TransTerm Product Guide - Mibsga.com

Product Guide®Policy DescriptionAbout TransTerm SMTransTerm is structured to offer term-like initial level premiums for 10, 15, 20, 25 or 30 years. The initiallevel premiums offer affordability similar to term and the universal life policy provides the option tocontinue coverage after the initial level premium period if the policy owner chooses.Premiums are flexible as provided within the universal life contract. The initial level premiumsscheduled to specifically meet the level period chosen must be paid on time as billed. Failure to doso may jeopardize the continuation of the initial level premium schedule. If insufficient premiums arereceived or premiums are received late, then a higher premium may be billed for the following policyyear. The ability to catch up exists, but may require significant additional premium and would notreestablish the initial level premium schedule until the next policy year.Policy DesignTransTerm is a flexible premium universal life insurance policy which has a lifetime death benefitguarantee. This product utilizes a “shadow account” design known as the Policy Threshold to providelifetime death benefit guarantees. The Policy Threshold is a number that is calculated monthly and it isused to determine whether the No-Lapse Guarantee Endorsement (also known as the Assured CoverageEndorsement) will remain active.At the beginning of each policy month, the Company recalculates the net amount at risk (the differencebetween the death benefit and the accumulation value) and deducts the Monthly Deduction (MD) fromthe policy’s accumulation value. The policy accrues interest daily at Company-declared rates on policyvalues and the Company credits it monthly, at the end of each policy month.Premium payments are flexible and may be made at any time prior to the insured’s age 111, subjectto the minimum and maximum premium requirements as explained in the policy. Beginning at theinsured’s age 111, no further premiums will be billed or accepted and the currently scheduled MonthlyDeductions will cease; however, the guaranteed maximum schedule of MD rates continues to age 121of the insured. The policy will continue to accrue interest on the accumulation value at the declaredinterest rate until age 121 of the insured when the accumulation value will continue to earn interest atthe guaranteed minimum interest rate of 3%. Loans can continue to be taken and interest will continueto accrue on any outstanding loans.No-Lapse Guarantee Endorsement (ACE)The No-Lapse Guarantee Endorsement “guarantees” the policy will remain in force even if the cashvalue is insufficient, provided the conditions of the endorsement continue to be met. The No-LapseGuarantee Endorsement (also known as the ACE Endorsement) alters the definition of when the policyenters the Grace Period. Usually, the policy enters the Grace Period as soon as there is insufficient CashValue to keep the policy in force.From the date the policy is issued and throughout the Threshold Period, a number called the PolicyThreshold is calculated to determine whether the guarantee is “active.” The Threshold Period is thespan of time from the Policy Date to the insured’s age 111. (The Policy Threshold figures do not appearon illustrations, data pages, Annual Statements, or on Grace Period notices.)t r a n s a m e r i c a | 5