The Benefits of Term Insurance
Policies issued by American General Life Insurance Company (AGL) except in
New York, where issued by The United States Life Insurance Company in the City
of New York (US Life).
What is Term Insurance?
Basic, inexpensive, and easy to understand.
Life insurance policy that provides coverage for a
certain period of time, or a specified “term”
Death benefit is paid out if the insured dies during the specified
term period and the policy is inforce.
Income replacement needs for beneficiaries/loved
ones
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What is Term Insurance?
Peace of
Mind
Competitive
Cost
Coverage
Death
Benefit
Protection
Living
BenefitsCritical,
Chronic, and
Terminal
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Low Cost Coverage
Initially much less expensive when compared to
permanent life insurance
All the coverage you need, none that you don’t
Premium is fixed for the duration of the initial term
period
Affordable for young families and budget focused
individuals
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Death Benefit Protection
Specified death benefit pays out if insured dies during
coverage period
Generally, the term period is between one year and up
to 35 years in length
Purely risk protection, no cash value
Protect the income their families were anticipating from
them
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Living Benefits-Chronic, Critical, Terminal
Can accelerate all or part of death benefit
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Peace of Mind
Debt – Know that protection is provided for length of
mortgage and/or other debts
Dependent Care –Helping to ensure coverage for
young children or until children have completed
college
Policies can be converted to permanent plans
regardless of changes in health
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How Does it Work?
Choose
Duration
• 1, 10, 20, or 35 years
Pay Premium
• Annual, Semi-annual, quarterly, monthly
Death Benefit
• Paid to beneficiary(ies) if insured dies
during term period
Conversion
• During conversion period, if applicable,
with no additional underwriting
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Types of Term Policies
Level
Decreasing
Term
Insurance
Annual
Renewable
Return of
Premium
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Level Term
 Most common type of term insurance
 Death benefit is level for the duration of the term period
 Premium is guaranteed to be level for the same duration
 Can be renewed for a higher premium after the initial term period, if client
meets the renewal guidelines
 Conversion possible for same rating as original term policy
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Annual Renewable
 Premium is paid for one year of coverage
 Policy is guaranteed to be continued each year for a certain number of years
– Usually varies from 10-35 year, or to a certain age of the insured
 Premiums increase with each renewal period
 Eventually, cost becomes prohibitive and would exceed the cost of a
permanent policy
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Return of Premium
 Returns premium paid during the policy term, minus fees and expenses, if the
insured outlives the term duration
 Premiums are generally much higher than a level term policy
 If policy is terminated early, they sometimes contain step-up provisions that
increase the amount returned after each year or after a certain number of
years
– Example: 10% back after 10 years, 30% back after 15 years, and 100%
back after 30 years
 Amount of premium that is returned is received income-tax free
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Decreasing Term
 Type of annual renewable policy that provides a death benefit that decreases
at a predetermined rate over the life of the policy
 The premiums are generally constant throughout the contract
 Sometimes referred to as “mortgage insurance” since the policy can be
decreased by an amount equal to the remaining balance of your home
mortgage
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Our Term Portfolio
Quality of Life…Insurance®
QoL Flex Term
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QoL Flex Term
Compare with Traditional Term Insurance
Not all riders are available in all states, riders may vary by state.
Traditional
Term Ins
QoL Flex
Term Ins
Death
Invasive Cancer
Yes
No
Yes
Yes!
Heart Attack
No
Yes!
Stroke
No
Yes!
Event
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SelectChoiceSM Accelerated Benefit Rider Features*
1
2
An illness or condition certified
within the last 12 months and
affects the insured person so that
he or she:
• Major Heart Attack
-
• Invasive Cancer
-
Is unable to perform at least
two of the six Activities of Daily
Living (ADLs) or
Requires substantial
supervision by another person
to protect the insured person
from threats to health and
safety due to severe cognitive
impairment
ADLs: Bathing, Dressing, Toileting,
Transferring, Continence, Eating
• Coronary Artery Bypass
• Stroke
• Blood Cancers: Leukemia,
Lymphoma and Multiple
Myeloma
3
An illness or physical condition
that is certified by a
physician to be reasonably
expected to result in the
insured’s death within 24
months from the date of
certification
• Major Organ Transplant
• End Stage Renal Failure
• Paralysis
• Coma
*SelectChoice not available in CA, CT, or MT.
• Severe Burn
PLEASE NOTE: The life insurance offered with SelectChoice Accelerated Benefit Rider is not stand-alone long term care
insurance, disability income insurance or other insurance designed to cover specific costs associated with an illness or
condition. Receiving benefits under the rider will reduce the amounts available for future acceleration under it and any other
Accelerated Benefit Rider attached to the policy. It will also reduce the base life insurance benefit and the funds available to
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supplement retirement or other needs. In some cases, such reductions can result in policy termination. The benefits paid
be less than what is needed to cover all of the costs associated with an illness or condition."
SelectChoiceSM ABR Features
1. Flexible Accelerated Benefit:
•
No-cost Accelerated Benefits
•
Automatically added to all eligible Quality of Life…Insurance®
UL and term policies
•
Allows owner to accelerate some or all of the life insurance
benefit in the event the insured is diagnosed with a Qualifying
Event: Critical, Chronic or Terminal illness
*Not available in CA, CT, or MT
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SelectChoiceSM ABR Features
2. Defined Accelerated Benefit*:
•
Optional and may be purchased for an additional premium with
eligible Quality of Life…Insurance® UL and term policies
•
The DAB for the initial Qualifying Event, where a claim is made,
is determined by a fixed percentage between 5%-15%
•
The DAB for a subsequent Qualifying Event is calculated using
a reduced percentage: 20% of initial DAB percentage
•
Subject to underwriting approval (Up to Table D)
•
Allows the owner to accelerate a defined amount of the life
insurance benefit in the event the insured is diagnosed with a
Qualifying Event: Critical, Chronic or Terminal illness
*Not available in CA, CT, or MT
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How Does It Work?
 You purchases a $250,000 Quality of Life…Insurance product at age
40, which includes the SelectChoice Accelerated Benefit Rider
 For an additional premium, you also purchase a 10% Defined
Accelerated Benefit
 Ten years later you suffer a major heart attack, but the prognosis for
recovery is excellent
 The medical costs associated with this event are substantial causing
you to consider your options. To help cover these expenses, you
accelerate the $25,000 Defined Accelerated Benefit for Critical
Illness
 The remaining death benefit is $225,000 which could also be
accelerated under the Flexible Accelerated Benefit
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How Does It Work?
 You then file a claim for another $25,000 under the Flexible
Accelerated Benefit
 AGL determines the benefit and makes an offer based on the severity
of your condition and how it will affect your life expectancy
 If you accepts this offer, the death benefit will be reduced by $25,000.
You will receive less than $25,000 because you are receiving a
portion of the death benefit today, rather than at the end of life
expectancy (discounting)
 In this case, you received an offer from AGL for an amount of
$11,222*. You could elect to take all, part or none of the offer
 You decide to take the $11,222* today and now have a remaining
death benefit is $200,000
*Amount is hypothetical and actual payment will vary be individual case.
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QoL Flex Term – Power Features
Feature
Additional Details
Coverage up to 35 years
-22 level premium periods with
guaranteed coverage
-Juvenile and senior coverages
available
Generous Conversion Guidelines
-Convertible for up to 80% of the
initial term period, or age 75
-Without evidence of insurability
-Can convert with SelectChoice ABRs
QoL Advantage
-Bundle more than 1 policy for a
multiple policy discounts
-Policy fee reductions
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QoL Flex Term – Conversion Rules
Conversion Period = 80% of the term period
Example: 30 year term convertible for 24 years
Maximum Conversion Age = 75
Convertible to QoL Universal Life without Evidence of Insurability
Can be converted to any UL policy currently in the portfolio
Conversion Credit = 1st year premium if converted in first 5 years
*Pro Rata for partial conversion, applied to accumulated value of UL policy
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QoL Advantage
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QoL Advantage – What is it?
QoL Advantage is a discount program in place to support
our commitment to help solve the increased life
insurance needs of consumers today.
It does this by helping consumers meet their financial
objectives at an affordable price through a “bundled”
solution:
• Policy fee reduction
• Volume discount based on aggregate coverage
• Bonus crediting on select Universal Life products
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QoL FlexTerm – QoL Advantage
 Available as a standalone policy; or
 Can be purchased with another QoL Universal Life policy as part of
QoL Advantage, which may include:
– Policy fee reduction (up to $75/yr per term policy)
– Volume discount based on aggregate amount of coverage
between all policies, including Universal Life if applicable.
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When permanent life insurance is
the solution, but the premium is
out of reach…
QoL Advantage can help to
satisfy the “Need”.
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Disclaimer
The information presented herein is not a comprehensive analysis of the topic
presented, and the viewer should consult tax and legal advisors to understand
all the ramifications of the topics discussed.
No representation or warranty, express or implied, is made by AGL or its
affiliates as to the completeness of the information provided. All companies
mentioned, their employees, financial professionals and other representatives
are not authorized to give legal, tax or accounting advice. Applicable laws and
regulations are subject to change and individuals should consult an attorney,
tax advisor or accountant. Any tax statements in this material are not intended
to suggest the avoidance of U.S. federal, state or local tax penalties.
To ensure compliance with requirements imposed by U.S. Treasury
Regulations, we inform you that any tax advice contained in this presentation
(including any attachments) is not intended or written to be used, and cannot
be used, for the purpose of (i) avoiding penalties under the Internal Revenue
Code or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed herein.
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Important Information
Policies issued by American General Life Insurance Company (AGL). Issuing company AGL is responsible for financial obligations of insurance products and
is a member of American International Group, Inc. (AIG). Guarantees are backed by the claims-paying ability of the issuing insurance company. AGL does not
solicit business in the state of New York. Policies issued by American General Life Insurance Company (AGL). Issuing company AGL is responsible for financial
obligations of insurance products and is a member of American International Group, Inc. (AIG). Guarantees are backed by the claims-paying ability of the issuing insurance
company. AGL does not solicit business in the state of New York. Products may not be available in all states and product features may vary by state. Please refer to your
policy. For policy forms ICC14-14579, 14579, ICC10 AGL ABR, AGL ABR, ICC14-14012,14012 ICC14-14018, 14018, ICC14-14390, 14390, AGL 05AHC, AGL EMD-DB,
ICC14-14002, 14002, 14306 and state variations. © 2014 American International Group, Inc. (AIG). All rights reserved.
The maximum amount of life insurance death benefits that may be accelerated as to an Insured Person under all accelerated benefit riders is the lesser of the existing
amount of such death benefits or a lifetime maximum of $1,500,000. See your policy for details. The insurance company may contest the policy from the date of policy
issue, a reinstatement or an increase in coverage, during a period provided by applicable law and described in the policy, for the misstatement or misrepresentation of
material fact on the application for such policy, reinstatement, or increase. If an Insured Person dies by suicide within the suicide period provided by applicable law and
description in the policy, the death benefit will be limited as provided by the policy. Rider names, benefits and definitions may vary in some states and/or not be available in
all states. Neither American General Life Insurance Company nor any agent representing it is authorized to give legal or tax advice.
(1) When filing a claim for Qualifying Critical Illness, Qualifying Terminal Illness or Qualifying Chronic Illness under an Accelerated Benefit Rider, the claimant must provide
to the Company a completed claim form (with Certification attached in the case of a Qualifying Chronic Illness) which must be received at its Administrative Center within
the time frame specified in the Rider, if any.
(2) If a benefit under an Accelerated Benefit Rider is payable and the Owner elects to receive such benefit, the Company will provide the Owner with one (1) opportunity to
elect a Flexible Accelerated Benefit and/or a Defined Accelerated Benefit, if applicable, under the Policy as to such Qualifying Event. To make such an election, the Owner
must complete an election form and return it to AGL within 60 days of receipt of the election form. The Company will not provide a later opportunity to elect a Flexible
Accelerated Benefit and/or a Defined Accelerated Benefit, if applicable, under a Policy as to the same Qualifying Critical Illness or Qualifying Chronic Illness. Under certain
circumstances where an insured’s mortality (i.e., our expectation of the insured’s life expectancy) is not significantly changed by a Qualifying Critical Illness or Qualifying
Chronic Illness, the accelerated benefit may be zero.
(3) The failure to provide a required claim form and a required election form (with the requested attachments) within the periods set forth for each in a Policy may preclude
payment of a benefit.
(4) Benefits payable under an accelerated benefit rider may be taxable. Neither American General Life Insurance Company nor any agent representing it is authorized to
give legal or tax advice. Please consult a qualified legal or tax advisor regarding questions concerning the information and concepts contained in this material.
(5) Generally, we will send you an IRS Form 1099-LTC if you receive an accelerated death benefit on account of a Chronic Illness or a Terminal Illness. We will send you
an IRS Form 1099-R if you receive an accelerated death benefit on account of a Critical Illness.
The sum that will be included in Box 2 (Accelerated death benefits paid) of IRS Form 1099-LTC or in Box 1 (Gross distribution) of IRS Form 1099-R will be the actual sum
you received by check or otherwise minus any refund of premium and/or loan interest included with our benefit payment plus any unpaid but due policy premium, if
applicable, and/or pro rata amount of any loan balance.
(6) See your policy for details.
Important: Prior to soliciting business, be certain that you are appropriately licensed and appointed with the insurer and that the product has
been approved for sale by the insurer in That state. If uncertain, contact your American General Life Companies representative for
assistance.
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American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries.. AIG companies serve commercial, institutional, and individual
customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the
United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.
Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIG_LatestNews | LinkedIn: http://www.linkedin.com/company/aig
AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our
website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries, and
coverage is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines
insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.
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