• | Pages 6 to 10 provide a table summarizing key information about the Policy. |
• | Pages 11 to 14 provide an overview of important features and benefits and other information. |
• | Pages 15 to 19 include tables showing fees and charges under the Policy. |
• | Pages 20 to 23 summarize the principal risks of investing in the Policy. |
• | Pages 24 to 60 provide additional, more detailed information about the Policy, in question and answer format. |
• | Pages 60 to 64 provide information about The Penn Insurance and Annuity Company (“Penn Insurance and Annuity,” or the “Company”), PIA Variable Life Account I (the “Separate Account”) and the underlying variable investment options (“Variable Investment Options”). |
• | Appendix A at the end of this prospectus lists the mutual fund portfolios that are available in the Variable Investment Options (the “Portfolios,” or “Funds”), including information regarding their expenses and past investment performance. |
• | Appendix B at the end of this prospectus describes the fixed account investment options (the“Fixed Account Options”) available under the Policy. |
• | Appendix C at the end of this prospectus describes material state variations in Policy provisions. |
Fees and Expenses | ||||||||||
Charges for Early Withdrawals |
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Transaction Charges |
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Risks | ||
Risk of Loss | |
Risks | ||
Not a Short-Term Investment |
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Risks Associated with Investment Options |
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Insurance Company Risks |
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Risks | ||
Policy Lapse | |
Restrictions | ||
Investments | | |
Optional Benefits | |
Taxes | ||
Tax Implications | | |
Conflicts of Interest | ||
Investment Professional Compensation |
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Exchanges | |
1. | Purpose of the Policy |
2. | Premiums |
3. | Policy Features |
Transaction Fees | ||||
Charge | When Charge is Deducted | Amount Deducted | ||
Maximum Charge: | ||||
Surrender Charge2 | ||||
Maximum of $ | ||||
$ | ||||
Lesser of $25 or | ||||
Maximum Charge $ Current Charge $ | ||||
One time charge of 12 months’ worth of policy charges on the accelerated amount, plus 12 months’ worth of interest charges on the accelerated amount. The interest rate will be the greater of (a) the current 90‑day Treasury bill rate, or (b) the current maximum statutory adjustable policy loan rate.5 |
1 | |
2 | The actual maximum surrender charge will equal the surrender charge premium multiplied by the appropriate surrender factor. The surrender factor is equal to 100% in the first policy year and grades to 0% in the 16th year. The surrender charge premium is determined separately for each Policy and takes into account the individual underwriting characteristics of both insureds, such as sex, age and risk classification, and the Specified Amount of the Policy. The table shows the lowest and highest surrender charges, based on our guaranteed maximum rates for individuals in |
standard risk classifications. The table also shows the surrender charge under a Policy issued to a pair of individuals who are representative of individuals we insure. The surrender charge shown in the table may not be representative of the charge that you will pay. Your Policy will state your surrender charge premium. More detailed information concerning your surrender charge is available from our administrative offices upon request. For additional information on the surrender charges, see What Are the Fees and Charges Under the Policy? — Surrender Charge in this prospectus. |
3 | |
4 | |
5 | The maximum statutory adjustable policy loan rate is a rate established by the Company from time to time in accordance with state law. You can contact us or your registered representative to determine the interest rate that will apply to you if you choose to exercise this benefit. See “How Do I Communicate With Penn Insurance and Annuity?” |
Periodic Charges Under the Policy Other Than The Funds’ Annual Operating Expenses | ||||
Charge | When Charge is Deducted |
Amount Deducted | ||
Base Contract Charges: | ||||
Maximum Charges |
Maximum of $ $ | |||
Current Charges |
Maximum of $ $ | |||
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Maximum Charge |
$ | |||
Current Charge |
$ | |||
Maximum Charge |
Maximum of $ | |||
Current Charge |
Maximum of $ |
Periodic Charges Under the Policy Other Than The Funds’ Annual Operating Expenses | ||||
Charge | When Charge is Deducted |
Amount Deducted | ||
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Maximum Charge |
$ | |||
Current Charge |
$ Amount of insurance | |||
Maximum Charge |
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Current Charge |
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Guaranteed Maximum $ Current Charge $ | ||||
Policy Loans3 Net Interest Charge4 |
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Maximum (Guaranteed) Charge | Annual rate of | |||
Current Charge | Annual rate of | |||
Cost of Insurance Charges6 | ||||
Maximum Charges |
Maximum of $ $ | |||
Current Charges |
Maximum of $ $ | |||
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Periodic Charges Under the Policy Other Than The Funds’ Annual Operating Expenses | ||||
Charge | When Charge is Deducted |
Amount Deducted | ||
Maximum Charge |
$ 00066, per $1,000 of benefit amount. | |||
Current Charge |
$ |
1 | |
2 | |
3 | You may borrow up to 95% of your Cash Surrender Value. The minimum amount you may borrow is $250. An amount equivalent to the loan is withdrawn from the Variable Investment Options and certain accounts in the Fixed Account on a pro‑rata basis and is transferred to a policy loan account, as collateral for the loan. See What Is a Policy Loan? in this prospectus and Appendix B for additional information about Policy Loans. |
4 | Net Interest Charge for a Loan means the difference between the amount of interest we charge on the loan and the amount of interest we credit to your Policy in the policy loan account. |
5 | |
6 | |
Annual Portfolio Expenses1 | Minimum | Maximum | ||||||
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2 | |
• | portfolio management decisions driven by the need to maintain higher than normal liquidity or the inability to sustain an investment objective; |
• | increased administrative and fund brokerage expenses; and/or |
• | dilution of the interests of long-term investors. |
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• | Determine when and how much premium you pay to us |
• | Determine when and how much to allocate to the Variable Investment Options and to the Fixed Account Options |
• | Borrow money |
• | Change the beneficiary |
• | Decrease the amount of insurance protection (decrease the Specified Amount) |
• | Surrender your Policy for its Net Cash Surrender Value |
• | Take partial withdrawals from your Policy (up to the Net Cash Surrender Value amount) |
• | Choose the form in which you would like the death benefit or other proceeds paid out from your Policy |
• | by wire or by exchange from another insurance company; |
• | via an electronic funds transfer program (any owner interested in making monthly premium payments must use this method); |
• | on‑line at www.pennmutual.com for initial premium payments which will be drawn electronically from your bank account (you will need to have your policy number and checking or savings account information on hand); or |
• | if we agree to it, through a salary deduction plan with your employer. |
• | no change may be made in the first policy year; |
• | no change may be made if it would cause the Policy not to qualify as life insurance under federal income tax law; |
• | any decrease in the Specified Amount of insurance must be at least $10,000; |
• | the Specified Amount after the decrease must be at least equal to the minimum Specified Amount under your Policy (generally $50,000); and |
• | any decrease in the Specified Amount of insurance in the first five policy years will be subject to a surrender change. |
• | the Net Premiums you have paid (your premiums less the percent of premium charges); |
• | plus or minus the investment results in the part of your Policy Value allocated to the Variable Investment Options; |
• | plus interest credited to the amount in the part of your Policy Value (if any) allocated to the Fixed Account Options; ● minus policy charges we deduct; and |
• | minus partial withdrawals you have made. |
(a) | restricting the dollar amount, the number of transfers made during a defined period, and the method used to submit transfers (this could include not allowing telephone, internet, or other electronic transfers); |
(b) | waiving or reducing any or all of the restrictions, uniformly to all members of the same class of policies, on transfers described in this Policy; |
(c) | revoking any waiver or reduction, uniformly to all members of the same class of policies; and |
(d) | terminating transfer privileges at any time (for all, some, or specific policy owners). |
• | Insurance Charge — A monthly charge for the cost of insurance protection is subtracted from the Policy Value. The amount of insurance risk we assume varies from Policy to Policy and from month to month. The amount of insurance risk is affected by the investment performance of the Variable Investment Options, payment of premiums, and charges. The insurance charge (also called a cost of insurance charge) therefore also varies. To determine the charge for a particular month, we multiply the amount of insurance for which we are at risk by a cost of insurance rate based upon an actuarial table. The amount of insurance is the “Net Amount at Risk,” or the difference between the death benefit and the Policy Value. The table in your Policy will show the maximum cost of insurance rates that we can charge. The cost of insurance rates that we currently apply are generally less than the maximum rates shown in your Policy. The table of rates we use will vary by issue age, policy duration, gender, and rate class for each of the insureds. We place insureds in a rate class when we issue the Policy, based on our examination of information bearing on insurance risk. We currently place people we insure in the following rate classes: a standard tobacco, preferred tobacco, standard non‑tobacco, preferred non‑tobacco or preferred plus non‑tobacco rate class. We may also place certain people in a rate class involving a higher mortality risk than the standard tobacco or standard non‑tobacco classes (a “substandard class”). Insureds age 19 and under are placed in a rate class that does not distinguish between tobacco and non‑tobacco rates. |
• | Per Policy Expense Charge — A monthly charge to help cover our administrative costs. This charge is a flat dollar charge of up to $50 in year 1 and $15 in years 2+ (currently, the flat charge is $50 in year 1 and $15 in years 2+ — we will notify you in advance if we change our current rates). Administrative expenses relate to premium billing and collection, recordkeeping, processing of death benefit claims, policy loans and policy changes, reporting and overhead costs, processing applications and establishing policy records. |
• | Expense Charge per Thousand of Specified Amount — A monthly charge to help cover our administrative costs as described in the paragraph above. The charge only applies for the first 240 months after the policy date. We will deduct the charge based on the initial Specified Amount of insurance. The charge is equal to the current rate as set forth in your Policy times each $1,000 of the initial Specified Amount of insurance. The charge varies with the age, gender and rate class of each insured (as measured at issue). |
• | Mortality and Expense Risk Asset Charge — A monthly charge to help cover the mortality risk of both insureds living for a shorter period than we originally estimated. The charge also helps cover the costs should expenses incurred in issuing and administering the policies be greater than we originally estimated, and the costs of paying benefits that are higher than originally estimated. The current charge is equivalent to an annual effective rate of 1.25% for the first 120 months, and 0.25% thereafter, of the Policy Value in the Separate Account. The guaranteed charge for all policy years is equivalent to an annual effective rate of 1.25% of the Policy Value in the Separate Account. The charges are deducted on a pro‑rata basis in proportion to the current market value of each Variable Investment Option (subaccount). |
• | Optional Supplemental Rider Charges — Monthly charges for any optional supplemental insurance benefits that are added to the Policy by means of a rider. (A charge can also apply upon exercise of certain rider benefits). Please see the Fee Table “Periodic Charges under Optional Supplemental Riders” and “What are the Supplemental Riders That Are Available?” in this Prospectus for more information about these charges. |
Name of Benefit |
Purpose | Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
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Name of Benefit |
Purpose | Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
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Name of Benefit |
Purpose | Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
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Name of Benefit |
Purpose | Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
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• | a maximum percentage of the Policy Value to be permitted in certain Variable Investment Options and/or the Fixed Account; and/or |
• | a minimum percentage of the Policy Value to be required in certain Variable Investment Options. |
(a) | a divorce decree, issued, and entered, by a court of competent jurisdiction, has been finalized, dissolving the marriage of the Insureds. |
(b) | the federal estate tax is repealed. |
(c) | the unlimited marital deduction under federal estate tax law is eliminated or reduced to one‑half or less of the federal gross estate. |
(d) | federal estate tax rates are reduced by 50% or more. |
(a) | the Policy must be in force and must not be in a grace period at the time of the exchange. |
(b) | the Owner must make a written application for the exchange. |
(c) | both Insureds must be alive on the Date of Exchange. |
(d) | neither Insured ’s rate class is a substandard class as determined by the last time evidence of insurability was received. |
(e) | the Owner must surrender all rights in this Policy in exchange for the new policies. |
(f) | the Owner of each new policy must have an insurable interest in the insured. |
(g) | the owner must make any premium payment that would be necessary to keep each new policy in force for two months. |
(h) | The Specified Amount of each new policy must sum to the Specified Amount of this Policy in excess of any debt and must be such that each new policy will satisfy the requirements of Section 7702 of the Internal Revenue Code. |
(i) | The new policies may not be variable life insurance policies. |
• | the sum of the two percentages must equal 100%. |
• | if the percentages are any amounts other than 50/50, evidence of insurability will be required on the policy where the percentage exceeds 50% (for the portion above 50%) |
(a) | at the time of exchange the new Insured must have the same relationship to the remaining insured as did the insured being replaced. |
(b) | the new Insured must submit evidence of insurability satisfactory to Us. |
(c) | the new Insured must be at least 20 years of age on the birthday nearest the Policy Date of this Policy |
(d) | the difference in the ages of the new Insured and the remaining Insured must not exceed 30 years |
(e) | the Policy must be in force and not be in a grace period at the time of the exchange |
(f) | the owner must make a written application for the exchange |
(g) | the owner must make any premium payment which would be necessary to keep the new policy in force for two months |
(h) | the owner must surrender all rights to this Policy in exchange for the new policy |
(i) | the owner must have an insurable interest in the new Insured |
(a) | The amount of death benefit proceeds you can access must be at least $10,000, but no more than the lesser of 50% of the total death benefit amount or $250,000. |
(b) | An insured must be diagnosed by a licensed physician of the United States as being terminally ill with a life expectancy of 12 months or less. The physician may not be the owner, an insured, beneficiary, or relative of any of them. |
(c) | Penn Insurance and Annuity reserves the right, at its own expense, to seek additional medical opinions in order to determine benefit eligibility. |
(d) | The accelerated death benefit is not available if both insured persons are living. |
(a) | The Owner may request the payment of the Chronic Illness Accelerated Benefit Payment in a single lump sum or in a series of equal payments occurring annually, semi-annually, quarterly, or monthly, provided that in Florida the Chronic Illness Accelerated Benefit Payment is available only once under this Rider. The series of benefit payments will continue as scheduled, as long as the insured is certified as having a Chronic Illness at least every 12 months, until the remaining death benefit reaches the minimum allowed by the Company or the rider is terminated. No more than 12 Chronic Illness Accelerated Benefit Payments will be paid in a 12 month period. The Chronic Illness Accelerated Benefit Payment must first be used to repay a pro rata share of any outstanding Policy Debt. |
(b) | Penn Insurance and Annuity will limit the Chronic Illness Accelerated Benefit Payment such that: |
• | The Policy is not disqualified as life insurance according to the Code; |
• | The Chronic Illness Accelerated Benefit Payment is at least $4,800 if taken as a single lump sum, or the sum of scheduled payments for the 12 month period following the election date is at least $4,800 if taken as a series of payments; |
• | The maximum total amount of Chronic Illness Accelerated Benefit Payments in a 12 month period, for all policies or riders under which the Insured accessing the benefit is covered with the Company, will not exceed the lesser of: (i) 24% of the Specified Amount, (ii) $240,000, or (iii) the annual Per Diem Limitation within the meaning of sections 101(g)(3)(D) and 7702B(d) of the Code. |
• | The maximum total amount of Chronic Illness Accelerated Benefit Payments during the life of the Insured accessing the benefit, for all policies or riders under which the Insured is covered with the Company, will not exceed $5,000,000; and |
• | The death benefit remaining after a Chronic Illness Accelerated Benefit Payment is not less than $50,000. |
(c) | Chronic Illness means that an Insured has been certified by a licensed health care practitioner within the last 12 months as: |
• | Being unable to perform at least two Activities of Daily Living (bathing, continence, dressing, eating, toileting, transferring) without substantial assistance from another person due to a loss of functional capacity for a period of at least 90 days (which must be consecutive, except in California); or |
• | Requiring substantial supervision by another person for a period of at least 90 days (which must be consecutive, except in California) to protect the Insured from threats to health and safety due to severe Cognitive Impairment. |
(d) | Severe Cognitive Impairment means deterioration or loss in intellectual capacity that is: |
• | Comparable to (and includes) Alzheimer’s Disease and similar forms of irreversible dementia; and |
• | Measured by clinical evidence and standardized tests which reliably measure impairment in: |
i. | Short term or long term memory; |
ii. | Orientation to people, places, or time; and |
iii. | Deductive or abstract reasoning. |
(e) | For each lump sum benefit payment, or at the beginning of each 12 month period following the election date if benefit payments are scheduled in a series, Penn Insurance and Annuity must receive written certification from a licensed health care practitioner that an Insured has a Chronic Illness. The licensed health care practitioner may be a licensed physician, registered professional nurse, licensed social worker, or other similar health care practitioner approved by the Internal Revenue Service and Penn Insurance and Annuity. The licensed health care practitioner shall not be an Insured, Owner, Beneficiary, or a relative thereof. Penn Insurance and Annuity reserves the right to obtain at any time an additional opinion of the Insured’s condition from a licensed health care practitioner at Penn Insurance and Annuity’s expense. Should this opinion differ from that of the Insured’s licensed health care practitioner, eligibility for benefits will be determined by a third licensed health care practitioner who is mutually acceptable to the Owner and Penn Insurance and Annuity. |
(f) | The Chronic Illness accelerated death benefit is not available if both insured persons are living. |
(a) | no more than twelve partial withdrawals may be made in a policy year; |
(b) | each partial withdrawal must be at least $250; |
(c) | a partial withdrawal may not be made from an account if the amount remaining in that account would be less than $25; |
(d) | the partial withdrawal may not reduce the Specified Amount of insurance under your Policy to less than the minimum Specified Amount under the Policy ($50,000); and |
(e) | the partial withdrawal will be subject to a processing fee equal to the lesser of $25 or 2% of the amount withdrawn. |
• | Option 1 — Interest income: We will credit interest to the amount applied, and the interest will be paid monthly, quarterly, semiannually or annually; |
• | Option 2 — Income for a fixed period: We will pay the amount applied, with interest, in equal monthly payments for a fixed period, which may not be greater than 30 years; |
• | Option 3 — Income of a specified amount: We will make payments monthly, quarterly, semiannually or annually of a specified amount until the total amount applied, with interest, has been paid; |
• | Option 4 — Life income: We will pay equal monthly payments during the life of the option annuitant; |
• | Option 5 — Life income with guaranteed period: We will pay equal monthly payments for a stated guaranteed period, which may be 5, 10 or 20 years, and thereafter during the life of the option annuitant; |
• | Option 6 — Life income with refund period: We will pay equal monthly payments during the life of the option annuitant and, if necessary, continue the payments after the death of the option annuitant until the total of all payments made equals the total amount applied; |
• | Option 7 — Joint and survivor life income: We will pay equal monthly payments during the joint life of two option annuitants and thereafter during the life of the survivor. |
• | The portion of the Net Cash Surrender Value or death benefit proceeds being applied to the installment benefit. |
• | The investment in the contract. |
• | policy loans in excess of $50,000, partial withdrawals in excess of $10,000, and surrenders; |
• | change of rate class; addition/removal of riders; |
• | decreases in Specified Amount of insurance; |
• | change of beneficiary; |
• | election of payment option for policy proceeds; and |
• | tax withholding elections. |
• | Registered representatives may be paid commissions on a Policy they sell based on premiums paid in amounts up to 53.50% of first year premiums of sales, 2.50% on premiums paid during the second through fifteenth policy years, and 1.20% on premiums paid after the first fifteen policy years. |
PORTFOLIO TYPE |
FUND AND ADVISER/SUBADVISER |
CURRENT EXPENSES |
AVERAGE ANNUAL TOTAL RETURNS (as of 12/31/2022) | |||||||
1 YEAR | 5 YEAR | 10 YEAR | ||||||||
Vanguard Variable Insurance Fund | ||||||||||
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(a) | the value of the Short-Term Fixed Account on the previous Monthly Anniversary; |
(b) | one month’s interest on (a); |
(c) | any premium allocated to the Short-Term Fixed Account since the preceding Monthly Anniversary reduced by the applicable percent of premium charge; |
(d) | any amount transferred into the Short-Term Fixed Account from one or more Variable Investment Options (or subaccounts) or the Traditional Fixed Account since the preceding Monthly Anniversary; |
(e) | interest on (c) from the date of receipt in the Home Office to the Monthly Anniversary; |
(f) | interest on (d) from the date of transfer into the Short-Term Fixed Account to the Monthly Anniversary; |
(g) | any loan repayments allocated to the Short-Term Fixed Account since the prior Monthly Anniversary; and |
(h) | interest on (g) from the date of receipt in the Home Office to the Monthly Anniversary. |
(a) | any partial withdrawal from the Short-Term Fixed Account since the preceding Monthly Anniversary; |
(b) | any amount transferred out of the Short-Term Fixed Account into one or more Variable Investment Options (or subaccounts) or the Traditional Fixed Account since the preceding Monthly Anniversary; |
(c) | interest on (a) from the date of withdrawal to the Monthly Anniversary; |
(d) | interest on (b) from the date of transfer out of the Short-Term Fixed Account to the Monthly Anniversary; |
(e) | the applicable Monthly Deduction for the following policy month; |
(f) | any policy loan or unpaid policy loan interest taken from the Short-Term Fixed Account; |
(g) | interest on (f) from the date of the loan or loan interest deduction to the Monthly Anniversary; and |
(h) | any applicable Surrender Charge taken from the Short-Term Fixed Account. |
(a) | the value of the Traditional Fixed Account on the previous Monthly Anniversary; |
(b) | one month’s interest on (a); |
(c) | any premium allocated to the Traditional Fixed Account since the preceding Monthly Anniversary reduced by the applicable percent of premium charge; |
(d) | any amount transferred into the Traditional Fixed Account from one or more Variable Investment Options (or subaccounts) or the Short-Term Fixed Account since the preceding Monthly Anniversary; |
(e) | interest on (c) from the date of receipt in the Home Office to the Monthly Anniversary; |
(f) | interest on (d) from the date of transfer into the Traditional Fixed Account to the Monthly Anniversary; |
(g) | any loan repayments allocated to the Traditional Fixed Account since the prior Monthly Anniversary; and |
(h) | interest on (g) from the date of receipt in the Home Office to the Monthly Anniversary. |
(a) | any partial withdrawal from the Traditional Fixed Account since the preceding Monthly Anniversary; |
(b) | any amount transferred out of the Traditional Fixed Account into one or more Variable Investment Options (or subaccounts) or the Short-Term Fixed Account since the preceding Monthly Anniversary; |
(c) | interest on (a) from the date of withdrawal to the Monthly Anniversary; |
(d) | interest on (b) from the date of transfer out of the Traditional Fixed Account to the Monthly Anniversary; |
(e) | the applicable Monthly Deduction for the following policy month; |
(f) | any policy loan or unpaid policy loan interest taken from the Traditional Fixed Account; |
(g) | interest on (f) from the date of the loan or loan interest deduction to the Monthly Anniversary; and |
(h) | any applicable Surrender Charge taken from the Traditional Fixed Account. |
(a) | The sum of all transfers in a policy year cannot exceed the greatest of: |
(i) | 25% of the Traditional Fixed Account Value at the previous policy anniversary, |
(ii) | $5,000, and |
(iii) | the total amount transferred from the Traditional Fixed Account in the previous policy year. |
(b) | The amount that may be transferred excludes any amount held in the Policy Loan Account. |
STATE | LOCATION IN PROSPECTUS | STATE VARIATION | ||
CA | See “Do I Have the Right to Cancel the Policy?” |
You have the right to cancel your Policy within 30 days after you receive it. | ||
CA | See “What Are the Supplemental Riders that are Available? — Chronic Illness Accelerated Benefit Rider” |
Chronic Illness means that an Insured has been certified by a licensed health care practitioner within the last 12 months as: • Being unable to perform at least two Activities of Daily Living (bathing, continence, dressing, eating, toileting, transferring) without substantial assistance from another person due to a loss of functional capacity for a period of at least 90 days (which need not be consecutive); or • Requiring substantial supervision by another person for a period of at least 90 days (which need not be consecutive) to protect the Insured from threats to health and safety due to severe Cognitive impairment. | ||
FL | See “What Is a Policy Loan?” |
There is no minimum policy loan amount. | ||
FL | See “Do I Have the Right to Cancel the Policy?” |
If your Policy is not replacing an existing policy, you have the right to cancel your Policy within 14 days after you receive it. If your Policy is a replacement, you have the right to cancel your Policy within 10 days after you receive it. | ||
ND | See “Do I Have the Right to Cancel the Policy?” |
If your Policy is not replacing an existing policy, you have the right to cancel your Policy within 20 days after you receive it. If your Policy is a replacement, you have the right to cancel your Policy within 10 days after you receive it. | ||
SD | See “Do I Have the Right to Cancel the Policy?” |
If you cancel your Policy during the free look period, you will receive a refund of any premiums you have paid. During the free look period, your Policy Value will be allocated to the Short-Term Fixed Account. At the end of the period, your Policy Value will be transferred to the Variable Investment Options and Fixed Account Options you have chosen. |
STATEMENT OF ADDITIONAL INFORMATION
For The
SURVIVORSHIP PROTECTION VUL
a flexible premium variable life insurance policy issued by
THE PENN INSURANCE AND ANNUITY COMPANY
and funded through
PIA VARIABLE LIFE ACCOUNT I
The Penn Insurance and Annuity Company
PO Box 178, Philadelphia, PA 19105
800-523-0650
September 1, 2023
This Statement of Additional Information (the “SAI”) is not a prospectus. It should be read in conjunction with our Survivorship Protection VUL prospectus dated September 1, 2023. A copy of the prospectus for the Policy is available, without charge, by writing to The Penn Insurance and Annuity Company (“PIA” or “the Company”), Customer Service Group – C3P, PO Box 178, Philadelphia, Pennsylvania, 19105. Or, you may call, toll free, 1-800-523-0650, or access our website at www.pennmutual.com.
Table of Contents
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THE PENN INSURANCE AND ANNUITY COMPANY
The Penn Insurance and Annuity Company is a Delaware stock life insurance company. We are a wholly-owned subsidiary of Penn Mutual Life Insurance Company. We were chartered in 1982 and have been continuously engaged in the life insurance business since that date. We are licensed to sell insurance in 49 states and the District of Columbia. Our corporate headquarters are located at 600 Dresher Road, Horsham, Pennsylvania, 19044, a suburb of Philadelphia. Our mailing address is The Penn Insurance and Annuity Company, PO Box 178, Philadelphia, Pennsylvania, 19105.
PIA Variable Life Account I
We established PIA Variable Life Account I (the “Separate Account”) as a separate investment account under Delaware law on March 10, 2021. The Separate Account is registered with the Securities and Exchange Commission (the “SEC”) as a unit investment trust under the Investment Company Act of 1940 (the “1940 Act”) and qualifies as a “separate account” within the meaning of the federal securities laws.
The value of accumulation units in the Variable Investment Options is determined by multiplying the accumulation unit value for the prior valuation period by the net investment factor for the current valuation period.
The net investment factor is an index used to measure the investment performance of each Variable Investment Option from one valuation period to the next. The net investment factor is determined by dividing (a) by (b), where
(a) | is the net asset value per share of the Fund held in the subaccount, as of the end of the current valuation period, plus the per share amount of any dividend or capital gain distributions by the fund if the ex-dividend date occurs in the valuation period; and |
(b) | is the net asset value per share of the Fund held in the subaccount as of the end of the last prior valuation period. |
ADDITIONAL INFORMATION
Assignment
You may assign the Policy while it is in force during the life of either Insured. Your rights, and the rights of any beneficiary, will be subject to the rights of an assignee under the terms of an assignment. We will not be bound by any assignment until you provide a signed form, that we have either provided or find acceptable, and the form has been filed at the home office. Unless you specify otherwise, the assignment will take effect as of the date you signed the form, subject to any action we have taken prior to the time that the assignment is received at the home office. We are not responsible for the effect or the validity of any assignment.
Misstatement of Age or Gender
If either of the insureds’ age or gender (if the policy is issued on a sex-distinct basis) has been misstated, we will adjust the proceeds payable under the Policy based on what the last monthly charges would have purchased at the correct age or gender (if the policy is issued on a sex-distinct basis).
Incontestability
With respect to the last Insured to die, after a Policy has been in force during the life of that insured for two years from the original Policy date, we may not contest the Policy, except in the case of fraud. However, if there has been a Policy change or reinstatement for which we required evidence of insurability, we may contest that Policy change or reinstatement for two years during the life of the last Insured to die with respect to information provided at that time, during the life of that insured, from the effective date of the Policy change or reinstatement.
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Suicide
If the last Insured to die, whether sane or insane, dies by suicide, within two years of the original Policy date, or any shorter period as may be required by applicable law in the state where the Policy is delivered or issued for delivery, our liability will be limited to an amount equal to the premiums paid for the Policy less any Policy loan partial withdrawals. If there has been a Policy change or reinstatement for which we required evidence of insurability, and if the last Insured to die dies by suicide within two years from the effective date of the Policy change or reinstatement, our liability with respect to the Policy change or reinstatement will be limited to an amount equal to the portion of the monthly charges associated with that Policy change or reinstatement.
No-Lapse Guarantee Rider
This rider is automatically included with your Policy at no additional cost. This rider prevents the lapse of the Policy when the Net Cash Surrender Value is insufficient to cover the Monthly Deduction for the following month as long as the No-Lapse Guarantee Requirement is satisfied. The Rider may last until the Maturity Date of the Policy.
We will continue to deduct Monthly Deductions from the Policy Value while the Policy is in force under the Rider. The Policy will remain in force with a negative Policy Value if the No-Lapse Guarantee Requirement is satisfied. We will not credit interest to the negative Policy Value. The Net Amount at Risk used to calculate Monthly Deductions will not exceed the Basic Death Benefit divided by the Death Benefit Discount Factor despite a negative Policy Value. The Death Benefit will not be reduced due to a negative Policy Value. Loan interest will continue to accrue and will be added to your Policy Debt.
No-Lapse Guarantee Requirement (“NLG Requirement”). On each Monthly Anniversary while this Policy is in force, the NLG Requirement is satisfied if the No-Lapse Guarantee Account, less any Policy Debt, exceeds zero.
A change in the Specified Amount, the addition, deletion or change of any supplemental riders to this Policy, or a change in the rate class of either Insured may result in a change in the No-Lapse Percent of Premium Charge, No-Lapse Monthly Deductions, and No-Lapse Interest Rate. As a result, additional premiums may be required on the date of change in order to satisfy the NLG Requirement.
No-Lapse Guarantee Account (“NLGA”). The NLGA is only used to determine whether or not the NLG Requirement is satisfied. The rates and charges used to determine the NLGA are guaranteed for the life of the Policy and are different from the rates and charges used to determine the value of your Policy.
On the Policy Date, the NLGA is the initial premium paid less the sum of:
(a) | the applicable No-Lapse Percent of Premium Charge shown in the Policy Specifications; and |
(b) | the applicable No-Lapse Monthly Deduction for the first Policy month. |
On each Monthly Anniversary until the No-Lapse Guarantee End Date while this Policy is in force, the NLGA equals the sum of:
(a) | the NLGA on the preceding Monthly Anniversary; |
(b) | one month’s interest on (a) using the applicable No-Lapse Interest Rate; |
(c) | any premium paid since the preceding Monthly Anniversary reduced by the applicable No-Lapse Percent of Premium Charge; and |
(d) | interest on (c) using the applicable No-Lapse Interest Rate from the date of receipt in the Home Office to the Monthly Anniversary; |
less the sum of:
(a) | any partial withdrawal since the preceding Monthly Anniversary; |
(b) | interest on (a) using the applicable No-Lapse Interest Rate from the date of withdrawal to the Monthly Anniversary; and |
(c) | the applicable No-Lapse Monthly Deduction for the following Policy month. |
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No-Lapse Percent of Premium Charge. The No-Lapse Percent of Premium Charge is deducted each time a premium is paid in the calculation of the NLGA.
No-Lapse Monthly Deduction. The No-Lapse Monthly Deduction is the sum of:
(a) | the No-Lapse COI Charge for the Policy month; |
(b) | the No-Lapse Per Policy Expense Charge; |
(c) | the No-Lapse Expense Charge Per $1,000 of Specified Amount; and |
(d) | the Monthly Deduction for the Policy month for any benefits provided by a supplemental rider made a part of this Policy determined as described in the rider section but using any applicable NLGA value and the applicable No-Lapse rates shown in the Policy Specifications. |
No-Lapse COI Charge. The No-Lapse COI Charge is determined on a monthly basis. The No-Lapse COI Charge for a Policy month is calculated as the sum of (a) multiplied by (b) where:
(a) | is the applicable No-Lapse COI Rate divided by 1,000; and |
(b) | is the No-Lapse Net Amount at Risk. |
No-Lapse Net Amount at Risk. The No-Lapse Net Amount at Risk is equal to (a) divided by (b) minus (c) where
(a) | is the Specified Amount at the beginning of the Policy month; |
(b) | is the Death Benefit Discount Factor as shown in the Policy Specifications; and |
(c) | is the NLGA at the beginning of the Policy month before the No-Lapse Monthly Deduction. |
If the calculation above causes the No-Lapse Net Amount at Risk to be negative, then the No-Lapse Net Amount at Risk will be set equal to zero.
No-Lapse COI Rate. The No-Lapse COI Rate is shown in the Policy Specifications and is based on Policy year and on the issue age, sex (if the Policy is issued on a sex-distinct basis), and rate class of both of the Insureds. A change in the Specified Amount may result in a change in the No-Lapse COI Rate.
No-Lapse Per Policy Expense Charge. The No-Lapse Per Policy Expense Charge is a monthly expense charge and is shown in the Policy Specifications.
No-Lapse Expense Charge Per $1,000 of Specified Amount. The No-Lapse Expense Charge Per $1,000 of Specified Amount is a monthly expense charge and is shown in the Policy Specifications.
No-Lapse Interest Rate. The No-Lapse Interest Rate is described in the Policy Specifications. A change in the Specified Amount may result in a change in the No-Lapse Interest Rate.
Allocation Requirements. in order to keep this Rider in force, we reserve the right to establish:
• | a maximum percentage of the Policy Value to be permitted in certain subaccounts and/or the Fixed Account; and/or |
• | a minimum percentage of the Policy Value to be required in certain subaccounts. |
Should we choose to enforce these restrictions, we will provide advance notice to you. Such notice will identify the restriction percentages to be applied and the subaccounts and/or Fixed Account impacted. We will evaluate the imposition of these restrictions on an annual basis.
Non-Principal Risks
In addition to the section of the prospectus on the principal risks of investing in the Policy, risks are disclosed separately in each of the appropriate sections of the prospectus.
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FEDERAL INCOME TAX CONSIDERATIONS
The following summary provides a general description of the federal income tax considerations associated with the Policy and does not purport to be complete or to cover all situations. This discussion is not intended as tax advice. Counsel or other competent tax advisers should be consulted for more complete information. This discussion is based on our understanding of the present federal income tax laws as they are currently interpreted by the Internal Revenue Service (the “IRS”). No representation is made as to the likelihood of continuation of the present Federal income tax laws or of the current interpretations by the IRS.
Tax Status of the Policy
Death benefits paid under contracts that qualify as life insurance policies under federal income tax law are not subject to federal income tax. Investment gains credited to such policies are not subject to income tax as long as they remain in the Policy. Assuming your Policy is not treated as a “modified endowment contract” under federal income tax law, distributions from the Policy are generally treated as first the return of investment in the Policy and then, only after the return of all investment in the Policy, as distributions of taxable income. Amounts borrowed under the Policy also are not generally subject to federal income tax at the time of the borrowing. An exception to this general rule occurs in the case of a decrease in the Policy’s death benefit or any other change that reduces benefits under the Policy in the first 15 years after the Policy is issued and that results in a cash distribution to the owner in order for the Policy to continue qualifying as life insurance. The application of these rules may vary depending on whether the change occurs in the first five years after the Policy is issued. Such a cash distribution may be taxed in whole or in part as ordinary income (to the extent of any gain in the Policy) under rules prescribed in Section 7702 of the Code.
To qualify as a life insurance contract for federal income tax purposes, the Policy must meet the definition of a life insurance contract which is set forth in Section 7702 of the Internal Revenue Code of 1986, as amended (the “Code”). Guidance as to how these requirements are to be applied is limited. Section 7702 was amended by U.S. federal tax legislation that was enacted on December 22, 2017 and on December 27, 2020. Certain aspects of the legislation are currently uncertain and future administrative guidance or legislation may result in additional changes. The manner in which Section 7702 should be applied to certain features of the Policy offered in its prospectus, including the second-to-die feature, is not directly addressed by Section 7702 or any guidance issued to date under Section 7702. Nevertheless, we believe it is reasonable to conclude that the Policy will meet the Section 7702 definition of a life insurance contract. In the absence of final regulations or other pertinent interpretations of Section 7702, however, there is necessarily some uncertainty as to whether the Policy will meet the statutory life insurance contract definition, particularly if it insures a substandard risk. If the Policy were determined not to be a life insurance contract for purposes of Section 7702, such contract would not provide most of the tax advantages normally provided by a life insurance contract.
If it is subsequently determined that the Policy does not satisfy Section 7702, we may take whatever steps are appropriate and reasonable to comply with Section 7702. For these reasons, we reserve the right to restrict Policy transactions as necessary to attempt to qualify it as a life insurance contract under Section 7702.
Section 817(h) of the Code requires that the investments of each subaccount of the Separate Account must be “adequately diversified” in accordance with Treasury regulations in order for the Policy to qualify as a life insurance contract under Section 7702 of the Code (discussed above). The funds in which each subaccount of the Separate Account may invest are owned exclusively by the Separate Account and certain other qualified investors. As a result, the Separate Account expects to be able to look through to the funds’ investments in order to establish that each subaccount is “adequately diversified”. It is expected that each underlying fund will comply with the diversification requirement applicable to the subaccounts as though the requirement applied to that underlying fund. Penn Mutual believes that the Separate Account will meet the diversification requirement, and Penn Mutual will monitor continued compliance with this requirement.
The Treasury Department has stated in published rulings that a variable contract owner will be considered the owner of the related separate account assets if the contract owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. In circumstances where the variable contract owner is considered the owner of separate account assets, income and gain from the assets would be currently includable in the variable contract owner’s gross income. The Treasury Department has indicated that in regulations or revenue rulings under Section 817(d), (relating to the definition
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of a variable contract), it will provide guidance on the extent to which contract owners may direct their investments to particular subaccounts without being treated as owners of the underlying shares. The Internal Revenue Service (“IRS”) has issued Revenue Ruling 2003-91 in which it ruled that the ability to choose among as many as 20 subaccounts and make not more than one transfer per 30-day period without charge did not result in the owner of the Policy being treated as the owner of the assets in the subaccount under the investment control doctrine.
The ownership rights under the Policy are similar to, but different in certain respects from, those described by the IRS in Revenue Ruling 2003-91 and other rulings in which it was determined that Policy owners were not owners of the subaccount assets. It is possible that these differences could result in Policy owners being treated as the owners of the assets of the subaccounts under the Policy. We, therefore, reserve the right to modify the Policy as necessary to attempt to prevent the owners of the Policy from being considered the owners of a pro rata share of the assets of the subaccounts under the Policy. In addition, it is possible that if regulations or additional rulings are issued, the contract may need to be modified to comply with them.
Tax Qualification Test
For the Survivorship Protection VUL Policy to be treated as a life insurance contract under the Code, it must pass one of two tests — a cash value accumulation test or a guideline premium/cash value corridor test. We currently offer only the cash value accumulation test. Guidance as to how these requirements are to be applied is limited. Nevertheless, we believe that the Policy should satisfy the applicable requirements.
The following discussion assumes that the Policy qualifies as a life insurance contract for federal income tax purposes.
We believe that the proceeds and cash value increases of the Policy should be treated in a manner consistent with a fixed-benefit life insurance policy for federal income tax purposes. Thus, the death benefit under the Policy should be excludable from the gross income of the beneficiary under Section 101(a)(1) of the Code.
Modified Endowment Contracts
The Code establishes a class of life insurance contracts designated as “modified endowment contracts,” which applies to policies entered into or materially changed after June 20, 1988.
Due to the Policy’s flexibility, classification as a modified endowment contract will depend on the individual circumstances of the Policy. Guidance as to how these requirements are to be applied, in particular to second-to-die policies, is limited. In general, the Policy will be a modified endowment contract if the accumulated premiums paid at any time during the first seven Policy years exceeds the sum of the net level premiums which would have been paid on or before such time if the Policy provided for paid-up future benefits after the payment of seven level annual premiums. The determination of whether the Policy will be a modified endowment contract after a material change generally depends upon the relationship of the death benefit and Policy value at the time of such change and the additional premiums paid in the seven years following the material change. We will endeavor to notify you on a timely basis if we believe you have exceeded this limit and the Policy has become a modified endowment contract under the Code.
All policies that we or our affiliate issue to the same owner during any calendar year, which are treated as modified endowment contracts, are treated as one modified endowment contract for purposes of determining the amount includable in gross income under Section 72(e) of the Code.
If there is a reduction in the benefits under the Policy during the first seven Policy years, for example, as a result of a partial withdrawal or surrender, the seven-pay test will have to be reapplied as if the Policy had originally been issued at the reduced Specified Amount. If there is a “material change” in the Policy’s benefits or other terms, the Policy may have to be retested as if it were a newly issued Policy. A material change may occur, for example, when there is an increase in the death benefit which is due to the payment of an unnecessary premium. Unnecessary premiums are premiums paid into the Policy which are not needed in order
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to provide a death benefit equal to the lowest death benefit that was payable in the first seven Policy years. To prevent your Policy from becoming a modified endowment contract, it may be necessary to limit premium payments or to limit reductions in benefits. A current or prospective Policy owner should consult a competent tax adviser to determine whether a Policy transaction will cause the Policy to be classified as a modified endowment contract.
The rules relating to whether the Policy will be treated as a modified endowment contract are complex and make it impracticable to adequately describe in full in the limited confines of this summary. Therefore, you should consult with a competent adviser to determine whether the Policy transaction will cause the Policy to be treated as a modified endowment contract.
Distributions from Policies Classified as Modified Endowment Contracts
Policies classified as a modified endowment contract will be subject to the following tax rules. First, all distributions, including distributions upon surrender and partial withdrawals from the Policy are treated as ordinary income subject to tax up to the amount equal to the excess (if any) of the Policy value immediately before the distribution over the investment in the Policy (described below) at such time. Second, loans taken from, or secured by, such a Policy are treated as distributions from the Policy and taxed accordingly. Past due loan interest that is added to the loan amount will be treated as a loan. Third, a 10 percent additional income tax is imposed on the portion of any distribution from, or loan taken from or secured by, the Policy that is included in income except where the distribution or loan is made on or after the owner attains age 59 1/2, is attributable to the owner becoming disabled (as determined under the Code), or is part of a series of substantially equal periodic payments for the life (or life expectancy) of the owner or the joint lives (or joint life expectancies) of the owner and the owner’s beneficiary.
If a Policy becomes a modified endowment contract, distributions that occur during the Policy year will be taxed as distributions from a modified endowment contract. In addition, distributions from a Policy within two years before it becomes a modified endowment contract may be taxed in this manner. This means that a distribution made from a Policy that is not a modified endowment contract could later become taxable as a distribution from a modified endowment contract.
Distributions from Policies Not Classified as Modified Endowment Contracts
Distributions from a Policy that is not classified as a modified endowment contract, are generally treated as first recovering the investment in the Policy (described below) and then, only after the return of all such investment in the Policy, as distributions of taxable income. Amounts borrowed under the Policy also are not generally subject to federal income tax at the time of the borrowing. An exception to this general rule occurs in the case of a decrease in the Policy’s death benefit or any other change that reduces benefits under the Policy in the first 15 years after the Policy is issued and that results in a cash distribution to the owner in order for the Policy to continue complying with the Section 7702 definitional limits. The application of these rules may vary depending on whether the change occurs in the first five years after the Policy is issued. Such a cash distribution may be taxed in whole or in part as ordinary income (to the extent of any gain in the Policy) under rules prescribed in Section 7702.
Finally, neither distributions (including distributions upon surrender) nor loans from, or secured by, the Policy that is not classified as a modified endowment contract are subject to the 10 percent additional tax.
Policy Loan Interest
Generally, personal interest paid on a loan under the Policy which is owned by an individual is not deductible. In addition, interest on any loan under the Policy owned by a taxpayer and covering the life of any individual will generally not be tax deductible. The deduction of interest on Policy loans may also be subject to the restrictions of Section 264 of the Code. An owner should consult a competent tax adviser before deducting any interest paid in respect of a Policy loan.
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Investment in the Policy
Investment in the Policy means: (i) the aggregate amount of any premiums or other consideration paid for the Policy, minus (ii) the aggregate amount received under the Policy which is excluded from gross income of the owner (except that the amount of any loan from, or secured by, the Policy that is a modified endowment contract, to the extent such amount is excluded from gross income, will be disregarded), plus (iii) the amount of any loan from, or secured by, the Policy that is a modified endowment contract to the extent that such amount is included in the gross income of the owner.
Withholding
To the extent that Policy distributions are taxable, they are generally subject to withholding for the recipient’s federal income tax liability. Recipients can generally elect, however, not to have tax withheld from distributions.
Business Uses of Policy
Businesses can use the Policies in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, tax exempt and nonexempt welfare benefit plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances. If you are purchasing the Policy for any arrangement the value of which depends in part on its tax consequences, you should consult a competent tax adviser.
Non-Individual Owners and Business Beneficiaries of Policies
If a Policy is owned or held by a corporation, trust or other entity that is not a natural person, this could jeopardize some or all of such entity’s interest deduction under Code Section 264, even where such entity’s indebtedness is in no way connected to the Policy. In addition, under Section 264(f)(5), if a business (other than a sole proprietorship) is directly or indirectly a beneficiary of a Policy, the Policy could be treated as held by the business for purposes of the Section 264(f) entity-holder rules. A competent tax adviser should be consulted before any non-natural person is made an owner or holder of a Policy, or before a business (other than a sole proprietorship) is made a beneficiary of a Policy.
Employer-Owned Life Insurance Policies
Pursuant to section 101(j) of the Code, unless certain eligibility, notice and consent requirements are satisfied, the amount excludible as a death benefit payment under an employer-owned life insurance policy will generally be limited to the premiums paid for such policy (although certain exceptions may apply in specific circumstances). An employer-owned life insurance policy is a life insurance policy owned by an employer that insures an employee of the employer and where the employer is a direct or indirect beneficiary under such policy. It is the employer’s responsibility to verify the eligibility of the intended Insured under employer-owned life insurance policies and to provide the notices and obtain the consents required by section 101(j). These requirements generally apply to employer-owned life insurance policies issued or materially modified after August 17, 2006. A competent tax adviser should be consulted by anyone considering the purchase of an employer-owned life insurance policy.
Split-Dollar Arrangements
The IRS and the Treasury Department have issued guidance that substantially affects split-dollar arrangements. Consult a competent tax adviser before entering into or paying additional premiums with respect to such arrangements.
Additionally, the Sarbanes-Oxley Act of 2002 prohibits, with limited exceptions, publicly-traded companies, including non-U.S. companies that have securities listed on exchanges in the United States, from extending, directly or through a subsidiary, many types of personal loans to their directors or executive officers. It is possible that this prohibition may be interpreted as applying to split-dollar life insurance policies for directors and executive officers of such companies, since such insurance arguably can be viewed as involving a loan from the employer for at least some purposes.
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The prohibition on loans is generally effective as of July 30, 2002. Any affected business contemplating the payment of a premium on an existing Policy, or the purchase of a new Policy, in connection with a split-dollar life insurance arrangement should consult legal counsel.
Tax Shelter Regulations
Prospective owners that are corporations should consult a competent tax adviser about the treatment of the Policy under the Treasury Regulations applicable to corporate tax shelters.
Tax Consequences of the Option to Extend the Maturity Date
The option to extend the Maturity Date that we offer allows the Policy owner to extend the original maturity date by 20 years. An extension of maturity could have adverse tax consequences. Before you exercise your rights under this option, you should consult with a competent tax adviser regarding the possible tax consequences of an extension of maturity.
Disposition of the Policy
The disposition of your Policy will likely have federal income tax consequences. The amount and character of any gain or income recognized in connection with a disposition may vary, depending on the nature of the disposition, your investment in the contract, premiums paid, and other factors. You should consult a competent tax adviser prior to any disposition.
Income payments from Net Cash Surrender Value or Death Benefit Proceeds
Your Policy contains provisions that allow for all or a portion of the net cash surrender value or death benefit to be paid in a series of installments. In addition, certain policies may have optional Riders that provide for installment benefits. These installments may be for a certain period of time, or may be payable based upon the life of one or more individuals.
Under the rules of Section 72 of the Code, each payment made will be comprised of two portions: A portion representing a return of the investment in the contract, and the remainder representing interest. The Exclusion Ratio as defined in Section 72(b) is used to determine what amount of each payment is excluded from tax reporting.
The calculation of the Exclusion ratio is based upon these two Policy values as of the date the amount of the installment payment is being determined:
• | The portion of the net cash surrender value or death benefit proceeds being applied to the installment benefit |
• | The investment in the contract. |
The portion of each payment that is treated as a return of the investment in the contract is equal to the Exclusion Ratio multiplied by the payment amount. For installment payments that are based upon the life of one or more individuals, once the investment in the contract has been depleted any subsequent payment(s) would be treated as a return of interest and thus fully taxable.
Certain Information Reporting
Code section 6050Y requires information reporting for certain life insurance policy transactions. A return must be filed by every person who acquires a life insurance contract or any interest in a life insurance contract in a reportable policy sale. A reportable policy sale is generally the acquisition of an interest in a life insurance contract, directly or indirectly, if the acquirer has no substantial family, business, or financial relationship with the insured. The buyer must file the return required under Section 6050Y with the IRS and furnish copies of the return to the insurance company that issued the contract and the seller.
Other Tax Considerations
The transfer of the Policy or the designation of a beneficiary may have federal, state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate and generation-skipping transfer taxes. For example, the transfer of the Policy to, or the designation as beneficiary of, or the payment of proceeds to, a person who is assigned to a generation which is two or more generations below the generation of the owner, may have generation skipping transfer tax considerations under Section 2601 of the Code.
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A 3.8% Medicare contribution tax generally applies to all or a portion of the net investment income of a taxpayer who is an individual and not a nonresident alien for federal income tax purposes and who has adjusted gross income (subject to certain adjustments) that exceeds a threshold amount ($250,000 if married filing jointly or if considered a “surviving spouse” for federal income tax purposes, $125,000 if married filing separately, and $200,000 in other cases). For these purposes, amounts received under annuities or life insurance contracts that are includable in gross income are generally considered net investment income.
The individual situation of each owner or beneficiary will determine the extent, if any, to which federal, state and local transfer taxes may be imposed. Consult with a competent tax adviser for specific information in connection with these taxes.
Life Insurance Purchases by Residents of Puerto Rico
In Rev. Rul. 2004-75, 2004-31 I.R.B. 109, the Internal Revenue Service announced that income received by residents of Puerto Rico under life insurance contracts issued by a Puerto Rico branch of a United States life insurance company is U.S.-source income that is generally subject to United States Federal income tax.
Life Insurance Purchases by Nonresident Aliens and Foreign Corporations
Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from life insurance policies at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser’s country of citizenship or residence. Prospective purchasers that are not U.S. citizens or residents are advised to consult with a competent tax adviser regarding U.S. and foreign taxation with respect to a life insurance policy purchase.
Possible Tax Law Changes
The foregoing is a summary of the federal income (and, where noted, non-income) tax considerations associated with the Policy and does not purport to cover all possible situations. The summary is based on our understanding of the present federal income tax laws as they are currently interpreted by the IRS. The summary is not intended as tax advice. No representation is made as to the likelihood of continuation of the present federal income tax laws or of the current interpretations by the IRS. Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the Policy could change by legislation or otherwise. Consult a competent tax adviser with respect to legislative developments and their effect on the Policy.
Our Income Taxes
We currently make no charge against Policy values to pay federal income taxes on investment gains.
However, we reserve the right to do so in the event there is a change in the tax laws. We currently do not expect that any such charge will be necessary.
Under current laws, we may incur state and local taxes (in addition to premium taxes) in several states. At present, these taxes are not significant. If there is a material change in applicable state or local tax laws, we reserve the right to make such deductions for such taxes.
SALE OF THE POLICY
Hornor, Townsend & Kent, LLC (“HTK”), a wholly-owned subsidiary of Penn Mutual Life Insurance Company, acts as a principal underwriter of the Policies on a continuous basis. HTK, located at 600 Dresher Road, Horsham, Pennsylvania 19044, was organized as a Pennsylvania corporation on March 13, 1969. The
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offering is on a continuous basis. HTK also acts as principal underwriter for (1) Penn Mutual Variable Annuity Account III, a separate account established by Penn Mutual Life Insurance Company; for (2) Penn Mutual Variable Life Account I, also a separate account established by Penn Mutual Life Insurance Company; and for (3) PIA Variable Annuity Account I, a separate account established by The Penn Insurance and Annuity Company. HTK is a registered broker-dealer under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority.
The Survivorship Protection VUL Policy is newly offered and therefore HTK did not receive any compensation for its services related to the Policy during the last three fiscal years.
PERFORMANCE INFORMATION
We may provide performance information for the investment funds offered as investment options under the Policy. The performance information for the funds does not reflect expenses that apply to the Separate Account or the Policy. Inclusion of these charges would reduce the performance information.
EXPERTS
The financial statements of the Company (i) as of December 31, 2022 and for each of the two years in the period ended December 31, 2022 and (ii) as of December 31, 2020 and for each of the two years in the period ended December 31, 2020; and the financial statements of the Separate Account as of December 31, 2022 and for the periods indicated, included in this SAI constituting part of this Registration Statement, have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP’s principal business address is at 2001 Market Street, Suite 1800, Philadelphia, Pennsylvania 19103.
FINANCIAL STATEMENTS
The financial statements of the Company and the Separate Account are incorporated by reference to the financial statements included in the Form N-VPFS filed on April 25, 2023. The financial statements of the Company should be distinguished from any financial statements of the Separate Account and should be considered only as bearing upon the Company’s ability to meet its obligations under the Policy.
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Part C
Other Information
Item 30: Exhibits
Item 31: Directors and Officers of the Depositor
The following table sets forth the names of the executive officers of The Penn Insurance and Annuity Company and the officers and trustees of The Penn Insurance and Annuity Company who are engaged directly or indirectly in activities relating to the Separate Account or the Policies offered by the Separate Account. Unless otherwise noted, the principal business address of each of the officers is The Penn Mutual Life Insurance Company, Horsham, Pennsylvania 19044.
Name and Principal Business Address |
Position and Offices with Depositor | |
David M. O’Malley | Director and Chief Executive Officer | |
Thomas M. Harris | Director and President | |
Rick Klenk | Director, Chief Financial Officer of Life and Annuities | |
Karthick Dalawai | Director and Chief Risk Officer | |
Victoria M. Robinson | Director, Secretary and Chief Ethics and Compliance Officer | |
David M. Raszeja | Director | |
Ann-Marie Mason | Chief Legal Officer |
Item 32: Persons Controlled By or Under Common Control with the Depositor or Registrant
The Penn Insurance and Annuity Company established PIA Variable Life Account I as a separate investment account under Delaware law on March 10, 2021. The Penn Insurance and Annuity Company is a wholly-owned subsidiary of Penn Mutual Life Insurance Company.
Penn Mutual Life Insurance Company’s Wholly-Owned Subsidiaries as of July 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
The Penn Insurance and Annuity Company | Life Insurance and Annuities | Delaware | ||
Penn Mutual Asset Management, LLC | Investment Adviser | Pennsylvania | ||
Penn Series Funds, Inc. | Investment Company | Maryland | ||
Penn Mutual Payroll Administration, LLC | Payroll | Pennsylvania | ||
Independence Square Properties, LLC | Holding Company | Delaware | ||
Hornor, Townsend & Kent, LLC | Registered Broker-Dealer and Investment Adviser | Pennsylvania | ||
Vantis Life Insurance Company | Life Insurance | Connecticut | ||
The Penn Insurance and Annuity Company of New York (a NY Corporation) | Life Insurance | New York | ||
ILS Holdings, LLC | Holding Company | Delaware | ||
1847 Insurance Captive, LLC | Captive Insurance | Delaware | ||
myWorth, LLC | Financial Planning | Pennsylvania |
The Penn Insurance and Annuity Company Wholly-Owned Subsidiaries as of July 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
PIA Reinsurance Company of Delaware I | Reinsurance | Delaware | ||
Dresher Run I, LLC | Holding Company | Delaware |
Vantis Life Insurance Company Wholly-Owned Subsidiary as of July 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
The Savings Bank Life Insurance Company Agency, LLC | Life Insurance | Connecticut |
Independence Square Properties, LLC Wholly-Owned Subsidiaries as of July 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
Janney Montgomery Scott LLC | Registered Broker-Dealer and Investment Adviser | Delaware |
Janney Montgomery Scott LLC Wholly-Owned Subsidiaries as of July 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
JMS Resources, Inc. | Investments | Pennsylvania | ||
Janney Capital Management, LLC | Investments | Delaware | ||
Janney Trust Company, LLC | Trust Company | New Hampshire |
JMS Resources, Inc. Wholly-Owned Subsidiary as of July 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
Janney Private Equity Company, Inc. | Investments | Delaware |
Hornor, Townsend & Kent, LLC Wholly-Owned Subsidiary as of July 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
HTK Insurance Agency, LLC | Insurance Agents or Brokers | Pennsylvania |
All subsidiaries listed above are included in the Registrant’s consolidated financial statements.
Item 33. Indemnification
Article IV of the By-Laws of The Penn Insurance and Annuity Company provides that, in accordance with the provisions of the Section, the Company shall indemnify trustees and officers against expenses (including attorneys’ fees), judgments, fines, excise taxes and amounts paid in settlement actually incurred in connection with actions, suits and proceedings, to the extent such indemnification is not prohibited by law, and may provide other indemnification to the extent not prohibited by law. The By-Laws are included as exhibit f(2) hereto.
Pennsylvania law (15 Pa. C.S.A. §§ 1741-1750) authorizes Pennsylvania corporations to provide indemnification to directors, officers and other persons. Penn Mutual Life Insurance Company owns a directors and officers liability insurance policy covering liabilities that trustees and officers of Penn Mutual Life Insurance Company and its subsidiaries may incur in acting as trustees and officers. The Penn Insurance and Annuity Company is a wholly- owned subsidiary of the Penn Mutual Life Insurance Company.
Insofar as indemnification for liability arising under the Securities Act of 1933 (the “1933 Act”) may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 34. Principal Underwriters
Hornor, Townsend & Kent, LLC serves as principal underwriters of the securities of the Registrant. Hornor, Townsend & Kent, LLC also serves as distributor of variable annuity and variable life policies issued through Penn Mutual Variable Annuity Account III and Penn Mutual Variable Life Account I.
Hornor, Townsend & Kent, LLC — Board of Managers and Officers*
| ||
David M. O’Malley | Manager and Chairman of the Board | |
Aaron J. Gordon | Manager President | |
Thomas H. Harris | Manager | |
Karthick Dalawai | Manager | |
Victoria M. Robinson | Manager and Chief Compliance Officer | |
Keith G. Huckerby | Manager | |
Cristina M. Leder | Treasurer and Financial Operations Principal | |
Ann-Marie Mason | Chief Legal Officer and Corporate Secretary | |
Tiffany MacLean | Anti-Money Laundering Officer | |
Jessica F. Swarr | Assistant Vice President Corporate Tax |
* | The principal business address of the managers and officers is The Penn Mutual Life Insurance Company, Horsham, Pennsylvania 19044. |
Commissions and Other Compensation Received by Each Principal Underwriter during the last Fiscal Year:
Name of Principal Underwriter |
Net Underwriting Discounts and Commissions |
Compensation on Redemption |
Brokerage Commissions |
Other Compensation |
||||||||||||
Hornor, Townsend & Kent, LLC |
$ | 14.96 | $ | 0 | $ | 0 | $ | 0 |
Item 35. Location of Accounts and Records
The name and address of the person who maintains physical possession of each account, book or other documents required by Section 31(a) of the Investment Company Act of 1940, as amended, is as follows:
The Penn Mutual Life Insurance Company
600 Dresher Road
Horsham, Pennsylvania 19044
Item 36. Management Services
Not applicable.
Item 37. Fee Representation
The Penn Insurance and Annuity Company represents that the fees and charges deducted under the Policies, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the Company.
Signatures
As required by the Securities Act of 1933, as amended (the “1933 Act”), and the Investment Company Act of 1940, as amended (the “1940 Act”), the Registrant has duly caused this Pre-Effective Amendment to the Registration Statement on Form N-6 to be signed on its behalf, by the undersigned, thereunto duly authorized in the city of Horsham and state of Pennsylvania on this 25th day of August, 2023.
PIA VARIABLE LIFE ACCOUNT I | ||
(Registrant) | ||
By: | /s/ David M. O’Malley* | |
Director and Chief Executive Officer | ||
THE PENN INSURANCE AND ANNUITY COMPANY | ||
(Depositor) | ||
By: | /s/ David M. O’Malley* | |
Director and Chief Executive Officer |
As required by the 1933 Act, this Pre-Effective Amendment to the Registration Statement on Form N-6 has been signed below by the following persons, in the capacities indicated, and on the date indicated
Signature |
Title |
Date | ||
/s/ David M. O’Malley* |
Director and Chief Executive Officer | 8/25/2023 | ||
David M. O’Malley | ||||
/s/ David M. Raszeja* |
Director (Controller) | 8/25/2023 | ||
David M. Raszeja | ||||
/s/ Victoria Robinson* |
Director and Secretary | 8/25/2023 | ||
Victoria Robinson | ||||
/s/ Thomas H. Harris* |
Director and President | 8/25/2023 | ||
Thomas H. Harris | ||||
/s/ Karthick Dalawai* |
Director and Chief Risk Officer | 8/25/2023 | ||
Karthick Dalawai | ||||
/s/ Rick Klenk* |
Director and Chief Financial Officer of Life and Annuities | 8/25/2023 | ||
Rick Klenk |
*BY: | /s/ Ann-Marie Mason | |
Ann-Marie Mason | ||
Attorney-in-Fact |
Exhibit Index
The Penn Insurance & Annuity CompanyAction of Directors without a MeetingResolution PIA Variable Life Account I (a Separate Account)
THE PENN INSURANCE AND ANNUITY COMPANY
ACTION OF DIRECTORS WITHOUT A MEETING
August 1, 2023
Resolution PIA Variable Life Account I
(a Separate Account)
The undersigned, being all of the Directors of The Penn Insurance and Annuity Company (Company), a Delaware Corporation, acting pursuant to Section 141 of Title 8 of the Delaware Code, hereby, through executing counterparts, adopt the following resolutions with the same effect as if they had been adopted at a duly held meeting of the Board of Directors of the Company, and hereby consent to the taking of the action referred to in such resolution:
WHEREAS, The Penn Insurance and Annuity Company (the Company) established PIA Variable Life Account I by Action Of the Directors without a meeting on March 10, 2021 thereby establishing, pursuant to Section 2932 of the Delaware Insurance Code, as amended, a separate account, designated PIA Variable Life Account I (the Separate Account);
WHEREAS, it was resolved, that the Separate Account shall be used for receipt of amounts allocated to it in accordance with the terms of variable life insurance policies. Amounts allocated to the Separate Account provide for life insurance, the amount or duration of which varies according to the investment experience of the Separate Account.
RESOLVED, That the Separate Account shall be divided into investment subaccounts, each investment subaccount in the Separate Account shall invest in the shares of a mutual fund portfolio designated on the Policy specifications page of the Policy and that net premiums under the Policies shall be allocated to the eligible portfolios in accordance with instructions received from owners of the Policies; and
RESOLVED FURTHER, That the Board of Directors expressly reserves the right to add or remove any investment subaccount of the Separate Account or substitute one designated mutual fund for another as it may hereafter deem necessary or appropriate.
The Penn Insurance & Annuity CompanyAction of Directors without a MeetingResolution PIA Variable Life Account I (a Separate Account)
RESOLVED FURTHER, the officers of the Company are hereby authorized to take all action necessary to: (a) register the Separate Account as a unit investment trust under the Investment Company Act of 1940; (b) register the variable life insurance policies under the Securities Act of 1933 in such amounts as the officers of the Company shall from time to time deem appropriate; (c) apply for such exemptions from, and other orders pursuant to, the Investment Company Act of 1940, as the officers of the Company shall deem necessary or desirable for the Separate Account; and (d) take all other action necessary or desirable to comply with the Investment Company Act of 1940, the Securities Exchange Act of 1934, the Securities Exchange Act of 1933 and all other applicable state and federal laws In connection with the offering of the variable life insurance policies and the operation of the Separate Account.
The Penn Insurance and Annuity Company
Insureds: WILLIAM PENN | $200,000 Specified Amount | |||
HANNAH PENN |
Level Death Benefit Option | |||
Policy Number: 8888888 | Policy Date: January 1, 2023 | |||
Date of Issue: January 1, 2023 |
The Penn Insurance and Annuity Company agrees, subject to the provisions of this Policy, to pay the Death Benefit to the Beneficiary of the last insured to die upon receipt of due proof of the death of both Insureds while this Policy is in force. The Penn Insurance and Annuity Company also agrees to provide all of the other benefits stated in this Policy.
This contract is made in consideration of the payment of premiums as provided in this Policy. The provisions on this and the following pages are part of this Policy.
Executed on the Date of Issue by The Penn Insurance and Annuity Company.
Ann-Marie Mason | Thomas H. Harris | |
Chief Legal Officer | President |
THE DEATH BENEFIT AND DURATION OF COVERAGE MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THE POLICYS ACCUMULATION VALUE IN THE SEPARATE ACCOUNT MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF THAT ACCOUNT. THE POLICY VALUE IS NOT GUARANTEED.
FREE LOOK PERIOD - This Policy may be canceled by returning it within 10 days after it is received by the policy owner. If this Policy is a Replacement Policy it may be canceled by returning it within 30 days after it is received by the policy owner. In either situation, it must be returned to The Penn Insurance and Annuity Company or to the agent through whom it was purchased. This Policy will then be considered void as of its inception. The Net Policy Value, Premium Charge and the Monthly Deductions will be refunded. READ YOUR POLICY CAREFULLY. This Policy is a legal contract between the Owner and The Penn Insurance and Annuity Company.
Last Survivor Flexible Premium Variable Life Insurance Policy
Death Benefit payable on death of last Insured to die prior to the Maturity Date Maturity Benefit payable on Maturity Date Variable Policy Value Flexible premiums payable until Maturity Date Non-Participating Supplemental riders, if any, listed in Section 1 |
The Penn Insurance and Annuity Company, Wilmington, DE | www.pennmutual.com | (800) 523-0650
Mailing Address: The Penn Insurance and Annuity Company, Philadelphia, PA 19172
ICC23-PI-SVFL
Guide to Policy Sections
1. Policy Specifications 2. Endorsements 3. Qualification as Life Insurance 4. Premiums 5. Lapse and Reinstatement 6. Basis of Computation of Values 7. Death and Maturity Benefits |
8. Policy Loans 9. Surrender of Policy 10. Policy Changes 11. Owner and Beneficiary 12. General Provisions 13. Income Payment Options | |
Additional Policy Specifications, any supplemental riders and a copy of the application follow Section 13. |
ICC23-PI-SVFL | Page 2 |
1. Policy Specifications
Insureds: A. WILLIAM PENN |
Important Dates | |
B. HANNAH PENN |
Policy Date: January 1, 2023 | |
Date of Issue: January 1, 2023 | ||
Policy Number: 8888888 | Maturity Date: January 1, 2109 * | |
Specified Amount: $200,000.00 | ||
Your State Insurance Department contact: | ||
Age: A. 35 |
Pennsylvania Department of Insurance | |
B. 35 |
1326 Strawberry Square | |
Sex: A. Male |
Harrisburg, PA 17120 | |
B. Female |
(717) 787-2317 | |
Rate Class: A. Standard Non-Tobacco |
||
B. Standard Non-Tobacco |
Life Insurance Qualification Test: Cash Value
Accumulation
Death Benefit Option: Level
Issue State: PA
* | This Policy may not mature even if planned premiums are paid due to the fact that the current cost of insurance and interest rates are not guaranteed, Policy Values may increase or decrease in accordance with the investment performance of the funds in the Separate Account, the current expense loads of the funds in the Separate Account may change, policy loans and partial withdrawals may be taken, and there may be requested changes to the Specified Amount. Even if coverage does continue to the Maturity Date, there could be little or no Cash Surrender Value on the Maturity Date. |
Surrender Charges
Policy Year |
Surrender Charges | |||
1 |
$ | 2,475.42 | ||
2 |
$ | 2,401.16 | ||
3 |
$ | 2,351.65 | ||
4 |
$ | 2,277.39 | ||
5 |
$ | 2,104.11 | ||
6 |
$ | 1,980.34 | ||
7 |
$ | 1,807.06 | ||
8 |
$ | 1,658.53 | ||
9 |
$ | 1,510.01 | ||
10 |
$ | 1,361.48 |
ICC23-PI-SVFL | Page 3.1 |
11 |
$ | 1,237.71 | ||
12 |
$ | 1,113.94 | ||
13 |
$ | 940.66 | ||
14 |
$ | 594.10 | ||
15 |
$ | 247.54 | ||
16 and later |
$ | 0.00 |
Riders
The following riders are included on this Policy. Additional Information summarizes values for some riders - on other riders this column will be blank.
See rider pages for full details of each rider.
Rider Name |
Additional Information | |||
No-Lapse Guarantee | No-Lapse Guarantee | See Additional Policy | ||
Requirements: | Specifications |
Premiums
Planned Initial Premium |
$ | 1,107.28 | ||
Planned Payment Frequency |
Annual |
Separate Account: PIA Variable Life Account I
Eligible investment funds are listed in the Additional Policy Specifications
Initial Premium Allocation
Account |
% of Premium |
|||
Total Stock Market Index Portfolio |
100 | % |
Expense Charges
Maximum percent of premium charge |
10 | % | ||
Maximum monthly per policy expense charge in Year 1 |
$ | 50.00 | ||
Maximum monthly per policy expense charge in Years 2 and later |
$ | 15.00 | ||
Maximum monthly expense charge per $1,000 of initial Specified Amount |
$ | 0.400 | ||
Maximum monthly Mortality and Expense Risk Asset Charge as percent of market value in the Separate Account |
1.25 | % |
ICC23-PI-SVFL | Page 3.2 |
Guaranteed Cost of Insurance Charges
The maximum Cost of Insurance Rates are based on: | 2017 Commissioners Standard Ordinary Male/ Female, Smoker/ Nonsmoker Ultimate Mortality Table, Age Nearest Birthday |
Interest Rates
Traditional Fixed Account Guaranteed Minimum Interest Rate | 1% Annual Rate 0.08295% Monthly Rate | |
Short-Term Fixed Account Guaranteed Minimum Interest Rate | 0.5% Annual Rate 0.04157% Monthly Rate | |
Death Benefit Discount Factor | 1.0008295 | |
Loan Value Percentage | 95.00% | |
Policy Loan Account Rates | 6% in all years | |
Maximum Net Cost of the Loan | 1% policy years 1-10 0.50% policy years 11 and after |
Minimums
Minimum Premium Payment |
$ | 25.00 | ||
Minimum Allocation to the Dollar Cost Averaging Account |
$ | 600.00 | ||
Minimum Transfer from the Dollar Cost Averaging Account |
$ | 25.00 | ||
Minimum Allocation Amount |
$ | 25.00 | ||
Minimum Transfer Amount |
$ | 25.00 | ||
Minimum Specified Amount |
$ | 200,000.00 | ||
Minimum Specified Amount Change |
$ | 10,000.00 | ||
Minimum Partial Withdrawal |
$ | 250.00 | ||
Minimum Loan Amount |
$ | 250.00 | ||
Minimum Amount to Apply for Income Payment Option |
$ | 5,000.00 | ||
Minimum Income Payment |
$ | 50.00 | ||
Minimum Total of Income Option 3 Payments |
$ | 75.00 |
ICC23-PI-SVFL | Page 3.3 |
Fees
Separate Account Transfer charge |
$ | 10.00 | ||
Partial Withdrawal processing fee percentage |
2 | % | ||
Partial Withdrawal processing fee dollar amount |
$ | 25.00 | ||
Maximum Fee for Projection of Benefits and Values |
$ | 25.00 |
Guaranteed Income Payment Rates
The interest rate used to compute the Guaranteed Income Payment Rates of this Policy is 1.0%.
The mortality table used to compute the Guaranteed Income Payment Rates of this Policy is the 2012 Individual Annuity Reserve table.
Important Notices
The Owner and Beneficiary are as provided in the application or as amended.
Your annual statement will include important notices on when Your Policy may lapse based on interest rates, expenses, cost of insurance rates and premium payments.
Insurance will terminate if the premiums paid and the interest credited are insufficient to cover the Monthly Deductions, except as provided in Section 4.
Section 7702A of the Internal Revenue Code of 1986 establishes a class of life insurance contracts designated as Modified Endowment Contract. The rules relating to whether a policy will be treated as a Modified Endowment Contract are extremely complex. Please consult a qualified tax advisor regarding your own personal situation.
ICC23-PI-SVFL | Page 3.4 |
2. Endorsements
This Policy has been issued without endorsements.
ICC23-PI-SVFL | Page 4 |
In this Policy, We, Us, or Our means The Penn Insurance and Annuity Company; You and Your means the Owner of the Policy; and Insured means a person whose life is covered under the Policy.
3. Qualification as Life Insurance
The life insurance qualification test for this Policy will be the Cash Value Accumulation Test unless otherwise elected in the application. The Life Insurance Qualification Test for this Policy is shown in Section 1. The test may not be changed at any time after the Policy is issued.
We may limit premium payments as necessary in order to qualify the Policy as a life insurance contract under Section 7702 of the Internal Revenue Code of 1986, as amended, or as set forth in any applicable successor thereto (Section 7702). No payment will be returned or refused if it is necessary to continue coverage, but the premium allotted to the Policy may be reduced and the balance returned.
Cash Value Accumulation Test Under this test, a minimum margin must exist between the Death Benefit and the Policy Value in order to qualify the Policy as a life insurance contract under Section 7702. The Basic Death Benefit will be adjusted accordingly with factors shown in the Table of Death Benefit Factors to satisfy the requirements of this test. See the Death and Maturity Benefits Section for further details.
Guideline Premium Test Under this test, the amount of premium that can be paid in a policy year may not exceed the Maximum Premium Limit. The limit for a policy year is the largest amount of premium which can be paid in that policy year such that the sum of the premiums paid will not at any time exceed the guideline premium limitation. The limitation is referred to in Section 7702. The Maximum Premium Limit for the following policy year will be shown on the Annual Report. In addition, a minimum margin must exist between the Death Benefit and the Policy Value. The margin is defined in Section 7702 and is based on the attained age of the younger Insured. The Basic Death Benefit will be adjusted accordingly with factors shown in the Table of Death Benefit Factors to satisfy the requirements of this test. See the Death and Maturity Benefits Section for further details.
4. Premiums
Payment of Premiums The Planned Initial Premium is the amount You intend to pay and the Planned Payment Frequency is the frequency You intend to pay this amount. These are shown in Section 1. Premiums are payable while this Policy is in force until the Maturity Date. The first premium is due at the time Your Policy is delivered. Any due and unpaid Monthly Deductions between the Policy Date and the date We receive the first premium will be subtracted from the Policy Value when the first premium is received. Premiums after the first premium may be paid in any amount and at any interval subject to the following conditions
(a) | No premium payment may be less than the minimum as shown in Section 1. |
(b) | We require submission of evidence of insurability on subsequent premiums that cause an immediate increase in the difference between the Death Benefit and the Policy Value. The increase will be incontestable with respect to statements about the surviving Insured made in the evidence of insurability for that increase after the increase has been in force during the life of that Insured for two years from its effective date. Any application for such increase will be attached to and made a part of the Policy. See Incontestability provision for further details. |
(c) | If the Guideline Premium Test is in effect, total premiums paid in any policy year may not exceed the Maximum Premium Limit for that policy year. If excessive premium is paid We are authorized to refund only the portion that is over the limit. No payment will be returned or refused if it is necessary to continue coverage, but the premium allotted to the Policy may be reduced as required and the balance returned. |
ICC23-PI-SVFL | Page 5 |
Each premium after the first premium is payable at Our Home Office. A receipt signed by the President or the Secretary will be given on request. If a loan is outstanding, deposits not designated as loan repayment will be applied as premium payments.
Premium Charge Each premium payment will be reduced by a percent of premium charge. The percent of premium charge will be set by the Company as described in the Determination of Nonguaranteed Factors provision. In no event will the percent of premium charge assessed on each premium paid be greater than that shown in Section 1.
Net Premium Net premium is the amount of any premium payment reduced by the percent of premium charge.
Allocation Date The later of the Policy Date or the date We receive the first premium at Our Home Office.
Allocation of Net Premiums The initial net premium, and any additional premium paid before the Policy is issued, will be allocated based on the Initial Premium Allocation specified in Section 1. On the Allocation Date, the assets will be allocated to the subaccounts of the Separate Account, to the Short-Term Fixed Account, to the Traditional Fixed Account or to the Fixed Dollar Cost Averaging Account as directed by You in the application for this Policy. Subject to, and in accordance with, the provisions of this Policy, subsequent net premiums will be allocated as directed by You to the subaccounts of the Separate Account, the Short-Term Fixed Account, the Traditional Fixed Account and the Fixed Dollar Cost Averaging Account set forth in the Additional Policy Specifications. You may change the allocation of future premium payments at any time. Contact Us for information. Allocations must be in whole number percentages and must total 100% of premium.
Continuation of Insurance If all premium payments cease, this Policy will continue, subject to the Grace Period provision, for as long as the values in this Policy are sufficient to keep it in force. The Policy will continue in accordance with the provisions of this Policy and any supplemental riders attached to this Policy.
Grace Period If, on a Monthly Anniversary prior to the Maturity Date shown in Section 1 the Net Cash Surrender Value is insufficient to cover the Monthly Deduction for the following policy month, a Grace Period of 61 days will be allowed for the payment of a premium sufficient to pay the Monthly Deduction for the Grace Period plus two additional months.
We will send notice of the amount of premium required to be paid during the Grace Period to keep this Policy in force to Your last known address and that of any assignee on record. The notice will be sent at least 30 days before the end of the 61-day Grace Period. This Policy will remain in force during the Grace Period.
5. Lapse and Reinstatement
Lapse If a premium sufficient to keep this Policy in force is not paid during the Grace Period, this Policy will lapse at the end of the Grace Period. At lapse this Policy will terminate without value and cease to be in force.
Reinstatement This Policy may be reinstated within five years after lapse. A reinstatement is subject to:
(a) | the submission of evidence of insurability, including but not limited to good health, where such evidence is satisfactory to Us for any Insured alive on the date of lapse; |
(b) | the payment or reinstatement of any Policy Debt which existed at the end of the Grace Period; and |
ICC23-PI-SVFL | Page 6 |
(c) | the payment of a premium sufficient to cover an amount to make the Net Cash Surrender Value positive on the date of reinstatement plus the Monthly Deductions for the two policy months following the reinstatement date. |
The effective date of a reinstatement will be the date of Our approval of the application for reinstatement. Such application will be attached to and made a part of the reinstated Policy. Following reinstatement, the Policy Date continues to be the date shown in Section 1.
The Policy Value on the date of reinstatement is the sum of:
(a) | the Policy Value at the beginning of the Grace Period of lapse, including any Policy Debt; |
(b) | interest on (a) at the Traditional Fixed Account Guaranteed Minimum Interest Rate per year until the date of reinstatement; and |
(c) | the payment made upon reinstatement reduced by the percent of premium charge |
less the sum of:
(a) | the Monthly Deductions for the Grace Period; |
(b) | interest on (a) at the Traditional Fixed Account Guaranteed Minimum Interest Rate per year until the date of reinstatement; and |
(c) | the Monthly Deduction for the policy month following the date of reinstatement. |
The Surrender Charge set forth in the Surrender of Policy Section will continue to apply to any surrender of this Policy following reinstatement. The Surrender Charge will be calculated based on the Policy Date and will include the period while the Policy was lapsed.
6. Basis of Computation of Values
Policy Value On the Policy Date the Policy Value is the premiums paid on or before the Policy Date less the sum of:
(a) | the percent of premium charge; and |
(b) | the Monthly Deduction for the first policy month. |
On each Monthly Anniversary while this Policy is in force, the Policy Value is the sum of:
(a) | the current market value of each subaccount; |
(b) | the value of the Short-Term Fixed Account; |
(c) | the value of the Traditional Fixed Account; |
(d) | the value of the Fixed Dollar Cost Averaging Account; and (e) the value of the Policy Loan Account. |
On any date other than the Policy Date or a Monthly Anniversary, the Policy Value will be determined consistently with the above.
Monthly Deductions will be deducted on the Policy Date and each Monthly Anniversary from the values of the subaccounts of the Separate Account, Short-Term Fixed Account, and Traditional Fixed Account as directed by You. If the values in the directed subaccounts of the Separate Account, Short-Term Fixed Account, and Traditional Fixed Account are insufficient to cover the Monthly Deductions, or if no allocation is directed, Monthly Deductions will be deducted on the Policy Date and each Monthly Anniversary from the subaccounts of the Separate Account, Short-Term Fixed Account, and Traditional Fixed Account on a pro rata basis in proportion to the current market value of each subaccount and the value of the Short-Term Fixed Account and the Traditional Fixed Account. If there is not enough value in these accounts, deductions will be made from the Fixed Dollar Cost Averaging Account.
ICC23-PI-SVFL | Page 7 |
Separate Account The Separate Account named in Section 1 was established by Us for this and other variable life insurance policies. The Separate Account is divided into subaccounts for the investment of assets in shares of the funds specified in the Additional Policy Specifications. Amounts allocated by Us to the Separate Accounts shall be owned by Us, the assets therein shall be the property of Us, and no insurer by reason of such accounts shall be or hold itself out to be a trustee. The assets in a Separate Account shall not be chargeable with liabilities arising out of any other business of Ours.
Income and realized and unrealized gains and losses from the assets held in each subaccount of the Separate Account are credited to or charged against the subaccounts without regard to the income, gains or losses in Our other investment accounts. Shares of a fund held in a subaccount are valued at current net asset value on each business day. Shares of a fund held in a subaccount will be redeemed at current net asset value to make transfers, pay benefits and cover applicable charges and deductions. Any dividend or capital gain distribution from a fund will be reinvested in shares of that fund.
Substitution of Investment If investment in a subaccount should no longer be possible or, in Our judgment, investment in a subaccount becomes inappropriate to the purposes of the Separate Account, be it for legal, regulatory, federal income tax reasons or for any other reason, or if in Our judgment, investment in another subaccount is in the interest of owners of this class of policies, We may substitute another subaccount or insurance company separate account. Substitution may be made with respect to existing investments and the investment of future net premiums. We will obtain any necessary regulatory or other approvals prior to making such a change. We will endorse the Policy as required to reflect any withdrawal or substitutions. Substitute funds may have higher fund expenses than the funds replaced.
Operation of Separate Account The Operation of the Separate Account, including the substitution of investments, will be subject to the approval of the Insurance Department of Our state of domicile. The approval process is on file with the Commissioner.
Variable Accumulation Values At any valuation time, the current market value of a subaccount is determined by multiplying that subaccounts accumulation unit value by the number of subaccount units held under this Policy.
The number of accumulation units related to an allocation is determined by dividing the amount allocated to the subaccount by the subaccounts accumulation unit value for the date when the allocation is made.
The number of subaccount accumulation units will increase when:
(a) | net premiums are allocated to that subaccount; |
(b) | amounts are transferred to that subaccount; and |
(c) | policy loans are repaid and credited to that subaccount. |
The number of subaccount accumulation units will decrease when:
(a) | a portion of the Monthly Deduction is deducted from that subaccount; |
(b) | a policy loan is taken from that subaccount; |
(c) | policy loan interest is not paid when due and the new loan is taken from that subaccount; |
(d) | an amount is transferred, including any transfer charges, from that subaccount; |
(e) | a partial withdrawal, including any charges, is taken from that subaccount; and |
(f) | applicable Surrender Charges are taken from that subaccount. |
ICC23-PI-SVFL | Page 8 |
Valuation Period As used in this Policy, Valuation Period is the interval from one valuation time to the next valuation time. Valuation time is the time as of which each underlying investment company determines the net asset value of its shares. For any valuation time where the New York Stock Exchange (NYSE) is not open for business, the net asset value will be determined at the close of business on the next day that the NYSE is open.
Value of Each Accumulation Unit For each subaccount of the Separate Account, the value was set at $10 when the subaccount was established. The value may increase or decrease from one Valuation Period to the next. For any Valuation Period the value is:
The value of an Accumulation Unit for the prior Valuation Period multiplied by the Net Investment Factor for that subaccount for the current Valuation Period.
Net Investment Factor As used in this Policy, Net Investment Factor is an index used to measure the investment performance of a subaccount from one Valuation Period to the next. For any subaccount, the Net Investment Factor for a Valuation Period is found by dividing (a) by (b), where:
(a) | is the sum of (i) and (ii), where: |
(i) | The net asset value per share of the mutual fund held in the subaccount, as of the end of the Valuation Period; and |
(ii) | The per-share amount of any dividend or capital gain distributions by the mutual fund if the ex-dividend date occurs in the Valuation Period. |
(b) | is the net asset value per share of the mutual fund held in the subaccount as of the end of the prior Valuation Period. |
Separate Account Transfers Subject to, and in accordance with, the provisions of this Policy, at any time after the Allocation Date amounts may be transferred among the subaccounts of the Separate Account, the Short-Term Fixed Account, and the Traditional Fixed Account, provided that:
(a) | the transfer amount is greater than the minimum transfer amount shown in Section 1 or, if less, is the full amount held in the subaccount or the Short-Term Fixed Account or the Traditional Fixed Account; |
(b) | for partial transfers, the amount remaining in a subaccount or the Short-Term Fixed Account or the Traditional Fixed Account must be at least the minimum allocation amount shown in Section 1; and |
(c) | the first 12 transfers per policy year will be allowed free of charge; thereafter, a transfer charge, shown in Section 1, may be deducted from the amount transferred. Transfers made from the Fixed Dollar Cost Averaging Account are not subject to a transfer fee and will not be considered in the 12 transfers per policy year allowance. |
Your right to make transfers under Your Policy is subject to modification if We determine in Our sole discretion that the exercise of that right will disadvantage or potentially hurt the rights or interests of other policy owners. Such restrictions may be applied in any manner reasonably designed to prevent any use of the transfer right, which We consider to be to the actual or potential disadvantage of other policy owners. Any modification may be applied to transfers to or from some or all of the subaccounts of the Separate Account, the Short-Term Fixed Account, and the Traditional Fixed Account and may include, but not be limited to:
(a) | restricting the dollar amount, the number of transfers made during a defined period, and the method used to submit transfers; |
(b) | waiving or reducing any or all of the restrictions, uniformly to all members of the same class of policies, on transfers described in this Policy; |
(c) | revoking any waiver or reduction, uniformly to all members of the same class of policies; and |
(d) | terminating transfer privileges at any time. |
ICC23-PI-SVFL | Page 9 |
The Fixed Account The Fixed Account is comprised of four distinct accounts consisting of the Short-Term Fixed Account, the Traditional Fixed Account, the Policy Loan Account and the Fixed Dollar Cost Averaging Account. Amounts allocated or transferred to any of these accounts under this Policy become part of Our general account assets. Subject to applicable law and regulation, investment of general account assets is at Our sole discretion. The Short-Term and Traditional Fixed Accounts allow for investments outside of the Separate Account. The Short Term-Fixed Account has fewer restrictions on transfers than the Traditional Fixed Account and a lower guaranteed minimum interest rate. Each Fixed Account may have its own unique rate of interest credited. While We expect to credit a higher rate of interest to the Traditional Fixed Account than to the Short-Term Fixed Account, We do not guarantee to do so.
Short-Term Fixed Account Amounts allocated or transferred to the Short-Term Fixed Account will be credited with interest. In no event will the rate of interest credited be less than the Short-Term Fixed Account Guaranteed Minimum Interest Rate listed in Section 1. The declared rate will apply from the date of allocation or transfer through the end of a twelve month period. The twelve month period begins on the first day of the calendar month in which the allocation or transfer is made. Thereafter, interest will be credited on such amount for successive twelve month periods at the rate then applicable to new allocations to the account.
We will determine the interest rates applicable for the Short-Term Fixed Account as described in the Determination of Nonguaranteed Factors provision. Any credited interest above the minimum guaranteed interest is nonforfeitable after crediting except indirectly due to Surrender Charges. Additional amounts, if any, will be credited no less frequently than annually.
Short-Term Fixed Account Value On each Monthly Anniversary while this Policy is in force, the Short-Term Fixed Account Value is the sum of:
(a) | the value of the Short-Term Fixed Account on the previous Monthly Anniversary; |
(b) | one months interest on (a); |
(c) | any premium allocated to the Short-Term Fixed Account since the preceding Monthly Anniversary reduced by the applicable percent of premium charge; |
(d) | any amount transferred into the Short-Term Fixed Account from one or more subaccounts or the Traditional Fixed Account since the preceding Monthly Anniversary; |
(e) | interest on (c) from the date of receipt in the Home Office to the Monthly Anniversary; |
(f) | interest on (d) from the date of transfer into the Short-Term Fixed Account to the Monthly Anniversary; |
(g) | any loan repayments allocated to the Short-Term Fixed Account since the prior Monthly Anniversary; and |
(h) | interest on (g) from the date of receipt in the Home Office to the Monthly Anniversary. |
Less the sum of:
(a) | any partial withdrawal from the Short-Term Fixed Account since the preceding Monthly Anniversary; |
(b) | any amount transferred out of the Short-Term Fixed Account into one or more subaccounts or the Traditional Fixed Account since the preceding Monthly Anniversary; |
(c) | interest on (a) from the date of withdrawal to the Monthly Anniversary; |
(d) | interest on (b) from the date of transfer out of the Short-Term Fixed Account to the Monthly Anniversary; |
(e) | the applicable Monthly Deduction for the following policy month; |
(f) | any policy loan, including loans from unpaid policy loan interest, taken from the Short-Term Fixed Account; |
(g) | interest on (f) from the date of the loan or loan interest deduction to the Monthly Anniversary; and |
(h) | any applicable Surrender Charge taken from the Short-Term Fixed Account. |
ICC23-PI-SVFL | Page 10 |
On dates other than a Monthly Anniversary, the value of the Short-Term Fixed Account will be determined consistently with the above.
Short-Term Fixed Account Transfers Subject to and in accordance with the provisions of this Policy, including the Transfers provision of the Separate Account Section, at any time after the Allocation Date, an amount held in the Short-Term Fixed Account may be transferred to one or more subaccounts or the Traditional Fixed Account.
We reserve the right, in Our sole discretion to add transfer restrictions on the Short-Term Fixed Account.
Traditional Fixed Account Amounts allocated or transferred to the Traditional Fixed Account will be credited with interest. In no event will the rate of interest credited be less than the Traditional Fixed Account Guaranteed Minimum Interest Rate listed in Section 1. The declared rate will apply from the date of allocation or transfer through the end of a twelve month period. The twelve month period begins on the first day of the calendar month in which the allocation or transfer is made. Thereafter, interest will be credited on such amount for successive twelve month periods at the rate then applicable to new allocations to the account.
We will determine the interest rates applicable for the Traditional Fixed Account as described in the Determination of Nonguaranteed Factors provision. Any credited interest above the minimum guaranteed interest is nonforfeitable after crediting except indirectly due to Surrender Charges. Additional amounts, if any, will be credited no less frequently than annually.
Traditional Fixed Account Value On each Monthly Anniversary while this Policy is in force, the Traditional Fixed Account Value is the sum of:
(a) | the value of the Traditional Fixed Account on the previous Monthly Anniversary; |
(b) | one months interest on (a); |
(c) | any premium allocated to the Traditional Fixed Account since the preceding Monthly Anniversary reduced by the applicable percent of premium charge; |
(d) | any amount transferred into the Traditional Fixed Account from one or more subaccounts or the Short-Term Fixed Account since the preceding Monthly Anniversary; |
(e) | interest on (c) from the date of receipt in the Home Office to the Monthly Anniversary; |
(f) | interest on (d) from the date of transfer into the Traditional Fixed Account to the Monthly Anniversary; |
(g) | any loan repayments allocated to the Traditional Fixed Account since the prior Monthly Anniversary; and |
(h) | interest on (g) from the date of receipt in the Home Office to the Monthly Anniversary. |
Less the sum of:
(a) | any partial withdrawal from the Traditional Fixed Account since the preceding Monthly Anniversary; |
(b) | any amount transferred out of the Traditional Fixed Account into one or more subaccounts or the Short-Term Fixed Account since the preceding Monthly Anniversary; |
(c) | interest on (a) from the date of withdrawal to the Monthly Anniversary; |
(d) | interest on (b) from the date of transfer out of the Traditional Fixed Account to the Monthly Anniversary; |
(e) | the applicable Monthly Deduction for the following policy month; |
(f) | any policy loan including loans from unpaid policy loan interest taken from the Traditional Fixed Account; |
(g) | interest on (f) from the date of the loan or loan interest deduction to the Monthly Anniversary; and |
(h) | any applicable Surrender Charge taken from the Traditional Fixed Account. |
ICC23-PI-SVFL | Page 11 |
On dates other than a Monthly Anniversary, the value of the Traditional Fixed Account will be determined consistently with the above.
Traditional Fixed Account Transfers Subject to and in accordance with the provisions of this Policy, including the Transfers provision of the Separate Account Section and the Short-Term Fixed Accounts Section at any time after the Allocation Date, an amount held in the Traditional Fixed Account may be transferred to one or more subaccounts or the Short-Term Fixed Accounts subject to the following restrictions:
(a) | The sum of all transfers in a policy year cannot exceed the greatest of: |
(i) | 25% of the Traditional Fixed Account Value at the previous policy anniversary, |
(ii) | $5,000, and |
(iii) | the total amount transferred from the Traditional Fixed Account in the previous policy year. (b) The amount that may be transferred excludes any amount held in the Policy Loan Account. |
We reserve the right, in Our sole discretion to add or waive the transfer restrictions on the Traditional Fixed Account. Please contact Us or Your agent to determine if a waiver is currently in effect.
Fixed Dollar Cost Averaging Account Premium payments may be allocated to the Fixed Dollar Cost Averaging Account and have a fixed percentage transferred monthly from the account to the subaccounts of the Separate Account, as directed by You, to achieve dollar cost averaging. The available periods under the Fixed Dollar Cost Averaging Account are listed in the Additional Policy Specifications.
Amounts held in the Fixed Dollar Cost Averaging Account will be credited with interest. The declared interest rate will apply from the date of the allocation to the account through the end of the dollar cost averaging period. At the expiration of the period, We will declare a rate not less than the Traditional Fixed Account Guaranteed Minimum Interest Rate for a new period.
We will determine the interest rates applicable for the Fixed Dollar Cost Averaging Account as described in the Determination of Nonguaranteed Factors provision. Any credited interest above the minimum guaranteed interest is nonforfeitable after crediting except indirectly due to Surrender Charges. Additional amounts, if any, will be credited no less frequently than annually.
Premium payments may only be allocated to one of the Fixed Dollar Cost Averaging Accounts in conjunction with an election of the Dollar Cost Averaging program. Once a Fixed Dollar Cost Averaging Account option is selected, an additional Fixed Dollar Cost Averaging Account option cannot be selected.
You can request to terminate the Fixed Dollar Cost Averaging Account. The remaining balance will be transferred to the subaccounts of the Separate Account as directed by You. The minimum amount that can be allocated to the account is shown in Section 1. The minimum transfer amount from the Fixed Dollar Cost Averaging Account is shown in Section 1.
Monthly Deduction The Monthly Deduction is the sum of:
(a) | the Cost of Insurance for the policy month; |
(b) | the monthly per policy expense charge; |
(c) | the monthly expense charge per $1000 of Specified Amount; |
(d) | the Mortality and Expense Risk Asset charge (not applicable for The Fixed Account) applied to the value in the subaccounts as of the dates on which Monthly Deductions are deducted; and |
(e) | the Monthly Deduction for the policy month for any benefits provided by a supplemental rider made a part of this Policy. |
ICC23-PI-SVFL | Page 12 |
Monthly Deductions will be deducted on the Policy Date and on each Monthly Anniversary as described in the Policy Value provision.
The Mortality and Expense Risk Asset charge will be deducted on the Policy Date and each Monthly Anniversary from the subaccounts on a pro rata basis in proportion to the current market value of each subaccount. This charge will not be deducted from the Fixed Accounts.
Net Amount at Risk The Net Amount at Risk is equal to (a) divided by (b), minus (c), where:
(a) | is the Basic Death Benefit at the beginning of the policy month; |
(b) | is the Death Benefit Discount Factor shown in Section 1; and |
(c) | is the Policy Value at the beginning of the policy month before the Monthly Deduction. |
Cost of Insurance The Cost of Insurance is determined on a monthly basis. The total Cost of Insurance for a policy month is calculated as (a) multiplied by (b) where:
(a) | is the applicable Cost of Insurance Rate divided by 1,000; and |
(b) | is the Net Amount at Risk. |
Cost of Insurance Rate The Cost of Insurance Rate is based on policy year and on the issue age, sex (if the Policy is issued on a sex distinct basis) and rate class of each Insured.
We will determine the Cost of Insurance Rate as described in the Determination of Nonguaranteed Factors provision. These rates will not exceed those shown in the Additional Policy Specifications. Such maximum rates are based on the mortality table shown in Section 1.
Expense Charges The Expense Charges include the following:
(a) | the monthly per policy expense charge; |
(b) | the monthly expense charge per $1000 of Specified Amount; |
(c) | the Mortality and Expense Risk Asset Charge; and |
(d) | the percent of premium charge. |
The actual monthly per policy expense charge will be determined as described in the Determination of Nonguaranteed Factors provision. However, these actual expense charges will not exceed the maximum expense charges stated in Section 1.
The monthly expense charge per $1,000 of the initial Specified Amount is based on the policy year and on the issue age, sex (if the Policy is issued on sex distinct basis) and rate class of each Insured. We will determine the monthly expense charge per $1,000 as described in the Determination of Nonguaranteed Factors provision. These rates will not exceed those shown in Section 1.
The Mortality and Expense Risk Asset Charges do not apply to amounts in The Fixed Account.
Determination of Nonguaranteed Factors We will determine Cost of Insurance Rates, Expense Charges, and Interest Rates based on expectations as to future mortality, investment, expense, taxes, and persistency experience.
We will not adjust such rates or charges as a means of recovering prior losses or as a means of distributing prior profits.
ICC23-PI-SVFL | Page 13 |
Computation of Values - All Policy Values and benefits are equal to or greater than those required by or pursuant to the NAIC Variable Life Insurance Regulation, model #270 using Actuarial Guideline XXIV. A detailed statement of the method of computing Policy Values has been filed with the Interstate Insurance Product Regulation Commission.
7. Death and Maturity Benefits
Basic Death Benefit - This Policy has a Level Death Benefit Option, as shown in Section 1. The Basic Death Benefit prior to the Maturity Date will be the greater of:
(a) | the Specified Amount; or |
(b) | the Policy Value multiplied by an attained age factor based on the attained age of the younger Insured shown in the Table of Death Benefit Factors shown in the Additional Policy Specifications. |
Amount of Death Benefit The Death Benefit, payable at the death of the last Insured while this Policy is in force and before surrender, will be equal to the sum of:
(a) | the Basic Death Benefit on the date of death of the last Insured to die; and |
(b) | any benefit provided by a supplemental rider attached to this Policy and payable because of the death of the last Insured to die. |
less the sum of:
(a) | any Policy Debt on this Policy at the time of the death of the last Insured to die; and |
(b) | if the death of the last Insured to die occurs during a Grace Period, the lesser of the past due Monthly Deductions until the date of death of the last Insured to die or the amount needed to meet the requirements of the No-Lapse Guarantee Rider (if attached to the Policy). |
Suicide Exclusion - If the last Insured to die dies by suicide, while sane or insane, within two years from the Date of Issue, or any shorter period as may be required by applicable law in the state where the policy is delivered or issued for delivery, the Death Benefit will be limited to the premiums paid less any Policy Debt and any partial withdrawals.
The Suicide Exclusion provision for the amount of insurance converted from another life insurance policy will run from the Date of Issue of the original policy.
If the last Insured to die, dies by suicide, while sane or insane, within two years from the effective date of any reinstatement, or any shorter period as may be required by applicable law in the state where the policy is delivered or issued for delivery, the Death Benefit will be limited to the premiums paid less any Policy Debt and any partial withdrawals since the date of reinstatement.
Death Benefit Deposit Account Death Benefit funds left on deposit from the date of death of the last Insured to die to the date of payment will be placed in this account.
Payment of Death Benefit The Death Benefit will be paid upon receipt of due proof of death of both Insureds. Due proof of death of both Insureds will consist of a certified copy of the death certificate of each Insured, or other lawful evidence providing equivalent information, and proof of the claimants entitlement to the proceeds. The Death Benefit will be paid to the Beneficiary in one sum or, if elected, under an income payment option. We will pay interest from the date of death of the last Insured to die to the date of payment. The interest rate will be the rate in effect on the date of death of the last Insured to die for funds left on deposit in the Death Benefit Deposit Account.
ICC23-PI-SVFL | Page 14 |
Interest shall accrue at the effective annual rate determined above, plus additional interest at a rate of 10% annually beginning with the date that is 31 calendar days from the latest of Items (1), (2) and (3) to the date the claim is paid, where:
(1) | The date that We receive due proof of death of the last Insured to die; |
(2) | The date We receive sufficient information to determine Our liability, the extent of the liability, and the appropriate payee legally entitled to the proceeds; and |
(3) | The date that legal impediments to payment of proceeds that depend on the action of other parties are resolved and sufficient evidence of the same is provided to Us. Legal impediments to payment include, but are not limited to: |
(a) | the establishment of guardianships and conservatorships; |
(b) | the appointment and qualification of trustees, executors and administrators; and |
(c) | the submission of information required to satisfy state and federal reporting requirements. |
For values in a Separate Account, We reserve the right to defer the determination and payment of any portion of the Death Benefit in excess of the Specified Amount for any period during which the New York Stock Exchange is closed for trading (except for normal holiday closing) or when the Securities and Exchange Commission has determined that a state of emergency exists which may make such payment impractical.
Amount of Maturity Benefit - The Maturity Benefit payable if either Insured is living on the Maturity Date and if this Policy is then in force will be equal to the Net Policy Value on that date.
Payment of Maturity Benefit - The Maturity Benefit will be paid to You in one sum or, if elected, under an Income Payment Option, unless We receive a written request from You to extend the Maturity Date. If the Maturity Benefit is paid the Policy will terminate.
Option to Extend Maturity Date - Upon Your written request, this Policy will continue in force beyond the Maturity Date as shown in Section 1. The Basic Death Benefit under the Policy will continue beyond the Maturity Date without evidence of insurability. The Basic Death Benefit and the Policy Value will continue to be calculated as defined in the Policy. The attained age Death Benefit Factors will be equal to 1.00. The Monthly Deductions will be equal to zero. New partial withdrawals may not be made. New loans and loan repayments may be made. Policy Loans will continue to accrue interest and the Policy Loan Account will continue to operate as stated in the Policy Loans section. Amounts in the subaccounts of the Separate Account and the Short-Term Fixed Account will be moved to the Traditional Fixed Account.
Premium payments will not be accepted unless necessary to prevent lapse. All riders and benefits attached to the Policy, except the No-Lapse Guarantee Rider, if applicable, terminate as of the original Maturity Date, as shown in Section 1.
The Policy may not qualify as life insurance under federal tax law after the younger Insured reaches the Maturity Date. The Policy may be subject to adverse tax consequences and a tax advisor should be consulted before You choose to continue the Policy beyond the Maturity Date.
8. Policy Loans
Policy Loans - You may obtain a loan while this Policy is in force during the life of either Insured. The loan, plus any existing Policy Debt, may not be greater than the Loan Value of this Policy on the date of the loan. The minimum loan amount is shown in Section 1.
ICC23-PI-SVFL | Page 15 |
We may defer making a loan, subject to the following:
(i) | for values in a Fixed Account, We reserve the right to defer the payment of any loan for up to six months from the date of the loan request, except for any loan made to pay premiums due on a Policy We issued; |
(ii) | for values in a Separate Account, We reserve the right to defer the determination and payment of all benefits for any period during which the New York Stock Exchange is closed for trading (except for normal holiday closing) or when the Securities and Exchange Commission has determined that a state of emergency exists which may make such payment impractical. |
Loan Value - The Loan Value is equal to the Loan Value Percentage, as shown in Section 1, multiplied by the Cash Surrender Value.
Loan Interest - Loans will bear interest at the loan interest rates listed in Section 1.
Loan interest is due and payable at the end of each policy year. If the interest is not paid when due, it will be treated as a new loan and added to the existing loan. It will then bear interest at the rate of interest on loans.
Policy Loan Account - When a loan is taken, an amount equal to the amount of the loan will be withdrawn from the Policy Value. The amount will be placed in the Policy Loan Account. Loan interest due at the end of a policy year will first be withdrawn from any credited interest remaining in the Policy Loan Account. Otherwise the withdrawal will be made from the values of the subaccounts in the Separate Account, the Short-Term Fixed Account, and the Traditional Fixed Account on a pro-rata basis in proportion to the current value of each account. If there is not enough value in these accounts, the withdrawal will be made from the Fixed Dollar Cost Averaging Account.
Any repayment of Policy Debt or any remaining credited interest after withdrawing any interest due will be withdrawn from the Policy Loan Account and reallocated to the subaccounts of the Separate Account, the Short-Term Fixed Account, and the Traditional Fixed Account on a pro-rata basis in proportion to the current value of each account. Except for such repayment or withdrawal of credited interest, no transfers or partial withdrawals may be made from the Policy Loan Account.
The Policy Loan Account will be credited with interest. We will determine the rate of interest each year. In no event will the loan interest rate less the rate at which interest is credited be more than the Maximum Net Cost of the Loan shown in Section 1. In no event will the interest credited be less than the Traditional Fixed Account Guaranteed Minimum Interest Rate shown in Section 1.
Policy Debt Policy Debt means outstanding loans on this Policy plus any loan interest due or accrued. Policy Debt may be repaid in full or in part at any time while this Policy is in force during the life of either Insured. This Policy is the only security for Policy Debt on it. If the Policy Debt is greater than the Cash Surrender Value, a notice of pending termination will be mailed to Your last known address and that of any assignee on record. If We are not paid the excess Policy Debt, this Policy will terminate 61 days after the notice is mailed.
9. Surrender of Policy
Surrender You may surrender this Policy for its Net Cash Surrender Value by submitting a written request to Our Home Office. Surrender of this Policy is effective on the date We receive Your written request for surrender at Our Home Office, with all necessary documents and forms complete. The Net Cash Surrender Value may be taken in one sum or it may be left with Us under an income payment option. The annuity benefits at the time of their commencement will not be less than those that would be provided by the application of the Net Cash Surrender Value to purchase a single premium immediate annuity contract at purchase rates We offer at that time to the same class of annuitants. This Policy will terminate and cease to be in force when it is surrendered.
ICC23-PI-SVFL | Page 16 |
We may defer making the payment of the Net Cash Surrender Value in one sum, subject to the following:
(i) | for values in a Fixed Account, We reserve the right to defer the payment of any Net Cash Surrender Value for up to six months from the date of the surrender request. If the payment is deferred for 30 working days or more, it will bear interest at the Traditional Fixed Account Guaranteed Minimum Interest Rate per year compounded annually while it is deferred; |
(ii) | for values in a Separate Account, We reserve the right to defer the determination and payment of all benefits for any period during which the New York Stock Exchange is closed for trading (except for normal holiday closing) or when the Securities and Exchange Commission has determined that a state of emergency exists which may make such payment impractical. |
Net Cash Surrender Value The Net Cash Surrender Value is the Net Policy Value decreased by any Surrender Charge.
Net Policy Value The Net Policy Value is the Policy Value decreased by any Policy Debt on this Policy.
Cash Surrender Value The Cash Surrender Value is the Policy Value decreased by any Surrender Charge.
Surrender Charge The Surrender Charge for the initial Specified Amount is shown in the Table of Surrender Charges in Section 1, determined from the Policy Date.
A Surrender Charge will be deducted from the Policy Value upon a decrease in the Specified Amount in the first five policy years. The charge will be proportional to the amount that the Specified Amount decreased. The Surrender Charge will be deducted from the values of the subaccounts of the Separate Account, the Short-Term Fixed Account, and the Traditional Fixed Account on a pro-rata basis in proportion to the current value of each account. If there is not enough value in these accounts, deductions will be made from the Fixed Dollar Cost Averaging Account. There will be a proportional reduction in the Surrender Charge for the remaining Surrender Charges.
Surrender Charges will not be deducted for decreases that were caused by partial withdrawals.
Partial Withdrawal You may make a partial withdrawal for a portion of the Net Cash Surrender Value by submitting a written request to Our Home Office. The partial withdrawal is effective on the date We receive Your written request for the partial withdrawal. The partial withdrawal may not be less than the Minimum Partial Withdrawal shown in Section 1. No more than twelve partial withdrawals may be made in any policy year. No partial withdrawal may be made which would reduce the Specified Amount to less than the Minimum Specified Amount shown in Section 1. A processing fee will be deducted from the available Net Cash Surrender Value and will be considered part of the partial withdrawal. The fee is a percentage of the amount withdrawn as shown in Section 1, not to exceed the dollar amount shown in Section 1.
Any partial withdrawal will reduce the Policy Value by the amount of the partial withdrawal. The Specified Amount will be reduced by the amount of the partial withdrawal that exceeds the difference between the Death Benefit and the Specified Amount.
Partial withdrawals will be deducted from the values of the subaccounts of the Separate Account, the Short-Term Fixed Account, and the Traditional Fixed Account as directed by You, provided that the minimum amount remaining in each account as a result of the allocation meets the minimum allocation amount shown in Section 1. If there is not enough value in these accounts, the partial withdrawal will be made from the Fixed Dollar Cost Averaging Account. If no allocation is directed, the partial withdrawal will be deducted from the accounts on a pro-rata basis in proportion to the current net asset value of each subaccount of the Separate Account, the value of the Short-Term Fixed Account, and the value of the Traditional Fixed Account.
ICC23-PI-SVFL | Page 17 |
The Surrender Charge will not be reduced as a result of a partial withdrawal.
We may defer making the payment of the amount of a Partial Withdrawal, subject to the following:
(i) | for values in a Fixed Account, We reserve the right to defer the payment of any Partial Withdrawal for up to six months from the date of the Partial Withdrawal request, except for any Partial Withdrawal made to pay premiums due on a Policy We issued. If the payment is deferred for 30 working days or more, it will bear interest at the Traditional Fixed Account Guaranteed Minimum Interest Rate per year compounded annually while it is deferred; |
(ii) | for values in a Separate Account, We reserve the right to defer the determination and payment of all benefits for any period during which the New York Stock Exchange is closed for trading (except for normal holiday closing) or when the Securities and Exchange Commission has determined that a state of emergency exists which may make such payment impractical. |
Systematic Partial Withdrawal Program The Systematic Partial Withdrawal Program is a program of periodic distribution of a portion of the Policy Value through policy loans and partial withdrawals. We reserve the right to discontinue such a program at any time. Contact Our Home Office for details of how this program works. A processing fee of the percentage of the amount withdrawn as shown in Section 1, but not more than the dollar amount shown in Section 1, will be made for each year the program is active. This program is only available after the first policy year.
10. Policy Changes
Right to Make Change At any time while this Policy is in force after the first policy year, You may request changes as set forth in this section. The change will become effective on the Monthly Anniversary that coincides with or next follows Our receipt of the request. You may not make a change that would result in the Death Benefit under this Policy not being excludable from gross income due to not satisfying the requirements of Section 7702. In addition, each change is subject to the conditions stated. This Policy will be amended as the result of any such change.
Decrease in Specified Amount Any decrease in the Specified Amount must be at least the Minimum Specified Amount Change shown in Section 1. The Specified Amount may not be decreased to less than the Minimum Specified Amount as shown in Section 1. No decrease in Specified Amount may be made in the first policy year.
A Surrender Charge will be deducted from the Policy Value upon a decrease in the Specified Amount in the first five policy years. This is described in the Surrender Charge provision.
Change in Rate Class You may request a change in an Insureds rate class after issue to any more favorable rate class that was available at the time of issue. Any change is subject to Our underwriting guidelines in effect at the time of the change, and submission of evidence of insurability, including but not limited to good health, where such evidence is satisfactory to Us. We will adjust future Monthly Deductions to reflect the new rate class.
Rider and/or Benefit Additions If available, and subject to any underwriting guidelines and evidence of insurability requirements, You may submit a request that rider(s) and/or benefits be added to this Policy after the Policy Date.
ICC23-PI-SVFL | Page 18 |
11. Owner and Beneficiary
Owner The Owner of this Policy is the person (or persons in the case of joint owners) designated as Owner in the application unless changed by a subsequent owner designation (including by assignment) or by death of an Owner. Upon the death of an Owner, the deceased Owners ownership interest passes to the designated contingent owner. If no contingent owner is designated, the deceased Owners ownership interest passes to the surviving joint owner (or joint owners, if more than one, in equal shares). If no joint owner, the deceased Owners ownership interest passes to his or her estate.
Subject to the terms of any assignment, while this Policy is in force before the death of the Insureds, the Owner may exercise all of the rights in it without the consent of any other person. In the case of joint owners, the consent of all joint owners who are alive is required.
Beneficiary The Beneficiary of this Policy is as designated in the application unless changed by a subsequent beneficiary designation. If the Beneficiary dies before the death of the last Insured to die, and no contingent beneficiary is designated, then the Beneficiary or Beneficiaries will be the Owner or Owners (in equal shares).
Change of Owner or Beneficiary You may transfer ownership or change the Beneficiary by filing a written designation at the Home Office. We will provide the necessary form. Unless You specify otherwise, the designation will take effect as of the date You signed the form, subject to any action We have taken prior to the time that the designation is received at the Home Office.
Assignment You may assign this Policy while it is in force during the life of either Insured. Your rights, and the rights of any Beneficiary, will be subject to the rights of an assignee under the terms of an assignment. We will not be bound by any assignment until You provide a signed form, that We have either provided or find acceptable, and the form has been received at the Home Office. Unless You specify otherwise, the assignment will take effect as of the date You signed the form, subject to any action We have taken prior to the time that the assignment is received at the Home Office. We are not responsible for the effect or the validity of any assignment.
12. General Provisions
The Contract This Policy, and all applications and any supplemental riders, endorsements, or amendments when attached to the Policy, constitute the entire contract. Only the President, a Vice President, the Secretary, or an Actuary who is an officer of the Company may, on Our behalf, modify this Policy or waive any of its conditions. No agent is authorized to modify this contract or to make any promise as to the future payment of interest.
At any time We may unilaterally make such changes in this Policy as are necessary:
(i) | to assure compliance at all times with the definition of life insurance prescribed by federal income tax law; or |
(ii) | to make the Policy conform with any law or regulation issued by any government agency to which it is subject. |
Any approved amendments or endorsements will be mailed to You any time such a change occurs. Other changes may, however, be accepted in writing or rejected by You, by returning the amendment to Us.
ICC23-PI-SVFL | Page 19 |
This Policy was approved under the authority of the Interstate Insurance Product Regulation Commission and issued under the Commission standards. Any provision of the Policy that on the provisions effective date is in conflict with the applicable Interstate Insurance Product Regulation Commission standards for this product type in effect as of the provisions effective date of Commission policy approval is hereby amended to conform to the applicable Interstate Insurance Product Regulation Commission standards in effect as of the provisions effective date of Commission policy approval.
Incontestability This Policy and any rider or supplemental benefits attached to the Policy are incontestable with respect to the last Insured to die as to the truth of the representations contained in the application for insurance after they have been in force during the lifetime of that Insured for a period of two years from the Date of Issue, except for fraud in the procurement of the Policy, when permitted by applicable law. No statement will void this Policy or be used to contest a claim under it unless the statement is contained in the application. A copy of the application is attached to this Policy.
Any rider or supplemental benefits later attached to the Policy, Change in Rate Class, or reinstatement are incontestable with respect to the last Insured to die as to the truth of the representations contained in the application for the policy change or reinstatement after they have been in force during the lifetime of that Insured for a period of two years from the effective date of the policy change or reinstatement, except for fraud in the procurement of the policy change or reinstatement, when permitted by applicable law.
The Incontestability period for any amount of insurance converted from another life insurance policy will run from the Date of Issue of the original Policy.
Duration of Coverage The duration of coverage under this Policy will depend on the following:
(a) | The amount, timing and frequency of premium payments; |
(b) | changes in the Specified Amount or benefits; |
(c) | the interest rates credited or investment return; |
(d) | the cost of insurance rates charged; |
(e) | the expense charges; |
(f) | satisfaction of the requirements of the No-Lapse Guarantee Rider (if attached to the Policy); |
(g) | surrenders; and |
(h) | the amount and timing of any partial withdrawals or policy loans. |
Non-Participating This Policy will not participate in Our divisible surplus. No dividends will be payable.
Date of Issue The Date of Issue shown in Section 1 is the date Your Policy is issued at Our Home Office.
Policy Date The Policy Date shown in Section 1 is the date from which policy years, months and anniversaries are determined.
Monthly Anniversary The Monthly Anniversary is the day in each calendar month that is the same day of the month as the Policy Date.
Age The ages shown in Section 1 are the insurance ages of each Insured. This is the age of each Insured on the birthday nearest the Policy Date. Attained age means the insurance ages of the Insureds increased by the number of whole years and months after the Policy Date.
Misstatement of Age or Sex If the age or the sex (if the Policy is issued on a sex distinct basis) of either Insured has been misstated, the Death Benefit under this Policy will be the amount which would have been provided by the most recent Cost of Insurance charge at the correct ages and sexes (if the Policy is issued on a sex distinct basis). No adjustment in the Policy Value will be made. We will adjust future Monthly Deductions to reflect the corrected ages and sexes (if the Policy is issued on a sex-distinct basis). Any date shown in Section 1 that is based on incorrect ages may be changed to be consistent with the correct ages.
ICC23-PI-SVFL | Page 20 |
Policy Payments All payments made to or benefits paid by Us under this Policy are payable at the Home Office.
Annual Report Each year You will be sent a report. The report shows current information as of a date not more than four months prior to the date of the mailing. The report will contain at least the following information:
(a) | The beginning and end dates of the current report period; |
(b) | The Policy Value, if any, at the beginning of the current report period and at the end of the current report period; |
(c) | The amounts that have been credited or debited to the Policy Value during the current report period; for example, premium payments, interest credits, cost of insurance charges, expense charges, withdrawal amounts, and cost of rider(s); |
(d) | The current death benefit at the end of the current report period; |
(e) | The cash surrender value, if any, at the end of the current report period; |
(f) | The Loan Value and the amount of outstanding loans, if any, at the end of the current report period; and |
(g) | If assuming guaranteed interest, mortality and expense charges, the cash surrender value will not keep the Policy in force until the end of the next reporting period unless further premiums are made, a notice to this effect will be included. |
Projection of Benefits and Values Upon request, We will provide a projection of illustrative future Death Benefits and Policy Values. The request for a projection must be made in writing by You. We may charge a fee for this service, after the first report per year is provided at no cost, not to exceed the maximum fee as shown in Section 1.
13. Income Payment Options
Election of Income Payment Option An income payment option may be elected in place of a one sum payment of any amount payable upon the death of the last Insured to die, upon surrender, or upon maturity.
You may elect an income payment option or change a previous election while this Policy is in force before the death of the last Insured to die. If no election is in effect at the time of the death of the last Insured to die, the Beneficiary may elect an income payment option before any payment of the Death Benefit has been made and within one year of the date of death of the last Insured to die.
The amount applied under an income payment option must be at least the Minimum Amount to Apply for Income Payment Option shown in Section 1. No election may provide for income payments that are each less than the minimum income payment as shown in Section 1.
If any settlement option with a guaranteed period provides payments of the same amount at the same age for a different guarantee period, We will deem an election to have been made for the longer period.
The amount of income payment benefits at the time of their commencement will not be less than those that would be provided by the application of a one sum payment to purchase a single premium immediate annuity contract at purchase rates offered by the company at the time to the same class of annuitants.
Option 1 - Interest Income - We will credit interest to the amount applied, and the interest will be paid monthly, quarterly, semiannually or annually.
ICC23-PI-SVFL | Page 21 |
Option 2 - Income for a Fixed Period - We will pay the amount applied, with interest, in equal monthly payments for a fixed period. The fixed period may not be greater than 30 years.
Option 3 - Income of a Specified Amount - We will make payments of a specified amount until the total amount applied, with interest, has been paid. The payments may be made monthly, quarterly, semiannually or annually. The final payment may be less than the specified amount. The total of the payments to be made each year must be at least the amount as shown in Section 1 for each $1,000 applied.
Option 4 - Life Income - We will pay equal monthly payments during the life of the option annuitant.
Option 5 - Life Income with Guaranteed Period - We will pay equal monthly payments for a stated guaranteed period and thereafter during the life of the option annuitant. The guaranteed period may be 5 years, 10 years or 20 years.
Option 6 - Life Income with Refund Period - We will pay equal monthly payments during the life of the option annuitant. If necessary, the payments will continue after the death of the option annuitant until the total of all payments made, including a smaller final payment, if required, equals the total amount applied.
Option 7 - Joint and Survivor Life Income - We will pay equal monthly payments during the joint life of two option annuitants and thereafter during the life of the survivor.
Income Amount The income under Options 1 and 2 will be based on the interest rate shown in the Guaranteed Income Payment Rates section in Section 1, compounded annually. The unpaid balance of the amount applied under Option 3 will be credited with the interest rate shown in the Guaranteed Income Payment Rates section in Section 1, compounded annually.
The monthly income under Options 4, 5, 6 and 7 will be equal to the amount designated by You for an Income Option, applied to the selected Income Option, using the interest rate and mortality basis outlined in the Guaranteed Income Payment Rates section in Section 1. The Income Amount will be based upon the Income Option elected, each option annuitants age on their birthday nearest the date of the first payment, and sex (if the Policy is issued on sex distinct basis).
Guaranteed monthly income amounts are available upon request.
Income Period The income period under an option will begin on the date of death of the last Insured to die or on the date of surrender. Income payments under Options 1 and 3 will be made at the end of the payment interval. Income payments under Options 2, 4, 5, 6 and 7 will be made at the beginning of the payment interval.
Option Annuitant Option annuitant means a natural person on whose life the income payments under Options 4, 5, 6 and 7 are based.
We may require reasonable proof of the age and of the continued life of an option annuitant. If the age or the sex (if the Policy is issued on a sex distinct basis) of an option annuitant has been misstated, an appropriate adjustment will be made in the income payments.
Withdrawal Privilege Unless the election states otherwise, the payee under an income payment option may:
(a) | before any income payment has been made, withdraw the amount applied under the option; or |
(b) | withdraw the present value of the income payments to become due during any fixed, guaranteed or refund period; or |
(c) | withdraw the balance held under Option 1 or 3 plus any accrued interest. |
ICC23-PI-SVFL | Page 22 |
There will be no right to withdraw the present value of the income payments falling due after the guaranteed or refund period under Options 5 and 6. However, if the present value of income payments due during the guaranteed or refund period has been withdrawn, and the payee is alive at the end of the guaranteed period or refund period, income payments will resume until the option annuitants death. There will be no right to withdraw the present value of any income payments under Options 4 and 7.
We may defer the payment of the amount withdrawn for up to six months from the date of a withdrawal request.
Present Value The present value of the income payments available under the Withdrawal Privilege will be based on the interest rate shown in the Guaranteed Income Payment Rates section in Section 1. However, if the income payments are based on the current purchase rates as described under the Election of Income Payment Option provision, the present value of the income payments available under the Withdrawal Privilege will be calculated using the interest basis of the single premium immediate annuity contract.
Death of Payee Upon the death of the payee under an income payment option, We will pay the following to the payees executors or administrators unless stated otherwise in an election to which We consented:
(a) | the balance of the amount held under Option 1 or 3 plus any accrued interest; or |
(b) | the present value of the income payments to become due during the fixed period under Option 2; or |
(c) | if the option annuitant under Option 5 or 6 has died, the present value of the income payments, if any, to become due during the guaranteed or refund period; or |
(d) | if any option annuitant under Option 4, 5, 6 or 7 is living, any income payments as they become due during the option annuitants life plus, upon the death of the option annuitant under Option 5 or 6, the present value of the income payments, if any, to become due during the guaranteed or refund period. |
Assignment Creditors - The amount applied under an income payment option and the payments under the option may not be assigned and, to the extent permitted by law, will not be available to anyone who has a claim against the payee.
ICC23-PI-SVFL | Page 23 |
Additional Policy Specifications
Subaccounts | Vanguard Variable Insurance Funds | |
The Vanguard Group, Inc. | ||
Total Stock Market Index Portfolio | ||
Conservative Allocation Portfolio | ||
Total International Stock Market Index Portfolio | ||
Mid-Cap Index Portfolio | ||
Equity Index Portfolio | ||
Total Bond Market Index Portfolio | ||
Global Bond Index Portfolio | ||
Moderate Allocation Portfolio | ||
Eligible Fixed Interest Options | ||
The Penn Insurance and Annuity Company General Account | ||
Short-Term Fixed Account | ||
Traditional Fixed Account | ||
Fixed Dollar Cost Averaging Account - 12 Months |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 24 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Guaranteed Maximum Monthly Cost of Insurance Rates Per $1,000
Policy Year |
Base Policy | |||
1 |
.0001 | |||
2 |
.0002 | |||
3 |
.0004 | |||
4 |
.0006 | |||
5 |
.0009 | |||
6 |
.0011 | |||
7 |
.0014 | |||
8 |
.0017 | |||
9 |
.0021 | |||
10 |
.0024 | |||
11 |
.0028 | |||
12 |
.0032 | |||
13 |
.0037 | |||
14 |
.0043 | |||
15 |
.0049 | |||
16 |
.0057 | |||
17 |
.0067 | |||
18 |
.0081 | |||
19 |
.0098 | |||
20 |
.0118 | |||
21 |
.0141 | |||
22 |
.0167 | |||
23 |
.0195 | |||
24 |
.0227 | |||
25 |
.0264 | |||
26 |
.0309 | |||
27 |
.0366 | |||
28 |
.0437 | |||
29 |
.0523 | |||
30 |
.0628 | |||
31 |
.0752 | |||
32 |
.0897 | |||
33 |
.1069 | |||
34 |
.1273 | |||
35 |
.1519 | |||
36 |
.1821 | |||
37 |
.2199 | |||
38 |
.2675 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 25 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Guaranteed Maximum Monthly Cost of Insurance Rates Per $1,000
Policy Year |
Base Policy | |||
39 |
.3267 | |||
40 |
.4001 | |||
41 |
.4903 | |||
42 |
.5997 | |||
43 |
.7333 | |||
44 |
.8964 | |||
45 |
1.0988 | |||
46 |
1.3526 | |||
47 |
1.6665 | |||
48 |
2.0261 | |||
49 |
2.4543 | |||
50 |
2.9794 | |||
51 |
3.6938 | |||
52 |
4.4725 | |||
53 |
5.3902 | |||
54 |
6.4780 | |||
55 |
7.7138 | |||
56 |
9.0890 | |||
57 |
10.5651 | |||
58 |
12.1348 | |||
59 |
13.7831 | |||
60 |
15.4176 | |||
61 |
17.0716 | |||
62 |
19.0748 | |||
63 |
21.2442 | |||
64 |
23.5952 | |||
65 |
26.0935 | |||
66 |
28.7032 | |||
67 |
30.9508 | |||
68 |
33.1695 | |||
69 |
35.3239 | |||
70 |
37.3811 | |||
71 |
39.3065 | |||
72 |
41.0671 | |||
73 |
43.4240 | |||
74 |
45.9178 | |||
75 |
48.5598 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 26 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Guaranteed Maximum Monthly Cost of Insurance Rates Per $1,000
Policy Year |
Base Policy | |||
76 |
51.3605 | |||
77 |
54.3306 | |||
78 |
57.4816 | |||
79 |
60.8263 | |||
80 |
64.3774 | |||
81 |
68.1499 | |||
82 |
72.1579 | |||
83 |
76.4188 | |||
84 |
80.9518 | |||
85 |
83.3333 | |||
86 |
83.3333 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 27 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Death Benefit Factors
Attained Age of the younger Insured |
Factor | |||
35 |
2.9779 | |||
36 |
2.9195 | |||
37 |
2.8623 | |||
38 |
2.8062 | |||
39 |
2.7512 | |||
40 |
2.6973 | |||
41 |
2.6444 | |||
42 |
2.5927 | |||
43 |
2.5419 | |||
44 |
2.4922 | |||
45 |
2.4434 | |||
46 |
2.3956 | |||
47 |
2.3488 | |||
48 |
2.3028 | |||
49 |
2.2578 | |||
50 |
2.2137 | |||
51 |
2.1705 | |||
52 |
2.1281 | |||
53 |
2.0866 | |||
54 |
2.0460 | |||
55 |
2.0061 | |||
56 |
1.9671 | |||
57 |
1.9289 | |||
58 |
1.8915 | |||
59 |
1.8549 | |||
60 |
1.8190 | |||
61 |
1.7838 | |||
62 |
1.7495 | |||
63 |
1.7158 | |||
64 |
1.6829 | |||
65 |
1.6507 | |||
66 |
1.6193 | |||
67 |
1.5886 | |||
68 |
1.5586 | |||
69 |
1.5293 | |||
70 |
1.5007 | |||
71 |
1.4728 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 28 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Death Benefit Factors
Attained Age of the younger Insured |
Factor | |||
72 |
1.4457 | |||
73 |
1.4193 | |||
74 |
1.3937 | |||
75 |
1.3689 | |||
76 |
1.3449 | |||
77 |
1.3217 | |||
78 |
1.2993 | |||
79 |
1.2778 | |||
80 |
1.2572 | |||
81 |
1.2375 | |||
82 |
1.2187 | |||
83 |
1.2009 | |||
84 |
1.1841 | |||
85 |
1.1682 | |||
86 |
1.1535 | |||
87 |
1.1398 | |||
88 |
1.1271 | |||
89 |
1.1154 | |||
90 |
1.1047 | |||
91 |
1.0949 | |||
92 |
1.0857 | |||
93 |
1.0770 | |||
94 |
1.0686 | |||
95 |
1.0602 | |||
96 |
1.0512 | |||
97 |
1.0416 | |||
98 |
1.0305 | |||
99 |
1.0172 | |||
100 |
1.0172 | |||
101 |
1.0172 | |||
102 |
1.0172 | |||
103 |
1.0172 | |||
104 |
1.0172 | |||
105 |
1.0172 | |||
106 |
1.0172 | |||
107 |
1.0172 | |||
108 |
1.0172 | |||
109 |
1.0172 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 29 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Death Benefit Factors
Attained Age of the younger Insured |
Factor | |||
110 |
1.0172 | |||
111 |
1.0172 | |||
112 |
1.0172 | |||
113 |
1.0172 | |||
114 |
1.0172 | |||
115 |
1.0172 | |||
116 |
1.0172 | |||
117 |
1.0172 | |||
118 |
1.0172 | |||
119 |
1.0172 | |||
120 |
1.0172 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 30 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of No-Lapse Percent of Premium Charge
Policy Year |
No-Lapse Percent of Premium Charge |
|||
1 |
10 | % | ||
2 |
10 | % | ||
3 |
10 | % | ||
4 |
10 | % | ||
5 |
10 | % | ||
6 |
7 | % | ||
7 |
7 | % | ||
8 |
7 | % | ||
9 |
7 | % | ||
10 |
7 | % | ||
11 |
3 | % | ||
12 |
3 | % | ||
13 |
3 | % | ||
14 |
3 | % | ||
15 |
3 | % | ||
16 |
3 | % | ||
17 |
3 | % | ||
18 |
3 | % | ||
19 |
3 | % | ||
20 |
3 | % | ||
21 |
3 | % | ||
22 |
3 | % | ||
23 |
3 | % | ||
24 |
3 | % | ||
25 |
3 | % | ||
26 |
3 | % | ||
27 |
3 | % | ||
28 |
3 | % | ||
29 |
3 | % | ||
30 |
3 | % | ||
31 |
3 | % | ||
32 |
3 | % | ||
33 |
3 | % | ||
34 |
3 | % | ||
35 |
3 | % | ||
36 |
3 | % | ||
37 |
3 | % | ||
38 |
3 | % | ||
39 |
3 | % | ||
40 |
3 | % | ||
41 |
3 | % | ||
42 |
3 | % |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 31 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of No-Lapse Percent of Premium Charge
Policy Year |
No-Lapse Percent of Premium Charge |
|||
43 |
3 | % | ||
44 |
3 | % | ||
45 |
3 | % | ||
46 |
3 | % | ||
47 |
3 | % | ||
48 |
3 | % | ||
49 |
3 | % | ||
50 |
3 | % | ||
51 |
3 | % | ||
52 |
3 | % | ||
53 |
3 | % | ||
54 |
3 | % | ||
55 |
3 | % | ||
56 |
3 | % | ||
57 |
3 | % | ||
58 |
3 | % | ||
59 |
3 | % | ||
60 |
3 | % | ||
61 |
3 | % | ||
62 |
3 | % | ||
63 |
3 | % | ||
64 |
3 | % | ||
65 |
3 | % | ||
66 |
3 | % | ||
67 |
3 | % | ||
68 |
3 | % | ||
69 |
3 | % | ||
70 |
3 | % | ||
71 |
3 | % | ||
72 |
3 | % | ||
73 |
3 | % | ||
74 |
3 | % | ||
75 |
3 | % | ||
76 |
3 | % | ||
77 |
3 | % | ||
78 |
3 | % | ||
79 |
3 | % | ||
80 |
3 | % | ||
81 |
3 | % | ||
82 |
3 | % | ||
83 |
3 | % | ||
84 |
3 | % |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 32 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of No-Lapse Percent of Premium Charge
Policy Year |
No-Lapse Percent of Premium Charge |
|||
85 |
3 | % | ||
86 |
3 | % |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 33 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Monthly No-Lapse Cost of Insurance Rates Per $1,000
Policy Year |
Base Policy |
|||
1 |
0.0000 | |||
2 |
0.0000 | |||
3 |
0.0001 | |||
4 |
0.0001 | |||
5 |
0.0001 | |||
6 |
0.0001 | |||
7 |
0.0001 | |||
8 |
0.0002 | |||
9 |
0.0002 | |||
10 |
0.0002 | |||
11 |
0.0003 | |||
12 |
0.0003 | |||
13 |
0.0004 | |||
14 |
0.0005 | |||
15 |
0.0006 | |||
16 |
0.0006 | |||
17 |
0.0008 | |||
18 |
0.0009 | |||
19 |
0.0010 | |||
20 |
0.0013 | |||
21 |
0.0015 | |||
22 |
0.0018 | |||
23 |
0.0021 | |||
24 |
0.0024 | |||
25 |
0.0026 | |||
26 |
0.0029 | |||
27 |
0.0033 | |||
28 |
0.0038 | |||
29 |
0.0045 | |||
30 |
0.0052 | |||
31 |
0.0060 | |||
32 |
0.0069 | |||
33 |
0.0080 | |||
34 |
0.0091 | |||
35 |
0.0105 | |||
36 |
0.0123 | |||
37 |
0.0146 | |||
38 |
0.0175 | |||
39 |
0.0211 | |||
40 |
0.0256 | |||
41 |
0.0312 | |||
42 |
0.0378 | |||
43 |
0.0458 | |||
44 |
0.0556 | |||
45 |
0.0680 | |||
46 |
0.0841 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 34 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Monthly No-Lapse Cost of Insurance Rates Per $1,000
Policy Year |
Base Policy |
|||
47 |
0.1044 | |||
48 |
0.1270 | |||
49 |
0.1543 | |||
50 |
0.1894 | |||
51 |
0.2428 | |||
52 |
0.2997 | |||
53 |
0.3697 | |||
54 |
0.4572 | |||
55 |
0.5601 | |||
56 |
0.2035 | |||
57 |
0.2424 | |||
58 |
0.2846 | |||
59 |
0.3296 | |||
60 |
0.3734 | |||
61 |
0.4165 | |||
62 |
0.4752 | |||
63 |
0.5411 | |||
64 |
0.6152 | |||
65 |
0.6959 | |||
66 |
0.7813 | |||
67 |
0.8499 | |||
68 |
0.9157 | |||
69 |
0.9765 | |||
70 |
1.0301 | |||
71 |
1.0743 | |||
72 |
1.1074 | |||
73 |
1.1702 | |||
74 |
1.2365 | |||
75 |
1.3066 | |||
76 |
1.3807 | |||
77 |
1.4589 | |||
78 |
1.5416 | |||
79 |
1.6290 | |||
80 |
1.7213 | |||
81 |
1.8189 | |||
82 |
1.9219 | |||
83 |
2.0309 | |||
84 |
2.1460 | |||
85 |
2.2676 | |||
86 |
2.5000 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 35 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of No-Lapse Monthly Expense Charges Per $1,000 of Specified Amount
Policy Year |
Base Policy |
|||
1 |
0.3574 | |||
2 |
0.3574 | |||
3 |
0.3574 | |||
4 |
0.3574 | |||
5 |
0.3574 | |||
6 |
0.3574 | |||
7 |
0.3574 | |||
8 |
0.3574 | |||
9 |
0.3574 | |||
10 |
0.3574 | |||
11 |
0.3574 | |||
12 |
0.3574 | |||
13 |
0.3574 | |||
14 |
0.3574 | |||
15 |
0.3574 | |||
16 |
0.3574 | |||
17 |
0.3574 | |||
18 |
0.3574 | |||
19 |
0.3574 | |||
20 |
0.3574 | |||
21 |
0.3574 | |||
22 |
0.3574 | |||
23 |
0.3574 | |||
24 |
0.3574 | |||
25 |
0.3574 | |||
26 |
0.3574 | |||
27 |
0.3574 | |||
28 |
0.3574 | |||
29 |
0.3574 | |||
30 |
0.3574 | |||
31 |
0.3574 | |||
32 |
0.3574 | |||
33 |
0.3574 | |||
34 |
0.3574 | |||
35 |
0.3574 | |||
36 |
0.3574 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 36 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of No-Lapse Monthly Expense Charges Per $1,000 of Specified Amount
Policy Year |
Base Policy |
|||
37 |
0.3574 | |||
38 |
0.3574 | |||
39 |
0.3574 | |||
40 |
0.3574 | |||
41 |
0.3574 | |||
42 |
0.3574 | |||
43 |
0.3574 | |||
44 |
0.3574 | |||
45 |
0.3574 | |||
46 |
0.3574 | |||
47 |
0.3574 | |||
48 |
0.3574 | |||
49 |
0.3574 | |||
50 |
0.3574 | |||
51 |
0.3574 | |||
52 |
0.3574 | |||
53 |
0.3574 | |||
54 |
0.3574 | |||
55 |
0.3574 | |||
56 |
0.3574 | |||
57 |
0.3574 | |||
58 |
0.3574 | |||
59 |
0.3574 | |||
60 |
0.3574 | |||
61 |
0.3574 | |||
62 |
0.3574 | |||
63 |
0.3574 | |||
64 |
0.3574 | |||
65 |
0.3574 | |||
66 |
0.3574 | |||
67 |
0.3574 | |||
68 |
0.3574 | |||
69 |
0.3574 | |||
70 |
0.3574 | |||
71 |
0.3574 | |||
72 |
0.3574 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 37 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of No-Lapse Monthly Expense Charges Per $1,000 of Specified Amount
Policy Year |
Base Policy |
|||
73 |
0.3574 | |||
74 |
0.3574 | |||
75 |
0.3574 | |||
76 |
0.3574 | |||
77 |
0.3574 | |||
78 |
0.3574 | |||
79 |
0.3574 | |||
80 |
0.3574 | |||
81 |
0.3574 | |||
82 |
0.3574 | |||
83 |
0.3574 | |||
84 |
0.3574 | |||
85 |
0.3574 | |||
86 |
0.3574 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 38 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Monthly No-Lapse Interest Rates for NLGA
NLGA No-Lapse Tier Growth Percentage: |
6.00% |
Tier |
Policy Year 1 |
Policy Years After Year 1 | ||
Tier 1: | First $7,500.00 | First $7,500.00 of NLGA increased by No-Lapse Tier Growth Percentage each year | ||
Tier 2: | Next $500.00 | Next $500.00 of NLGA increased by No-Lapse Tier Growth Percentage each year | ||
Tier 3: | Next $500.00 | Next $500.00 of NLGA increased by No-Lapse Tier Growth Percentage each year | ||
Tier 4: | Remainder of NLGA | Remainder of NLGA |
Policy Year |
Tier 1 Monthly Interest Rate |
Tier 2 Monthly Interest Rate |
Tier 3 Monthly Interest Rate |
Tier 4 Monthly Interest Rate |
||||||||||||
1 |
0.00000 | % | 0.00000 | % | 0.00000 | % | 0.00000 | % | ||||||||
2 |
0.01700 | % | 0.01700 | % | 0.01700 | % | 0.01700 | % | ||||||||
3 |
0.03300 | % | 0.03300 | % | 0.03300 | % | 0.03300 | % | ||||||||
4 |
0.05000 | % | 0.05000 | % | 0.05000 | % | 0.05000 | % | ||||||||
5 |
0.06600 | % | 0.06600 | % | 0.06600 | % | 0.06600 | % | ||||||||
6 |
0.08300 | % | 0.08300 | % | 0.08300 | % | 0.08300 | % | ||||||||
7 |
0.09900 | % | 0.09900 | % | 0.09900 | % | 0.09900 | % | ||||||||
8 |
0.11600 | % | 0.11600 | % | 0.11600 | % | 0.11600 | % | ||||||||
9 |
0.13200 | % | 0.13200 | % | 0.13200 | % | 0.13200 | % | ||||||||
10 |
0.14900 | % | 0.14900 | % | 0.14900 | % | 0.14900 | % | ||||||||
11 |
0.16500 | % | 0.16500 | % | 0.16500 | % | 0.16500 | % | ||||||||
12 |
0.18200 | % | 0.18200 | % | 0.18200 | % | 0.18200 | % | ||||||||
13 |
0.27900 | % | 0.27900 | % | 0.27900 | % | 0.27900 | % | ||||||||
14 |
0.29500 | % | 0.29500 | % | 0.29500 | % | 0.29500 | % | ||||||||
15 |
0.31100 | % | 0.31100 | % | 0.31100 | % | 0.31100 | % | ||||||||
16 |
0.32700 | % | 0.32700 | % | 0.32700 | % | 0.32700 | % | ||||||||
17 |
0.34300 | % | 0.34300 | % | 0.34300 | % | 0.34300 | % | ||||||||
18 |
0.35900 | % | 0.35900 | % | 0.35900 | % | 0.35900 | % | ||||||||
19 |
0.37500 | % | 0.37500 | % | 0.37500 | % | 0.37500 | % | ||||||||
20 |
0.39100 | % | 0.39100 | % | 0.39100 | % | 0.39100 | % | ||||||||
21 |
0.40700 | % | 0.40700 | % | 0.40700 | % | 0.40700 | % | ||||||||
22 |
0.42300 | % | 0.42300 | % | 0.42300 | % | 0.42300 | % | ||||||||
23 |
0.43900 | % | 0.43900 | % | 0.43900 | % | 0.43900 | % | ||||||||
24 |
0.45500 | % | 0.45500 | % | 0.45500 | % | 0.45500 | % | ||||||||
25 |
0.47100 | % | 0.47100 | % | 0.47100 | % | 0.47100 | % | ||||||||
26 |
0.48700 | % | 0.48700 | % | 0.48700 | % | 0.48700 | % | ||||||||
27 |
0.50300 | % | 0.50300 | % | 0.50300 | % | 0.50300 | % |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 39 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Monthly No-Lapse Interest Rates for NLGA
Policy Year |
Tier 1 Monthly Interest Rate |
Tier 2 Monthly Interest Rate |
Tier 3 Monthly Interest Rate |
Tier 4 Monthly Interest Rate |
||||||||||||
28 |
0.51800 | % | 0.51800 | % | 0.51800 | % | 0.51800 | % | ||||||||
29 |
0.53400 | % | 0.53400 | % | 0.53400 | % | 0.53400 | % | ||||||||
30 |
0.55000 | % | 0.55000 | % | 0.55000 | % | 0.55000 | % | ||||||||
31 |
0.56500 | % | 0.56500 | % | 0.56500 | % | 0.56500 | % | ||||||||
32 |
0.58100 | % | 0.58100 | % | 0.58100 | % | 0.58100 | % | ||||||||
33 |
0.59700 | % | 0.59700 | % | 0.59700 | % | 0.59700 | % | ||||||||
34 |
0.61200 | % | 0.61200 | % | 0.61200 | % | 0.61200 | % | ||||||||
35 |
0.62800 | % | 0.62800 | % | 0.62800 | % | 0.62800 | % | ||||||||
36 |
0.64300 | % | 0.64300 | % | 0.64300 | % | 0.64300 | % | ||||||||
37 |
0.65900 | % | 0.65900 | % | 0.65900 | % | 0.65900 | % | ||||||||
38 |
0.67400 | % | 0.67400 | % | 0.67400 | % | 0.67400 | % | ||||||||
39 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
40 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
41 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
42 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
43 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
44 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
45 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
46 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
47 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
48 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
49 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
50 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
51 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
52 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
53 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
54 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
55 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
56 |
0.68200 | % | 0.68200 | % | 0.68200 | % | 0.68200 | % | ||||||||
57 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
58 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
59 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
60 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
61 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
62 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
63 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
64 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 40 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of Monthly No-Lapse Interest Rates for NLGA
Policy Year |
Tier 1 Monthly Interest Rate |
Tier 2 Monthly Interest Rate |
Tier 3 Monthly Interest Rate |
Tier 4 Monthly Interest Rate |
||||||||||||
65 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
66 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
67 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
68 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
69 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
70 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
71 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
72 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
73 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
74 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
75 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
76 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
77 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
78 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
79 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
80 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
81 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
82 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
83 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
84 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
85 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % | ||||||||
86 |
0.75900 | % | 0.75900 | % | 0.75900 | % | 0.75900 | % |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 41 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of No-Lapse Monthly Per Policy Expense Charge
Policy Year |
No-Lapse Monthly Per Policy Expense Charge |
|||
1 |
15.00 | |||
2 |
15.00 | |||
3 |
15.00 | |||
4 |
15.00 | |||
5 |
15.00 | |||
6 |
15.00 | |||
7 |
15.00 | |||
8 |
15.00 | |||
9 |
15.00 | |||
10 |
15.00 | |||
11 |
15.00 | |||
12 |
15.00 | |||
13 |
15.00 | |||
14 |
15.00 | |||
15 |
15.00 | |||
16 |
15.00 | |||
17 |
15.00 | |||
18 |
15.00 | |||
19 |
15.00 | |||
20 |
15.00 | |||
21 |
15.00 | |||
22 |
15.00 | |||
23 |
15.00 | |||
24 |
15.00 | |||
25 |
15.00 | |||
26 |
15.00 | |||
27 |
15.00 | |||
28 |
15.00 | |||
29 |
15.00 | |||
30 |
15.00 | |||
31 |
15.00 | |||
32 |
15.00 | |||
33 |
15.00 | |||
34 |
15.00 | |||
35 |
15.00 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 42 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of No-Lapse Monthly Per Policy Expense Charge
Policy Year |
No-Lapse Monthly Per Policy Expense Charge |
|||
36 |
15.00 | |||
37 |
15.00 | |||
38 |
15.00 | |||
39 |
15.00 | |||
40 |
15.00 | |||
41 |
15.00 | |||
42 |
15.00 | |||
43 |
15.00 | |||
44 |
15.00 | |||
45 |
15.00 | |||
46 |
15.00 | |||
47 |
15.00 | |||
48 |
15.00 | |||
49 |
15.00 | |||
50 |
15.00 | |||
51 |
15.00 | |||
52 |
15.00 | |||
53 |
15.00 | |||
54 |
15.00 | |||
55 |
15.00 | |||
56 |
15.00 | |||
57 |
15.00 | |||
58 |
15.00 | |||
59 |
15.00 | |||
60 |
15.00 | |||
61 |
15.00 | |||
62 |
15.00 | |||
63 |
15.00 | |||
64 |
15.00 | |||
65 |
15.00 | |||
66 |
15.00 | |||
67 |
15.00 | |||
68 |
15.00 | |||
69 |
15.00 | |||
70 |
15.00 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 43 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
Additional Policy Specifications
Table of No-Lapse Monthly Per Policy Expense Charge
Policy Year |
No-Lapse Monthly Per Policy Expense Charge |
|||
71 |
15.00 | |||
72 |
15.00 | |||
73 |
15.00 | |||
74 |
15.00 | |||
75 |
15.00 | |||
76 |
15.00 | |||
77 |
15.00 | |||
78 |
15.00 | |||
79 |
15.00 | |||
80 |
15.00 | |||
81 |
15.00 | |||
82 |
15.00 | |||
83 |
15.00 | |||
84 |
15.00 | |||
85 |
15.00 | |||
86 |
15.00 |
Policy Number 8888888 | ||||||
Last Survivor Flexible Premium Variable Life Insurance Policy | ||||||
ICC23-PI-SVFL |
WILLIAM PENN | HANNAH PENN | Page 44 | |||
Age 35 - Male - Standard Non-Tobacco | Age 35 - Female - Standard Non-Tobacco | |||||
$200,000.00 Specified Amount |
To obtain any of the benefits under this Policy, write to The Penn Insurance and Annuity Company at its Home Office or to its nearest agent.
Please notify The Penn Insurance and Annuity Company promptly of any change in address.
The Penn Insurance and Annuity Company is a stock life insurance company. It is a wholly owned subsidiary of The Penn Mutual Life Insurance Company, Philadelphia, Pennsylvania.
Last Survivor Flexible Premium Variable Life Insurance Policy
Death Benefit payable on death of last Insured to die prior to the Maturity Date
Maturity Benefit payable on Maturity Date
Variable Policy Value
Flexible premiums payable until Maturity Date
Non-Participating
Supplemental riders, if any, listed in Section 1 |
The Penn Insurance and Annuity Company, Wilmington, DE | www.pennmutual.com | (800) 523-0650
Mailing Address: The Penn Insurance and Annuity Company, Philadelphia, PA 19172
ICC23-PI-SVFL
Rider - No-Lapse Guarantee
In this Rider, We, Us, or Our means The Penn Insurance and Annuity Company; You and Your means the Owner of the Policy; and Insured means a person whose life is covered under the Policy. The Policy or this Policy means the Policy to which this Rider is attached.
We agree, subject to the provisions of the Policy and this Rider, to provide this Benefit. We also agree to provide all of the other benefits which are stated in this Rider. This Rider is a part of the Policy to which it is attached. It is subject to all of the provisions of the Policy unless stated otherwise in this Rider.
Benefit This Benefit prevents the lapse of the Policy when the Net Cash Surrender Value is insufficient to cover the Monthly Deduction for the following month if the following conditions are satisfied:
(a) | At least one Insured is alive; |
(b) | This Rider is in force; and |
(c) | The No-Lapse Guarantee Requirement is satisfied. |
We will continue to deduct Monthly Deductions and outstanding loan interest due from the Policy Value while the Policy is in force under the Rider. The Policy will remain in force with a negative Policy Value if the No-Lapse Guarantee Requirement is satisfied. We will not credit interest to the negative Policy Value. The Net Amount at Risk used to calculate the Monthly Deductions under the Policy will not exceed the Basic Death Benefit divided by the Death Benefit Discount Factor due to the negative Policy Value. The Death Benefit will not be reduced due to the negative Policy Value. Loan interest will continue to accrue and will be added to the Policy Debt.
No-Lapse Guarantee Requirement (NLG Requirement) On each Monthly Anniversary while this Policy is in force, the NLG Requirement is satisfied if the No-Lapse Guarantee Account less the Policy Debt exceeds zero.
A change in the Specified Amount, the addition, deletion or change of any supplemental riders to this Policy, or a change in the rate class of either Insured may result in a change in the No-Lapse Percent of Premium Charge, No-Lapse Monthly Deductions, and No-Lapse Interest Rate. As a result, additional premiums may be required on the date of change in order to meet the NLG Requirement.
No-Lapse Guarantee Account (NLGA) The NLGA, the No-Lapse Percent of Premium Charge, the No-Lapse Monthly Deductions, and the No-Lapse Interest Rate are not used to determine values and benefits under the Policy. These values are only used to determine whether or not the NLG Requirement is satisfied.
On the Policy Date, the NLGA is the premiums paid on or before the Policy Date less the sum of:
(a) | the applicable No-Lapse Percent of Premium Charge shown in the Additional Policy Specifications; and |
(b) | the applicable No-Lapse Monthly Deduction for the first policy month. |
On each Monthly Anniversary while this Policy is in force, the NLGA equals the sum of:
(a) | the NLGA on the preceding Monthly Anniversary; |
(b) | one months interest on (a) using the applicable No-Lapse Interest Rate; |
(c) | any premium paid since the preceding Monthly Anniversary reduced by the applicable No-Lapse Percent of Premium Charge; and |
(d) | interest on (c) using the applicable No-Lapse Interest Rate from the date of receipt in the Home Office to the Monthly Anniversary; |
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less the sum of:
(a) | any partial withdrawal since the preceding Monthly Anniversary; |
(b) | interest on (a) using the applicable No-Lapse Interest Rate from the date of withdrawal to the Monthly Anniversary; and |
(c) | the applicable No-Lapse Monthly Deduction for the following policy month. |
No-Lapse Percent of Premium Charge The No-Lapse Percent of Premium Charge is deducted each time a premium is paid in the calculation of the NLGA. The No-Lapse Percent of Premium Charge is shown in the Additional Policy Specifications.
No-Lapse Monthly Deduction The No-Lapse Monthly Deduction is the sum of:
(a) | the No-Lapse Cost of Insurance Charge for the policy month; |
(b) | the No-Lapse Per Policy Expense Charge; |
(c) | the No-Lapse Expense Charge Per $1,000 of Specified Amount; and |
(d) | the Monthly Deduction for the policy month for any benefits provided by a supplemental rider made a part of this Policy determined as described in the rider form but using any applicable No-Lapse Guarantee Account value and the applicable No-Lapse rates shown in the Additional Policy Specifications. |
No-Lapse Net Amount at Risk The No-Lapse Net Amount at Risk is equal to (a) divided by (b) minus (c) where:
(a) | is the Specified Amount at the beginning of the policy month; |
(b) | is the Death Benefit Discount Factor shown in Section 1; and |
(c) | is the No-Lapse Guarantee Account at the beginning of the policy month before the No-Lapse Monthly Deduction. |
If the calculation above causes the No-Lapse Net Amount at Risk to be negative, then the No-Lapse Net Amount at Risk will be set equal to zero.
No-Lapse Cost of Insurance Charge The No-Lapse Cost of Insurance Charge is determined on a monthly basis. The total No-Lapse Cost of Insurance Charge for a policy month is calculated as the sum of (a) multiplied by (b) where:
(a) | is the applicable No-Lapse Cost of Insurance Rate divided by 1,000; and |
(b) | is the No-Lapse Net Amount at Risk. |
No-Lapse Cost of Insurance Rate The No-Lapse Cost of Insurance Rate is based on policy year and on the issue age, sex (if the Policy is issued on a sex-distinct basis), and rate class of each Insured. The No-Lapse Cost of Insurance Rate is shown in the Additional Policy Specifications.
No-Lapse Per Policy Expense Charge The No-Lapse Per Policy Expense Charge is a monthly expense charge and is shown in the Additional Policy Specifications.
No-Lapse Expense Charge Per $1,000 of Specified Amount The No-Lapse Expense Charge Per $1,000 of Specified Amount is a monthly expense charge and is shown in the Additional Policy Specifications.
No-Lapse Interest Rate The No-Lapse Interest Rate is described in the Additional Policy Specifications. A change in the Specified Amount, the addition, deletion or change of any supplemental riders to this Policy, or a change in the rate class of either Insured may result in a change in the Table of Monthly No-Lapse Interest Rates for NLGA.
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Allocation Requirement In order to keep this Rider in force, We reserve the right to establish:
(a) | a maximum percentage of the Policy Value to be permitted in certain subaccounts and/or the Fixed Account; and/or |
(b) | a minimum percentage of the Policy Value to be required in certain subaccounts. |
Should We choose to enforce these restrictions, We will provide advance notice to You. Such notice will identify the restriction percentages to be applied and the subaccounts and/or Fixed Account impacted. We will evaluate the imposition of these restrictions on an annual basis.
Grace Period for the No-Lapse Guarantee Rider If, on a Monthly Anniversary prior to the Maturity Date shown in Section 1 of the Policy:
(1) | The Net Cash Surrender Value is insufficient to cover the Monthly Deduction for the following policy month; and |
(2) | The NLG Requirement described above is not satisfied, |
then a grace period of 61 days will be allowed for the payment of a premium sufficient to keep the base Policy in force. The payment of a premium sufficient to keep the base Policy in force must cover the lesser of: (i) an amount to make the Net Cash Surrender Value positive plus the Monthly Deductions for two additional policy months or (ii) the amount necessary to meet the NLG Requirement for two additional policy months.
Option to Extend Maturity The Maturity Date can be extended as described in the Policy. Under this provision, if the Rider is in force on the original Maturity Date, as shown in Section 1 of the Policy, the No-Lapse Monthly Deductions would be zero from that date forward.
Reinstatement If this Rider terminates due to lapse of the Policy, this Rider may be reinstated within five years after lapse under the same terms as described in the Policy.
The payment of premium must be sufficient to cover the lesser of: (i) the amount necessary to meet the NLG Requirement at that date of reinstatement and for two policy months following the reinstatement, or (ii) an amount to make the Net Cash Surrender Value positive plus the Monthly Deductions for the two policy months following the reinstatement date.
If this Rider terminates while the Policy is still in force, it may not be reinstated.
Termination This Rider will terminate upon:
(a) | lapse, surrender or maturity of this Policy; |
(b) | the date of death of the last Insured to die; |
(c) | the Monthly Anniversary which coincides with or next follows receipt by Us of a written request to terminate this Rider; |
(d) | the subaccounts and/or the Fixed Account limit as described in the Allocation Requirement provision is imposed and You do not take corrective action within 61 days after the date of mailing of the Notice of such requirement; or |
(e) | the Policy Debt exceeds the Basic Death Benefit and You do not take corrective action within 61 days after the date of mailing of Notice. |
Effective Date - The effective date of this Rider is the same as the Policy Date of the Policy to which it is attached.
The Penn Insurance and Annuity Company
ICC23-PI-NLGJ | Page 3 of 4 |
Thomas H. Harris
President
ICC23-PI-NLGJ | Page 4 of 4 |
Rider - Policy Split Option
In this Rider, We, Us, or Our means The Penn Insurance and Annuity Company; You and Your means the Owner of the Policy; and Insured means a person whose life is covered under the Policy.
We agree, subject to the provisions of this Rider, to provide the Policy Split Option. We also agree to provide all of the other benefits which are stated in this Rider. This Rider is a part of the Policy to which it is attached. It is subject to all of the provisions of the Policy unless stated otherwise in this Rider.
Policy Split Option - Within 180 days following the Conditions of Exchange set forth below, You may exchange this Policy for two permanent individual life insurance policies, one on the life of each of the Insureds under this Policy, subject to the following conditions:
(a) | This Policy must be in force and must not be in a grace period at the time of the exchange. |
(b) | You must make a written application for the exchange. |
(c) | Both Insureds must be alive on the Date of Exchange. |
(d) | Neither Insureds rate class is a rated class as determined by the last time evidence of insurability was received. |
(e) | You must make any premium payment necessary to keep each new policy in force for two months. |
(f) | The owner of each new policy must have an insurable interest in the insured. |
(g) | You must surrender all rights in this Policy in exchange for the new policies. |
Conditions of Exchange - This option may be exercised upon the occurrence of any of the following events:
(a) | A divorce decree, issued and entered by a court of competent jurisdiction, has been finalized, dissolving the marriage of the Insured; or, |
(b) | The federal estate tax is repealed; or, |
(c) | The unlimited marital deduction under federal estate tax law is eliminated or reduced to one-half or less of the federal gross estate; or, |
(d) | Federal estate tax rates are reduced by 50% or more. |
New Policies - The new policies will be any individual flexible premium adjustable life insurance policy available for issue at the time We receive Your application for the exchange, and are subject to Our approval.
The Policy Date of the new policies will be the Date of Exchange.
The new policies will be issued at the ages of the Insureds on the birthday nearest the Date of Exchange. The applicable charges and policy form will be those in use by Us on the Date of Exchange.
The Specified Amount of each new policy will be equal to specified percentages of the Specified Amount of this Policy in excess of the Policy Debt of this Policy, provided that:
(a) | the sum of the two percentages must equal 100%; |
(b) | if the percentage on the new policy is less than or equal to 50%, the rate class applicable to the new policy will be the rate class determined by the last time evidence of insurability was received; |
(c) | if the percentage on the new policy is greater than 50%, evidence of insurability, which is used to determine insurability and the rate class applicable to the new policy, will be required; |
(d) | the Specified Amounts must comply with Our rules as to minimum amount; |
(e) | the Specified Amounts must be such that each new policy will satisfy the requirements of Section 7702 of the Internal Revenue Code of 1986, as amended, or as set forth in any applicable successor provision. |
The new policies will be subject to Our rules as to amount and age at issue that are in effect on the Date of Exchange.
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Any existing Policy Debt on the Policy will be repaid by processing a partial withdrawal against the Policy Value at the time of the exchange and any applicable tax reporting will occur.
The specified percentages of the remaining Policy Value of this Policy on the Date of Exchange will be allocated as premium to each of the two new policies. Percent of premium charges will be applied to these premiums according to the terms of the new policies.
If a Supplemental Term Insurance Rider is attached to this Policy, the specified percentages of the Specified Amount of the rider may be added to the Specified Amounts of each individual policy as permanent insurance coverage, subject to Our rules as to limits, age at issue, and availability. In lieu of the above, a term insurance rider may be added to each new policy with a Specified Amount equal to the specified percentages of the Specified Amount of the rider attached to this Policy, subject to Our rules as to limits, age at issue and availability.
Other supplemental riders may be included in each new policy only with Our consent and subject to Our rules.
Date of Exchange - The date of the exchange will be the first Monthly Anniversary of this Policy following Our approval of Your application for the exchange.
Suicide Exclusion - For coverage converted under this Rider, the Suicide Exclusion on the new policy will be based on the Date of Issue of the Policy. The Suicide Exclusion for an increase to the Specified Amount of the new policy, where evidence of insurability was given, will be based on the effective date of the increase.
Incontestability - For coverage converted under this Rider, Incontestability on the new policy will be based on the Date of Issue of the Policy. Incontestability for an increase to the Specified Amount of the new policy, where evidence of insurability was given, will be based on the effective date of the increase.
Tax Consequences - There may be adverse tax consequences to exchanging the Policy under this Rider. The exchange will not qualify as a tax-free exchange pursuant to Section 1035 of the Internal Revenue Code (IRC) and could cause the new policies to become Modified Endowment Contracts, as defined in IRC Section 7702A.
A qualified tax advisor should be consulted before You choose to exchange the Policy under this Rider.
Termination - This Rider will terminate upon:
(a) | lapse of this Policy; |
(b) | the first death of an Insured; |
(c) | the monthly anniversary which coincides with or next follows the older Insureds 80th birthday; or |
(d) | full surrender of this Policy. |
Effective Date - The effective date of this Rider is the same as the Policy Date of the Policy to which it is attached.
The Penn Insurance and Annuity Company
Thomas H. Harris
President
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Rider - Supplemental Exchange
In this Rider, We, Us, or Our means The Penn Insurance and Annuity Company; You and Your means the Owner of the Policy; and Insured means a person whose life is covered under the Policy.
We agree, subject to the provisions of this rider, to provide the Exchange Privilege described below.
This rider is a part of the policy to which it is attached. It is subject to all of the provisions of the policy unless stated otherwise in this rider.
Exchange Privilege - This policy may be exchanged for a new policy on the life of one of the Insureds under this policy and the life of a new Insured subject to the following conditions:
(a) | At the time of the exchange the new Insured must have the same relationship to the remaining Insured as did the two Insureds in this policy. |
(b) | The new Insured must submit evidence of insurability satisfactory to us which is used to determine insurability and the new Insureds rate class at the time of the exchange. The rate class applicable to the remaining Insured will be the rate class determined by the last time evidence of insurability was received. |
(c) | This policy must be in force and not be in a grace period at the time of the exchange. |
(d) | The new Insured must be at least 20 years of age on the birthday nearest the Policy Date of this policy. |
(e) | The difference in the ages of the remaining Insured and the new Insured must not be greater than 30 years. |
(f) | You must make a written application for the exchange. |
(g) | You must make any premium payment which would be necessary to keep the new policy in force for two months. |
(h) | You must surrender all rights in this policy in exchange for the new policy. |
(i) | You must have an insurable interest in the new Insured. |
There are no cash values or loan values associated with this rider.
New Policy - The new policy will be on the same plan as this policy. The policy form and applicable charges will be that which we would have used if the new policy had been issued on the lives of the remaining Insured and the new Insured on the Policy Date.
The Policy Date of the new policy will be the same as the Policy Date of this policy. The Date of Issue of the new policy will be the date of the exchange.
The Specified Amount of the new policy will be as stated by you in the application for the exchange subject to the following conditions:
(a) | The Specified Amount must comply with our rules as to minimum amount. |
(b) | The Specified Amount must be such that the new policy will satisfy the requirements of Section 7702 of the Internal Revenue Code of 1986, as amended, or as set forth in any applicable successor provision. |
The Policy Value of the new policy on the date of the exchange will be equal to the Policy Value of this policy on such date.
The surrender charges applicable to the new policy will be the surrender charges applicable to this policy.
The new policy will be subject to our rules as to age at issue which were in effect on the Policy Date. The new policy will have a new Maturity Date.
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The new policy will be subject to any assignment of this policy and will be subject to any Policy Debt on this policy.
Supplemental riders may be included in the new policy only with our consent and subject to our rules.
Reinstatement - This Rider may be reinstated within five years after lapse under the same terms as described in the Policy. A reinstatement is subject to:
(a) | the submission of evidence of insurability satisfactory to us for any Insured alive on the date of lapse; |
(b) | the payment or reinstatement of any Policy Debt which existed at the end of the grace period; and |
(c) | the payment of a premium sufficient to cover the lesser of: |
(i) | the amount necessary to meet the No-Lapse Guarantee Requirement at the date of reinstatement and for two policy months following the reinstatement date, or |
(ii) | an amount to make the Net Cash Surrender Value positive plus the monthly deductions for the two policy months following the reinstatement date. |
Suicide Exclusion - If the new Insured dies by suicide, while sane or insane, within two years from the date of exchange, the Death Benefit will be limited to any premiums paid for the new policy plus the Policy Value of the existing policy on the exchange date, less any Policy Debt and partial withdrawals.
Date of Exchange - The date of the exchange will be the first Monthly Anniversary of this policy following our approval of the application for the exchange. The new policy will be in force beginning on the date of the exchange. This policy will terminate on the day prior to the date of the exchange.
Incontestability - The new policy will be incontestable after it has been in force during the life of the new Insured for two years from the date of exchange.
The minimum amount that will be paid for a contested claim will be limited to any premiums paid for the new policy plus the Policy Value of the existing policy on the exchange date, less any Policy Debt and partial withdrawals.
Termination - This rider will terminate upon:
(a) | lapse of this Policy; |
(b) | the date of the second death of an Insured; |
(c) | surrender of this Policy; |
(d) | The Maturity Date of this policy; |
(e) | the date of exchange; or |
(f) | the Monthly Anniversary that coincides with or next follows the receipt at the Home Office of your written request to terminate this rider. |
Effective Date - The effective date of this rider is the same as the Policy Date of the Policy to which it is attached unless another effective date is shown below.
The Penn Insurance and Annuity Company
Chairman and Chief Executive Officer
ICC17-PI-SEJ | Page 2 of 2 |
Rider - Estate Preservation - Supplemental Term Insurance
In this Rider, We, Us, or Our means The Penn Insurance and Annuity Company; You and Your means the Owner of the Policy; and Insured means a person whose life is covered under the Policy.
We agree, subject to the provisions of the Policy and this rider, to provide this Term Insurance Benefit. We also agree to provide all of the other benefits which are stated in this rider. This rider is a part of the Policy to which it is attached. It is subject to all of the provisions of the Policy unless stated otherwise in this rider.
Term Insurance Benefit - We will pay, upon receipt of due proof of the last insured to die while this rider is in force, the Term Insurance Benefit. The amount of the Term Insurance Benefit is the Specified Amount for Estate Preservation Term Insurance as shown on Page 3.
The Term Insurance Benefit payable upon the death of the last insured to die will be paid to the beneficiary in one sum or, if elected, under an income payment option. We will pay interest on this sum from the date of death to the date of payment. The interest rate will be determined each year by us, but will not be less than the Guaranteed Minimum Interest Rate shown on Page 3 per year compounded annually or such higher rate as is required by law.
There are no cash values or loan values associated with this rider.
Suicide Exclusion - If the last Insured to die dies by suicide, while sane or insane, within two years from the effective date of this rider, the Term Insurance Benefit will be limited to the Monthly Deductions associated with such benefit.
If the last Insured to die dies by suicide, while sane or insane, within two years from the effective date of any increase in the Term Insurance Benefit, the Term Insurance Benefit with respect to that increase will be limited to the Monthly Deductions for that increase.
If the last Insured to die dies by suicide, while sane or insane, within two years from the effective date of any reinstatement, the Term Insurance Benefit will be limited to the Monthly Deductions associated with such benefit since the date of reinstatement.
Monthly Deduction - While this rider is in force, the Monthly Deduction under this policy will include the Monthly Deduction for this rider. The Monthly Deduction for this rider is the Cost of Insurance for the policy month for the Term Insurance Benefit under this rider.
Cost of Insurance - The Cost of Insurance for the term insurance under this rider is determined on a monthly basis. It is calculated as (a) multiplied by (b) where:
(a) | is the Cost of Insurance Rate divided by $1,000 for Term Insurance applicable to this policy, and |
(b) | is the Specified Amount for this rider. |
Cost of Insurance Rate - The Cost of Insurance Rate for Estate Preservation Term Insurance is based on the policy year and on the issue age, sex (if issued on a sex distinct basis) and rate class of each Insured. Cost of Insurance Rates will be determined by us based on expectations as to future mortality, investment, expense, and persistency experience. However, these rates will not exceed those shown for Term Rates in the Additional Policy Specifications. Cost of Insurance Rates will not be adjusted by us as a means of recovering prior losses nor as a means of distributing prior profits.
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Computation of Values - All values and benefits in this rider are equal to or greater than those required by the Interstate Insurance Product Regulation Commission.
Incontestability -This rider will be incontestable with respect to each insured after it has been in force during the life of that Insured for two years from the Effective Date, except for fraud in the procurement of the rider, when permitted by applicable law. Any increase in the Term Insurance Benefit will be incontestable with respect to statements made in the evidence of insurability for that increase after the increase has been in force during the life of each Insured for two years from its effective date, except for fraud in the procurement of the increase, when permitted by applicable law.
This rider will be incontestable with respect to statements made in an application for reinstatement after it has been in force during the life of each Insured for two years from the effective date of the reinstatement, except for fraud in the procurement of the reinstatement, when permitted by applicable law.
We will send you written notice, within 90 days from the end of the two year contestable period, requesting that you inform us if either of the insureds have died. Upon being informed of a death, any contest will promptly begin. Contests cannot be avoided by failing to inform us of a death during the contestable period even if the payment of premiums into the policy continues.
Termination of Rider - This rider will terminate upon:
(a) | the Termination Date for this rider shown on Page 3; |
(b) | lapse of this Policy; |
(c) | surrender of this Policy; |
(d) | the date of death of the last Insured to die; |
(e) | the Maturity Date of this Policy; or |
(f) | the Monthly Anniversary that coincides with or next follows our receipt of a written request to terminate this rider. |
Reinstatement -This Rider may be reinstated within five years after lapse under the same terms as described in the Policy. A reinstatement is subject to:
(a) | the submission of evidence of insurability satisfactory to us for any Insured alive on the date of lapse; |
(b) | the payment or reinstatement of any Policy Debt which existed at the end of the grace period; and |
(c) | the payment of a premium sufficient to cover the lesser of: |
(i) | the amount necessary to meet the No-Lapse Guarantee Requirement at the date of reinstatement and for two policy months following the reinstatement date, or |
(ii) | an amount to make the Net Cash Surrender Value positive plus the monthly deductions for the two policy months following the reinstatement date. |
Effective Date - The effective date of this rider is the same as the Policy Date of the policy to which it is attached unless another effective date is shown below.
The Penn Insurance and Annuity Company
Chairman and Chief Executive Officer
ICC17-PI-EPSTI | Page 2 of 2 |
Rider Accelerated Death Benefit for Terminal Condition
In this Rider, We, Us, or Our means The Penn Insurance and Annuity Company; You and Your means the Owner of the Policy; and Insured means the person whose life is covered under the Policy.
Disclosure - Upon your request, we will provide prepayment to you a portion of the death benefit based on a noncorrectable terminal condition resulting in the Insureds life expectancy to be 12 months or less. Exercising this benefit could be a taxable event so assistance and advice should be obtained from a personal tax advisor prior to receipt of any prepayments. Accelerated death benefits may also adversely affect the recipients eligibility for Medicaid and other government provided benefits. Death benefits, cash values and loan values will be reduced if an accelerated death benefit is paid.
We agree, subject to the provisions of this rider, to provide prepayment of a portion of the death benefit based on a noncorrectable terminal condition resulting in the Insureds remaining life expectancy to be twelve months or less.
This rider is a part of the policy to which it is attached. It is subject to all of the provisions of the policy unless stated otherwise in this rider.
Free Look Period - You may return payment to our Home Office within 10 days of receipt of payment. We will then void the prepayment of that portion of the death benefit. If you exercise this option and return any prepayment you may not exercise this benefit again at a later date.
Insured - The person covered under the basic Policy to which this rider is attached. This term does not include other persons covered under other riders which are part of the Policy. If the Policy is a Last Survivor Policy with two persons listed as the insureds, this term refers to the surviving insured after the death of one insured. The accelerated death benefit is not available if both insured persons are living.
Benefit Payment - The accelerated death benefit is paid to you while the Insured is living, unless you have otherwise assigned or designated the benefit. If the Insured dies before accelerated benefits are paid, no payment will be made under this rider. However, this provision will not apply to any payment we made before receiving written notice of the Insureds death at our Home Office. Prior to the benefit payment, we will provide you with a Benefit Payment Notice which will include the amount of benefit payment, the dollar amounts of the remaining death benefit and any accumulation values.
Premium - There is no premium for this benefit.
Values - This rider has no cash values or loan values.
Eligibility - In order to receive any benefits under this rider, all the following conditions must be satisfied:
1. | This rider is only available for coverage on the life of the Insured. |
2. | Your request for benefits under this rider must be received in a written form at our Home Office. |
3. | We must receive sufficient evidence that the Insured has a noncorrectable terminal condition. This includes but is not limited to certification from a physician licensed in the United States. This noncorrectable terminal condition must result in the Insureds having a remaining life expectancy of twelve months or less. The licensed physician shall not be the Insured, Owner, Beneficiary, or a relative thereof. (In addition to the definition of kinship in the base policy, a relative is defined as an aunt, uncle, cousin, parent, step-parent, or grandparent.) We reserve the right to obtain additional medical opinions provided at our expense. In the case of conflicting opinions, eligibility for benefits shall be determined by a third medical opinion that is provided by a physician that is mutually acceptable to you and us. |
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4. | This rider is attached only to the base policy (excluding any additional riders except for the Supplemental Term Insurance Rider). |
5. | The policy to which this rider is attached must not be in its premium grace period. |
6. | We must receive signed acknowledgment of concurrence of payments from all assignees and irrevocable beneficiaries. |
7. | This benefit is not available if: |
(a) | Law requires this benefit to meet the claims of creditors, whether in bankruptcy or otherwise, or |
(b) | A government agency requires this benefit in order to apply for, obtain, or keep a government benefit or entitlement. |
8. | If the Policy is a Last Survivor Policy, we must receive written proof of the death of one insured. |
Payment of the accelerated death benefit is due immediately upon our receipt of the due written proof of eligibility.
Requested Percentage - The Requested Percentage is the percentage of Eligible Specified Amount that is to be accelerated. The unadjusted payment is the Requested Percentage multiplied by the Eligible Specified Amount. We reserve the right to limit the unadjusted payment and the accelerated benefit such that:
1. | The Requested Percentage does not exceed 50%; |
2. | The Accelerated Benefit Payment does not exceed $250,000; |
3. | The Accelerated Benefit Payment is at least $10,000; and |
4. | The policy is not disqualified as life insurance according to Internal Revenue Code. |
Eligible Specified Amount - Does not include all coverages, but is restricted to the base policy Specified Amount (excluding any additional riders except for the Supplemental Term Insurance Rider).
Accelerated Benefit Payment - This is the actual benefit amount that you will receive under this rider if eligible. We will pay the Accelerated Benefit Payment in a lump sum only once per policy. The Accelerated Benefit Payment is equal to the unadjusted payment less the following adjustments as of the benefit payment date:
1. | Premiums and policy charges that would have been due during the twelve month period following the benefit payment date for the coverage corresponding to this unadjusted payment; |
2. | A twelve month interest rate discount using a rate that will not exceed the greater of the current yield on the ninety-day Treasury bill or the current maximum statutory adjustable policy loan interest rate based on the Moodys Corporate Bond Yield Averages; and |
3. | A reduction in the unadjusted payment for policy loans by an amount equal to the Requested Percentage times the loan amount. |
Effect on Policy Values - The policy will be subject to pro-rata reductions based on the Requested
Percentage used to produce the Accelerated Benefit Payment. These pro rata reductions will be made to the death benefit, policy value, loan amounts, and any other policy charges.
Reinstatement - This Rider may be reinstated within five years after lapse under the same terms as described in the Policy. A reinstatement is subject to:
(a) | the submission of evidence of insurability satisfactory to us; |
(b) | the payment or reinstatement of any Policy Debt which existed at the end of the grace period; and |
(c) | the payment of a premium sufficient to cover the lesser of: |
(i) | the amount necessary to meet the No-Lapse Guarantee Requirement at the date of reinstatement and for two policy months following the reinstatement date, or |
ICC15-PI-ACDB | Page 2 of 3 |
(ii) | an amount to make the Net Cash Surrender Value positive plus the monthly deductions for the two policy months following the reinstatement date. |
Incontestability - This rider will be incontestable after it has been in force during the life of the Insured for two years from the Effective Date, except for fraud in the procurement of the rider, when permitted by applicable law.
This rider will be incontestable with respect to statements made in an application for reinstatement after it has been in force during the life of the Insured for two years from the effective date of the reinstatement, except for fraud in the procurement of the reinstatement, when permitted by applicable law.
Termination of Rider - This rider will terminate upon:
(a) | lapse of this Policy; or |
(b) | surrender of this Policy; or |
(c) | the maturity date of this Policy; or |
(d) | if the Policy is not a Last Survivor Policy, the date of death of the Insured; or |
(e) | if the Policy is a Last Survivor Policy, the date of death of the last surviving Insured; or |
(f) | the Monthly Anniversary which coincides with or next follows our receipt of a written request to terminate this rider. |
Termination shall not prejudice the payment of benefits for any qualifying event that occurred while the rider was in force.
Effective Date - The effective date of this rider is the same as the Policy Date of the Policy to which it is attached unless another effective date is shown below.
The Penn Mutual Life Insurance Company
Chairman, President and Chief Executive Officer
ICC15-PI-ACDB | Page 3 of 3 |
Rider - Accelerated Benefit - Chronic Illness
In this Policy, We, Us, or Our means The Penn Insurance and Annuity Company at its Home Office; You and Your means the Owner of the Policy.
We agree, subject to the provisions of the Policy and this rider, to provide the Accelerated Benefit Payments (ABPs) described below. We also agree to provide all of the other benefits which are stated in this rider.
This rider is a part of the Policy to which it is attached. It is subject to all of the provisions of the Policy unless stated otherwise in this rider.
Disclosure - Upon request by you, we will provide a prepayment to you of a portion of the death benefit when the Insured has been certified with a Chronic Illness as described below. ABPs may affect eligibility for, or amounts of, Medicaid or other benefits provided by federal, state, or local government. Although payments of ABPs provided by this rider are intended to qualify for favorable tax treatment under section 101(g) of the Federal Internal Revenue Code, the federal, state, or local tax consequences resulting from payment of ABPs will depend on the specific facts and circumstances, and consequently advice and guidance should be obtained from a personal tax advisor prior to the receipt of any ABPs. Death benefits and policy values, such as cash values, premium payments and COI charges if applicable, will be reduced as described below if an ABP is paid.
Notice to Buyer - This rider may not cover all of the costs associated with the Chronic Illness of the Insured. The benefits provided by the rider do not and are not intended to qualify as long-term care insurance. The buyer is advised to review carefully the rider benefits.
Free Look Period:
You may return this rider to us within 30 days of the Effective Date of this rider.
Insured:
The person covered under the basic Policy to which this rider is attached. This term does not include other persons covered under other riders which are part of the Policy. If the Policy is a Last Survivor Policy with two persons listed as the insureds, this term refers to the surviving insured after the death of one insured. The ABP is not available if both insured persons are living.
Eligible Amount:
The Amount of Death Benefit, as described in the Policy, on the date of the initial application for an ABP. This amount excludes all supplemental riders except for the following riders if attached to the Policy:
(a) | Supplemental Term Insurance Rider; |
(b) | Flexible Protection Rider; |
(c) | Enhanced Permanent Paid-Up Additions Rider; |
(d) | Accelerated Permanent Paid-Up Additions Rider; |
(e) | Supplemental Paid-Up Additions Agreement; and |
(f) | Accelerated Paid-Up Additions Agreement. |
ICC15-PI-ABCI | Page 1 of 6 |
Accelerated Benefit Payment (ABP):
This is the actual benefit amount you will receive. You may request the payment of the ABP in a single lump sum or in a series of equal payments occurring annually, semi-annually, quarterly, or monthly. The determination of the amount of any ABP will only take into account the period covered by a certification of the Insureds Chronic Illness from a licensed health care practitioner. The series of benefit payments will continue as scheduled, as long as the Insured has a Chronic Illness and the conditions otherwise specified in this rider are satisfied, until the remaining death benefit reaches the minimum allowed by us or the rider is terminated. No more than 12 ABPs will be paid in a 12 month period.
The ABP must first be used to repay a pro rata share of any Policy Debt as described below.
Upon a request to receive an ABP and upon the payment of an ABP, you and any irrevocable beneficiary shall be given a statement demonstrating the effect of the ABP on cash value, death benefit, premium, COI charges, and policy loans.
Payment of Accelerated Benefit Payment:
The ABP is paid to you or your estate while the insured is living, unless the benefit has been otherwise assigned or designated by you.
We will obtain from any assignee or irrevocable beneficiary a signed acknowledgement of concurrence for payout. If we are the assignee under the Policy, no acknowledgement is required.
We will provide an eligibility claim form within 15 days of the ABP request.
The ABP is due immediately up receipt of the due written proof of eligibility. The ABP is subject to the same requirements as the base policy Death Benefit with respect to any delay in processing required to receive an ABP.
If the Insured dies and we receive written notice of the death before ABPs are paid, no ABPs will be made. However, any payment made by us prior to receiving written notice of the Insureds death is effective.
ABP Limits:
We will limit the ABP such that:
(1) | The Policy is not disqualified as life insurance according to Internal Revenue Code. |
(2) | The ABP is at least $4,800 if taken as a single lump sum, or the sum of scheduled payments for the 12 month period following the date of application for ABPs is at least $4,800 if taken as a series of payments. |
(3) | The maximum total amount of ABPs in a 12 month period will not exceed the least of 24% of the Eligible Amount, $240,000, or the annual Per Diem Limitation within the meaning of sections 101(g)(3)(D) and 7702B(d) of the Internal Revenue Code. The Per Diem Limitation is reduced by benefits for and reimbursements of qualified long-term care services for the Insured through insurance or otherwise during the applicable period. ABPs available under this rider are determined after taking into account any such other coverages and reimbursements. |
(4) | The maximum total amount of ABPs during the life of the Policy will not exceed $5,000,000. |
(5) | The death benefit remaining after an ABP is not less than $50,000. |
(6) | The ABP is not less than the pro-rata reduction in the cash surrender value less outstanding loans for a Flexible Premium Adjustable Life Insurance Policy or reduction in the cash value less outstanding loans for a Whole Life Policy as described in the section below called Effect on the Policy. |
Chronic Illness:
Chronic Illness means that the Insured has been certified by a licensed health care practitioner within the last 12 months as:
ICC15-PI-ABCI | Page 2 of 6 |
(1) | Being unable to perform at least two Activities of Daily Living without Substantial Assistance from another person due to a loss of functional capacity for a period of at least 90 consecutive days; or |
(2) | Requiring substantial supervision by another person for a period of at least 90 consecutive days to protect the Insured from threats to health and safety due to Severe Cognitive Impairment. |
For each lump sum benefit payment, or at the beginning of each 12 month period following the date of application for ABPs if benefit payments are scheduled in a series, we must receive written certification from a licensed health care practitioner that the Insured has a Chronic Illness. The licensed health care practitioner must also certify that continuous care in an eligible facility or at home is expected to be required for the remainder of the insureds life when the insured has a Chronic Illness. The licensed health care practitioner may be a licensed physician, registered professional nurse, licensed social worker, or other similar health care practitioner permitted under the Internal Revenue Code and approved by us. The licensed health care practitioner shall not be the Insured, you, the beneficiary, or a relative thereof. We reserve the right to obtain at any time an additional opinion of the Insureds condition from a licensed health care practitioner at our expense. Should this opinion differ from that of the Insureds licensed health care practitioner, eligibility for benefits will be determined by a third licensed health care practitioner who is mutually acceptable to you and us at our expense.
Activities of Daily Living:
The Activities of Daily Living are:
(1) | Bathing - the ability to wash oneself by sponge bath or in either a tub or shower, including the task of getting into or out of the tub or shower. |
(2) | Continence - the ability to maintain control of bowel or bladder function, or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene, including caring for a catheter or colostomy bag. |
(3) | Dressing - the ability to put on and take off all items of clothing and any necessary braces, fasteners or artificial limbs. |
(4) | Eating - the ability to feed oneself by getting food into the body from a receptacle, such as a plate, cup, or table, or by feeding tube or intravenously. |
(5) | Toileting - the ability to get to and from the toilet, getting on and off the toilet, and performing associated personal hygiene. |
(6) | Transferring - the ability to move into or out of a bed, chair or wheelchair. |
Substantial Assistance:
Substantial Assistance means both Hands-On Assistance and Standby Assistance. Hands-On Assistance means the physical assistance of another person without which the individual would be unable to perform the Activity of Daily Living. Stand-By Assistance means the presence of another person within arms reach of the individual that is necessary to prevent, by physical intervention, injury to the individual while the individual is performing the Activity of Daily Living.
Severe Cognitive Impairment:
Severe Cognitive Impairment means deterioration or loss in intellectual capacity that is:
(1) | Comparable to (and includes) Alzheimers Disease and similar forms of irreversible dementia; and |
(2) | Measured by clinical evidence and standardized tests which reliably measure impairment in: |
(a) | Short term or long term memory; and |
ICC15-PI-ABCI | Page 3 of 6 |
(b) | Orientation to people, places, or time; and |
(c) | Deductive or abstract reasoning. |
Effect on Death Benefit:
The Death Benefit will be reduced by the amount of Death Benefit that has a present value equal to the ABP. If a series of payments is elected, the Death Benefit will be reduced independently for each ABP at the time of payment.
The following factors will be used to determine the decrease in the Death Benefit:
(1) | The ABP; and |
(2) | The ABP Interest Rate in effect; and |
(3) | A mortality table declared by us for individuals with a Chronic Illness. |
The mortality table used in calculations related to the rider will be no less favorable to the Owner than the mortality table in the attached schedule. The use of any table more favorable than the one specified in the rider will be based on reasonable assumptions as to investment income, mortality, and expenses. The declared table will be on a basis equitable to all policyholders of a given class.
ABP Interest Rate:
The ABP Interest Rate will not exceed the greater of the current yield on the ninety-day Treasury bill available on the date of application for the ABP, or the current maximum statutory adjustable policy loan interest rate. The maximum statutory adjustable policy loan interest rate is the greater of:
(a) | Moodys Corporate Bond Yield Average - Monthly Average Corporates as published by Moodys Investors Service, Inc. for the calendar month ending two months prior to the date of application for an ABP; or |
(b) | The minimum interest rate used to calculate policy values under the Policy plus 1 percentage point per year. |
If Moodys Corporate Bond Yield Average - Monthly Average Corporates is no longer published, the rate used in its place will be as established by law or by regulation of the insurance supervisory official of the jurisdiction in which this Policy is issued.
The use of any interest rate more favorable than the maximum specified in the rider will be based on reasonable assumptions as to investment income, mortality, and expenses. The declared interest rate will be on a basis equitable to all policyholders of a given class.
Specified Amount:
The term Specified Amount as used in this rider refers to the Specified Amount shown on page 3 of a Flexible Premium Adjustable Life Insurance Policy or the Face Amount shown on page 3 of a Whole Life Policy. The Specified Amount used in this rider includes any subsequent changes in the amount since the Policy was issued, including any increases or decreases in the Specified Amount.
ICC15-PI-ABCI | Page 4 of 6 |
Effect on the Policy:
The Policy will be subject to pro-rata reductions based on the percentage decrease in the Death Benefit. These pro rata reductions will be made to the Specified Amount, cash value, dividends, and paid-up additions for a Whole Life Policy, and the Specified Amount, policy value, cash surrender value, and surrender charge for a Flexible Premium Adjustable Life Insurance Policy. The remaining portions of the policy values, such as premiums and monthly deductions, will be as if the Policy had been originally issued at the reduced amount.
The ABP will first be used to repay a pro rata share of any Policy Debt. The Policy Debt reduction will not exceed the amount of the ABP.
For a Flexible Premium Adjustable Life Insurance Policy with a No Lapse Guarantee Requirement based on Accumulated Premiums exceeding Accumulated No Lapse Premiums, both the Accumulated Premiums and Accumulated No Lapse Premiums to date will be reduced by the percentage of the Death Benefit decreased.
For a Flexible Premium Adjustable Life Insurance Policy with a No Lapse Guarantee Requirement based on a No Lapse Guarantee Account, the No Lapse Guarantee Account value will be reduced by the percentage of the Death Benefit decreased.
Premium:
There is no separate premium required for this benefit. However, this rider does not eliminate the need to pay premiums to keep the Policy in force. You must continue to pay any premiums necessary to avoid policy lapse as described in the Policy or in any applicable riders attached to the Policy.
Values:
This benefit has no cash value or loan value.
Eligibility:
(1) | This benefit is only available to you upon written request. |
(2) | Requests to exercise this benefit must be received in writing at Our Home Office. |
(3) | For each lump sum benefit payment or at the beginning of each 12 month period following the date of application for the ABP if benefit payments are scheduled in a series, we must receive written certification that the Insured has a Chronic Illness as described in this rider. |
(4) | The benefit excludes any riders that may be attached to the Policy except for the following riders if attached to the Policy: |
(a) | Supplemental Term Insurance Rider; |
(b) | Flexible Protection Rider; |
(c) | Enhanced Permanent Paid-Up Additions Rider; |
(d) | Accelerated Permanent Paid-Up Additions Rider; |
(e) | Supplemental Paid-Up Additions Agreement; and |
(f) | Accelerated Paid-Up Additions Agreement. |
(5) | The Policy must be in force other than as extended term insurance. |
(6) | The Policy must not be in a premium grace period. |
(7) | If the Policy is a Last Survivor Policy, we must receive written proof of the death of one insured. |
(8) | We must receive signed acknowledgment of concurrence with payments from you, the Insured, all assignees, and all irrevocable beneficiaries. |
(9) | Benefit is not available if the law requires the benefit to meet the claims of creditors, whether in bankruptcy or otherwise; or a government agency requires the benefit in order to apply for, obtain, or keep a government benefit or entitlement. |
ICC15-PI-ABCI | Page 5 of 6 |
Monthly Anniversary:
The Monthly Anniversary is the day in each calendar month that is the same day of the month as the Policy Date.
Reinstatement:
This Rider may be reinstated within five years after lapse under the same terms as described in the Policy.
Incontestability:
This rider will be incontestable after it has been in force during the life of the Insured for two years from its Effective Date. During the first two years this rider is in effect, we may contest a request for an ABP under this rider, based on material misrepresentations made in applying for this rider.
This Policy will be incontestable with respect to statements made in an application for reinstatement after it has been in force during the life of the Insured for two years from the effective date of the reinstatement.
Termination of Rider:
This rider will terminate upon:
(a) | the maturity date of this Policy; or |
(b) | lapse of this Policy; or |
(c) | surrender of this Policy; or |
(d) | if the Policy is not a Last Survivor Policy, the date of death of the Insured; or |
(e) | if the Policy is a Last Survivor Policy, the date of death of the last surviving Insured; or |
(f) | the Monthly Anniversary which coincides with or next follows |
(i) | receipt by Us of a written request to terminate this rider; and |
(ii) | return of this Policy for appropriate endorsement. |
Termination of this rider will not prejudice the payment of benefits for any qualifying event while the form was in force.
Effective Date:
The effective date of this rider is the same as the Date of Issue of this Policy unless another effective date is shown below, which would be the date of issue of this rider.
The Penn Insurance and Annuity Company
Chairman, President and Chief Executive Officer
ICC15-PI-ABCI | Page 6 of 6 |
Application for Individual Life Insurance The Penn Mutual Life Insurance Company The Penn Insurance and Annuity Company COMPACT A. Proposed Insured (PI 1) 1. Name First Middle Last 2. Sex 3. Date of Birth (mm/dd/yyyy) 4. Social Security/Tax ID # Male Female / / 5. Drivers License State, No., Issue and Expiration Date 6. Marital Status 7. Birth Place (State/Country) M D S W 8. Citizenship (If other, provide details including valid Green Card or Visa # and Type. Attach a copy of complete document.) US Other Details 9. Address Street City State Zip 10. City State Zip 11. Years at Address 12. Number 13. Email Address Personal ( ) Business ( ) 14. Employer 15. Occupation 16. How Long 17. Business Address Street City State Zip B. Proposed Insured (PI 2)Complete for: Survivorship Plan Additional Insured Rider If multiple additional insureds complete form PM5023. If info for PI 1 is same as PI 2 indicate same. 1. Name First Middle Last 2. Sex 3. Date of Birth (mm/dd/yyyy) 4. Social Security/Tax ID # Male Female / / 5. Drivers License State, No., Issue and Expiration Date 6. Marital Status 7. Birth Place (State/Country) M D S W 8. Citizenship (If other, provide details including valid Green Card or Visa # and Type. Attach a copy of complete document.) US Other Details 9. Address Street City State Zip 10. City State Zip 11. Years at Address 12. Number 13. Email Address Personal ( ) Business ( ) 14. Relationship to First Insured 15. Employer 16. Occupation 17. How Long 18. Business Address Street City State Zip PM1143COM The Penn Mutual Life Insurance Company Page 1 of 13 ICC13 PM1143COM Philadelphia, PA 19172, www.pennmutual.com Rev. 09/23
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C. I. Whole Life Coverage Details 1. Product Name (Select One) Guaranteed Whole Life II Protection Whole Life Survivorship Whole Life 2. Face Amount (Excluding Riders) + 3. Flexible Protection Amount* = 4. Total Initial Coverage $ $ $ *The Flexible Protection Rider is available for Guaranteed Whole Life II only. 5. Whole Life Policy Payment Period (Number of Years) __________ Guaranteed Whole Life IIMinimum 5 years; maximum up to the Insureds insurance age 100. Survivorship Whole Life10 years or until younger Insureds insurance age 100. Protection Whole LifeUntil Insureds insurance age 100. II. RidersRiders may not be available in all states, please refer to the state product approval chart for availability. Guaranteed Whole Life II Survivorship Whole Life Overloan Protection Benefit Rider * Yes No Overloan Protection Benefit Rider * Yes No * If left blank, policy will be issued as illustrated * If left blank, policy will be issued as illustrated Accidental Death Benefit Rider $ Enhanced Permanent Paid Up Additions Rider Childrens Term Insurance Rider (Number of Years)______ (Complete Section R of application) Estate Preservation Term Rider $____________________ Number of Units ____________ Flexible Protection Rider $ Protection Whole Life Guaranteed Purchase Option Rider $ Accidental Death Benefit Rider $ __________________ Paid Up Additions (Number of Years)______ PUAR Version (Select only one) Childrens Term Insurance Rider Accelerated Permanent Paid Up Additions Rider (Complete Section R of application) Enhanced Permanent Paid Up Additions Rider Number of Units ________ Surrender Value Enhancement Rider Enhanced Permanent Paid Up Additions Rider Waiver of Premium (Select only one) Number of Years _______ Disability Waiver of Premium Rider Guaranteed Purchase Option Rider $ _______________ Enhanced Disability Waiver of Premium Rider Waiver of Premium (Select only one) Disability Waiver of Premium Rider Enhanced Disability Waiver of Premium Rider III. Dividend Options Cash Paid Up Additions Accumulate at Interest Other _________________________________ Premium Reduction (Not available with Penn Check, Salary Allotment or the Automated Premium Offset Program) IV. Additional Product Features 1. PUA Rider (PUAR) Information (a) Initial premium to be used for PUAR $ ____________________ (b) Additional premium to be used for lump sum from 1035 exchange $ ____________________ (c) Additional Lump Sum $ ____________________ (d) Annual Payment Limit $ ____________________ (e) Scheduled PUAR Premium (Annual Amount for Billing) $ ____________________ *If Penn Check or Salary Allotment is selected as the payment method this will be the amount drafted for the PUA Rider. 2. Automatic Premium Loan Yes No (If no Automatic Premium Loan is selected, the default is No) 3. Automated Premium Offset Program Yes No Policy Year of Offset _________ The Automated Premium Offset Program will automatically surrender Dividends/PUAs in the policy year entered above. Dividends are not guaranteed and loans may impact program availability. Once initiated, the program does not guarantee that dividends will always offset premiums in future years. This program will discontinue on any Policy Anniversary where Dividends/PUAs are less than total annual premium due. Surrendering Dividends/PUAs may result in a Modified Endowment Contract and/or a reduction in death benefit. PM1143COM Page 2 (Whole Life) of 13 ICC13 PM1143COM Rev. 09/23
C. I. Term Coverage Details 1. Product Name (Select One) Guaranteed Convertible Term® 10 15 20 30 Protection Non-Convertible Term® 10 15 20 30 2. Face Amount (Excluding Riders) $ II. RidersRiders may not be available in all states, please refer to the state product approval chart for availability. Protection Non-Convertible Term® Accidental Death Benefit Rider $_____________________ Childrens Term Insurance Rider (Complete Section R of application) Number of Units_____ Disability Waiver of Premium Rider Guaranteed Convertible Term® Accidental Death Benefit Rider $_____________________ Childrens Term Insurance Rider (Complete Section R of application) Number of Units_____ Waiver of Premium (Select only one) Disability Waiver of Premium Rider with Automatic Conversion Disability Waiver of Premium Rider PM1143COM Page 2 (Term) of 13 ICC13 PM1143COM Rev. 09/23
C. I. Indexed Universal Life (IUL) Coverage Details 1. Product Name (Select One) Accumulation IUL Survivorship IUL 2. Face Amount (Excluding Riders) 3. Supplemental Term Amount 4. Total Initial Coverage 5. Definition of Life Insurance (Select One) Guideline Premium Test Cash Value Accumulation Test 6. Death Benefit Option (Select One) Level Death Benefit Increasing Death Benefit II. Riders Accumulation IUL Survivorship IUL Accidental Death Benefit Rider $ Estate Growth Benefit Rider _____________% Additional Insured Term Insurance Rider Estate Preservation Term Insurance Rider $_____________ (Complete section B of application) $ Overloan Protection Benefit Rider Childrens Term Insurance Rider Supplemental Term Insurance Rider $_________________ (Complete section R of application) Surrender Benefit Enhancement Rider Number of Units Early Surrender Value Rider Disability Waiver of Monthly Deductions Rider Disability Waiver of Stipulated Premium Rider (Disability Completion Benefit) Guaranteed Increase Option Rider $ Overloan Protection Benefit Rider Supplemental Term Insurance Rider $ Surrender Benefit Enhancement Rider Early Surrender Value Rider III. Additional Product Features 1. Accumulation IUL and Survivorship IUL Premium and DCA Allocation (a) Accumulation IUL and Survivorship IUL Premium Allocation I elect to have my premium allocated directly to the accounts as indicated below. ________% Capped 1-Year with 1% Floor ________% Uncapped 1-Year with 1% Floor ________% Capped 1-Year with 0% Floor ________% Uncapped 1-Year with 0% Floor ________% Capped 1-Year with 0% Floor and 3% Spread ________% Uncapped 2-Year with 0% Floor ________% Fixed Account ________% DCA Account (b) Accumulation IUL and Survivorship IUL Premium Allocation (to be completed if DCA is selected) I elect to have my premium allocated from the DCA Account to the accounts as indicated below. ________% Capped 1-Year with 1% Floor ________% Uncapped 1-Year with 1% Floor _______ % Capped 1-Year with 0% Floor ________% Uncapped 1-Year with 0% Floor ________% Capped 1-Year with 0% Floor and 3% Spread ________% Uncapped 2-Year with 0% Floor Each Set of allocations in question 1(a) or 1(b) must equal 100%. PM1143COM Page 2 (IUL) of 13 ICC13 PM1143COM Rev. 09/23
C. I. Universal Life (UL) Coverage Details 1. Product Name (Select One) Guaranteed Protection UL Protection UL 2. Specified Amount (Excluding Riders) $ 3. Definition of Life Insurance (Select One) Guideline Premium Test Cash Value Accumulation Test 4. Death Benefit Option (Select One) Level Death Benefit Increasing Death Benefit* * The Increasing Death Benefit option is not available for Guaranteed Protection UL. II. Riders Guaranteed Protection UL Accidental Death Benefit Rider $ Additional Insured Term Insurance Rider (Complete Section B of application) $ Childrens Term Insurance Rider (Complete Section R of application) Number of Units Disability Waiver of Stipulated Premium Rider (Disability Completion Benefit) Guaranteed Increase Option Rider $ Protection UL Accidental Death Benefit Rider $ Childrens Term Insurance Rider (Complete Section R of Application) Number of Units Disability Waiver of Monthly Deductions Rider Guaranteed Increase Option Rider $ PM1143COM Page 2 (UL) of 13 ICC13 PM1143COM Rev. 09/23
C. I. Variable Universal Life (VUL) Coverage Details 1. Product Name (Select One) Diversified Advantage Variable Universal LifeSM 2. Face Amount (Excluding Riders) 3. Supplemental Term Amount 4. Total Initial Coverage + = $ $ $ 5. Definition of Life Insurance (Select One) Guideline Premium Test Cash Value Accumulation Test 6. Death Benefit Option (Select One) Level Death Benefit Increasing Death Benefit II. Riders Diversified Advantage Variable Universal LifeSM Accidental Death Benefit Rider $ Additional Insured Term Insurance Rider (Complete Section B of application) $ Cash Value Enhancement Rider Childrens Term Insurance Rider (Complete Section R of application) Number of Units Disability Di Waiver of Monthly Deductions Rider Disability Waiver of Stipulated Premium Rider (Disability Completion Benefit) Guaranteed Increase Option Rider $ Overloan Protection Benefit Rider Supplemental Term Insurance Rider $ Waiver of Surrender Charges Rider III. Additional Product Features 1. Premium Allocation (a) Premium Allocation: Please specify the allocation of the net initial and subsequent premiums in Column A on the chart on the next page. Do not use increments of less than 1%. (b) Dollar Cost Averaging (DCA) One box Must be selected. Annual premium must be at least $600. I elect DCA using the Money Market Fund. Please transfer $ __________ ($50.00 minimum) monthly from the Money Market Fund into the funds selected in Column B on the chart on the next page. I elect DCA using the 12-Month DCA Account. Please transfer funds in 12 monthly installments into the funds selected in Column C on the chart on the next page. I decline the DCA option. (c) Automatic Asset Rebalancing (AAR) One box MUST be selected. The Money Market Fund is not available for AAR if the DCA option was elected. Minimum policy value of $1000 is required to activate AAR. I elect to have the total of the assets in all funds automatically rebalanced on the last business day of each calendar quarter into the funds selected in Column D on the chart on the next page. I decline the AAR option. (d) Monthly Deduction Allocation You may specify the investment options from which certain monthly charges will be deducted in Column E on the chart on the next page. If any particular investment option has insufficient funds to cover your specified percentage deduction, the charge will be deducted pro-rata from each of your investment options. Mortality and expense risk asset charges cannot be specified and will be deducted pro-rata from each of your investment options. Note: Mortality and expense risk asset charges are not deducted from any of the Fixed Account options. PM1143COM Page 2 (VUL) of 13 ICC13 PM1143COM Rev. 09/23
C. I. Variable Universal Life (VUL) Coverage Details (continued) IV. Premium Allocation Chart (e) COL A INVESTMENT OPTIONS INVESTMENT MANAGERS COL B COL C COL D COL E INITIAL & DCA DCA from 12 AAR Mo. Deduction SUB PMTS. month (not Allocation available for (not available VMAX II and for VMAX II VUL 3) and VUL 3) % SMID Cap Value Fund AllianceBernstein $ % % % % Large Cap Value Fund AllianceBernstein $ % % % % Mid Core Value Fund American Century $ % % % % Real Estate Securities Fund Cohen & Steers Capital Management $ % % % % Mid Cap Growth Fund Delaware Investments Fund Advisers $ % % % % Large Core Growth Fund Delaware Investments Fund Advisers $ % % % % Large Core Value Fund Eaton Vance Management $ % % % % Small Cap Value Fund Goldman Sachs Asset Management $ % % % % SMID Cap Growth Fund Goldman Sachs Asset Management $ % % % % Small Cap Growth Fund Janus Henderson Investors US LLC $ % % % % Mid Cap Value Fund Janus Henderson Investors US LLC $ % % % % Large Cap Growth Fund MFS Investment Management $ % % % % Money Market Fund Penn Mutual Asset Management, LLC N/A % % % % Limited Maturity Bond Fund Penn Mutual Asset Management, LLC $ % % % % Quality Bond Fund Penn Mutual Asset Management, LLC $ % % % % High Yield Bond Fund Penn Mutual Asset Management, LLC $ % % % % Balanced Fund Penn Mutual Asset Management, LLC $ % % % % Aggressive Allocation Fund Penn Mutual Asset Management, LLC $ % % % % Moderately Aggressive Allocation Fund Penn Mutual Asset Management, LLC $ % % % % Moderate Allocation Fund Penn Mutual Asset Management, LLC $ % % % % Moderately Conservative Allocation Fund Penn Mutual Asset Management, LLC $ % % % % Conservative Allocation Fund Penn Mutual Asset Management, LLC $ % % % % Index 500 Fund State Street Global Advisors $ % % % % Small Cap Index Fund State Street Global Advisors $ % % % % Developed International Index Fund State Street Global Advisors $ % % % % Flexibly Managed Fund T. Rowe Price Associates $ % % % % Large Growth Stock Fund T. Rowe Price Associates $ % % % % Emerging Markets Equity Fund Vontobel Asset Management, Inc. $ % % % % International Equity Fund Vontobel Asset Management, Inc. $ % % % % Traditional Fixed Account The Penn Mutual Life Insurance Company N/A N/A N/A % % 12-Month DCA Account The Penn Mutual Life Insurance Company N/A N/A N/A N/A % Classic 1% Floor S&P 500 Indexed Account The Penn Mutual Life Insurance Company $ % N/A % % Enhanced S&P 500 Indexed Account The Penn Mutual Life Insurance Company $ % N/A % % Uncapped S&P 500 Indexed Account The Penn Mutual Life Insurance Company $ % N/A % 100% TOTALS $ 100% 100% 100% PM1143COM Page 2 (VUL) of 13 ICC13 PM1143COM Rev. 09/23
C. I. Variable Universal Life (VUL) Coverage Details (continued) (f) DCA, AAR, and Indexed Fixed Account Disclosures Any residual funds in the Money Market (less than the minimum) will automatically transfer to the allocation on record. Any residual funds in the 12-month DCA Account will automatically transfer to the allocation on record at the end of each 12-month period. The first DCA transfers will take place on the first monthly anniversary after the Free Look period ends. DCA transfers will continue monthly: anytime the balance in the Money Market fund is above the minimum DCA transfers will not take place: if the policy enters a grace period DCA transfers will continue until: the company receives a written or telephone request from the Owner to terminate DCA or five years from the start date of the first DCA transfer from the Money Market fund or the following date selected ________________ AAR will continue quarterly until: The company receives a written or telephone request from the Owner to terminate AAR. (g) Disclosure (a) Did the Owner receive the prospectus? Yes No (b) Does the Owner understand that: The Death Benefit may increase or decrease depending on investment experience? Yes No The cash value may increase or decrease depending on the investment experience? Yes No The policy will lapse if the net cash surrender value becomes insufficient to cover Yes No policy charges and the terms of the no-lapse provision of this policy (if applicable) have not been met? (c) Does the Owner believe that this policy will meet insurance needs and financial objectives? Yes No PM1143COM Page 2 (VUL) of 13 ICC13 PM1143COM Rev. 09/23
C. I. Variable Universal Life (VUL) Coverage Details 1. Product Name (Select One) Protection Variable Universal Life Survivorship Protection Variable Universal Life 2. Specified Amount (Excluding Riders) $ 3. Definition of Life Insurance Cash Value Accumulation Test 4. Death Benefit Option Level Death Benefit II. Riders Protection Variable Universal Life Accidental Death Benefit Rider $ ____________________ Childrens Term Insurance Rider (Complete Section R of application) Number of Units ________ Disability Waiver of Monthly Deductions Rider Survivorship Protection Variable Universal Life Estate Preservation Term Rider $ ____________________ III. Additional Product Features 1. Premium Allocation (a) Premium Allocation: Please specify the allocation of the net initial and subsequent premiums in Column A on the chart on the next page. Do not use increments of less than 1%. (b) Dollar Cost Averaging (DCA) One box Must be selected. Annual premium must be at least $600. I elect DCA using the 12-Month DCA Account. Please transfer funds in 12 monthly installments into the funds selected in Column B on the chart on the next page. I decline the DCA option. (c) Automatic Asset Rebalancing (AAR) One box MUST be selected. Minimum policy value of $1000 is required to activate AAR. I elect to have the total of the assets in all funds automatically rebalanced on the last business day of each calendar quarter into the funds selected in Column C on the chart on the next page. I decline the AAR option. (d) Monthly Deduction Allocation You may specify the investment options from which certain monthly charges will be deducted in Column D on the chart on the next page. If any particular investment option has insuï¬cient funds to cover your specified percentage deduction, the charge will be deducted pro-rata from each of your investment options. Mortality and expense risk asset charges cannot be specified and will be deducted pro-rata from each of your investment options. Note: Mortality and expense risk asset charges are not deducted from any of the Fixed Account options. PM1143COM Page 2 (VUL) of 13 ICC13 PM1143COM Rev. 07/23
C. I. Variable Universal Life (VUL) Coverage Details (continued) IV. Premium Allocation Chart (e) COL A INVESTMENT INVESTMENT COL B COL C COL D INITIAL & OPTIONS MANAGEMENT DCA from 12 AAR Mo. SUB PMTS. month Deduction % Total Stock Market Index The Vanguard Group, Inc. % % % % Total Bond Market Index The Vanguard Group, Inc. % % % % Mid-Cap Index The Vanguard Group, Inc. % % % % Global Bond Index The Vanguard Group, Inc. % % % Total International Stock Market % The Vanguard Group, Inc. % % % Index % Equity Index The Vanguard Group, Inc. % % % % Conservative Allocation The Vanguard Group, Inc. % % % % Moderate Allocation The Vanguard Group, Inc. % % % The Penn Insurance % Short-Term Fixed Account N/A N/A % and Annuity Company The Penn Insurance % Traditional Fixed Account N/A N/A % and Annuity Company The Penn Insurance % 12-Month DCA Account N/A N/A N/A and Annuity Company 100 % Totals 100 % 100 % 100 % PM1143COM Page 2 (VUL) of 13 M1143COM Rev. 09/23
C. I. Variable Universal Life (VUL) Coverage Details (continued) (f) DCA and AAR Disclosures Any residual funds in the 12-month DCA Account will automatically transfer to the allocation on record at the end of each 12-month period. AAR will continue quarterly until: The company receives a written or telephone request from the Owner to terminate AAR. (g) Disclosure (a) Did the Owner receive the prospectus? Yes No (b) Does the Owner understand that: The Death Benefit may increase or decrease depending on investment experience? Yes No The cash value may increase or decrease depending on the investment experience? Yes No The policy will lapse if the net cash surrender value becomes insufficient to cover Yes No policy charges and the terms of the no-lapse provision of this policy (if applicable) have not been met? (c) Does the Owner believe that this policy will meet insurance needs and financial objectives? Yes No PM1143COM Page 2 (VUL) of 13 ICC13 PM1143COM Rev. 09/23
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D. Owner, if other than Insured If product selected is a survivorship policy, Insureds will be joint owners with right of survivorship, unless otherwise specified. If Trust, give names of Trust and Trustee and date of Trust. 1. Name (First, Middle, Last or Trust/Entity) 2. Relationship to Proposed Insured 3. Address Street City State Zip 4. Number ( ) 5. Mailing Address (if different from above) Street City State Zip 6. Birth/Trust Date (mm/dd/yyyy) 7. Social Security/Tax ID # 8. Email Address / / 9. Name of Trustee(s)/Authorized Company Representative 10. Drivers License State, No., Issue and Expiration Date E. Contingent OwnerIf Trust, give name of Trust, Trustee and date of Trust. 1. Name (First, Middle, Last or Trust/Entity) 2. Relationship to Proposed Insured 3. Address Street City State Zip 4. Number ( ) 5. Mailing Address (if different from above) Street City State Zip 6. Birth/Trust Date (mm/dd/yyyy) 7. Social Security/Tax ID # 8. Email Address / / 9. Name of Trustee(s)/Authorized Company Representative 10. Drivers License State, No., Issue and Expiration Date F. PayorComplete only if Payor is other than the Proposed Insured or Owner or if a different address is requested. 1. Name (First, Middle, Last or Trust/Entity) 2. Date of Birth (mm/dd/yyyy) / / 3. Address Street City State Zip 4. Mailing Address (if different from above) Street City State Zip 5. Social Security/Tax ID # 6. Number 7. Email Address ( ) 8. Relationship to Proposed Insured 9. What is the amount of life insurance carried on the life of the Payor? 10. Please provide details as to why the Payor is paying the premiums. G. Certification of Owners Taxpayer ID Under penalty of perjury, I the Owner certify that: 1. The number shown in this application as my social security number or taxpayer identification number is correct; and 2. I am not subject to backup withholding because I have not been notified by the IRS that I am subject to backup withholding as a failure to report all interest or dividends, or the IRS has notified me that I am no longer subject to backup withholding, or I am exempt from backup withholding; and 3. I am a U.S. person (including a U.S. resident alien). Check this box if you are subject to backup withholding under section 3406(a)(1)(c) of the Internal Revenue Code. PM1143COM Page 3 of 13 ICC13 PM1143COM Rev. 09/23
H. Primary BeneficiaryIf no beneficiary survives the Insured, proceeds revert to the Estate of the Insured. Date of Birth or Name (First, Middle, Last) and Social Security Phone Number Date of Trust Relationship % Address (Street, City, State, Zip) or Tax ID No. (mm/dd/yyyy) Name Address Name Address Name Address Name Address I. Contingent Beneficiary Date of Birth or Name (First, Middle, Last) and Social Security Phone Number Date of Trust Relationship % Address (Street, City, State, Zip) or Tax ID No. (mm/dd/yyyy) Name Address Name Address J. Additional Insured Rider BeneficiarySee contract language for additional information Date of Birth or Name (First, Middle, Last) and Social Security Phone Number Date of Trust Relationship % Address (Street, City, State, Zip) or Tax ID No. (mm/dd/yyyy) Name Address Name Address PM1143COM Page 4 of 13 ICC13 PM1143COM Rev. 09/23
K. Non-Conforming Illustration Acknowledgement (Non-variable only) An illustration is defined as a presentation or depiction that includes non-guaranteed elements of a policy over a period of years. If an illustration was presented during the sales process and matches the policy applied for, a copy of that illustration must be signed and submitted with the application. If the signed illustration is not submitted, indicate the reason below (check one). 1. An illustration was not presented to me 2. An illustration was presented to me, however, the policy applied for is diïerent than as illustrated 3. An illustration was presented to me on a computer screen If 1, 2, or 3 are checked, I acknowledge, as applicant, that I did not receive and sign an illustration that matches this application for the reason indicated above. I also understand that an illustration matching the policy at time of issue will be provided for my signature no later than at the time the policy is delivered. L. Premium and Billing Information If money was collected with this application, please complete and submit the Temporary Insurance Agreement (TIA) PM1146. No TIA can be provided unless premium has been collected. 1. (a) Total premium to be billed $ (b) If single premium amount $ 2. (a) Additional premium expected via 1035 exchange $ ; (b) additional lump sum $ 3. Billing Mode and/or Method of Payment Single Premium Annual Semi-annual Quarterly Salary Allotment, the client should provide an existing account number if applicable SPIA Period Certain, Number of Years Penn Check (monthly): The client should provide an existing account number if applicable (For a new Penn Check account, see below) Draft initial premium when policy issued (Only available for Penn Check monthly) Must complete Penn Check Account information below if selecting Penn Check billing method, or policy will be issued quarterly. Penn Check is only available for premiums totaling $25.00 or more. Please include copy of void check. (a) Bank Name (b) Bank Routing and Account Number Routing # Account # (c) Account Type Checking Savings Pershing Other (d) Draft Date 1st 8th 15th 22nd (e) Bank Address Street City State Zip (f) Name (First, Middle, Last) of First Depositor (g) Name (First, Middle, Last) of Second Depositor M. Sources of Premium 1. What is the source of the premiums? (Indicate all that apply for any part of the premium.) Applicants personal income Applicants personal liquid assets Applicants family member, including spouse Applicants personal illiquid assets (Identify and describe their source below) Premium finance company (Identify lender below) Mortgage, reverse mortgage or home equity loan Other person or entity Annuity payments (identify type of annuity, source of (Identify and describe their source below) annuity premiums, reasons for annuity below) SPIA payments (identify and describe source of premium for SPIA below) PM1143COM Page 5 of 13 ICC13 PM1143COM Rev. 09/23
M. Sources of Premium (continued) If anyone other than the applicant is paying any part of the premium, describe any arrangement which has been established or is being considered for repayment by the applicant, the Insured if other than the applicant, or any trust established by the Insured or the applicant. Indicate whether any such promised or potential repayment will or would come from the policy cash value or death benefit, and describe any other source of repayment. N. Life Insurance In Force or Pending 1. Has any Proposed Insured ever applied for life, health or disability insurance PI1 PI2 and been declined, postponed or ered on a basis other than applied? Yes No Yes No 2. Does any Proposed Insured have any formal or informal applications pending with any other life insurance company now? Yes No Yes No If answered Yes to above questions, please give details for each Proposed Insured. Proposed Insured 1 Proposed Insured 2 3. Does any proposed insured have any existing life insurance or annuities in force? Yes No (If Yes, complete any State required replacement forms and comparison statements.) 4. List all Insurance In Force on any Proposed Insured. Business Face Policy Issue Is Policy Being Check if Insureds Name & Company or Amount Number Year Replaced or 1035 Exchange Personal Changed? B P Yes No Yes No B P Yes No Yes No B P Yes No Yes No B P Yes No Yes No B P Yes No Yes No O. Replacement and 1035 Exchange Information Complete only if there is existing life insurance and/or annuity coverage. coverage 1. Are you . considering stopping premium payments, surrendering, replacing, forfeiting, assigning to the insurer or reducing your benefits under an existing policy or contract? Yes No 2. Are you considering using or borrowing funds from your existing policies or contracts to pay premiums due on the new or applied for policy? Yes No If answered Yes to either question, please complete and sign all required replacement forms. 3. If 1035 Exchange, will loan be carried over? Yes No If Yes, amount of loan $ A 1035 loan transfer is not available on a whole life policy. 4. Loan Election for policy with an Indexed Loan feature. Loans being carried over to a policy with an Indexed Loan feature must elect the option to apply to the transferred loan. Please make one of the following selections: Traditional Loan Option Indexed Loan Option P. Intent to Transfer & Life Expectancy Evaluation 1. Is there any arrangement that has been established, or is being considered, to make a collateral assignment of the policy, or otherwise to transfer the policy, or any part of the policy, or any interest in the policy (including any interest in a trust or other entity with an interest in the policy)? Yes No If Yes, please explain. 2. Has there been a life expectancy evaluation of the Insured in the past 2 years or is there an arrangement which has been established or is being considered to perform one in the future? Yes No 3. Have you settled or sold to a third party a life insurance policy in the past 5 years? Yes No If Yes, please indicate which policy (listed in Section P) was settled and explain. PM1143COM Page 6 of 13 ICC13 PM1143COM Rev. 09/23
Q. Financial Needs BenefitsGive reasons for insuring the life of each Insured (check all that apply). Death Benefit Protection Deferred Compensation Retirement Funding Savings, Accumulation Tax Planning Education/College Funding Debt Protection Transfer of Estate Upon Death Buy/Sell Charitable Giving Other, please describe. R. Childrens Term Insurance Agreement If School Drivers License Relationship Date of Birth Age Current Height Weight Insurance State & Number Childs Name (First, Middle, Last) to Insured (mm/dd/yyyy) Grade Ft./In. Lbs. In Force (if applicable) / 1. Are all children equally insured? Yes No If No, please provide details. 2. With whom and where do all children reside? 3. Please advise the amount of insurance currently in force on parent(s)/guardian. If none, please provide details. 4. Has any child been absent from school or work for more than 5 consecutive days due to illness or injury within the past 12 months? Yes No If Yes, please provide details. 5. Has any child ever been treated for or diagnosed by a member of the medical profession with any disease of the heart or circulatory system, lungs, kidney, tumor or cancer, diabetes, elevated blood pressure, nervous, blood or joint disorder, disorder of stomach, liver, intestines, paralysis or accident, Acquired Yes No Immune Deficiency Syndrome or alcohol/drug abuse? If Yes, please provide Insured name and details. 6. Has any child ever had any operation, medical treatment or physical exam within the past 2 years? Yes No If Yes, please provide Insured name and details. 7. Has any child smoked cigarettes or used tobacco in any form? Yes No If Yes, please provide when last used, amount, frequency and product. 8. In the past 5 years, has any child been convicted of a moving violation, been convicted of a DUI (driving under the influence of alcohol or drugs) or had their drivers license suspended or revoked? Yes No If Yes, please provide details. Special Requests PM1143COM Page 7 of 13 ICC13 PM1143COM Rev. 09/23
S. Tobacco and/or Nicotine Use Information 1. Does either person proposed for coverage, currently use or have they ever used tobacco or products in any form containing nicotine (e.g., cigarettes, cigars, pipes, chewing tobacco, nicotine gum, nicotine patches, or any other nicotine delivery system)? (a) Proposed Insured 1 Yes No If Yes: (f) Proposed Insured 2 Yes No If Yes: (b) Type (c) Amount (g) Type (h) Amount (d) Frequency (i) Frequency (e) Date Last Used (mm/dd/yyyy) / / (j) Date Last Used (mm/dd/yyyy) / / T. Personal Physician Information 1. Personal PhysicianIf no personal physician, list physician last consulted, date and reason last consulted. For Proposed Insured 1 and Proposed Insured 2. Proposed Insured 1 Physician Name Date Last Seen (mm/dd/yyyy) Phone Number / / ( ) Address Street City State Zip Reason Last Seen Proposed Insured 2 Physician Name Date Last Seen (mm/dd/yyyy) Phone Number / / ( ) Address: Street City State Zip Reason Last Seen U. Lifestyle InformationComplete for Proposed Insured 1 and Proposed Insured 2 or Additional Insureds. Provide details to any Yes answers in Details section. 1. Does either Proposed Insured intend to reside or travel outside the United States YesPI1 No YesPI2 No within the next 24 months other than vacation of not more than 2 weeks? If Yes, please complete foreign travel questionnaire PM0326, EXCEPT for vacations of not more than 2 weeks duration. If vacation, provide complete details including dates, destinations, and duration in the Details section on page 9. 2. Within the past 2 years, has either Proposed Insured flown or taken instruction as a Yes No Yes No pilot or crew member or does either proposed insured intend to do so within the next two years? (If Yes, please complete Aviation Supplement form # 5835-5) 3. Within the past 2 years, has either Proposed Insured engaged in any kind of racing, Yes No Yes No scuba or sky diving, hang gliding, base jumping, mountain or rock climbing, or big game hunting or does either proposed insured intend to do so within the next 2 years? (If Yes, please complete appropriate questionnairePM2782, PM2782A or PM1047) 4. Within the past five years, has either Proposed Insured: (a) Been convicted of a moving violation or had their drivers license suspended Yes No Yes No or revoked? (b) Been convicted of a DUI (driving under the influence of alcohol or drugs)? Yes No Yes No 5. Has either Proposed Insured been convicted of, or currently charged with, the Yes No Yes No commission of any criminal offense other than the violation of a motor vehicle law within the last 10 years? 6. Is either Proposed Insured a member, or entered into a written agreement to Yes No Yes No become a member, of any armed forces or military reserve? (If Yes, please complete PS1017) 7. Has either Proposed Insured declared bankruptcy? Yes No Yes No (If Yes, please advise if discharged and date of discharge) 8 . Is either Proposed Insured currently receiving, or within the past 5 years have they Yes No Yes No received or applied for, any disability benefits, including Workers Compensation, Social Security Disability Insurance, or any other form of disability insurance? PM1143COM Page 8 of 13 ICC13 PM1143COM Rev. 09/23
U. Lifestyle Information (continued) Details of any YES answers in Section U. V. Financial Information A. Personal Finances (Needs to be completed for all applications. If PI is a child please use parent information.) PI 1 PI 2 1. Annual Earned Income from occupation (after deduction of business expenses) $ $ 2. Other Income (give source) $ $ 3. Net Worth $ $ B. Business FinancesComplete the following section for business owned contracts. 1. Business Insurance Purposes Key Person Buy Sell Business Loan Other Assets Liabilities Gross Sales Net Income Fair Market Value of Business Current Year $ $ $ $ $ Previous Year $ $ $ $ $ 2. How was the amount applied for determined? 3. What percentage of the business is owned by the Proposed Insured(s)? % 4. Are other partners/Owners/executives insured or applying for life insurance with any company? Yes No If Yes, please provide details. Special Instructions and Home Oï¬ce Amendments and Corrections PM1143COM Page 9 of 13 ICC13 PM1143COM Rev. 09/23
W. Non-Medical Part 2Complete for all Proposed Insureds not requiring an examination (see Penn Mutual medical evidence chart for details). Completion for Proposed Insureds being examined is optional, but encouraged. Provide details to any Yes answers in Details section on page 11. 1. Height (in shoes) 2. Weight (clothed) Weight change in last year? Yes No PI1 ft. in. lbs. If Yes, Increase Decrease No. of lbs. 3. Height (in shoes) 4. Weight (clothed) Weight change in last year? Yes No PI2 ft. in. lbs. If Yes, Increase Decrease No. of lbs. PI1 PI2 5. Are you presently taking any medication, supplements or homeopathic remedies Yes No Yes No either prescribed or over the counter? 6.During the past 10 years, has a licensed member of the medical profession treated you for, or made a diagnosis of: a. High blood pressure, chest discomfort, heart attack, heart murmur, Yes No Yes No circulatory or heart disorder? b. Diabetes, sugar in urine, thyroid disorder, elevated cholesterol or other Yes No Yes No endocrine or metabolic disorder? c. Asthma, bronchitis, emphysema, shortness of breath, sleep apnea or any Yes No Yes No other lung or respiratory disorder? d. Hepatitis, cirrhosis, ulcer, colitis or other disorder of the stomach, liver or Yes No Yes No digestive system? e. Anemia, leukemia or other blood or clotting disorder? Yes No Yes No f. Arthritis, gout, back or joint pain, bone fracture, muscle disorder, or any Yes No Yes No disorder of the skin? g. Seizures, stroke, fainting, paralysis, falls, loss of consciousness, mental or Yes No Yes No emotional disorder or any other disorder of the brain or nervous system? h. Alzheimers disease, dementia, memory impairment, Parkinsons disease Yes No Yes No or any other progressive neurological disease? i. Cancer, tumor, polyp or cyst? Yes No Yes No j. Disorder of eyes, ears, nose or throat? Yes No Yes No k. Kidney, bladder, urinary, reproductive organ, breast or prostate disorder? Yes No Yes No l. Acquired Immune Deficiency Syndrome (AIDS), AIDS Related Complex Yes No Yes No (ARC), or any disorder of the immune system or a positive blood test for antibodies to the HIV virus? 7. Have you ever used any controlled substances such as: amphetamines, Yes No Yes No barbiturates, hallucinogens, heroin, morphine, cocaine, marijuana, opiates or any prescription drug, except as prescribed by a physician? If Yes, please complete Substance Use Questionnaire PM0293. 8. Have you ever been advised by a physician to limit or discontinue the use of Yes No Yes No alcohol or drugs, sought or received medical treatment, counseling or participated in a self help group for alcohol or drug use? If Yes, please complete Substance Use Questionnaire PM0293. 9. Other than previously stated, have you within the past 5 years: a. Consulted a physician or any other practitioner, had a check-up, illness, Yes No Yes No surgery or been hospitalized? b. Had an electrocardiogram, exercise treadmill test, echocardiogram, X-ray, Yes No Yes No blood test or other diagnostic test, excluding HIV related tests? c. Been advised to have, or scheduled, any diagnostic test, hospitalization or Yes No Yes No surgery which was not completed, excluding HIV related tests? PM1143COM Page 10 of 13 ICC13 PM1143COM Rev. 09/23
W. Non-Medical Part 2 (continued) 10. Family History Have any of your immediate family members (parents, brothers and sisters) died or been diagnosed or treated by a member of the medical profession as having diabetes, heart disease, TIA (transient ischemic attack) or other cerebrovascular disorder, cancer, stroke, Huntingtons disease and Chorea, neuromuscular disorder, or kidney disease prior to age 60? PI 1 Yes No PI 2 Yes No (If Yes, provide details in Medical Impairment section below.) Amount of Insurance Age(s) Age(s) Medical Impairment Cause of Death (Complete if Proposed (if living) (at death) Insured is under 17) Father (PI 1) Father (PI 2) Mother (PI 1) Mother (PI 2) Brother (PI 1) Brother (PI 2) Sister (PI 1) Sister (PI 2) X. Details for Medical History Questions Question No. Date Details (include full names and address Person and Letter (mm/dd/yyyy) of physicians, hospitals, etc.) PM1143COM Page 11 of 13 ICC13 PM1143COM Rev. 09/23
Additional Remarks Y. Authorization for Fund Transfer (Variable only) The Financial Professional may request transfers of account values pursuant to my instruction. If neither box is checked only the owner may request transfers of account values. Yes No Penn Check Authorization By completing Section L of this application, I authorize monthly payments from my checking or savings account, or from my Pershing Resource Checking or Pro Cash Plus account to the Penn Mutual Life Insurance Company, its subsidiaries, aï¬liates, and third party administrators (herein Company) for premiums on this policy, beginning with the next periodic payment that comes due under the contract, until such time as a payment cannot be made due to insucient funds or the Company gives the other parties at least 30 days advance written notice of the termination of such payment plan. I am able to cancel the payment plan at any time by either calling the Company at 1-800-523-0650 or in writing. Monthly payments will be drawn from my account on or about the date specified in this application. If no date has been selected in Section L, the draw date will be the 15th of the month. I further agree that if any such check be dishonored, whether with or without cause and whether intentionally or inadvertently, the Company shall be under no liability whatsoever even though such dishonor results in the forfeiture of insurance. Notice and Consent for Employer Owned Insurance The undersigned Insured hereby consents to being insured for the initial maximum amount of insurance indicated in Section C of this application. The undersigned Insured understands and consents that the Insureds employer indicated in Section D and Section H of this application will be the Owner and beneficiary of the life insurance policy, and that the employer may continue to maintain the life insurance policy beyond the term of the Insureds employment. Indexed Account Disclosure S&P®, Standard & Poors®, S&P 500®, Standard & Poors 500, S&P Global BMI, Standard & Poors Global BMI, S&P Global Broad Market Index, and Standard & Poors Global Broad Market Index are trademarks of Standard & Poors Financial Services LLC and have been licensed for use by The Penn Insurance and Annuity Company and its affiliates. The product is not sponsored, endorsed, sold or promoted by Standard & Poors and Standard & Poors makes no representation regarding the advisability of purchasing this product. Continued on Page 13 PM1143COM Page 12 of 13 ICC13 PM1143COM Rev. 09/23
Representations (Please Read Carefully) I (we), the Proposed Insured(s), and the Applicant(s) if other than the Proposed Insured(s), and the Applicant(s) on behalf of the Proposed Insured(s), if the Proposed Insured(s) is (are) age 17 or less and the Applicant(s) is (are) authorized under applicable law to make such a representation on behalf of the Proposed Insured(s), represent that the statements and answers in this Part I of the application are written as made by me (us) and are complete and true to the best of my (our) knowledge and belief. I (we) the Proposed Insured(s), or the Applicant(s) if other than the Proposed Insured(s) agree that they will be a part of the contract of insurance if issued, that I (we) will be bound by such statements and answers, and that the Company, believing them to be true, will rely and act upon them. I (we) also understand and agree that: 1. Subject to any coverage provided under the terms and provisions of a Temporary Insurance Agreement, if applicable, no insurance coverage will be in force until the first modal premium is paid in full AND a life insurance policy has been issued and delivered to the policy owner while the health, habits, occupation, financial circumstances and other facts relating to the Proposed Insured(s) and to the Payor, if a Payor Benefit is issued, are the same as described in this Part I of the application, any Part II required by the Company, and any amendments or supplements to them. 2. Notice to or knowledge of a Financial Professional or a medical examiner is not notice to or knowledge of the Company, and no Financial Professional or medical examiner is authorized to accept risks, to pass upon acceptability for insurance or to modify any contract of insurance. 3. Acceptance of any policy issued based on this application will be a ratification of any amendments or corrections noted by the Company in the space headed Home Office Amendments and Corrections, except that if required by statute, regulation or Interstate Insurance Product Regulation Commission standard, any change in amount, age, plan of insurance, additional benefits or classification must be agreed to in writing. Fraud Warning Fraud Warning: Any person who knowingly presents a false statement in an application for insurance may be guilty of a criminal oense and subject to penalties under state law. SignaturesIf Proposed Insured is under age 18, Parent or Guardian must sign and include relationship. Signed and Dated by the Applicant in / / City State Date (mm/dd/yyyy) Signature of Insured (Or Parent/Guardian if Insured is under the age of 18) Proposed Insured 1 Proposed Insured 2 Signature of Owner and/or Applicant if other than the Proposed Insured Owner* Applicant *If a Corporation, the signature and title of any authorized oï¬cer other than the Proposed Insured(s) is required and the full name of the Corporation must be shown. If a Trust, the signature of the Trustee(s), as required by the Trust document. Signature of Payor Financial Professionals CertificationBe sure to check appropriate block. Each Financial Professional present at solicitation must sign. I certify to the best of my knowledge the answers to the questions in all parts of this application are true and correct. I further certify to the best of my knowledge this policy will will not replace or change any existing life insurance or annuity policy now in force. / / Signature of Financial Professional Date (mm/dd/yyyy) / / Signature of Financial Professional Date (mm/dd/yyyy) PM1143COM Page 13 of 13 ICC13 PM1143COM Rev. 09/23
ADMINISTRATIVE SERVICES AND SUPPORT AGREEMENT
Parties: | The Penn Mutual Life Insurance Company (Penn Mutual), a Pennsylvania corporation with offices at 600 Dresher Road, Horsham, Pennsylvania and The Penn Insurance and Annuity Company (PIA), a Delaware corporation with offices at 600 Dresher Road, Horsham, PA 19044. | |
Subject: | PIA, a wholly owned subsidiary of Penn Mutual, requires the performance of services to operate its business. Penn Mutual shall perform the services for the benefit of PIA during the term of the Agreement on the terms and conditions contained herein. | |
Services: | Penn Mutual will provide PIA with such services and facilities as PIA determines to be reasonably necessary to conduct its business (Services). See Exhibit A. PIA shall maintain oversight with respect to the Services and functions performed for it by Penn Mutual, and PIA shall monitor and have the right to audit such Services on a annual basis to confirm that such Services meet PIAs quality and performance standards. | |
Term: | This Agreement is effective as of January 1, 2022 and shall continue in effect on an annual basis until terminated in accordance with the Termination section of this Agreement. | |
Payment: | Services provided by Penn Mutual under this Agreement shall be charged to PIA on the basis of Penn Mutuals direct and directly allocable expenses, reasonably and equitably determined to be attributable to such Services, plus a reasonable charge for overhead, where applicable. Direct and directly allocable expenses shall consist of costs incurred for Services that exclusively and specifically inure to the benefit of PIA. Costs that cannot be allocated directly but for which a cost/benefit relationship can be reasonably identified, shall be included in the allocated costs. Penn Mutuals allocation methodologies may include policy count, revenue, headcount, service volumes, and square footage and are subject to approval of PIA (which approval shall not be unreasonably withheld). Any such methodology shall allocate such costs equitably and consistently between and among Penn Mutual, PIA and Penn Mutuals other affiliates. Overhead and administrative and general costs incurred generally for Penn Mutual and its affiliates, and for which a more specific or direct cost allocation methodology is impractical, shall be allocated from time to time using allocations statistics and methodologies developed by Penn Mutual which are fair, equitable and reasonable under the circumstances and which are otherwise consistent with statutory accounting standards and practices as set forth in the Accounting Practices & Procedures Manual of the National Association of Insurance Commissioners (Accounting Manual).
PIA shall pay for Services quarterly based on a calendar year beginning January 1 and ending on December 31. Charges shall be billed on the 20th of the month after the previous quarter close and shall be due by the 30th of that month. Charges shall be substantiated by appropriate schedules or documentation. PIA shall, on an annual basis, have the right to review all schedules or documentation supporting all service charges and adjust as appropriate. |
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The amounts payable for the Services under this Agreement do not include any amounts for sales, use, value-added or proposed goods and services tax or other similar taxes. If any such taxes are found at any time to be required, they will be added to the amounts payable pursuant to this Agreement. The amounts payable shall be payable without deduction or withholding on any account whatsoever and regardless of whether an invoice has been supplied to PIA. If Penn Mutual is required by law to make any such deduction or withholding, PIA shall pay to Penn Mutual such additional amount as may be necessary to enable Penn Mutual to receive a net amount equal to the full amount which would otherwise have been payable pursuant to this Agreement, unless such deduction or withholding is made by reference to net income. If Penn Mutual is required to withhold taxes that are refundable to Penn Mutual, then such taxes will be withheld from amounts payable. | ||
The calculation and settlement of amounts due under this Agreement shall be subject to, and shall comply with, the Accounting Manual.
PIA shall not advance funds to Penn Mutual except to pay for Services as contemplated by this Agreement. Penn Mutual shall not advance funds to PIA under this Agreement except to the extent that the Services include payment of amounts to third-parties for such Services (which amounts shall thereafter be reimbursed to Penn Mutual by PIA in accordance with the requirements of this Agreement). Funds and invested assets of each insurer are the exclusive property of the insurer, held for the benefit of the insurer and are subject to the control of the insurer. | ||
See Exhibit B for Planned 2022 allocated expenses. | ||
Books and Records: |
Penn Mutual and PIA shall each maintain appropriate books and records documenting the Services provided, the costs incurred and the amounts charged under this Agreement (collectively, Books and Records). Upon request, each party shall make the Books and Records held by it available to the counterparty during business hours for inspection and copying by an authorized representative of the counterparty. Penn Mutual will furnish to PIA such information as may be reasonably required to audit and confirm the Services rendered, costs allocated and amounts charged hereunder to PIA.
Books and Records maintained by Penn Mutual with respect to Services (PML Books and Records) shall be the property of, be held for the benefit of and be subject to the control of Penn Mutual, but PIA shall at all times have the right to review and be provided complete copies of all such PML Books and Records. |
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Books and Records maintained by PIA with respect to Services (PIA Books and Records) shall be the property of, be held for the benefit of and be subject to the control of PIA, but Penn Mutual shall at all times have the right to review and be provided complete copies of all such PIA Books and Records. | ||
If PIA is made the subject of receivership or other proceedings under 18 Del. Code §§ 5901 et seq., PIA shall promptly and continuously make the PIA Books and Records available to PIAs Statutory Successor (as hereinafter defined). | ||
If Penn Mutual is made the subject of receivership or other proceedings under 40 P.S. § 221.1 et seq., Penn Mutual shall promptly and continuously make Penn Mutuals Books and Records available to Penn Mutuals Statutory Successor. | ||
The term Statutory Successor means and includes any conservator, rehabilitator, liquidator or other statutory representative appointed or otherwise designated to manage or supervise the affairs and operations of (i) PIA under the Delaware insurance insolvency laws, or (ii) Penn Mutual under the Pennsylvania insurance insolvency laws. | ||
Reservation of Rights: |
Penn Mutual shall not be obligated to modify the Services, subject of this Agreement, to conform to PIAs future needs but Penn Mutual shall use best efforts to accommodate PIAs needs during the Term. Penn Mutual shall only be required to provide the Services as they are constituted on the effective date of this Agreement. Penn Mutual shall at all times during the Term of this Agreement have the right to amend/modify the Services at any time to conform to Penn Mutuals needs. Penn Mutual shall give PIA not less than thirty (30) days prior written notice of any such material amendment or modification. PIA reserves the right to obtain some or all of the Services from any third party and/or to provide such Services internally. | |
Confidential Information: | In connection with its performance under this Agreement, each party (a Receiving Party) may be supplied with materials and information, whether transmitted in written, oral, magnetic form or any other medium, concerning the other party by or on behalf of such other party (the Disclosing Party) and its affiliates which is non-public, confidential or proprietary in nature (the Confidential Information). Confidential Information shall mean personally identifiable information (PII), protected health information (PHI), and electronic protected health information (ePHI) as well as confidential and proprietary business information as including, but not limited to, inventions, proprietary information and business matters or affairs, including, but not limited to, processes, systems, methods, formulas, patents, patent applications, machinery, materials, research activities and plans, business proposals, production cost data, contracts, employee information. Confidential Information shall also include Personal Information, which means information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly to, a natural person, including information that meets the definition personal information, personal data, personally identifiable information, sensitive personal information, or similar term under applicable Law, including, but not limited to the California Consumer Privacy Act (Cal.Civ.Code §1798.100 et.seq.) and state data breach |
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notification laws. Each party may be given direct access into the other partys computer systems and network, thereby giving the Receiving Party direct access to Disclosing Partys Confidential Information. Confidential Information does not include information that: (i) has become part of the public domain through no act or omission of the Receiving Party; (ii) to Receiving Partys knowledge, was lawfully disclosed to the Receiving Party without restriction on disclosure by a third party (other than on behalf of the Disclosing Party); (iii) was developed independently by the Receiving Party; or (iv) is or was lawfully and independently provided to the Receiving Party prior to disclosure hereunder from a third party who to the Receiving Partys knowledge is not and was not subject to an obligation of confidentiality or otherwise prohibited from transmitting such information. | ||
The Receiving Party shall receive and use Confidential Information of the Disclosing Party solely for purposes of receiving or providing Services under this Agreement and for the work and transactions contemplated hereby. The parties may not retain, sell or otherwise disclose any Confidential Information for any purpose other than to provide the Services in this Agreement or retain, use or disclose Confidential Information outside of the direct relationship between the parties; provided, however, that the Receiving Party may disclose any such Confidential Information to its employees, affiliates, representatives, agents, accountants, attorneys and other confidential advisors who need to know the Confidential Information for purposes of the work and transactions contemplated by this Agreement. In accordance with Title V of the Gramm-Leach-Bliley Act of 1999 (GLB Act) and its implementing regulations and Regulation S-P promulgated by the United States Securities and Exchange Commission, the Receiving Party will not disclose any non-public personal information as defined in the GLB Act and in Regulation S-P regarding any customer; provided, however, that the parties may disclose such information as necessary in the ordinary course of business to carry out the purposes for which such information was disclosed to Penn Mutual, or as may be required by law. The parties agree to use reasonable precautions to protect and prevent the unintentional disclosure of such non-public personal information. In the event that the Receiving Party is required by law or requested by any governmental agency or other regulatory authority (including any self-regulatory organization having jurisdiction or claiming to have jurisdiction over the parties) or pursuant to legal process to disclose any of the Confidential Information or non-public personal information, the Receiving Party shall exercise reasonable efforts to provide the Disclosing Party with written notice of any such request or requirement, to the extent permissible and practicable under the circumstances, so that the parties may seek a protective order or other appropriate remedy and confer for the purposes of limiting any proposed disclosure to that which is required by law. Any Confidential Information which is given to the Receiving Party under the terms of this Agreement shall remain the property of the Disclosing Party. The Receiving Party will, upon termination of this Agreement, securely return or destroy all records, electronic or otherwise, containing any Confidential Information. Disposal may be achieved through delivery of all copies of such records to the Disclosing Party or through destruction in a manner that renders the records unreadable and undecipherable by any means consistent with a data protection law. Upon the Disclosing Partys request, the Receiving Party will provide written confirmation of the disposal of Confidential Information consistent with this Section. |
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All products, books, records and files created, established or maintained by employees of Penn Mutual on behalf of PIA, which, if created, established or maintained by employees of PIA, would have been owned by PIA, shall be the property of PIA and shall be subject to examination by persons authorized by PIA during reasonable business hours and shall be delivered to PIA or its designees as requested. | ||
Information Security: |
Each Party shall maintain effective information security measures to protect Confidential Information from unauthorized disclosure or use, including measures as required by applicable law. Each Party must hold Confidential Information to at least the same extent that the Party maintains its own Confidential Information, but no less than a reasonable standard of care or any higher standard of care required by applicable law. Each Party shall provide each other with the information regarding such security measures upon the reasonable request of the other Party and promptly provide the other with information regarding any failure of such security measures or any security breach related to Confidential Information. | |
(1) Security Breach. Security Breach means any act or omission that materially compromises either the security, confidentiality or integrity of Confidential Information or the physical, technical or organizational safeguards put in place by each party, that relate to the protection of security, confidentiality or integrity of Confidential Information. Without limiting the foregoing, a material compromise shall include unauthorized access to or disclosure or acquisition of Confidential Information. | ||
(2) Breach Notification. In the event of a security breach, each Party will provide immediate and direct notification to the other Party. Each Party agrees that no public statements will be made regarding a network, or security breach involving client data without prior written approval from the other Party. | ||
(3) Expenses. Each party shall at its own expense take reasonable steps to immediately contain and remedy any Security Breach and prevent any further Security Breach, including, but not limited to taking any and all action necessary to comply with applicable privacy rights, laws, regulations and standards. The party that sustains a Security Breach shall reimburse the non breaching Party for all reasonable costs incurred by the non-breaching Party in responding to, and mitigating damages caused by, any Security Breach, including all costs of remediation and/or notice of the Security Breach to be provided to any individuals, regulators, law enforcement agencies, consumer reporting agencies or others as required by law or regulation. |
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Termination: | This Agreement may be terminated as follows: | |||
(1) | By either party for convenience, on not less than thirty (30) days prior written notice to the counterparty. | |||
(2) | By either party for cause, consisting of fraud, willful misconduct or material breach of the counterparty. Termination for fraud or willful misconduct under this clause shall be effective upon delivery of written notice to the counterparty. Termination for material breach under this clause shall take effect upon the termination date set forth in the written notice of such termination which shall be no less than fifteen (15) days following delivery of such notice (Notice Period); provided however, that such termination shall not take effect if the breach is cured to the reasonable satisfaction of the terminating party within the Notice Period. | |||
Penn Mutual shall use its best efforts to assist PIA in acquiring from independent third parties those services, subject of this Agreement, as PIA may require upon termination of this Agreement or upon termination of any single service agreement attached hereto. | ||||
Insolvency: | If PIA is made the subject of receivership or other proceedings under 18 Del. Code §§ 5901 et seq., (i) the rights of PIA under this Agreement shall extend to the Delaware Insurance Commissioner and any receiver, liquidator or rehabilitator appointed to manage the affairs of PIA (collectively, Statutory Successor); (ii) Penn Mutual shall not thereupon have the automatic right to terminate this Agreement; and (iii) Penn Mutual will continue to maintain systems, programs and other infrastructure for the servicing of PIA and shall make such available to the Statutory Successor for as long as Penn Mutual continues to receive timely payment for Services rendered hereunder.
If Penn Mutual is made the subject of receivership or other proceedings under 40 P.S. § 221.1 et seq., (i) the rights of Penn Mutual under this Agreement shall extend to the Pennsylvania Insurance Commissioner and any receiver, liquidator or rehabilitator appointed to manage the affairs of Penn Mutual (collectively, Statutory Successor); and (ii) PIA shall not thereupon have the automatic right to terminate this Agreement. | |||
Indemnification: | ||||
Penn Mutual shall indemnify, defend and hold PIA harmless from and against any and all loss, damage, liability, cost and expense, including reasonable attorneys fees, incurred as a result of a breach by Penn Mutual of its obligations under this Agreement or which otherwise results from or arises out of a negligent or knowingly wrongful act or omission to act on the part of Penn Mutual under or in connection with this Agreement, the Services or the work and transactions contemplated hereby. |
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PIA shall indemnify, defend and hold Penn Mutual harmless from and against any and all loss, damage, liability, cost and expense, including reasonable attorneys fees, incurred as a result of a breach by PIA of its obligations under this Agreement or which otherwise results from or arises out of a negligent or knowingly wrongful act or omission to act on the part of PIA under or in connection with this Agreement or the work and transactions contemplated hereby. | ||
Successors And Assigns: |
All covenants and agreement contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of such parties. Any party may not assign this Agreement without prior written consent of the other party hereto. | |
Modification, Amendment or Waiver: | No modification, amendment, or waiver of this Agreement shall be effective unless approved in writing by both parties hereto. A partys failure at any time to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of each party thereafter to enforce each and every provision of this Agreement in accordance with its terms. | |
Independent Contractor: | Penn Mutual shall render the services provided hereunder as an independent contractor in accordance with its own standards, subject to its compliance with provisions of this Agreement and with all applicable laws, ordinances and regulations. | |
Entire Agreement: | This Agreement embodies the complete agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. \ | |
Governing Law: | This Agreement shall be construed as to validity, performance and enforcement in accordance with and governed by the laws of the Commonwealth of Pennsylvania. | |
Further Assurances: | The parties hereto shall execute such further documents or instruments and take such further action as may be reasonably requested by the other to effect the purposes of this Agreement. | |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement with an effective date of January 1, 2022. |
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THE PENN MUTUAL LIFE INSURANCE COMPANY | THE PENN INSURANCE AND ANNUITY COMPANY | |||||||
By: |
|
By: |
| |||||
Title: | CFO | Title: | Vice President and Controller | |||||
Date: | February 14, 2022 | Date: | February 8, 2022 |
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Administrative Services and Support Agreement
List of Services Provided
Exhibit A
Executive and Administrative. Penn Mutual assists in the corporate executive administration of PIA. In order to promote the efficient operation of PIA, certain of Penn Mutuals executive and administrative personnel keep themselves informed of all aspects of PIAs operations and serve as consultants to PIA. Penn Mutual makes recommendations relating to the adoption and implementation of management policies and programs, financial policies and programs, operating procedures and practices, additions to and improvements of property, plant and equipment, and development and modification of PIAs marketing means and methods and business plans and programs.
Legal. Penn Mutuals legal staff shall provide PIA with such legal services, advice, consultation and representation as may be requested in respect of regulatory, compliance, transactional, litigation and other matters as required by PIA from time to time.
Data Processing. Penn Mutual shall furnish PIA with data processing services, equipment and facilities required for the operations of PIA and for the management and administration of its business, including, without limitation, the following:
(a) Installation and maintenance of such software, hardware, telecommunications equipment and facilities as PIA may require.
(b) Availability of mainframe capacity for batch and on-line data processing requirements.
(c) Disaster recovery, including archival of programs, data files, records and reports at an off-site facility.
(d) Development and implementation of security measures to ensure that third parties shall not have access to PIAs data files, records, reports and programs.
(e) Such other data processing services, equipment and facilities as may reasonably be required by PIA from time to time.
The PIA acknowledges that all computer programs, tutorials and related documentation made available by Penn Mutual or by Penn Mutuals third-party suppliers (the Software) are and shall remain the exclusive property of Penn Mutual or such third-party supplier, as applicable. Penn Mutual warrants and represents that it is either the legal titleholder or a duly authorized licensee of the Software and that the Software, and the use of the Software in rendering the services hereunder, will not infringe upon or otherwise violate the terms of any validly issued and outstanding patent, copyright or trademark. If necessary for the purposes of this Agreement, Penn Mutual shall grant to PIA (or, if applicable, may arrange with any third-party Software supplier for the granting of) a personal non-exclusive, non-transferable right and license (or sublicense, as applicable) to use the Software for PIAs internal, end-user purposes during the term of this Agreement.
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Treasury. Penn Mutual will provide treasury services to PIA, including advice on the development and implementation of financing programs, preparation of financial analyses and studies, advice concerning arrangements for bonds or escrow accounts and assistance in the preparation of necessary papers, documents, statements, applications and declarations. Penn Mutual will assist in cash management, establishment of bank credit lines, collection policies and development of investment programs and practices.
Corporate Secretarial. Penn Mutual will assist PIA in the maintenance of its official corporate records, minute books, charters, bylaws, contracts, deeds, stockholder records, the preparation and issuance of stock certificates and the performance of duties related to the transfer of stock. Penn Mutual will perform such other corporate secretarial functions as may be requested.
Marketing. Penn Mutual will provide PIA with general marketing consultation to include, by way of example only, client and product development, and the structuring of joint venture and other business combinations with third parties.
Recordkeeping and Reporting. Penn Mutual shall assist PIA with recordkeeping and reporting including particularly, but without limitation, recordkeeping and reporting assistance in the following areas:
(a) Recordation and reporting of the business, including periodic accounting of income, fees, and disbursements.
(b) Preparation, maintenance and reporting of PIAs general accounting records, financial reports, regulatory reports and filings.
(c) Recordation and reporting relative to federal, state and local tax returns and regulatory filings.
(d) Compliance with records retention rules and requirements for the data files, records and reports of the business in accordance with applicable laws, regulations, third-party contract terms and PIAs internal record retention policies.
Purchasing Services. Penn Mutual will advise and assist PIA in connection with purchases of equipment, materials and supplies.
Insurance Services. Penn Mutual will advise and assist PIA in all insurance matters, including without limitation, obtaining policies of insurance and pursuing and settling insurance claims.
Tax Services. Penn Mutuals Tax Department will provide tax services to PIA including, without limitation: (i) tax compliance, return preparation and estimated quarterly tax payments; (ii) tax accounting including GAAP and statutory accounting and footnote preparation; (iii) audit support; (iv) tax planning, budgeting, forecasts and research; and (v) correspondence with, and representation before, tax authorities.
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Service Operations. Penn Mutuals Service Operations Department will perform various functions such as claim processing, enrollment processing and recording, customer service for PIA.
Internal Audit- Penn Mutuals Internal Audit group will perform various function to ensure proper controls and procedures are being followed and adhered to.
Actuarial Services- Penn Mutual will provide actuarial valuation and product development services.
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Administrative Services and Support Agreement
Penn Mutual - PIA
2022 Planned Allocations
Exhibit B
Expenses charged to PIA for services provided are based on the amount of business in PIA. PIA volumes, which vary each quarter, are applied to a standard cost to determine expenses Penn Mutual allocates to PIA.
Estimated Expense |
Methodology | |||||
Single Life Fixed UL |
||||||
New Commissions |
4,915,304 | 65.54% of new commissions to issue policies | ||||
New Policies |
563,300 | $524.00 for each new policy to issue | ||||
Renewal Cash Premium |
1,119,819 | 1.60% of every $1 of renewal cash premium | ||||
Inforce Amount |
1,087,500 | 15.00% of every $1000 of inforce in support | ||||
Inforce Policies |
1,410,022 | $122.61 for each inforce policy in support | ||||
|
|
|||||
Total |
$ 9,095,944 | (a) | ||||
Single Life Indexed UL |
||||||
New Cash Premium (up to target) |
$14,461,162 | 34.93% of every $1 of new cash premium up to target | ||||
New Cash Premium (excess) |
588,613 | 0.95% of every $1 of new cash premium in excess of target | ||||
New Policies |
786,000 | $524.00 for each new policy to issue | ||||
Inforce Amount |
3,040,000 | 16.00% of every $1000 of inforce in support | ||||
Inforce Policies |
2,629,908 | $131.50 for each inforce policy in support | ||||
|
|
|||||
Total |
$21,505,683 | (b) | ||||
Joint Life UL |
||||||
New Cash Premium (up to target) |
$ 1,947,939 | 33.73% of every $1 of new cash premium up to target | ||||
New Cash Premium (excess) |
92,220 | 0.86% of every $1 of new cash premium in excess of target | ||||
New Policies |
75,520 | $944.00 for each new policy to issue | ||||
Inforce Amount |
2,400,000 | 16.00% of every $1000 of inforce in support | ||||
Inforce Policies |
453,659 | $131.50 for each inforce policy in support | ||||
|
|
|||||
Total |
$ 4,969,338 | (c) | ||||
Variable UL |
||||||
New Cash Premium (up to target) |
$ 3,893,213 | 37.08% of every $1 of new cash premium up to target | ||||
New Cash Premium (excess) |
174,668 | 0.90% of every $1 of new cash premium in excess of target | ||||
New Policies |
262,000 | $524.00 for each new policy to issue | ||||
Inforce Amount |
7,510 | 17.00% of every $1000 of inforce in support | ||||
Inforce Policies |
69,079 | $131.50 for each inforce policy in support | ||||
|
|
|||||
Total |
$ 4,406,469 | (d) | ||||
Indexed Annuities |
||||||
New Premium |
$239,597 | 1.20% of every $1 of new cash premium | ||||
New Policies |
11,200 | $112.00 for each new policy to issue | ||||
Inforce Policies |
132,505 | $139.48 for each inforce policy in support | ||||
|
|
|||||
Total |
$ 383,302 | (e) | ||||
Variable Annuities |
||||||
Inforce Policies |
97,635 | (f) $139.48 for each inforce policy in support | ||||
Payout Annuities |
||||||
Inforce Policies |
16,107 | (g) $32.87 for each inforce policy in support | ||||
PIA Allocated General Operating Expense |
$40,474,479 | (a)+(b)+(c)+(d)+(e)+(f)+(g) |
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August 25, 2023
Board of Directors
The Penn Insurance and Annuity Company
600 Dresher Rd
Horsham, PA 19044
Re: | The Penn Insurance and Annuity Company |
PIA Variable Life Account I |
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-6 |
File Nos. 333-269813; 811-23646 |
Ladies and Gentlemen:
This opinion is furnished in connection with the filing by PIA Variable Life Account I (the Separate Account) of the above-referenced Registration Statement under the Securities Act of 1933 for the Survivorship Protection Variable Universal Life Insurance policies (the Policies) offered and funded by the Separate Account. I have examined, or persons on my staff have examined such documents and laws as I considered necessary and appropriate. On the basis of such examination, it is my opinion that:
1. | The Penn Insurance and Annuity Company (the Company) is a stock life insurance company duly organized and validly existing under the laws of the state of Delaware and has been duly authorized by the Department of Insurance of the state of Delaware to issue variable life insurance policies. |
2. | The Separate Account is a separate account of the Company within the meaning of Section 2932 of the Delaware Insurance Code, as amended, duly established by resolution of the Companys Board of Directors on March 10, 2021 and validly existing under the laws of the state of Delaware. |
3. | To the extent Delaware state law governs, the Policies have been duly authorized by the Company and, when issued as contemplated by the Registration Statement, will constitute legal, validly issued and binding obligations of the Company, enforceable in accordance with their terms, subject, as to enforceability, to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors rights generally from time to time in effect and to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). |
I hereby consent to the use of this opinion as an exhibit to said Registration Statement.
Sincerely,
Ann-Marie Mason
Chief Legal Officer
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Statement of Additional Information constituting part of this Pre- Effective Amendment No. 1 to the Registration Statement on Form N-6 (No. 333-269813) (the Registration Statement) of our reports dated February 17, 2023 and February 18, 2021 relating to the statutory financial statements of The Penn Insurance and Annuity Company and consent to the use in the Registration Statement of our report dated April 13, 2023 relating to the financial statements of each of the subaccounts of PIA Variable Life Account I indicated in our report. We also consent to the references to us under the heading Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
August 25, 2023
September 1, 2023
INITIAL SUMMARY PROSPECTUS
For The
SURVIVORSHIP PROTECTION VUL
a flexible premium variable life insurance policy issued by
THE PENN INSURANCE AND ANNUITY COMPANY
and funded through
PIA VARIABLE LIFE ACCOUNT I of
The Penn Insurance and Annuity Company PO Box 178, Philadelphia, Pennsylvania 19105
800-523-0650
This Summary Prospectus for New Investors summarizes key features of the Survivorship Protection Variable Universal Life Insurance policy (the Policy), a joint-life (or second-to-die), flexible premium variable universal life insurance policy issued by The Penn Insurance and Annuity Company (the Company). The Policy provides life insurance and a cash surrender value that varies with the investment performance of one or more of the mutual fund portfolios in the Variable Investment Options that you select. The available portfolios are listed in the Appendix to this summary prospectus. The Policy also provides options in the Fixed Account in which amounts may be held to accumulate interest. The life insurance (or death benefit) provided under the Policy will never be less than the amount specified in the Policy. The death benefit is paid only on the death of the second of the two insureds to die; no death benefit is paid on the death of the first insured to die.
Before you invest, you should also review the prospectus for the Policy, which contains more information about the Policys features, benefits, and risks. You can find the prospectus and other information about the Policy online at https://www.pennmutual.com/for-individuals-and-businesses/performance-and-rates/prospectuses. You can also obtain this information by calling 1-800-523-0650 or by sending an email request to FundOperations@pennmutual.com.
Right to Cancel. If you are a new purchaser of a Policy, you may cancel your Policy within 10 days of receiving it without paying fees or penalties. In some states, this Free Look or cancellation period may be longer. If you cancel your Policy, in most states you will receive your policy value, plus any premium charge and monthly deductions (minus any loans and accrued loan interest). In some states, you will receive a full refund of the amount of any premiums you have paid. You should review the prospectus, or consult with your investment professional, for additional information about specific cancellation terms that apply.
The Securities and Exchange Commission (SEC) has not approved or disapproved of this security or passed upon the accuracy or adequacy of this summary prospectus. Any representation to the contrary is a criminal offense. Additional information about certain investment products, including variable life insurance, has been prepared by the Securities and Exchange Commissions staff and is available at Investor.gov.
Policies have risks including risk of loss of the amount invested. Policies are not deposits of, or guaranteed or endorsed by, any bank and are not federally insured by the FDIC, Federal Reserve Board, or any other agency.
Table of Contents
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Overview of the Survivorship Protection Variable Universal Life Insurance Policy |
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The prospectuses of the available portfolios contain important information that you should know about the investments that may be made under the Policy. You should read the portfolio prospectuses carefully before you invest. You can obtain the portfolio prospectuses by calling 1-800-523-0650 or by sending an email request to FundOperations@pennmutual.com.
In this summary prospectus, the words we, our or us refer to The Penn Insurance and Annuity Company and the words you or your refer to the policyowner. This summary prospectus (and the life insurance policy) is not considered an offering in any jurisdiction where such offering may not be lawfully made. We do not authorize any information or representations regarding the offering described in this summary prospectus other than as contained in these materials or any supplements to them, or in any other materials (such as the prospectus or supplemental sales material) we authorize.
More detailed information concerning the terms defined below is in the appropriate sections of the prospectus and this summary prospectus.
Cash Surrender Value: The Policy Value, less any surrender charges that may apply.
Company: The Penn Insurance and Annuity Company. Also referred to as We, our, and us, or PIA.
Fixed Accounts. There are four Fixed Accounts under the Policy: the Short-Term Fixed Account, the Traditional Fixed Account, the Policy Loan Account, and the Fixed Dollar Cost Averaging Account. These are all part of the Companys general account assets. These are the Fixed Account Options.
General Account: All of our general assets, liabilities, capital and surplus, income, gains, or losses that are not included in the Separate Account or any other separate account. These assets are subject to the claims of our general creditors.
Investment Options: Policy Investment Options that consist of the Variable Investment Options and the Fixed Account Options.
Monthly Deduction: The charges we deduct from your Policy Value each month, including the Cost of Insurance Charge, Per Policy Expense Charge, the Expense Charge per Thousand of Specified Amount, the Mortality and Expense Risk Asset Charge, and any applicable Optional Supplemental Rider Charges.
Net Amount at Risk: The difference between the death benefit and the Policy Value.
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Net Cash Surrender Value: The Policy Value, less any surrender charges that may apply, less any outstanding loans and accrued loan interest. This is the amount we will pay you if you surrender your Policy.
Net Policy Value: The Policy Value, less any Policy Debt.
Net Premium: The balance of a premium payment after deduction of the percent of premium charge.
Policy Debt: Any outstanding policy loans plus all accrued interest.
Policy Specifications Page: Section 1 of your Policy. The Policy Specifications Page contains your policys individual specifications.
Policy Value: The total value of your policy, which is the sum of the values in the Variable Investment Options and the Fixed Account Options. At any time, your Policy Value is equal to: the Net Premiums you have paid (your premiums less the percent of premium charges); plus or minus the investment results in the part of your Policy Value (if any) allocated to the Variable Investment Options; plus interest credited to the part of your Policy Value (if any) allocated to the Fixed Account Options; minus policy charges we deduct; and minus partial withdrawals you have made. Policy loans may also affect your Policy Value.
Portfolios: The mutual fund portfolios that are available for investment through the Variable Investment Options of the Separate Account. Sometimes referred to as Funds or Eligible Portfolios.
Separate Account: PIA Variable Life Account I of Penn Insurance and Annuity Company, a segregated asset account of the Company. The Separate Account is divided into subaccounts that correspond to the Variable Investment Options. Each subaccount corresponds to, and invests exclusively in, a particular Portfolio.
Specified Amount: The dollar amount of life insurance under the Policy as selected by the policy owner. It equals the initial Specified Amount shown on the Policy Specifications Page, minus any decreases made to the initial Specified Amount.
Variable Investment Options. The subaccounts of the Separate Account, each of which invests exclusively in a specified Portfolio or Fund.
We (Our, Us): The Penn Insurance and Annuity Company (the Company).
You, Your: The policy owner, who can make decisions regarding allocation of Net Premiums, transfers, withdrawals, surrender, borrowing money, naming beneficiary(ies), electing riders, and other matters (all within the policy limits).
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IMPORTANT INFORMATION YOU SHOULD CONSIDER ABOUT THE SURVIVORSHIP PROTECTION VARIABLE UNIVERSAL LIFE INSURANCE POLICY
FEES AND EXPENSES | ||||||||||
Charges for Early Withdrawals |
If you fully surrender your Policy within 15 years following your purchase of the policy, you may be assessed a surrender charge of up to 4.00% of your Specified Amount.
For example, if you were to surrender your Policy during the first year after your Policy purchase (and your total premiums paid were $100,000 and your Specified Amount is $500,000), then you could be assessed a surrender charge of up to $20,000.
For more detailed information, see the prospectus: Table of Fees and Expenses; What Are the Fees and Charges Under the Policy? | |||||||||
Transaction Charges |
In addition to the surrender charge for Policy surrenders, you may be charged for other transactions. These include a Percent of Premium Charge (deducted from each premium) and a partial withdrawal processing fee. A surrender charge will also be deducted if you decrease the Specified Amount of the life insurance death benefit in the first five policy years.
We reserve the right to impose transfer charges (when you transfer Policy Value between Investment Options), but we currently do not impose these charges. We may also impose charges if you exercise certain rider benefits.
For more detailed information, see the prospectus: Table of Fees and Expenses; What Are the Fees and Charges Under the Policy? | |||||||||
Ongoing Fees and Expenses (annual charges) | In addition to surrender charges and transaction charges, an investment in the Policy is subject to certain ongoing fees and expenses (usually deducted on a monthly basis). Some of these charges, such as the monthly Cost of Insurance Charge, the monthly Expense Charge per Thousand of Specified Amount, and certain rider charges (for supplemental benefits), are set based on individual characteristics of both insureds (e.g., age, sex, and rating classification).
Other ongoing charges include the monthly Per Policy Expense Charge, the Mortality and Expense Risk Asset Charge, loan interest, and certain other rider charges. Please refer to the Policy Specifications Page (Section 1 of your Policy) for rates and the specific fees applicable to your Policy.
Investors will also bear expenses associated with the Portfolios, as shown in the following table, which shows the minimum and maximum total operating expenses deducted from Portfolio assets (before any fee waiver or expense reimbursement) during the year ended December 31, 2022.
Portfolios Total Annual Operating Expenses (expenses that are deducted from Portfolio assets) | |||||||||
Annual Fee | Minimum | Maximum | ||||||||
Variable Investment Options (Portfolio Company fees and expenses) |
0.11% | 0.17% | ||||||||
For more detailed information, see the prospectus: Table of Fees and Expenses; What Are the Fees and Charges Under the Policy? |
RISKS | ||
Risk of Loss | You can lose money by investing in this Policy, including loss of your premiums (principal).
For more detailed information, see the prospectus: Summary of Principal Risks of Investing in the Policy; What is the Value of My Policy? |
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RISKS | ||
Not a Short-Term Investment |
This Policy is not designed for short- term investing and is not appropriate for an investor who needs ready access to cash.
The Policy is designed to provide a life insurance benefit or to help meet other long-term financial objectives. Substantial fees, expenses, and tax implications generally make variable life insurance unsuitable as a short-term savings vehicle. Additionally, the Policy limits your ability to withdraw a portion of the Policy Value (also called cash value) through partial withdrawals or loans; you cannot access more than your Net Cash Surrender Value (the Policy Value less the surrender charge and less any outstanding policy loan).
For more detailed information, see the prospectus: Summary of Principal Risks of Investing in the Policy. | |
Risks Associated with Investment Options |
An investment in this Policy is subject to the risk of poor investment performance of the Portfolios you choose, and the value of an investment can vary depending on the performance of the Portfolios.
Each Investment Option (the Portfolios and the Fixed Accounts) has its own unique risks. The performance of the Portfolios will vary, and some are riskier than others.
A discussion of the risks of allocating your premiums or Policy Value to one or more Portfolios can be found in the prospectuses for the Portfolios. You should review the prospectuses for the Portfolios before making an investment decision.
Premiums and Policy Value allocated to the Traditional Fixed Account Option may be kept there for an extended period of time due to restrictions on transfers out of the Traditional Fixed Account Option.
For more detailed information, see the prospectus: Summary of Principal Risks of Investing in the Policy; Appendix A Portfolios Available Under the Policy; Appendix B Fixed Account Options. | |
Insurance Company Risks |
An investment in the Policy is subject to the risks related to Penn Insurance and Annuity Company (the Company), including:
Any obligations, guarantees, and benefits of the Policy (including the Fixed Account Options), are subject to the claims-paying ability and financial strength of the Company.
There are risks relating to the Companys administration of the Policy, including cybersecurity and infectious disease outbreak risks.
If the Company experiences financial distress, it may not be able to meet its obligations to you.
More information about the Company, including its financial strength ratings, is available upon request from the Company at 1-800-523-0650.
For more detailed information, see the prospectus: The Penn Insurance and Annuity Company; Financial Statements; Summary of Principal Risks of Investing in the Policy Insurance Company Risks; Other Information. |
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RISKS | ||
Policy Lapse | Your Policy can lapse even if you pay all of the planned premiums on time.
When a Policy lapses, it has no value, and no benefits are paid upon the death of either insured. You will also lose the principal invested.
A Policy can lapse if the Net Cash Surrender Value is insufficient to pay the Policy charges. This can happen due to insufficient premium payments, poor investment performance, withdrawals, unpaid loans or loan interest, and Policy charges (including increases in those charges).
The larger a Policy loan becomes relative to the policys Cash Surrender Value, the greater the risk that the Policys Net Cash Surrender Value will not be sufficient to support the Policys charges, including any loan interest due, and the greater the risk of the Policy lapsing.
A Policy lapse may have tax consequences.
If the Policy lapses, there are costs and premium requirements associated with reinstatement of the Policy.
The No-Lapse Guarantee Rider can prevent the Policy from lapsing if the No-Lapse Guarantee Rider Requirement is satisfied.
For more detailed information, see the prospectus: Summary of Principal Risks of Investing in the Policy; What Payments Must I Make Under the Policy? Lapse and Reinstatement; What Are the Supplemental Riders That Are Available? No-Lapse Guarantee Rider; How is the Policy Treated Under Federal Income Tax Law? Policy Loans. |
RESTRICTIONS | ||
Investments |
You can allocate your Net Premiums to the Variable Investment Options (that invest in the Portfolios) and the Fixed Account Options.
The minimum amount that you can transfer generally is $25.
The maximum amount that you can transfer out of the Traditional Fixed Account in any Policy Year is the greatest of (a) 25% of the amount in the
Traditional Fixed Account at the previous Policy anniversary, (b) $5,000, or (c) the total amount transferred out of that account in the previous policy year.
The Company reserves the right to remove or substitute any of the Portfolios as Investment Options that are available under the policy.
In addition, we may limit your ability to make transfers involving the Variable Investment Options if a transfer may disadvantage or potentially harm or hurt the rights or interests of other policy owners.
We will also reject or reverse a transfer request if for any reason any of the Portfolios do not accept the purchase of its shares.
For more detailed information, see the prospectus: How Are Amounts Credited to the Separate Account?; How Can I Change the Policys Investment Allocations? |
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RESTRICTIONS | ||
Optional Benefits |
We may impose restrictions and limitations on your choice of Investment Options in order to keep the No-Lapse Guarantee Rider in effect, but we currently do not enforce any such restrictions.
A change in Specified Amount; the addition, deletion, or change of any riders; or a change in either insureds rate class may impact the No-Lapse Guarantee rider, and may require the payment of additional premiums to maintain the riders guarantee.
We may stop offering an optional benefit at any time.
For more detailed information, see the prospectus: What Are the Supplemental Riders That Are Available? | |
TAXES | ||
Tax Implications | Consult with a tax professional to determine the tax implications of an investment in and payments received under this Policy.
If you purchase the Policy through a tax-qualified plan or individual retirement account (IRA), you do not get any additional tax benefit.
Earnings on your Policy (if any) are taxed when you withdraw them (or if a Policy loan is not repaid), at ordinary income tax rates, and may be subject to an additional tax before the younger of the insureds attains age 59 1⁄2.
For more detailed information, see the prospectus: Summary of Principal Risks of Investing in the Policy Tax Risks; How Is the Policy Treated Under Federal Income Tax Law? | |
CONFLICTS OF INTEREST | ||
Investment Professional Compensation |
Your investment professional may receive compensation for selling this Policy to you, in the form of commissions, asset-based compensation, allowances for expenses, and other compensation programs, and the Company may share the revenue it earns on this Policy with the professionals firm. (Your investment professional may be your broker, investment adviser, insurance agent, or someone else).
For these reasons, these investment professionals may have a financial incentive to recommend this Policy over another policy or investment.
For more detailed information, see the prospectus: Distribution Arrangements. | |
Exchanges | Some investment professionals may have a financial incentive to offer you a new policy in place of the one you own. You should only exchange your policy if you determine, after comparing the features, fees, and risks of both policies, that it is preferable for you to purchase the new policy rather than continue to own your existing policy.
For more detailed information, see the prospectus: What Payments Must I Make Under the Policy? Tax-Free Section 1035 Insurance Policy Exchanges. |
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Overview of the Survivorship Protection Variable Universal Life Insurance Policy
The following provides an overview of the Policys primary features. Please read the full descriptions in the prospectus, and your Policy, for more information regarding these features and other provisions of the Policy.
1. | Purpose of the Policy |
This Policy provides permanent survivorship (or second-to-die) life insurance coverage with the potential for tax-deferred cash value (Policy Value) accumulation. The Policy is offered by Penn Insurance and Annuity Company. The Policy offers (1) survivorship life insurance protection, (2) flexible premium payments, (3) a Net Cash Surrender Value that you can access through withdrawals and loans, (4) the ability to invest in a variety of Variable Investment Options and Fixed Account Options, (5) the ability to transfer among these options tax-free, and (6) optional benefit riders. The Policy is designed to be long-term life insurance coverage. It is not suitable as a short-term investment vehicle. Please read the entire prospectus before you invest.
2. | Premiums |
Amounts you pay to us under your Policy are called premiums or premium payments. Policy premium payments are flexible; other than the required initial minimum premium payment, you can select the time and amount of premiums you pay, within limits.
You choose in your application how often to pay planned premiums annually, semi-annually, quarterly or monthly. You are not required to pay the planned premium as long as your Policy has sufficient value to pay Policy charges or the provisions of the No-Lapse Guarantee Rider are satisfied. See What Payments Must I Make Under the Policy? Lapse and Reinstatement; and What are the Supplemental Riders That Are Available? No-Lapse Guarantee Rider in the prospectus. Additional or unplanned premiums may be paid in any amount and at any time. A premium may not be less than the minimum shown in your policy (generally at least $25).
Although you may have a schedule of planned premiums, your Policy can lapse even if you pay all of the planned premiums on time (unless the provisions of the No-Lapse Guarantee Rider are satisfied). This can happen because the investment performance of the Variable Investment Options you have allocated premiums or Policy Value to has been poor, because of charges we deduct, because of withdrawals you take, or because of a combination of these factors has caused the Net Cash Surrender Value of your Policy to be insufficient to pay the policy charges (including payment of interest on any loan that may be outstanding under the Policy). When a Policy lapses, it terminates and has no value, and no benefits are paid upon the death of either insured. You also lose the principal invested.
To qualify your Policy as life insurance under the Internal Revenue Code of 1986, as amended (the IRC or Code), federal tax law limits the amount of premium payments you may make in relation to the amount of life insurance provided under the Policy. In addition, we can limit the amount of premium payments and/or require medical insurance underwriting and satisfactory evidence of insurability before we accept additional premiums.
Premiums are allocated among the Variable Investment Options and the available Fixed Account Options according to your instructions. The Policy Value in the Variable Investment Options will vary up or down with the investment performance of the corresponding underlying mutual fund portfolios. Amounts in the Fixed Account Options are guaranteed and will earn interest declared from time to time by the Company.
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3. | Policy Features |
The Policy offers a variety of important features and benefits, including the following:
Life Insurance Benefit
The Policy provides life insurance on two individual(s) you name (the death benefit is paid only on the death of the second to die). In your application for the Policy, you will tell us how much life insurance coverage you want on the lives of the insured people (the Specified Amount). The death benefit is the greater of (a) the Specified Amount of insurance, or (b) a percentage of the Policy Value (on the date of the second insured to die) equal to the minimum necessary for your Policy to qualify as life insurance under IRC Section 7702. Therefore the death benefit could increase or decrease based on investment performance, but will not be less than the Specified Amount. You can decrease the Specified Amount, subject to certain conditions. While the Policy is in effect, we will pay the beneficiary the death benefit less the amount of any outstanding loan and any unpaid policy charges upon the death of the second insured to die.
Investment Options
The Policy allows you to allocate your Policy Value to the different Variable Investment Options which each invest in a specified mutual fund portfolio (each, a Portfolio or Fund). Your Policy Value will increase or decrease to reflect the investment performance of the Portfolios you select; you bear the investment risk and you can lose money invested in the Portfolios. The Appendix of this summary prospectus lists the Portfolios currently available in the Policy and includes additional information about the Portfolios.
In addition to the Variable Investment Options, the Policy has Fixed Account Options that are designed to be safe investments that provide fixed returns, where the Company pays a fixed rate of interest (that it declares periodically, subject to a minimum) and where the Company bears the investment risk. The Policy allows you to allocate your Policy Value to a Traditional Fixed Account and a Short-Term Fixed Account. The Short-Term Fixed Account is intended as a temporary holding place for premiums that are expected ultimately to be invested in the Variable Investment Options; therefore, the Company intends to declare a lower rate of interest for the Short-Term Fixed Account, and transfers out of the Traditional Fixed Account are subject to restrictions that do not apply to the Short-Term Fixed Account. In addition to a Traditional Fixed Account and a Short-Term Fixed Account, premium payments may also be allocated to a Fixed Dollar Cost Averaging Account, which are automatically re-allocated each month to one or more of the other Investment Options you select. The Policy does not allow you to allocate your Policy Value to a Fixed Dollar Cost Averaging Account. Investments in the Fixed Account Options are subject to the Companys financial strength and claims-paying ability. The Fixed Account Options are further described in Appendix B to the prospectus.
You can change the Investment Options in which you invest throughout the life of the Policy.
Transfers
Within limitations, you may transfer Policy Value from one Variable Investment Option to another and to and from the Short-Term Fixed Account and Traditional Fixed Account Options. In addition, the Policy offers two automated transfer programs a dollar cost averaging program and an asset rebalancing program.
Policy Value
The Policy Value includes the amount in the Variable Investment Options and the Fixed Account Options. The value of your Policy will increase or decrease based upon the investment performance of the Variable Investment Options you choose, your premium payments, interest credited to the Fixed Account Options, any partial withdrawals, outstanding loans (including loan interest), and the charges we deduct.
The Cash Surrender Value is the Policy Value decreased by any surrender charge. The Net Cash Surrender Value is the Policy Value decreased by any outstanding policy loan and less any surrender charge.
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See What Is the Value of My Policy? in the prospectus. You may surrender your Policy at any time and you will receive the Net Cash Surrender Value.
The Policy Value of your Policy will vary with the investment performance of the options you select. There is a risk that the investment performance of the Variable Investment Options may be unfavorable or may not perform up to your expectations, which may decrease the amount of your Net Cash Surrender Value. If the Variable Investment Options you select for your Policy perform poorly you could lose money, including some or all of the premiums paid. Each Variable Investment Option invests in a different underlying Portfolio, and a discussion of the investment risks of each of the underlying Portfolios may be found in the prospectus for each of the Portfolios. Each underlying Portfolio has its own investment objective and investment strategy. The performance of each will vary, and some Portfolios are riskier than others. We do not guarantee the investment performance of any of the Variable Investment Options or Portfolios. You bear the entire investment risk for all amounts allocated to the Variable Investment Options.
Loans
You may take a loan on your Policy. You may borrow up to 95% of your Cash Surrender Value. The minimum amount you may borrow is $250. If you take a loan, Policy Value will be transferred from the Variable Investment Options or the Fixed Account Options into the policy loan account. The Policy Value in the policy loan account does not participate in the investment experience of the Variable Investment Options. Interest on loans will be charged at a fixed loan interest rate of 6% and is payable at the end of each policy year. You may repay all or part of a loan at any time.
Policy loans reduce your Policy Value and death benefit, which may increase the risk your Policy could lapse. Outstanding loans may impact your No-Lapse Guarantee, and you may need to make additional premium payments or loan repayments to maintain the riders guarantee. If you take a loan on your policy, you may be subject to tax consequences. See How Is the Policy Treated Under Federal Income Tax Law? in the prospectus.
Surrenders and Withdrawals
You may surrender your Policy in full at any time. If you do, we will pay you the Net Cash Surrender Value (the Policy Value, less any policy loan outstanding and less any surrender charge that then applies). You may make partial withdrawals (subject to limitations) from your Net Cash Surrender Value. The minimum partial withdrawal amount is $250. Note that you do not have access to your full Policy Value, just the Net Cash Surrender Value.
However, the Policy is generally not a liquid investment. Surrender charges will apply during the first 15 policy years (the surrender charge period). There are limitations on your ability to access your Policy Value through surrenders and partial withdrawals, including surrender charges, partial withdrawal fees, possible tax consequences, adverse impacts on Policy benefits, increased risk of Policy lapse, and administrative requirements (i.e., your request must be received in good order. See What is the Timing of Transactions Under the Policy? in the prospectus for more information). A withdrawal will reduce your Policy Value (and therefore your Net Cash Surrender Value) by the amount withdrawn, and could reduce your death benefit. If the policys Net Cash Surrender Value is reduced to a point where it cannot meet the Monthly Deductions, then your Policy may lapse and terminate.
Free Look Period: Right to Cancel
You have the right to cancel your Policy within 10 days after you receive it (or longer in some states). This is referred to as the free look period. To cancel your Policy, simply deliver or mail the Policy to our office or to our representative who delivered the Policy to you.
No-Lapse Guarantee
The Policy includes a No-Lapse Guarantee Rider at no additional cost. This rider prevents the lapse of the Policy when the Net Cash Surrender Value is insufficient to cover the Monthly Deduction for the following
10
month, as long as the No-Lapse Guarantee Requirement is satisfied. The Rider may last until the Maturity Date of the Policy. The No-Lapse Guarantee Requirement is based on the amount of your premium payments (less withdrawals), hypothetical no-lapse guarantee charges and interest rates, and other factors. See What Are the Supplemental Riders That Are Available? No-Lapse Guarantee Rider in the prospectus for additional information.
Additional Benefits
The Policy includes a number of additional benefits that are standard (automatically included at no additional charge) provided that certain conditions are met. These standard benefits are an Accelerated Death Benefit Rider, Chronic Illness Accelerated Benefit Rider, Policy Split Option Rider, and Supplemental Exchange Rider (and the No-Lapse Guarantee Rider).
Also, an optional Estate Preservation Term Rider is available for an additional charge; if you elect this rider, then the applicable monthly charge for this rider will be deducted from your Policy Value as part of the Monthly Deduction.
Taxes
Death benefits paid under life insurance policies are generally not subject to federal income tax, but may be subject to federal and state estate taxes. Investment gains from your Policy are not taxed as long as the gains remain in the Policy. If the Policy is not treated as a modified endowment contract under federal income tax law, then distributions from the Policy may be treated first as the return of investments in the Policy and then, only after the return of all investment in the Policy, as distributions of taxable income (taxed as ordinary income). Distributions include partial withdrawals and surrenders. See How Is the Policy Treated Under Federal Income Tax Law? in the prospectus for additional information.
In your application for the Policy, you tell us how much life insurance coverage you want on the lives of the insureds. This is called the Specified Amount of insurance. It is generally referred to as a Level Death Benefit. The minimum Specified Amount of insurance that you can purchase is $200,000. Insurance coverage under the Policy is effective on the policy date after we accept the application, receive the initial premium payment, and all underwriting and administrative requirements have been met.
Upon the death of the second insured to die, we will pay the beneficiary the death benefit less the amount of any outstanding loan and any unpaid policy charges. The death benefit is the greater of (a) the Specified Amount of insurance, or (b) the applicable percentage of the Policy Value on the date of the death of the second insured to die. No death benefit is paid on the death of the first insured to die.
The Policy Value includes amounts in the Variable Investment Options and the Fixed Account Options.
The applicable percentages depend on the life insurance qualification test under the Code. We are currently only offering policies using the Cash Value Accumulation Test (CVAT) and the applicable percentages will vary by the attained age of the younger insured and the insurance risk characteristics. Tables showing applicable percentages are included in the Policy. If the investment performance of the Investment Options you have chosen is favorable, then possibly the amount of the death benefit may increase. Favorable investment performance will not ordinarily increase the death benefit for several years and may not increase it at all.
The death benefit could increase or decrease based on investment performance, but will not be less than the Specified Amount. You can decrease the Specified Amount, subject to certain conditions.
Death benefits are calculated based on values as of the date of death of the second insured to die. We will ordinarily pay the death benefit within seven days after receipt at our office of all the documents required for completion of the transaction in good order.
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You may choose to receive proceeds from the Policy as a single sum. This includes proceeds that become payable because of death or surrender. Alternatively, you can elect to have proceeds of $5,000 or more applied to any of the following payment options:
| Option 1 Interest income: We will credit interest to the amount applied, and the interest will be paid monthly, quarterly, semiannually or annually payment of interest on the proceeds payable,; |
| Option 2 Income for a fixed period: We will pay the amount applied, with interest, in equal monthly payments for a fixed period, which may not be greater than 30 years;, |
| Option 3 Income of a specified amount: We will make payments monthly, quarterly, semiannually or annually of a specified amount until the total amount applied, with interest, has been paid; |
| Option 4 Life income: We will pay equal monthly payments during the life of the option annuitant;, |
| Option 5 Life income with guaranteed period: We will pay equal monthly payments for a stated guaranteed period, which may be 5, 10 or 20 years, and thereafter during the life of the option annuitant;, |
| Option 6 Life income with refund period: We will pay equal monthly payments during the life of the option annuitant and, if necessary, continue the payments after the death of the option annuitant until the total of all payments made equals the total amount applied;, |
| Option 7 Joint and survivor life income: We will pay equal monthly payments during the joint life of two option annuitants and thereafter during the life of the survivor. |
Periodic payments may not be less than $50 each. Only one payment will be made if the annuitant(s) dies before the second payment is made under Option 4 and Option 7. Only a few payments will be made if the annuitant(s) dies shortly after payments begin. You can change the payment option at any time before the proceeds are payable. If no election is in effect at the time of the death of the insured, the beneficiary may elect an income payment option before any payment of the death benefit has been made and within one year of the date of death. The death benefit will be paid to the beneficiary in one sum if an income payment option is not elected.
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Other Benefits Available Under The Policy
In addition to the standard death benefit associated with your Policy, other standard and optional benefits may also be available to you. The following table summarizes information about those benefits. Information about the fees associated with each benefit included in the table may be found in the Fee Table.
Name of Benefit |
Purpose | Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
No Lapse Guarantee Rider |
This ensures that your Policy will not lapse when the Net Cash Surrender Value is insufficient to cover the Monthly Deduction, as long as the No Lapse Guarantee Requirement is satisfied. | Standard |
We will continue to deduct Monthly Deductions and the policy will remain in force with a negative Policy Value. We will continue to deduct loan interest and it will continue to accrue and be added to Policy Debt. The No-Lapse Guarantee Requirement depends on premiums paid and special, hypothetical No- Lapse charges, deductions, interest rates, any policy loan, and other factors. We reserve the right to impose Investment Option allocation requirements and restrictions, but we currently do not do so. A change in Specified Amount; the addition, deletion, or change of any riders; or a change in either insureds rate class may impact the rider, and may require the payment of additional premiums to maintain the riders guarantee. | |||
Policy Split Option Rider | This rider allows the joint policy to be exchanged for two individual fixed permanent policies, one on the life of each of the Insureds under this policy, in the event of divorce or estate tax changes. | Standard as long as the older insured is age 79 or less and neither insureds rate class is a substandard class as determined by the last time evidence of insurability was received |
Conditions of policy exchange are: finalized divorce decree issued by a court of competent jurisdiction, repeal of the federal estate tax, elimination of or reduction to one-half or less of the federal gross estate of the unlimited marital deduction under federal estate tax, or minimum 50% reduction of federal estate tax rates Policy exchange must occur within 180 days following conditions of policy exchange Policy must be in force and not be in a grace period at the time of the exchange Owner must make written application for the exchange |
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Name of Benefit |
Purpose | Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
Both Insureds must be alive on the Date of Exchange Neither Insured s rate class is a substandard class as determined by the last time evidence of insurability was received Owner must surrender all rights in this policy in exchange for the new policies The owner of each new policy must have an insurable interest in the insured Owner must make any premium payment that would be necessary to keep each new policy in force for two months The Specified Amount of each new policy must sum to the Specified Amount of this policy in excess of any debt and must be such that each new policy will satisfy the requirements of Section 7702 of the Internal Revenue Code An exchange of the Policy pursuant to this rider may have adverse tax consequences. Before you exercise your rights under this rider, you should consult with a competent tax adviser regarding the possible tax consequences of such an exchange. The new policies may not be variable life insurance policies | ||||||
Supplemental Exchange Rider | Allows for the exchange of this policy for a new policy on the life of one of the Insureds under this policy and the life of a new Insured who has the same insurable relationship to the policy owner. | Standard |
At the time of exchange the new Insured must have the same relationship to the remaining Insured as did the two Insureds in this policy New Insured must submit evidence of insurability satisfactory to PIA New Insured must be at least 20 years of age on the birthday nearest the Policy Date of this policy The difference in the ages of the new Insured and the remaining Insured must not exceed 30 years. Policy must be in force and not be in a grace period at the time of the exchange |
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Name of Benefit |
Purpose | Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
Owner must make a written application for the exchange Owner must make any premium payment which would be necessary to keep the new policy in force for two months Owner must surrender all rights to this policy in exchange for the new policy Owner must have an insurable interest in the new Insured An exchange of the Policy pursuant to this rider does not qualify as a tax-free exchange under section 1035 and may have adverse tax consequences. Before you exercise your rights under this rider, you should consult with a competent tax adviser regarding the possible tax consequences of such an exchange. | ||||||
Estate Preservation Rider | Provides term insurance for four years equal to an elected Specified Amount for the purpose of covering estate taxes | Optional. Available at issue only. |
Specified Amount cannot exceed 125% of the total death benefit. The two Insureds covered by this rider must be the same two Insureds covered by the base policy. Specified Amount of this rider may not be increased. | |||
Accelerated Death Benefit Rider |
Provides access to a portion of the death benefit while an insured is living, if that insured has a life expectancy of 12 months or less. | Standard for Policies with a Specified Amount greater than $50,000 |
Minimum payment is $10,000. Maximum payment is the lesser of $250,000 or 50% of the total death benefit amount. A payment under this rider will reduce your policys death benefit. Requires diagnosis of terminal illness and life expectancy by licensed physician (not an insured, owner, beneficiary, or a relative of any of them). The accelerated death benefit is not available if both insured persons are living. You should consult a competent tax adviser regarding receipt of this benefit. |
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Name of Benefit |
Purpose | Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
Chronic Illness Accelerated Benefit Rider |
Provides access to a portion of the death benefit while an insured is living, if that insured is certified with a Chronic Illness. | Standard for Policies with a Specified Amount greater than $50,000 and a maximum amount of $10,000,000 as long as the insureds meet our underwriting requirements |
Continuous care in an eligible facility or at home must be expected to be required for the insureds life. Limits apply to the Chronic Illness Accelerated Benefit Payments Chronic Illness is defined in the rider (based on inability to perform specified Activities of Daily Living, or severe cognitive impairment). Chronic illness must be certified by a licensed health care professional (not an insured, owner, or beneficiary or a relative of any of them). The Chronic Illness accelerated death benefit is not available if both insured persons are living. Upon each Chronic Illness Accelerated Benefit Payment, the death benefit will be reduced by an amount greater than the payment amount. In certain circumstances a payment under this rider may have adverse tax consequences. Before you exercise your rights under this rider, you should consult with a competent tax adviser regarding the possible tax consequences. | |||
Fixed Dollar Cost Averaging Account |
Allows you to allocate all or a portion of a premium payment to the Fixed Dollar Cost Averaging Account, where it is automatically re-allocated each month to one or more of the Investment Options you select. | Optional |
Requires that at least $600 be allocated to the Fixed Dollar Cost Averaging Account. Does not guarantee a profit or prevent a loss. | |||
Asset Rebalancing | Automatically reallocates your Policy Value among the Variable Investment Options in accordance with the proportions you originally selected. | Optional |
Requires a minimum Policy Value of $1,000. Does not guarantee a profit or prevent a loss. |
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Premium Payments
Amounts you pay to us under your Policy are called premiums or premium payments. The amount we require as your first premium depends on a number of factors, such as age of each insured, sex of each insured, rate classification of each insured, the amount of insurance specified in the application, and any supplemental riders. You will have a schedule of planned premium payments. However, within limits, you can make premium payments when you wish, and additional or unplanned premiums may be paid in any amount and at any time. That is why the Policy is called a flexible premium Policy. Paying the planned premiums may not be sufficient to keep the policy in force.
A premium may not be less than the minimum shown in your policy (generally at least $25). We may require satisfactory evidence of insurability before accepting any premium which increases our Net Amount at Risk (the difference between the death benefit and the Policy Value).
We may also limit premium payments as necessary in order to qualify the Policy as life insurance under the Internal Revenue Code of 1986, as amended (the Code). No payment will be returned or refused if it is necessary to continue coverage (that is, to prevent lapse), but the premium allotted to the Policy may be reduced (to maintain qualification as life insurance) and the balance returned to you. See How Is the Policy Treated Under Federal Income Tax Law? in the prospectus.
A premium charge will be deducted from each premium, and the remaining amount (the Net Premium) will be credited to the Policy Value and allocated to the Investment Options according to your elections.
Planned Premiums
The policy specifications page of your Policy will show the planned premium for the Policy. You choose this amount in the policy application. We will send a premium reminder notice to you based upon the planned premium that you specified in your application, with the exception of monthly premiums being paid via electronic fund transfer program. You also choose in your application how often to pay planned premiums annually, semi-annually, quarterly or monthly. You are not required to pay the planned premium as long as your Policy has sufficient value to pay policy charges or the provisions of the No-Lapse Guarantee Rider are satisfied.
Although you may have a schedule of planned premiums, your Policy can lapse even if you pay all of the planned premiums on time (unless the provisions of the No-Lapse Guarantee Rider are satisfied). When a Policy lapses, it terminates and has no value, and no benefits are paid upon the death of either insured.
If all premium payments cease, this Policy will continue, subject to the Grace Period provision (see below), for as long as the values in this Policy are sufficient to keep it in force.
How Your Policy Can Lapse
Grace Period and Lapse
If, on a Monthly Anniversary prior to the Maturity Date, the Net Cash Surrender Value is insufficient to cover the Monthly Deduction for the following policy month, (and the provisions of the No-Lapse Guarantee Rider are not satisfied), then a Grace Period of 61 days will be allowed for the payment of a premium sufficient to pay the Monthly Deduction for the Grace Period plus two additional months. Notice of the amount of premium required to be paid during the Grace Period to keep this Policy in force will be sent to your last known address and that of any assignee on record.
During the Grace Period, the Policy Value, Cash Surrender Value, No-Lapse Guarantee Account value, and death benefit are calculated in the same manner as before the Policy entered the Grace Period. We will
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notify you of how much premium you will need to pay to keep the Policy in force. If you dont pay at least the required amount by the end of the Grace Period, your Policy will terminate (i.e., lapse). All coverage under the Policy will then cease. If the last remaining insured dies after the end of the grace period, when the Policy has terminated, the beneficiary will not receive any death benefit.
Reinstatement
If the Policy terminates, you can apply to reinstate it within five years from the date of lapse if one of the insureds is alive. You will have to provide evidence that the insured person or persons still meets our requirements for issuing insurance. You will also have to pay a minimum amount of premium. The minimum amount of premium to be paid on reinstatement is equal to an amount necessary to make the Net Cash Surrender Value positive plus the Monthly Deductions for the two policy months following the reinstatement date, or the amount necessary to satisfy the provisions of the No-Lapse Guarantee Rider at the date of reinstatement and for two policy months following the reinstatement date (if applicable). Policy Debt (any outstanding policy loan, including interest) which existed at the end of the Grace Period must either be repaid or reinstated.
Following reinstatement, the No-Lapse Guarantee Rider is also reinstated. Any other supplemental riders attached to the Policy prior to lapse may be reinstated.
No-Lapse Guarantee Rider
The No-Lapse Guarantee (NLG) Rider is automatically included with your Policy at no additional cost. This rider prevents the lapse of the Policy when the Net Cash Surrender Value is insufficient to cover the Monthly Deduction for the following month as long as the No-Lapse Guarantee Requirement is satisfied. The NLG Rider may last until the Maturity Date of the Policy.
We will continue to deduct Monthly Deductions from the Policy Value while the Policy is in force under the NLG Rider. The Policy will remain in force with a negative Policy Value if the No-Lapse Guarantee Requirement is satisfied. We will not credit interest to the negative Policy Value. The death benefit will not be reduced due to a negative Policy Value. Loan interest will continue to accrue and will be added to your Policy Debt.
No-Lapse Guarantee Requirement (NLG Requirement) On each Monthly Anniversary while this Policy is in force, the NLG Requirement is satisfied if the No-Lapse Guarantee Account, less any Policy Debt, exceeds zero.
No-Lapse Guarantee Account (NLGA) The NLGA is only used to determine whether or not the NLG Requirement is satisfied. It is a hypothetical, or phantom account that has no actual value. It cannot be accessed or used for withdrawals or loans, and does not impact the amount of the death benefit. The NLGA is based on your premium payments, and special NLG policy charges and rates. The NLG rates and charges used to determine the NLGA are different from the rates and charges used to determine the actual value of your Policy. See your Policy Specifications Page (Section 1 of your Policy) for the NLG rates and charges.
Allocation Requirements In order to keep the NLG Rider in force, we reserve the right to establish requirements and restrictions on your Policy Value allocations to the Variable Investment and Fixed Account Options. We do not currently impose any special allocation requirements or restrictions.
Making Withdrawals: Accessing The Money in Your Policy
Surrender
You may surrender your Policy at any time. If you do, we will pay you the Policy Value, less any policy loan outstanding and less any surrender charge that then applies. This is called your Net Cash Surrender Value. The Policy Value is based on amounts allocated to the Variable Investment Options and/or the Fixed
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Account Options. Surrenders may be subject to tax consequences, including an additional tax if withdrawn before age 59 1⁄2 of the younger insured. See How Is the Policy Treated Under Federal Income Tax Law? in the prospectus for additional information.
Partial Withdrawal
You may make a partial withdrawal of a portion of the Net Cash Surrender Value. Partial withdrawals reduce the Policy Value and Net Cash Surrender Value by the amount of the partial withdrawal. Partial withdrawals will be deducted from the Variable Investment Options, the Short-Term Fixed Account and the Traditional Fixed Account in accordance with your directions. In the absence of such direction, the partial withdrawal will be deducted from the Variable Investment Options, the Short-Term Fixed Account and the Traditional Fixed Account on a pro-rata basis. Partial withdrawals may increase the risk that the Policy will lapse, and may be subject to tax consequences, including an additional tax if withdrawn before age 59 1⁄2 of the younger insured. See How Is the Policy Treated Under Federal Income Tax Law? in the prospectus for additional information.
Partial withdrawals are subject to a number of conditions, including that no more than twelve partial withdrawals may be made in a policy year; each partial withdrawal must be at least $250; a partial withdrawal may not be made from an account if the amount remaining in that account would be less than $25; the partial withdrawal may not reduce the Specified Amount of insurance under your Policy to less than the minimum Specified Amount under the Policy ($50,000); and the partial withdrawal will be subject to a processing fee equal to the lesser of $25 or 2% of the amount withdrawn.
If any withdrawals are made, the death benefit will be less than it would have been if no withdrawals were made. The Specified Amount may also be reduced; specifically, a partial withdrawal may reduce your Specified Amount of insurance by the amount by which the partial withdrawal exceeds the difference between (a) the death benefit provided under the Policy, and (b) the Specified Amount of insurance.
Timing of Transactions
We will ordinarily pay the partial withdrawal or surrender proceeds within seven days after receipt at our office of all the documents required for completion of the transaction in good order.
Additional Information About Fees
The following tables describe the fees and expenses that you will pay when buying, owning and surrendering the Policy or making withdrawals. Please refer to your Policy Specifications Page (Section 1 of your Policy) for information about the specific fees you will pay each year based on the options you have elected. (See What Are the Fees and Charges Under the Policy? in the prospectus for additional information).
The first table describes the fees and expenses that you will pay when you make a premium payment, surrender the Policy, make a withdrawal, or transfer Policy Value between Investment Options.
Transaction Fees | ||||
Charge | When Charge is Deducted | Amount Deducted | ||
Percent of Premium Charge | When a premium is paid. | Maximum Charge: 10% of each premium payment1 | ||
Surrender Charge2 | ||||
Guaranteed Maximum Charges | When the Policy is surrendered within the first 15 policy years and upon a decrease in the Specified Amount within the first 5 policy years. | Maximum of $40.00 to minimum of $8.02 per $1000 of Specified Amount or decrease in Specified Amount.3 |
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Transaction Fees | ||||
Charge | When Charge is Deducted | Amount Deducted | ||
Surrender Charge for a representative non-tobacco male and non-tobacco female insured, both age 55 in the first policy year | ||||
Maximum Charge | When the Policy is surrendered within the first 15 policy years and upon a decrease in the Specified Amount within the first 5 policy years. |
$19.46 per $1000 of Specified Amount or decrease in Specified Amount.3 | ||
Partial Withdrawal Processing Fee | When you take a partial withdrawal from your Policy. | Lesser of $25 or 2.0% of the amount withdrawn. | ||
Transfer Charge | When you make a transfer. | Maximum Charge $10.00 Current Charge $0.004 | ||
Accelerated Death Benefit Rider | When Benefit is Exercised | One time charge of 12 months worth of policy charges on the accelerated amount, plus 12 months worth of interest charges on the accelerated amount. The interest rate will be the greater of (a) the current 90-day Treasury bill rate, or (b) the current maximum statutory adjustable policy loan rate.5 |
1 | The percent of premium charge imposed is currently reduced to 7% on premiums paid in the second policy year and thereafter. This reduction is not guaranteed and may change. |
2 | The actual maximum surrender charge will equal the surrender charge premium multiplied by the appropriate surrender factor. The surrender factor is equal to 100% in the first policy year and grades to 0% in the 16th year. The surrender charge premium is determined separately for each Policy and takes into account the individual underwriting characteristics of both insureds, such as sex, age and risk classification, and the Specified Amount of the Policy. The table shows the lowest and highest surrender charges, based on our guaranteed maximum rates for individuals in standard risk classifications. The table also shows the surrender charge under a Policy issued to a pair of individuals who are representative of individuals we insure. The surrender charge shown in the table may not be representative of the charge that you will pay. Your Policy will state your surrender charge premium. More detailed information concerning your surrender charge is available from our administrative offices upon request. For additional information on the surrender charges, see What Are the Fees and Charges Under the Policy? Surrender Charge in the prospectus. |
3 | The maximum amount reflects the charge that may be assessed in the first policy year. |
4 | No transaction fee is currently imposed for making a transfer among Variable Investment Options and/or the Fixed Account Options. While we do not currently intend to impose a transfer fee, we reserve the right to impose a $10 fee in the future on any transfer that exceeds twelve transfers in a policy year. |
5 | The maximum statutory adjustable policy loan rate is a rate established by the Company from time to time in accordance with state law. You can contact us or your registered representative to determine the interest rate that will apply to you if you choose to exercise this benefit. See How Do I Communicate With Penn Insurance and Annuity? in the prospectus. |
The next table describes charges that a policy owner may pay periodically during the time you own the Policy. The charges do not include fees and expenses incurred by the Portfolios that serve as Investment Options under the Policy.
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Periodic Charges Under the Policy Other Than The Funds Annual Operating Expenses | ||||
Charge | When Charge is Deducted |
Amount Deducted | ||
Base Contract Charges: | ||||
Cost of Insurance Charges1: | ||||
Maximum Charges |
Monthly | Maximum of $83.33 to minimum of $0.00002 per $1,000 of Net Amount at Risk. | ||
Current Charges |
Monthly | Maximum of $83.33 to minimum of $0.00002 per $1,000 of Net Amount at Risk. | ||
First year charge for a representative non-tobacco male and non-tobacco female insured, both age 55 |
||||
Maximum Charge |
Monthly | $0.00066 per $1,000 of Net Amount at Risk. | ||
Current Charge |
Monthly | $0.00060 per $1,000 of Net Amount at Risk. | ||
Expense charge per $1,000 of Specified Amount2 | ||||
Maximum Charge |
Monthly, for the first 240 months after the policy date | Maximum of $2.40 per $1,000 of Specified Amount of insurance to minimum of $0.280 per $1,000 of Specified Amount of insurance | ||
Current Charge |
Monthly, for the first 120 months after the policy date | Maximum of $0.650 per $1,000 of Specified Amount of insurance to minimum of $0.145 per $1,000 of Specified Amount of insurance | ||
First year charge for a representative non-tobacco male and non-tobacco female insured, both age 55 |
||||
Maximum Charge |
Monthly | $0.90 per $1,000 of initial Specified Amount of insurance. | ||
Current Charge |
Monthly | $0.285 per $1,000 of initial Specified Amount of insurance |
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Periodic Charges Under the Policy Other Than The Funds Annual Operating Expenses | ||||
Charge | When Charge is Deducted |
Amount Deducted | ||
Mortality and Expense Risk Asset Charge | ||||
Maximum Charge |
Monthly | 0.10% monthly (annual rate of 1.25%) of Policy Value allocated to the Separate Account | ||
Current Charge |
Monthly | 0.10% monthly (annual rate of 1.25%) in policy years 1 10 and 0.02% monthly (annual rate of 0.25%) in policy years 11+ of the Policy Value allocated to the Separate Account | ||
Per Policy Expense Charge | Monthly | Guaranteed Maximum $50.00 in policy year 1 and $15.00 in policy years 2+ Current Charge $50.00 in policy year 1 and $15.00 in policy years 2+ | ||
Optional Benefit Charges: | ||||
Policy Loans3 Net Interest Charge4 |
End of each policy year. | |||
Maximum (Guaranteed) Charge | Annual rate of 1.00% until year 11 and then an annual rate of 0.50% (after credit from interest paid on collateral held in policy loan account).5 | |||
Current Charge | Annual rate of 1.00% until year 11 and then an annual rate of 0.25% (after credit from interest paid on collateral held in policy loan account) | |||
Estate Preservation Term Rider | ||||
Cost of Insurance Charges6
Maximum Charges |
Monthly for first 4 policy years | Maximum of $83.33 to minimum of $0.00002, per $1,000 of benefit amount. | ||
Current Charges |
Monthly for first 4 policy years | Maximum of $83.33 to minimum of $0.00002, per $1,000 of benefit amount. | ||
First year charge for a representative non-tobacco male and non-tobacco female insured, both age 55 |
||||
Maximum Charge |
Monthly for first 4 policy years | $0.00066, per $1,000 of benefit amount. | ||
Current Charge |
Monthly for first 4 policy years | $0.00060, per $1,000 of benefit amount. |
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1 | The Cost of Insurance Charges under the Policies vary depending on the individual circumstances of both insureds, such as sex, age and risk classification. The charges also vary depending on the amount of insurance specified in the Policy and the policy year in which the charge is deducted. The table shows the lowest and the highest cost of insurance charges for a pair of insureds, based on our current rates and on guaranteed maximum rates for individuals in standard risk classifications. The table also shows the first year cost of insurance charges under a Policy issued to individuals who are representative of individuals we insure. The charge shown in the table may not be representative of the charge that you will pay. Your Policy will state your guaranteed maximum cost of insurance charges. More detailed information concerning your cost of insurance charges is available from our administrative offices upon request. Also, before you purchase the Policy, we will provide you with hypothetical illustrations of policy values based upon the insureds age and risk classifications, the amount of insurance specified in the Policy, planned periodic premiums, and riders requested. The Net Amount at Risk referred to in the tables is based upon the difference between the current death benefit provided under the Policy and the current value of the Policy. For additional information on cost of insurance charges, see What Are the Fees and Charges Under the Policy? Monthly Deductions Insurance Charge in the prospectus. |
2 | The Expense Charges per $1,000 under the Policies vary depending on the risk classification, sex, and age of both insureds and the amount of insurance specified in the Policy. The table shows the lowest and the highest expense charges for a pair of insureds, based on our current rates and on guaranteed maximum rates. The table also shows the first year expense charges under a Policy issued to individuals who are representative of individuals we insure. The charge shown in the table may not be representative of the charge that you will pay. Your Policy will state the guaranteed maximum expense charges. More detailed information concerning your expense charges is available from our administrative offices upon request. For additional information on expense charges, see What Are the Fees and Charges Under the Policy? Monthly Deductions Expense Charge per Thousand of Specified Amount in the prospectus. |
3 | You may borrow up to 95% of your Cash Surrender Value. The minimum amount you may borrow is $250. An amount equivalent to the loan is withdrawn from the Variable Investment Options and certain accounts in the Fixed Account on a pro-rata basis and is transferred to a policy loan account, as collateral for the loan. See What Is a Policy Loan? in the prospectus and Appendix B to the prospectus for additional information about Policy Loans. |
4 | Net Interest Charge for a Loan means the difference between the amount of interest we charge on the loan and the amount of interest we credit to your Policy in the policy loan account. |
5 | The policy loan account is guaranteed to earn interest at 5.00% during the first ten policy years and 5.50% thereafter. On a guaranteed basis, the Net Interest Charge during the first ten policy years is 1.00% and 0.50% thereafter. The policy loan account currently earns interest at 5.00% during the first 10 policy years and 5.75% thereafter. On a current basis, the Net Interest Charge during the first 10 policy years is 1.00% and 0.25% thereafter. |
6 | The cost of insurance charges under the Riders vary depending on the individual circumstances of both insureds, such as sex, age and risk classification. The charges also vary depending on the amount of insurance specified in the Rider and the year in which the charge is deducted. The charges shown in the table may not be representative of the charge you would pay. The table shows the lowest and the highest cost of insurance charges for a pair of insureds, based on current rates and on guaranteed maximum rates for individuals in standard risk classifications. The table also shows the first year cost of insurance charges under a Rider issued to individuals who are representative of individuals we insure. The specifications pages of the Policy will indicate the guaranteed maximum cost of insurance charge for the Rider applicable to your Policy. More detailed information concerning your cost of insurance charges is available from our administrative offices upon request. Also, before you purchase the Policy, we will provide you with hypothetical illustrations of policy values based upon both insureds age and risk classification, the amount of insurance specified in the Policy, planned periodic premiums, and riders requested. The Net Amount at Risk referred to in the table is based upon the difference between the current benefit provided under the Rider and the current Policy Value allocated to the Rider. For additional information about the Riders, see What Are the Supplemental Riders That I Can Buy? in the prospectus. |
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Portfolios Annual Operating Expenses
The next table shows the minimum and maximum total operating expenses deducted from Portfolio assets. Portfolio expenses may be higher or lower in the future. You may pay these expenses periodically during the time that your Policy Value is invested in the Variable Investment Options. A complete list of the underlying Portfolios, including information concerning each underlying Portfolios fees and expenses, is contained in the Appendix to this summary prospectus.
Annual Portfolio Expenses1 | Minimum | Maximum | ||||||
Total Annual Portfolio Operating Expenses (expenses that are deducted from portfolio assets, including management fees, distribution (12b-1) fees, and other expenses) | 0.11% | 0.17% | ||||||
Net Annual Portfolio Operating Expenses (expenses that are deducted from portfolio assets, including management fees, 12b-1 fees, and other expenses, after any expense reimbursement or fee waiver arrangements)2 | 0.11% | 0.17% |
1 | Expressed as a percentage of average net assets for the fiscal year ended December 31, 2022. Portfolio expenses may be higher or lower in the future. This information is provided by the Portfolios and their agents. The information is based on 2022 expenses. We have not verified the accuracy of the information provided by Portfolios. |
2 | The range of Net Annual Portfolio Operating Expenses takes into account contractual arrangements for the Portfolios that require a Portfolios investment adviser to reimburse or waive Portfolio expenses through at least April 30, 2024. |
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APPENDIX
Portfolios Available Under the Policy
The following is a list of Portfolios currently available under the policy. More information about the Portfolios is available in the prospectuses for the Portfolios, which may be amended from time to time and can be found online at https://www.pennmutual.com/for- individuals-and-businesses/performance-and-rates/prospectuses. You can also request this information at no cost by calling 1-800-523-0650 or sending an email request to FundOperations@pennmutual.com.
The current expenses and performance information below reflects fees and expenses of the Portfolios, but does not reflect the other fees and expenses that your policy may charge. Expenses would be higher and performance would be lower if these other charges were included. Each Portfolios past performance is not necessarily an indication of future performance. Updated performance information is available online at https://www.pennmutual.com/for-individuals-and-businesses/performance-and-rates.
PORTFOLIO TYPE |
FUND AND ADVISER/SUBADVISER |
CURRENT EXPENSES |
AVERAGE ANNUAL TOTAL RETURNS (as of 12/31/2022) | |||||||
1 YEAR | 5 YEAR | 10 YEAR | ||||||||
Vanguard Variable Insurance Fund | ||||||||||
Large-Cap Equity | Equity Index Portfolio The Vanguard Group, Inc. (Adviser) |
0.14% | -18.23% | 9.27% | 12.40% | |||||
Large-Cap Equity | Total Stock Market Index Portfolio The Vanguard Group, Inc. (Adviser) |
0.13% | -19.59% | 8.55% | 11.92% | |||||
Global Bond | Global Bond Index Portfolio* The Vanguard Group, Inc. (Adviser) |
0.13% | -13.13% | -0.12% | N/A | |||||
Mid-Cap Equity | Mid Cap Index Portfolio The Vanguard Group, Inc. (Adviser) |
0.17% | -18.82% | 7.18% | 10.95% | |||||
Asset Allocation | Moderate Allocation Portfolio* The Vanguard Group, Inc. (Adviser) |
0.12% | -15.93% | 3.65% | 6.14% | |||||
U.S. Fixed Income | Total Bond Market Index Portfolio The Vanguard Group, Inc. (Adviser) |
0.14% | -13.21% | -0.10% | 0.92% | |||||
International Equity | Total International Stock Market Index Portfolio* The Vanguard Group, Inc. (Adviser) |
0.11% | -16.01% | 1.01% | N/A | |||||
Asset Allocation | Conservative Allocation Portfolio* The Vanguard Group, Inc. (Adviser) |
0.13% | -14.90% | 2.52% | 4.52% |
* | This is a fund-of-funds, which invests in other underlying funds. A fund-of-funds structure may have higher expenses than a direct investment in its underlying funds because it bears its own expenses and indirectly bears its proportionate share of expenses of the underlying funds in which it invests. |
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[BACK COVER PAGE]
The prospectus and Statement of Additional Information (SAI) contain additional information about the Survivorship Protection Variable Universal Life Insurance policy. These documents are available without charge upon request from The Penn Insurance and Annuity Company, Attn: SAI Request, PO Box 178, Philadelphia, Pennsylvania, 19105. Or you can call us toll-free at 1-800-523-0650 or visit our website at www.pennmutual.com to obtain these documents. The prospectus and SAI, both dated September 1, 2023 are incorporated by reference into this summary prospectus and, therefore, both are legally a part of this summary prospectus.
In addition, you can also request, free of charge, a personalized illustration of death benefits, cash surrender values and policy values by contacting The Penn Insurance and Annuity Company, Customer Service Group, PO Box 178, Philadelphia, Pennsylvania, 19105. Or you can call us toll-free at 1-800-523-0650.
The SEC EDGAR Contract Identifier for the Survivorship Protection VUL Policy is C000242683.
PM 8989
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