be credited. For example, if the Index Growth is 10% and the Participation Rate is 100%, but the Cap is set at 6%, 6% is credited.

The Indexed Strategy earnings are credited and locked in annually. Once interest is credited it can never be lost due to a decline in the Index. No Indexed Strategy earnings are credited for funds allocated to the Index Strategies for periods shorter than a full year.

Accumulated Value EnhancementStarting in year 11, a 0.35% account value enhancement will be credited to the policy’s accumulated value each year. The account value enhancement is not guaranteed, except in NY. An average of the monthly accumulated values will be multiplied by the account value enhancementpercentage (0.35%) and credited to the Basic Strategy at the end of the policy year.

Upside Potential with Downside Protection continued

6TC84130(0415)3


Interest Guarantee (Downside Protection)In the event the index value declines, each index strategy provides a 0% Floor. This means that you have downside protection because the interest crediting rate will never be negative.

At death or full surrender of your policy, the accumu-lated value will be equal to the greater of the current accumulated value or the guaranteed accumulated

value. The guaranteed accumulated value is calculated based on a minimum guaranteed annual interest rate of 2.5%.

Projected values given in the illustrations for this product are not guaranteed. This contract complies with the minimum non-forfeiture requirements of your state.

Comparison of Point-To-Point Crediting Strategies

Assumptions: Participation Rate Cap Assumptions: Participation

Rate Cap

Cap Focus 100% 14% Cap Focus 100% 11%

Participation Rate Focus 140% 12% Participation Rate Focus 140% 9%

No Cap 80% None No Cap 70% None

Return Point-to-Point Cap Focus

Point-to-Point Participation Rate Focus

Point-to-Point No Cap Return Point-to-Point

Cap Focus

Point-to-Point Participation Rate Focus

Point-to-Point No Cap

0% 0.00% 0.00% 0.00% 0% 0.00% 0.00% 0.00%

1% 1.00% 1.40% 0.80% 1% 1.00% 1.40% 0.70%

2% 2.00% 2.80% 1.60% 2% 2.00% 2.80% 1.40%

3% 3.00% 4.20% 2.40% 3% 3.00% 4.20% 2.10%

4% 4.00% 5.60% 3.20% 4% 4.00% 5.60% 2.80%

5% 5.00% 7.00% 4.00% 5% 5.00% 7.00% 3.50%

6% 6.00% 8.40% 4.80% 6% 6.00% 8.40% 4.20%

7% 7.00% 9.80% 5.60% 7% 7.00% 9.00% 4.90%

8% 8.00% 11.20% 6.40% 8% 8.00% 9.00% 5.60%

9% 9.00% 12.00% 7.20% 9% 9.00% 9.00% 6.30%

10% 10.00% 12.00% 8.00% 10% 10.00% 9.00% 7.00%

11% 11.00% 12.00% 8.80% 11% 11.00% 9.00% 7.70%

12% 12.00% 12.00% 9.60% 12% 11.00% 9.00% 8.40%

13% 13.00% 12.00% 10.40% 13% 11.00% 9.00% 9.10%

14% 14.00% 12.00% 11.20% 14% 11.00% 9.00% 9.80%

15% 14.00% 12.00% 12.00% 15% 11.00% 9.00% 10.50%

16% 14.00% 12.00% 12.80% 16% 11.00% 9.00% 11.20%

17% 14.00% 12.00% 13.60% 17% 11.00% 9.00% 11.90%

18% 14.00% 12.00% 14.40% 18% 11.00% 9.00% 12.60%

19% 14.00% 12.00% 15.20% 19% 11.00% 9.00% 13.30%

20% 14.00% 12.00% 16.00% 20% 11.00% 9.00% 14.00%

21% 14.00% 12.00% 16.80% 21% 11.00% 9.00% 14.70%

22% 14.00% 12.00% 17.60% 22% 11.00% 9.00% 15.40%

23% 14.00% 12.00% 18.40% 23% 11.00% 9.00% 16.10%

24% 14.00% 12.00% 19.20% 24% 11.00% 9.00% 16.80%

25% 14.00% 12.00% 20.00% 25% 11.00% 9.00% 17.50%

7TC84130(0415)3

I have read and the agent has explained the in for ma tion presented on this page. I have read and the agent has explained the in for ma tion presented on this page. I have read and the agent has explained the in for ma tion presented on this page. _________________________ (initial)_________________________ (initial)_________________________

Upside Potential with Downside Protection continued

Differentiating Point-to-PointIndex Strategies • The Cap Focus Index Strategy guarantees that the

Participation Rate will always be equal to or greater than 100%.

• The Participation Rate Focus Index Strategy guaranteesthat the Participation Rate will be at least 110% or greater. Since this strategy is designed to provide a higher Participation Rate, it will have a lower Cap.

• The No Cap Index Strategy applies no Cap and is,therefore, balanced by a lower Participation Rate.

Which Index and Strategy Should You Choose?The performance of the interesting crediting strategies will vary over time, and by strategy. It cannot be determined in advance which strategy or index will perform best.

You may decide that you want to allocate your premium across multiple strategies or even across both indices in order to mitigate risk of zero returns. By doing this, you may be able to capture gains in one index and/or strategy even if another is performing poorly at the time.

The Point-to-Point method is more sensitive to short-term index movements near the end of the segment. The Point-to-Average method is more sensitive to the overall index trend over the year.

Systematic Allocation Rider7

The Systematic Allocation Rider, available at no additional charge, allows you to use your net premium (premiums after insurance and administrative costs have been deducted) from new premium, 1035 exchange, or index renewal bucket money and spread the money out over a 12 month period. Once elected, the money will be allocated from a fi xed interest account to the diff erent interest crediting strategies according to your wishes.

Systematic Allocation allows you to spread out your net annual premium over the year to help capitalize on potential interest rate crediting dates and reduce risk associated with one annual crediting anniversary. It also gives you an effi cient way to allocate a lump sum by allowing you to create one allocation schedule for the year without the monthly maintenance. Systematic allocation does not, however, guarantee an advantage over the annual crediting method.

Policy Cash Values and Death Benefi tAnother feature that permanent life insurance off ers is the tax-deferred build-up of policy cash value and the ability to access that value during lifetime, income tax-free, through policy loans and withdrawals.

You can borrow or withdraw from the policy values to achieve your unique and personal objectives, including:

• Helping your children pay for college,

• Supplementing your retirement income,

• Taking advantage of opportunities,

• Meeting unexpected emergencies, or

• Reducing or eliminating out-of-pocket premium payments.

7 The Systematic Allocation Rider, form series 8992/ICC11-8992, available at no additional charge, allows you to allocate 7 The Systematic Allocation Rider, form series 8992/ICC11-8992, available at no additional charge, allows you to allocate 7 The Systematic Allocation Rider, form series 8992/ICC11-8992, available at no additional charge, allows you to allocate your net premium (premiums after insurance and administrative costs have been deducted) from a lump sum or a 1035 your net premium (premiums after insurance and administrative costs have been deducted) from a lump sum or a 1035 your net premium (premiums after insurance and administrative costs have been deducted) from a lump sum or a 1035 exchange and spread the money out over a 12 month period. Once elected, your lump sum premium is placed into the exchange and spread the money out over a 12 month period. Once elected, your lump sum premium is placed into the exchange and spread the money out over a 12 month period. Once elected, your lump sum premium is placed into the Basic Account where policy costs will be deducted. From there, funds are swept from the Basic Account to the SA Account Basic Account where policy costs will be deducted. From there, funds are swept from the Basic Account to the SA Account Basic Account where policy costs will be deducted. From there, funds are swept from the Basic Account to the SA Account where each month, 1/12 is allocated to the chosen strategies. The remaining premium stays in the SA Account where it earns where each month, 1/12 is allocated to the chosen strategies. The remaining premium stays in the SA Account where it earns where each month, 1/12 is allocated to the chosen strategies. The remaining premium stays in the SA Account where it earns a fi xed interest rate. Systematic Allocation allows you to spread out your lump sum over the 12 month period to capitalize a fi xed interest rate. Systematic Allocation allows you to spread out your lump sum over the 12 month period to capitalize a fi xed interest rate. Systematic Allocation allows you to spread out your lump sum over the 12 month period to capitalize on potential interest rate crediting dates and reduce interest rate risk associated with one annual crediting anniversary.on potential interest rate crediting dates and reduce interest rate risk associated with one annual crediting anniversary.on potential interest rate crediting dates and reduce interest rate risk associated with one annual crediting anniversary.

8 Surrender charges may reduce the policy’s cash value in early years.9 Contract loans and withdrawals will reduce the contract’s cash value and death benefi t and may result in a taxable event. Contract loans and withdrawals will reduce the contract’s cash value and death benefi t and may result in a taxable event. Contract loans and withdrawals will reduce the contract’s cash value and death benefi t and may result in a taxable event.

Withdrawals up to the basis paid into the contract and contract loans thereafter may not create an immediate taxable event, Withdrawals up to the basis paid into the contract and contract loans thereafter may not create an immediate taxable event, Withdrawals up to the basis paid into the contract and contract loans thereafter may not create an immediate taxable event, but substantial tax ramifi cations could result upon contract lapse or surrender. This would not be true if the contract were but substantial tax ramifi cations could result upon contract lapse or surrender. This would not be true if the contract were but substantial tax ramifi cations could result upon contract lapse or surrender. This would not be true if the contract were classifi ed as a Modifi ed Endowment Contract (MEC), as all loans and withdrawals would be considered taxable income.classifi ed as a Modifi ed Endowment Contract (MEC), as all loans and withdrawals would be considered taxable income.classifi ed as a Modifi ed Endowment Contract (MEC), as all loans and withdrawals would be considered taxable income.

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Withdrawals of policy values up to your basis in the policy(sum of your premiums) are received income tax-free.

Loans against your cash value are also received income tax-free. Additionally, policy loans do not have to be paid back within any specifi c time frame. Loan interest is charged on all outstanding loans and may be paid back or accrue into the loaned amount.

Indexed Universal Life is designed to be held for a long period of time.8 Surrendering your policy within 10 years of issue or after a face amount increase will result in surrender charges and the surrender value may be less than your original premium.9

Your Indexed Life Policy features two loan options:

1. Variable Net Cost Loan With a Variable Net Cost Loan, loaned Accumulated Value remains in the Interest Crediting Strategies and earns the same interest it would have earned in the absence of any loan. The “net cost” of the loan will depend on the interest credited in the Interest Crediting Strategies.

For Example: Interest credited on the index account = 8.7%

Variable loan rate charged on loan = 5.7%

Net = +3%

Or Interest credited on the index account = 4%

Loan rate charged on loan = 5.7%

Net = -1.7%

While the Variable Net Cost Loan method allows for potentially higher earnings, the net cost is not known in advance. To provide more predictable results, you may decide to use the Fixed Net Cost Loan Method.

2. Fixed Net Cost Loan Method With a Fixed Net Cost Loan, loaned Accumulated Value is segregated from the interest crediting strategies and credited an interest rate. The interest rate credited to the segregated account will never be less than 2.5%. We are currently crediting interest to the segregated account at the Variable Loan Rate minus 0.50% in years 1-10 and at the Variable Loan Rate in years 11+.

For Example:

Interest credited on thesegregated account = 5.20% years 1-10; 5.70% year 11+

Loan rate charge on loan = 5.70%

Net = 0.50% years 1-10; 0% years 11+

As long as the policy stays in-force until the death of the insured, policy loans remain tax-free income. If the policy were to lapse prior to death, a portion of the loaned amount may be taxed as income to the policy holder.

Note: Loans and withdrawals will reduce the policy’s death benefi t and cash value. It may also become necessary for you to resume premium payments if the policy’s cash value is not suffi cient to cover the monthly fees and cost of insurance charges.

Overloan ProtectionA powerful feature of your Indexed Universal Life policy is the Overloan Protection Rider.10 This rider prevents the policy from lapsing when the loan amount exceeds the accumulated value and other requirements of the rider are met therefore preventing any reportable taxable gain to you. Exercising the rider results in a paid-up policy.

Indexed Universal Life

allows you to diversify among the strategies

and to adjust yourallocation over

time.

10 The Overloan Protection Rider, form series 8315 is an optional benefi t. There is no cost for the rider, however, there is a fee when the rider is exercised. Substantial limitations apply to exercising the Overloan Protection Rider, including that the policy be in force at least 15 years and the insured having attained the age of 75. This rider is not available in all states.

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11 Qualifi ed Long-Term Care services, are defi ned as: The necessary diagnostic, preventative, therapeutic, curing, treating, mitigating and rehabilitative services, and maintenance or personal care services that are required by a chronically ill

11 Qualifi ed Long-Term Care services, are defi ned as: The necessary diagnostic, preventative, therapeutic, curing, treating, mitigating and rehabilitative services, and maintenance or personal care services that are required by a chronically ill

11 Qualifi ed Long-Term Care services, are defi ned as: The necessary diagnostic, preventative, therapeutic, curing, treating,

individual and are provided pursuant to a plan of care prescribed by a licensed health care practitioner.mitigating and rehabilitative services, and maintenance or personal care services that are required by a chronically ill individual and are provided pursuant to a plan of care prescribed by a licensed health care practitioner.mitigating and rehabilitative services, and maintenance or personal care services that are required by a chronically ill

12 LSW Accelerated Benefi t Riders, form series 8052, 8095, 8165, 8766, ICC10-8844, ICC13-8165, 20287, 20288, ICC15-20287, ICC15-20288.Riders are optional, may be subject to underwriting, exclusions and/or limitations and may not be available in all states or on all products. Receipt of accelerated benefi ts reduces the Death Benefi t and cash value (if any) otherwise payable under Riders are optional, may be subject to underwriting, exclusions and/or limitations and may not be available in all states or on all products. Receipt of accelerated benefi ts reduces the Death Benefi t and cash value (if any) otherwise payable under Riders are optional, may be subject to underwriting, exclusions and/or limitations and may not be available in all states or

the policy, may be a taxable event and may aff ect your eligibility for public assistance programs, such as medical assistance on all products. Receipt of accelerated benefi ts reduces the Death Benefi t and cash value (if any) otherwise payable under the policy, may be a taxable event and may aff ect your eligibility for public assistance programs, such as medical assistance on all products. Receipt of accelerated benefi ts reduces the Death Benefi t and cash value (if any) otherwise payable under

(Medicaid), Aid to Families with Dependent Children, and Supplemental Security Income. Please consult your personal tax the policy, may be a taxable event and may aff ect your eligibility for public assistance programs, such as medical assistance (Medicaid), Aid to Families with Dependent Children, and Supplemental Security Income. Please consult your personal tax the policy, may be a taxable event and may aff ect your eligibility for public assistance programs, such as medical assistance

advisor to determine the tax status of any benefi ts paid under this rider and with social service agencies concerning how (Medicaid), Aid to Families with Dependent Children, and Supplemental Security Income. Please consult your personal tax advisor to determine the tax status of any benefi ts paid under this rider and with social service agencies concerning how (Medicaid), Aid to Families with Dependent Children, and Supplemental Security Income. Please consult your personal tax

receipt of such a payment will aff ect you, your spouse and your family’s eligibility for public assistance. The accelerated advisor to determine the tax status of any benefi ts paid under this rider and with social service agencies concerning how receipt of such a payment will aff ect you, your spouse and your family’s eligibility for public assistance. The accelerated advisor to determine the tax status of any benefi ts paid under this rider and with social service agencies concerning how

benefi ts off ered under this rider are intended to qualify for favorable tax treatment under the Internal Revenue Code of receipt of such a payment will aff ect you, your spouse and your family’s eligibility for public assistance. The accelerated benefi ts off ered under this rider are intended to qualify for favorable tax treatment under the Internal Revenue Code of receipt of such a payment will aff ect you, your spouse and your family’s eligibility for public assistance. The accelerated

1986. Whether such benefi ts qualify depends on factors such as your life expectancy at the time benefi ts are accelerated benefi ts off ered under this rider are intended to qualify for favorable tax treatment under the Internal Revenue Code of 1986. Whether such benefi ts qualify depends on factors such as your life expectancy at the time benefi ts are accelerated benefi ts off ered under this rider are intended to qualify for favorable tax treatment under the Internal Revenue Code of

or how the benefi ts are used.1986. Whether such benefi ts qualify depends on factors such as your life expectancy at the time benefi ts are accelerated or how the benefi ts are used.1986. Whether such benefi ts qualify depends on factors such as your life expectancy at the time benefi ts are accelerated

The actual payment you receive will be less than the portion of the death benefi t accelerated because the benefi ts are paid prior to death. Values are based on a current interest rate and mortality rates. There is an initial administrative fee at the The actual payment you receive will be less than the portion of the death benefi t accelerated because the benefi ts are paid prior to death. Values are based on a current interest rate and mortality rates. There is an initial administrative fee at the The actual payment you receive will be less than the portion of the death benefi t accelerated because the benefi ts are paid

time the rider is exercised. We currently limit the amount of death benefi t that may be accelerated under all contracts made prior to death. Values are based on a current interest rate and mortality rates. There is an initial administrative fee at the time the rider is exercised. We currently limit the amount of death benefi t that may be accelerated under all contracts made prior to death. Values are based on a current interest rate and mortality rates. There is an initial administrative fee at the

over the entire lifetime of the insured to $1,500,000 for terminal or chronic illness, and $1,000,000 for critical illness or time the rider is exercised. We currently limit the amount of death benefi t that may be accelerated under all contracts made over the entire lifetime of the insured to $1,500,000 for terminal or chronic illness, and $1,000,000 for critical illness or time the rider is exercised. We currently limit the amount of death benefi t that may be accelerated under all contracts made

injury. We reserve the right to change this limit in the future; however the limit will never be less than $500,000. Other over the entire lifetime of the insured to $1,500,000 for terminal or chronic illness, and $1,000,000 for critical illness or injury. We reserve the right to change this limit in the future; however the limit will never be less than $500,000. Other over the entire lifetime of the insured to $1,500,000 for terminal or chronic illness, and $1,000,000 for critical illness or

restrictions, limitations and waiting periods may apply.injury. We reserve the right to change this limit in the future; however the limit will never be less than $500,000. Other restrictions, limitations and waiting periods may apply.injury. We reserve the right to change this limit in the future; however the limit will never be less than $500,000. Other

Our Terminal Illness riders allow for the payment of a portion of an insured’s death benefi t, on a discounted basis, if the insured has an illness or chronic condition which can reasonably be expected to result in death in 24 months or less. Our Terminal Illness riders allow for the payment of a portion of an insured’s death benefi t, on a discounted basis, if the insured has an illness or chronic condition which can reasonably be expected to result in death in 24 months or less. Our Terminal Illness riders allow for the payment of a portion of an insured’s death benefi t, on a discounted basis, if the

There is no additional premium for this rider.insured has an illness or chronic condition which can reasonably be expected to result in death in 24 months or less. There is no additional premium for this rider.insured has an illness or chronic condition which can reasonably be expected to result in death in 24 months or less.

Our Chronic Illness and Covered Chronic Illness riders allow for the payment of a portion of an insured’s death benefi t, on a discounted basis, if the insured is Chronically Ill. A chronic illness is defi ned as one that leaves you unable to perform, Our Chronic Illness and Covered Chronic Illness riders allow for the payment of a portion of an insured’s death benefi t, on a discounted basis, if the insured is Chronically Ill. A chronic illness is defi ned as one that leaves you unable to perform, Our Chronic Illness and Covered Chronic Illness riders allow for the payment of a portion of an insured’s death benefi t, on

without substantial assistance, two of the six normal activities of daily living for a period of at least 90 consecutive days a discounted basis, if the insured is Chronically Ill. A chronic illness is defi ned as one that leaves you unable to perform, without substantial assistance, two of the six normal activities of daily living for a period of at least 90 consecutive days a discounted basis, if the insured is Chronically Ill. A chronic illness is defi ned as one that leaves you unable to perform,

due to a loss of functional capacity or requires substantial supervision to protect oneself (LSW only – for a period of 90 without substantial assistance, two of the six normal activities of daily living for a period of at least 90 consecutive days due to a loss of functional capacity or requires substantial supervision to protect oneself (LSW only – for a period of 90 without substantial assistance, two of the six normal activities of daily living for a period of at least 90 consecutive days

consecutive days) from threats to health and safety due to severe cognitive impairment. The six activities of daily living due to a loss of functional capacity or requires substantial supervision to protect oneself (LSW only – for a period of 90 consecutive days) from threats to health and safety due to severe cognitive impairment. The six activities of daily living due to a loss of functional capacity or requires substantial supervision to protect oneself (LSW only – for a period of 90

include bathing, continence, dressing, eating, toileting, and transferring. There is no additional premium for this rider.consecutive days) from threats to health and safety due to severe cognitive impairment. The six activities of daily living include bathing, continence, dressing, eating, toileting, and transferring. There is no additional premium for this rider.consecutive days) from threats to health and safety due to severe cognitive impairment. The six activities of daily living

Our Critical Illness or Critical Injury Riders allow for the payment of a portion of an insured’s death benefi t, on a discounted basis, if the insured is Critically Ill or Critically Injured. Covered critical illnesses are Covered critical illnesses are ALS Our Critical Illness or Critical Injury Riders allow for the payment of a portion of an insured’s death benefi t, on a discounted basis, if the insured is Critically Ill or Critically Injured. Covered critical illnesses are Covered critical illnesses are ALS Our Critical Illness or Critical Injury Riders allow for the payment of a portion of an insured’s death benefi t, on a discounted

(Lou Gehrig’s disease), Aorta Graft Surgery, Aplastic Anemia, Blindness, Cancer, Cystic Fibrosis, End-Stage Renal Failure, basis, if the insured is Critically Ill or Critically Injured. Covered critical illnesses are Covered critical illnesses are ALS (Lou Gehrig’s disease), Aorta Graft Surgery, Aplastic Anemia, Blindness, Cancer, Cystic Fibrosis, End-Stage Renal Failure, basis, if the insured is Critically Ill or Critically Injured. Covered critical illnesses are Covered critical illnesses are ALS

Heart Attack, Heart Valve Replacement, Major Organ Transplant, Motor Neuron Disease, Stroke, Sudden Cardiac Arrest. (Lou Gehrig’s disease), Aorta Graft Surgery, Aplastic Anemia, Blindness, Cancer, Cystic Fibrosis, End-Stage Renal Failure, Heart Attack, Heart Valve Replacement, Major Organ Transplant, Motor Neuron Disease, Stroke, Sudden Cardiac Arrest. (Lou Gehrig’s disease), Aorta Graft Surgery, Aplastic Anemia, Blindness, Cancer, Cystic Fibrosis, End-Stage Renal Failure,

Covered Critical Injury illnesses are Coma, Paralysis, Severe Burns, Traumatic Brain Injury. Covered critical illnesses and Heart Attack, Heart Valve Replacement, Major Organ Transplant, Motor Neuron Disease, Stroke, Sudden Cardiac Arrest. Covered Critical Injury illnesses are Coma, Paralysis, Severe Burns, Traumatic Brain Injury. Covered critical illnesses and Heart Attack, Heart Valve Replacement, Major Organ Transplant, Motor Neuron Disease, Stroke, Sudden Cardiac Arrest.

covered critical injuries may vary by state. Covered Critical illness in the state of MA 9744MA (0204) includes: Coronary Covered Critical Injury illnesses are Coma, Paralysis, Severe Burns, Traumatic Brain Injury. Covered critical illnesses and covered critical injuries may vary by state. Covered Critical illness in the state of MA 9744MA (0204) includes: Coronary Covered Critical Injury illnesses are Coma, Paralysis, Severe Burns, Traumatic Brain Injury. Covered critical illnesses and

artery disease resulting in acute infarction vascular or requiring surgery; End-stage Renal Disease; Major organ transplant; covered critical injuries may vary by state. Covered Critical illness in the state of MA 9744MA (0204) includes: Coronary artery disease resulting in acute infarction vascular or requiring surgery; End-stage Renal Disease; Major organ transplant; covered critical injuries may vary by state. Covered Critical illness in the state of MA 9744MA (0204) includes: Coronary

Permanent neurological defi cit resulting from cerebral vascular accident; Diagnosis of an invasive malignancy characterized artery disease resulting in acute infarction vascular or requiring surgery; End-stage Renal Disease; Major organ transplant; Permanent neurological defi cit resulting from cerebral vascular accident; Diagnosis of an invasive malignancy characterized artery disease resulting in acute infarction vascular or requiring surgery; End-stage Renal Disease; Major organ transplant;

by the uncontrolled growth and spread of malignant cells and the invasion of tissue. Cancer does not include: Stage A Permanent neurological defi cit resulting from cerebral vascular accident; Diagnosis of an invasive malignancy characterized by the uncontrolled growth and spread of malignant cells and the invasion of tissue. Cancer does not include: Stage A Permanent neurological defi cit resulting from cerebral vascular accident; Diagnosis of an invasive malignancy characterized

Prostate Cancer; Any skin cancer, except invasive malignant melanoma into the dermis or deeper; Pre-malignant lesions, by the uncontrolled growth and spread of malignant cells and the invasion of tissue. Cancer does not include: Stage A Prostate Cancer; Any skin cancer, except invasive malignant melanoma into the dermis or deeper; Pre-malignant lesions, by the uncontrolled growth and spread of malignant cells and the invasion of tissue. Cancer does not include: Stage A

benign tumors, or polyps; and Carcinoma in-situ.Prostate Cancer; Any skin cancer, except invasive malignant melanoma into the dermis or deeper; Pre-malignant lesions, benign tumors, or polyps; and Carcinoma in-situ.Prostate Cancer; Any skin cancer, except invasive malignant melanoma into the dermis or deeper; Pre-malignant lesions,

There is no additional premium for this rider.

Helping to Meet Lifetime NeedsOur Accelerated Benefits Rider (ABR)

By adding Accelerated Benefi ts Riders12 to your contract, you can access your death benefi t, to help cover costs from an illness that is terminal, chronic or critical or a critical injury. Expenses might include, but are not limited to:

• Nursing home care • Home health care

• Adult day care • Medical procedures

• Drug therapies • Household expense

• Quality of life expenditures

The Accelerated Benefi ts Riders are available at no-additional cost and allow you to access all or part of your death benefi t if diagnosed with an illness that is

terminal, chronic or critical or diagnosed with a critical injury. The terminal illness, critical illness and critical injury benefi ts are paid as a lump sum distribution; for chronic illness you may request to accelerate up to 2% of the death benefi t each month (or 24% per year) not to exceed the IRS per diem limit and not to exceed the total sum of the ABR death benefi t amount. Actual payments under the ABRs are calculated based on a discounted death benefi t amount.

The uses of ABR benefi ts are not limited with the exceptionthat ABR proceeds for chronic illness in the state of Massachusetts can only be used to pay for expenses incurred for Qualifi ed Long-Term Care services. 11

10TC84130(0415)3


12 (continued) Accelerated Benefi ts Riders (ABR) vs. Long-term Care (LTC) InsuranceCertain states require advertising for ABRs to provide a comparison to the benefi ts provided by LTC insurance. However, Accelerated Benefi ts provided by the ABR riders are not long-term care insurance, and are not intended to be the same as, or an alternative to, long-term care insurance.This is a life insurance benefi t that also gives you the option to accelerate some or all of the death benefi t in the event that you meet the criteria for a qualifying event described in the policy. This policy or certifi cate does not provide long-term care insurance subject to California long-term care insurance law. This policy or certifi cate is not a California Partnership for Long-Term Care program policy. This policy or certifi cate is not a Medicare supplement (policy or certifi cate).ABR Riders are supplemental benefi ts that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance. Receipt of benefi ts may reduce or eliminate the availability of other policy riders and benefi ts. Benefi ts available are calculated at time of claim based on the age of the policy and our expectation of your future mortality. The amount of Accelerated Benefi t available will depend on your life policy’s death benefi t value when ABR benefi ts are claimed. For policies in good standing, if ABR benefi ts are not used, policy death benefi ts and other rider benefi ts are still available.Long-term care (LTC) insurance is a form of health insurance, rather than an optional rider on a life insurance policy, and as such, has no death benefi t or cash value. LTC insurance benefi ts are specifi ed at the time of the contract. LTC benefi ts are paid as a form of expense reimbursement for qualifi ed long-term care expenses. By comparison, since ABR benefi ts can be used for any reason, they are paid once qualifi cations are met, and do not require you to provide receipt of specifi c expenses to qualify for the benefi t. LTC premiums vary based on the level and length of benefi t chosen by the policyholder. Premiums are paid on a recurring basis, and failure to pay premiums will generally lapse the policy. If LTC benefi ts are not claimed, they are typically forfeited. LTC insurance policies may off er non-forfeiture benefi ts for additional premium.

This is a solicitation of insurance. An insurance agent may contact you.13 The Lifetime Income Benefi t Rider, form series 20153/20205, provides a benefi t for the life of the insured if certain

conditions are met, including but not limited to the insured’s attained age being between age 60 and 85, and that the policy has been inforce at least 10 years. Insuffi cient policy values, outstanding policy loans and other considerations may also restrict exercising the rider. Receipt of income benefi ts will reduce the policy’s cash value and death benefi t and may terminate other riders or reduce their benefi ts. There is a monthly charge from the accumulated value during the income payment period. Guarantees are dependent upon the claims-paying ability of the issuing company.

Required for all Applicants in the state of ArkansasUnderstandingMy signature as Applicant acknowledges that I have read and the agent has explained the contents of this Buyers Guide. I understand that I am applying for an indexed universal life insurance policy that credits interest based on a formula that considers the change in the value of an external equity index but does not participate directly in the equity market. I understand that this original Buyers Guide will be enclosed with my application and a copy of it will be sent with my Policy.

Print Applicant Name

__________________________________________

Applicant Signature

_____________________________ Date ________

Print Agent Name

_________________________ Agent No. ________

Agent Signature

_____________________________ Date ________

Lifetime Income Benefit Rider™ (LIBR)

Outliving retirement income no longer has to be a fear. Once exercised, the Lifetime Income Benefi t Rider13

guarantees you a stream of income for life at retirement once certain qualifi cations are met. This rider is automatically added to the policy at issue if approved in your state.

The benefi t payments are deducted from the accumu-lated value through policy loans. Once the minimum threshold is met, the following events occur: the benefi t payments will continue to be paid for the life of the insured; a one time charge will be deducted from the cash surrender value; all other monthly deductions will be terminated; and the death benefit and cash surrender value will continue to be reduced by the benefi t payments until they reach respective minimum fl oors. Please consult the rider form for more details.

11TC84130(0415)3

The Lifetime Income Benefi t Rider is optional and available at policy issue. Benefi t payments are funded via policy loans, which will reduce the policy’s cash value and death benefi t. The policyholder cannot make additional premium payments or request additional withdrawals or policy loans during the benefi t payment period or the rider will terminate. Terminating the rider may result in a lapsed policy and substantial tax consequences.

LSW FlexLife Indexed Universal Life (IUL ), form series 8973/8974/ICC11-8973/ICC11-8974 is underwritten by Life Insurance Company of the Southwest, Addison, Texas. Riders are optional, may require additional premium and may not be available in all states.

The Participation Rate is the maximum percentage of the annual increase in the Index that will be credited. The Cap is the maximum earnings percent that will be credited. Participation Rates and Caps are subject to change annually for a given indexed segment. The minimum Guaranteed Participation and Cap Rates are: Strategies 1 and 5: PR = 100%, Cap = 3.1%; Strategy 2: PR = 110%, Cap = 3.0%; Strategy 3: PR = 25%, No Cap; Strategy 4: PR = 30%, No Cap. In the event the market declines, the policy has a built-in 0% interest crediting fl oor. The Floor is the minimum earnings percent that will be credited. The minimum annual rate of interest credited to funds in the fi xed-interest strategy is 2.5% and the minimum interest credited in the indexed strategies is 2.5% upon death or full surrender.

Monthly deductions from the account value include a monthly policy fee, monthly expense charge, cost of insurance charge, and applicable rider charges. In addition there is a surrender charge if the policy is lapsed or surrendered in the fi rst 10 years from issue or following an increase. Surrender charges vary based on gender, rate classifi cation, issue age, and policy year.

Excess Interest Formula: Index earnings for each indexed segment are calculated at the end of the crediting period as follows: index growth is multiplied by the segment’s participation rate, adjusted so that this rate is no greater than the segment’s index earnings cap, and no less than 0%; multiplied by the value in the indexed segment value. Failure to maintain the policy to maturity will result in no participation in the equity index. Index earnings are not direct participation in any stock or equity investment.

There are two death benefi t options from which to choose: Option A: Level Death Benefi t = Face Amount; Option B: Increasing Death Benefi t = Face Amount + Account Value. Upon death of the insured, a death benefi t equivalent to the death benefi t at the time of the insured’s death less any policy debt and less other amounts owed to the insurance company will be paid to the benefi ciary. The policy will then be terminated and all rights including access to the cash surrender value shall cease.

“Standard & Poor’s®”, “S&P®”, “S&P 500®”, and “Standard & Poor’s 500™” are trademarks of Standard & Poor’s and have been licensed for use by Life Insurance Company of the Southwest. This Product is not sponsored, endorsed, sold or promotedby Standard & Poor’s and Standard & Poor’s makes no representations regarding the advisability of investing in the Product. The S&P Composite Index of 500 stocks (S&P 500®) is a group of unmanaged securities widely regarded by investors to be representative of large-company stocks in general. An investment cannot be made directly into an index. The S&P 500® Index does not refl ect dividends paid on the stocks underlying the index.

Certain features of this contract may be indexed to an MSCI Index. This contract is not sponsored, endorsed, sold or promotedby MSCI, Inc. and MSCI bears no liability with respect to any such contracts. A more detailed description of the limited relationship MSCI has with Life Insurance Company of the Southwest accompanies the contract. The MSCI Emerging Markets Index is a free fl oat-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.

National Life Group® is a trade name representing various affi liates, which off er a variety of fi nancial service products.

Centralized Mailing Address: One National Life Drive, Montpelier, VT 05604 | Home Offi ce: Addison, TX1-800-732-8939 | www.NationalLife.comTC84130(0415)3

cat.no. 64281 · buying life insurance when you buy life insurance, you want coverage that fits...

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