How your policy’s cash value builds When you pay scheduled premiums, a percentage can be allocated to an account of your choice. Allocate to either an index segment , which typically can earn credit up to a cap , or your policy’s fixed account, which earns a flat interest rate. ● Index segments are tied to the performance of popular market indexes, without any actual market exposure. Each segment matures after one year 1 . Upon segment maturity, cash value can be reallocated to new index selection segments or moved to the fixed account. ● Cash value growth is generally tax-free 2 . ● Earn a guaranteed bonus on funds allocated to an index segment beginning policy year 11. See your illustration for details.
Downside protection — guaranteed In addition to any applicable cap rate, all index selections feature a floor rate of 0% or above that protects your account value. Because index selections can only step up, they reduce the impact of market volatility over time. 3
For illustrative purposes. Does not reflect actual or projected performance.
1 Indexed accounts formed in the first policy month mature after 11 months. All other index segments mature after one year. 2 Cash value growth is not subject to capital gains and access is tax-free assuming the following: 1) that withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals) and 2) that the policy is not a modified endowment contract. See IRC §§ 7702(f)(7)(B), 7702A. Cash value is typically accessed tax-free up to the tax basis via withdrawals, then accessed via loans, which are taxed as ordinary income but are not subject to capital gains. If the life insurance policy lapses, loans and withdrawals that exceed the total premiums paid will become taxable. 3 It’s still possible to lose policy cash value due to internal fees.
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