Whole Life

Dividend Term

Original line of business: Aetna

Updated on: Dec 13, 2018

Product snapshot

The Dividend Term product is a participating, permanent term product with a pre-set enhancement dividend option. Premiums were guaranteed level and payable for life. The basic coverage is guaranteed for life and the enhancement is guaranteed for 20 years, regardless of dividend performance.

Basic product information

Sample contract: N/A

Dividend options: Yes

Bonus: No

Dividend options

  • Enhancement dividend option only
  • The enhanced portion is made up of a combination of one-year term insurance and paid-up additions. Policies that are paid-up / reduced paid-up and extended term insurance (non premium paying policies) do not receive dividends and therefore will not produce an annual statement

Bonus

No

Premium paying period

  • Guaranteed level premiums to age 100 and then policy goes paid-up
  • If after 20 years, the coverage is reduced due to the dividend scale, the client has the option of increasing the level premium to maintain the original face amount
  • If the client chooses option 3 (maintain the same amount of insurance at a higher premium) at the 20th anniversary, then you will start seeing a premium on the enhancement coverage

Policy fees

1987 rate series: 

  • $50.00 single life
  • $25.00 per life for multiple lives
  • 1991 rate series
  • $90.00 single life
  • $50.00 per life for multiple lives

Deposit load

N/A

Values, loans & withdrawals

Non forfeiture option: Yes

Loans: Yes

Withdrawals: N/A

Non-forfeiture option

Two options: Extended lapse protection & Extended term insurance 

Extended lapse protection: 

  • Available at the end of the second policy year, extends the grace period to 120 days
  • If life insured dies during this period, the policy will be considered to be inforce as if the premium had been paid but any unpaid premium plus interest will be deducted from the death benefit
  • Premium payments may be resumed, without evidence of insurability, by paying all overdue premiums plus interest.  Basic coverage and all riders will be reinstated if payment is resumed within 12 months
  • If outstanding premiums are not paid before the extended lapse protection period expires, the policy will lapse unless coverage can be continued under the extended term insurance provision 

Extended term insurance: 

  • At any time after there is a policy value, after the grace period has expired, and/or after the extended lapse protection period has expired, the policy will automatically be changed to extended term insurance should overdue premiums remain unpaid
  • The amount of insurance will be equal to the sum insured in force at the time this provision becomes effective
  • All riders will terminate
  • All coverages will lapse at the end of the extended term insurance period
  • Premium resumption is permitted without medical evidence within 12 months of the first missed premium. Unpaid premiums plus interest is required
  • After 12 months of the first missed premium, premiums may resume with medical evidence, unpaid premiums and interest

Loans

 

  • Available after the 20th policy anniversary
  • Maximum loan is 85% of the net cash value  

Withdrawals

N/A

Cash value 

  • Available after the 20th policy anniversary, not necessarily at the 20th policy year. Please check contract to confirm
  • Partial withdrawals are not available  

Policy values are created by the payment of premiums and the applicaiton fo accountable dividends to the policy

Policy values during the first 20 years are used to support the benefit provisiions and are not availalbe as cash

Please order an in force illustration to confirm values

Reduced paid up 

  • Available after the 20th year
  • Will be changed to a reduced amount of non-participating paid-up insurance
  • Riders will be terminated  

To determine future RPU values, an illustration must be requested as values will not appear on the system until year 20

Riders & benefits

Premium offset/holiday: Yes

Premium offset/holiday

Vanishing premium feature: 

  • No further premiums are due when the total policy value and the accountable dividend are sufficient to fund the sum insured then in force to the life insured's age 100
  • If the client elects to pay premiums beyond the vanishing premium date, the sum insured will increase through the purchase of paid up additions
  • To see the vanishing premium date, an illustration is required. Client must elect this option as it is not automatic

Death benefit

  • Basic coverage plus any dividends
  • Payable on second death

Reinstatement period

This policy may be reinstated at any time within two years from the date of lapse

Convertible

No, already a permanent product