TransTerm Product Guide - Mibsga.com

Product Guide®The rates applicable to any premium payments are dependent on the dates premium payments arereceived in the Administrative Office. Consequently, more than one interest rate may apply to differentportions of the accumulation value at the same time. The policy owner’s annual statement itemizes theapplicable current rate(s).Guaranteed Minimum Interest RateThe guaranteed minimum interest rate is 3%.Policy Lapse and Grace PeriodPolicy LapseTransTerm is a “cash value-based” lapse policy. This means that the policy enters the Grace Period ifat the beginning of any policy month the cash value (less loans) is not sufficient to pay the MonthlyDeductions plus any loan interest due and not paid in cash (unless the No-Lapse Guarantee, also knownas the ACE endorsement, is active) or if after the insured’s age 111 there is insufficient net cash value tocover the loan interest not paid in cash. A Grace Period letter will be sent to the policy owner. If sufficientadditional premium is not received within the Grace Period, the policy will lapse.Grace PeriodTransTerm has a 61-day Grace Period. Unless the No-Lapse Guarantee, also known as the ACEendorsement, is active, if prior to the insured’s age 111 there is insufficient Net Cash Value to paythe Monthly Deduction due plus any loan interest due and not paid in cash, then the policy will enterthe Grace Period. At the end of any 61-day Grace Period, the policy will lapse if the Company doesnot receive sufficient premium during that time. If upon lapse there is net cash value remaining, theCompany will send a surrender check to the policy owner or change the policy to Reduced Paid Up (instates that require this option) for the amount that can be purchased by the net cash value.If after the insured’s age 111, the policy’s accumulation value is not enough to cover any outstanding loaninterest which has not been paid in cash, then the policy will enter the Grace Period. The policy ownerwill be notified and has 61 days to pay enough to provide sufficient accumulation value to cover theinterest due. If the Company does not receive the minimum payment within the Grace Period, the policyand any attached riders will lapse.ReinstatementsReinstatements are allowed within three years after the lapse date provided the policy owner did notsurrender the policy. The reinstatement is subject to the conditions stipulated in the contract, including:n Evidence of insurability satisfactory to us.n The appropriate premium and reinstatement interest of 6% is paid.If there is a loan, the policy owner must repay or reinstate any policy loan that was in existence as of thetermination date, and the compounded loan interest must be paid at the Loan Reinstatement InterestRate of 8%.t r a n s a m e r i c a | 13