self-owned life & retirement insurance arrangement (s.o.l.a.r.)
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Self-Owned Life and Retirement (S.O.L.A.R.) Insurance Arrangement
Voya Indexed Universal Life-Global Choice
A Flexible Premium Adjustable Life Insurance Policy(Standard Form #1186-09/12; may vary by state) SLR-74
Security Life of Denver Insurance Company
Designed for:
Mr. Valued Client
Presented by:
Mr. Valued Agent
Security Life of Denver Insurance Company
8055 East Tufts Avenue, Suite 650
Denver, CO 80237
This analysis is for illustration purposes and is not guaranteed. It is not a
financial plan and does not address all areas of financial concern. This
analysis is based upon information provided by the client. The Voya Life
Companies and their agents and representatives do not give tax or legal
advice. Please consult with your attorney, accountant, or tax advisor for
additional information.
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Using Voya Indexed Universal Life-Global Choice withSelf-Owned Life and Retirement (S.O.L.A.R) Insurance Arrangement
The Voya Indexed Universal Life-Global Choice product is a flexible premium,universal life insurance product designed to provide a death benefit and allow for cashvalues. It includes an Indexed Strategy with 3 different crediting options where indexcredits are linked in part to increases, if any, in outside indexes. The S&P 500 1 YearPoint to Point Index Strategy is subject to an annual minimum and maximum indexcredit rate. The 2 and 5 Year Global Indexed Strategies are linked to weighted changesin three indexes the S&P 500 Index, the EURO STOXX 50 Index, and the HangSeng Index - and calculates an index credit under a formula employing a look backstrategy where a portion of the better performing two out of three indexes is used, and issubject to a Guaranteed Minimum Interest Rate.
While the policy values may be affected by external indexes, the policy does not directlyparticipate in any index fund, stock or equity investments, and all policy guarantees arebased solely on the financial strength and claims-paying ability of Security Life ofDenver Insurance Company. The product is not a variable product or any type ofinvestment contract. See IMPORTANT INDEX DISCLAIMERS for moreinformation about each index.
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A Self-Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangement is an arrangement where anexecutive purchases a cash value life insurance policy to provide death benefit protection and to helpaccumulate funds for retirement. The arrangement can be funded through employer contributions as IRC 162bonuses, through after-tax contributions from the executive, or a combination of both. While premiumpayments must be treated as ordinary income, the executive can borrow money from the Voya IUL-GlobalChoice life insurance policy to pay income taxes. The executive can use the policy as a potential source ofsupplemental retirement income, as a source of survivorship benefits for his or her family, or both.
Key Considerations - Potential Advantages and Disadvantages
For the Executive For the Employer
Supplemental Retirement Income 1-- Bonuses areused to purchase a life insurance policy whichaccumulates cash values.
Reduce "Out-of-Pocket Costs" 1-- By taking a policyloan to pay income taxes, the S.O.L.A.R. InsuranceArrangement can reduce the current costs to theexecutive.
Tax-Deferred Growth -- No income tax is payablewhile money is accumulating inside the life insurancepolicy.
Tax-Free Income 1-- Provided the life insurancepolicy is not structured as a modified endowmentcontract (MEC), the executive will be able to attaintax-free income through a combination of policywithdrawals and loans.
Income Tax-Free Death Benefit 2-- The lifeinsurance policy provides protection for theexecutive's family in the event of death.
No IRS Distribution Requirements or Penalties --Policy distributions from a S.O.L.A.R. InsuranceArrangement can occur before age 59 without apremature distribution penalty from the IRS, and thereare no required minimum distributions at age 70 orthereafter.
Immediate Taxation -- Bonus payments made by theemployer are taxable income to the executive underIRC 61.
Immediate Tax Deduction -- Bonus payments made by theemployer are income tax deductible under I.R.C. 162 (solong as the executives total compensation is consideredreasonable).
Flexible Contributions -- There is no required schedule forcontributions to a S.O.L.A.R. Insurance Arrangement.Premiums can be designed to meet the changing needs ofthe employer.
Selective Benefit -- A S.O.L.A.R. Insurance Arrangementcan be offered on a selective basis. Unlike qualifiedretirement plans, there is no requirement that the benefit beavailable on a nondiscriminatory basis.
Simple Administration -- Some nonqualified benefits canrequire significant plan administration (maybe evenrequiring a third-party administrator). A S.O.L.A.R.Insurance Arrangement is a potentially simple arrangementrequiring little or no plan administration.
No Golden Handcuffs -- Although the bonus may be anincentive for the executive to remain with the company, theexecutive may choose to keep the policy after terminationof employment.
No Cost Recovery to the Employer -- The employer hasno rights to policy values or death benefits asreimbursement for the after-tax cost of the bonus.
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Mr. Valued ClientAge: 39Retirement Age: 65Policy Loan Type: Select Loans
Summary of Values
A Self-Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangement allows your employer toprovide you with death benefit protection for your family and a potential source of supplementalretirement income 1 by paying premiums into an IUL-Global Choice life insurance policy that you own.The premium payments by your employer are treated as taxable bonuses. However, you may borrowfunds from the IUL-Global Choice policy to pay the income tax associated with these bonuses.Furthermore, cash values may grow inside the policy tax-deferred, and cash value accumulation canprovide you a source of tax-free income through a combination of policy withdrawals and loans. 1
BENEFITS AT RETIREMENT
Based on the current assumptions used in the accompanying
illustration, your S.O.L.A.R. Insurance Arrangement is projected to
provide total supplemental retirement benefits of : $1,801,870
TOTAL OUT-OF-POCKET COSTS
Based on the current assumptions used in the accompanying
illustration, your net out-of-pocket costs for this benefit is projected
to be:
$0
DEATH BENEFIT
In addition, if you die at or before your projected retirement age
your family would be protected in the event of your premature death
with death benefits of at least: $1,439,860
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Summary of Values, continued
You should also keep in mind that the S.O.L.A.R. Insurance Arrangement is your policy. You are theowner of the life insurance policy at all times and you can choose when to take distributions from thepolicy's cash values. There are no IRS requirements that you leave cash in the policy until retirement ageor that you begin taking policy distributions at any particular time. The policy distribution scheduleillustrated here is just a sample of what might happen. When and whether you take distributions from thepolicy is entirely up to you.
COST TO EMPLOYER
Premium Bonuses Paid Over 10 Years: $300,000
Tax Savings (34% Tax):** $102,000
Net Cost to Employer: $198,000
COST TO YOU
Premiums Paid Over 10 Years: $300,000
Less Premium Bonuses Received from Employer: $300,000
Plus Tax Incurred on Premium Bonuses (28% Tax): $84,000
Less Policy Loans To Pay Tax: $84,000
Plus Interest on Loans Paid in Cash: $0
Net Cost to You: $0
SUPPLEMENTAL RETIREMENTBENEFITS FROM POLICY DISTRIBUTIONS
Age to Start Cash Value Distribution*: 65
Available Net Surrender Value at Age 65: $512,580
Annual Cash Value Distributions for 35 years: $51,482
Total Cash Value Distributions: $1,801,870
Cash Value at Age 121: $16,175,654
DEATH BENEFIT
Year 1 Net Death Benefit: $1,729,096
Available Net Death Benefit at Age 65: $1,439,860
Available Net Death Benefit at Age 121: $16,175,654
The values illustrated are not guaranteed. They assume that the illustrated non-guaranteed elements of the policy will continue unchanged forall years shown. This is not likely to occur, and actual results may be more or less favorable than those shown. This page must beaccompanied by the accompanying personalized policy illustration, which includes the guaranteed elements of the policy and other importantinformation.
*The policyowner must request all policy distributions from the company.
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Select Loans have the risk that policy performance may be lower than projected in the illustration if the amount credited to the account valuein the Fixed Strategy and/or Indexed Strategy is less than the fixed 6% interest charged on the policy loan. Detailed additional informationabout policy loans is located in the accompanying personalized policy illustration.
**IRC 162 states a bonus paid to an employee is generally deductible in the year paid if the employee's total compensation (including thebonus) is reasonable and is paid for personal services actually rendered. Compensation is regarded as "reasonable" if it is an amount as wouldordinarily be paid for like services by like enterprises under like circumstances. The amount of compensation a public-held corporation maydeduct for reasonable compensation paid to a covered employees is limited to $1,000,000.
The tax rates illustrated are assumptions based on information furnished by the employer and executive about their respective federal (andstate, if included) income tax rates. The actual tax rates experienced at any time may be more or less than those illustrated.
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A Self-Owned Life And Retirement (S.O.L.A.R.)Insurance Arrangement can be used by anemployer for the executive's purchase of lifeinsurance. It is a simple and straightforwardmethod of rewarding an executive over andabove the traditional salary and other benefits.A S.O.L.A.R. Insurance Arrangement fundedwith a Voya IUL-Global Choice policy can be avaluable selective benefit. It is selectivebecause the business can legally offer it to someemployees but not to others.
How it Works
1. The company and the executive agree that personal life insurance protection and the related cash value accumulation areimportant components of the executive's overall compensation package. Depending on the relationship between theparties, this understanding may be formalized through an optional employment agreement.
2. The Executive acquires a Voya IUL-Global Choice policy insuring his or her life.
3. The company makes the premium payments on this policy, which are taxed as additional compensation to theexecutive and create a current deduction for the employer. Optionally, the company may provide an additional cashbonus to the executive to cover the income tax associated with the premium payment.
4. The executive pays income taxes on the bonused premium payments either by having the taxes due withheld bypayroll deduction or by borrowing money from the Voya IUL-Global Choice policy utilizing Select Loans. SelectLoans have the risk that policy performance may be lower than projected in the following illustration if the amountcredited to the account value in the Fixed Strategy and/or Indexed Strategy is less than the fixed 6% interest chargedon the policy loan. 1 The executive who receives a bonus through payroll with taxes withheld may choose to take a NetLoan to replace the premium amount equal to the taxes paid. The Net Loan allows the executive to apply the loanproceeds directly to their policy as an additional premium payment. Once the net loan is processed and is on thepolicy, it acts just like the current Traditional or Select Loan.
5. The policy cash values are available to supplement the executive's retirement income through withdrawals and loans. 1The policy death benefit will be paid income tax free to the executive's beneficiaries. 2
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Employer Objectives
A Self-Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangement is a simple tool employers can use to reward their mostvalued employees. The S.O.L.A.R. Insurance Arrangement can be offered selectively as a benefit to encourage the retention ofexecutives the business can't afford to lose.
Tool to Recruit, Reward and Retain Key Executives
Employers today are faced with increased competition for talented key executives. In the past, employers attracted, motivated andretained their more talented executives by offering a combination of salary, incentive bonus, and qualified retirement benefits.Unfortunately, these traditional compensation strategies fail to address several important issues:
The cost of replacing key executives is getting higher;
Salary increases and bonuses have short-lived impacton long-term job satisfaction and loyalty to thebusiness.
Salary increases and bonuses force executives to paytaxes on income now even though the funds may not beneeded until later; and
ERISA makes it difficult to single out and rewardhighly-compensated executives using qualifiedretirement plans.
Key Considerations
Potential Advantages Potential Disadvantages
Immediate Tax Deduction -- Bonus payments madeby the employer are income tax deductible under IRC 162 (so long as the executive's total compensation isconsidered reasonable.)
Flexible Contributions -- There is no requiredschedule for contributions to a S.O.L.A.R. InsuranceArrangement. Premiums can be designed to meet thechanging needs of the employer.
Selective Benefit -- A S.O.L.A.R. InsuranceArrangement can be offered on a selective basis.Unlike qualified retirement plans, there is norequirement that the benefit be available on anondiscriminatory basis.
Simple Administration -- Some nonqualified benefitscan require significant plan administration (maybe evenrequiring a third-party administrator). A S.O.L.A.R.Insurance Arrangement is a simple arrangementrequiring little or no plan administration.
No "Golden Handcuffs" -- The policy is owned andcontrolled by the executive. Although the employerpremium bonus may be an incentive for the executiveto remain with the company, the executive may chooseto keep the policy after termination of employment.
No Cost Recovery to the Employer -- The employerhas no rights to policy values or death benefits toreimburse for the after-tax cost of the bonus.
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Executive Retirement Needs
A Self-Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangement offers today's executive asolution to one of life's most intimidating challenges: preparing adequately for retirement. Americanprofessionals expect to spend up to one-third of their lives in retirement.* Longer retirements can beattributed to two major factors:
1. People are generally living longer; and
2. People are retiring earlier to enjoy the fruits of their labor.
In addition to living longer, there are several other challenges for executives who want to preparefor a comfortable retirement:
Social Security Shortfall -- As more and more "baby boomers" reach retirement age and withfewer workers available to pay Social Security taxes, government projections indicate theresources of the system will shrink and reductions in benefits may be necessary.
Premature Death -- Retirement security means protecting both the executive and his or her familyduring working and retirement years. If the executive dies prematurely, his or her loved ones maybe left without resources needed to cover expenses now or during retirement. A comprehensiveretirement strategy will include protection for premature death.
Reverse Discrimination -- Qualified retirement plans may offer the best savings opportunity forretirement-- contributions are not taxed to employees until withdrawn from the plan and employercontributions are tax deductible. But there is a limit to how much a participant can contribute to aqualified plan ($18,000 annually for 401(k), 403(b), and 457(b) plans in 2015). The effect of thislimitation is to discriminate against highly paid executives.
Example: A highly paid executive who participates in a qualified retirement plan fails to receive the sameratio of before-to-after retirement income as the average worker. For example, an employee making$50,000 a year can contribute up to 36.00% of his or her income to a qualified plan whereas an executivemaking $200,000 can only contribute 9.00% of income.
Salary Maximum Pre-Tax Deferral Percentage
$50,000 36.00%
$100,000 18.00%
$150,000 12.00%
$200,000 9.00%
$250,000 7.20%
$300,000 6.00%
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A S.O.L.A.R. Insurance Arrangement provides a potential source of supplemental retirement income thatis not affected by qualified plan contribution limits and which also provides protection for an executive'sloved ones in the event of premature death.
*Voya Retirement Readiness & Middle America Survey, 2004.
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Key Considerations for the Executive
Potential Advantages Potential Disadvantages
Supplemental Retirement Income 1 -- Bonuses are used to purchase a life insurancepolicy which accumulates cash values.
Reduce "Out-of-Pocket Costs" 1 -- By takinga policy loan to pay income taxes, theS.O.L.A.R. Insurance Arrangement canreduce the current costs to the executive.
Tax-Deferred Growth -- No income tax ispayable while money is accumulating insidethe life insurance policy.
Tax-Free Income 1 -- Provided the lifeinsurance policy is not structured as amodified endownment contract ("MEC"), thebusiness owner will be able to attain tax-freeincome through a combination of policywithdrawals and loans.
Income Tax-Free Death Benefit 2 -- The lifeinsurance policy provides protection for theexecutive's family in the event of death.
No IRS Distribution Requirements orPenalties -- Policy distributions from aS.O.L.A.R. Insurance Arrangement can occurbefore age 59 without a prematuredistribution penalty from the IRS, and thereare no required minimum distributions at age70 or thereafter.
Immediate Taxation to Executive -- Bonuspayments made by the employer are taxableincome to the executive under IRC 61.
1 A portion of the policys surrender value may be available as a source of supplemental retirement income through policy loans andwithdrawals. Income tax free policy distributions may be achieved by policy loans or withdrawing to the cost basis (usually premiums paid).This assumes the policy qualifies as life insurance, is not a modified endowment contract and is not lapsed or surrendered with an outstandingloan. Policy loans and withdrawals may reduce or eliminate index credits, generate an income tax liability, reduce available surrender valueand reduce the death benefit, or cause the policy to lapse. Additionally, loans may limit your ability to make elections to the IndexedStrategy; if a loan results in amounts being deducted from a block prior to its block maturity date, no elections from the Fixed Strategy to theIndexed Strategy will be processed in the 18 months following the loan. Select Loans have the risk that policy performance may be lowerthan projected in the following illustration if the amount credited to the account value in the Fixed Strategy and/or Indexed Strategy is lessthan the fixed 6% interest charged on the policy loan. Detailed additional information about policy loans is located in the accompanyingpersonal policy illustration.
2 Death benefit proceeds from a life insurance policy are generally income tax-free, and if properly structured, may be free from estate tax.
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The Voya Life Companies and their agents and representatives do not give tax or legal advice. This information is general in nature and notcomprehensive; the applicable laws change frequently and the strategies suggested may not be suitable for everyone. You should seek advicefrom your tax and legal advisors regarding your individual situation.
These materials are not intended to and cannot be used to avoid tax penalties; and they were prepared to support the promotion or marketingof the matter addressed in this document. Each taxpayer should seek advice from an independent tax advisor.
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SELF-OWNED LIFE AND RETIREMENT INSURANCE ARRANGEMENT - COMBINED VALUESSingle Bonus
The purpose of this supplemental illustration is to show a Voya Indexed Universal Life-Global Choice policy using the Single BonusPlan and the corresponding affect on cash value and death benefit. The values illustrated are not guaranteed. An asterisk indicates theyear the policy would lapse assuming that since policy issue the minimum guaranteed interest was credited and the maximumguaranteed costs were deducted.
Prepared for:
Employer Tax Rate: 34%
Mr. Valued Client Male 39 Standard No Tobacco Tax Rate: 28%State of Issue: California
Initial Total Face Amount: $1,738,000Initial Death Benefit Option: 1 (Level)Initial Annual Premium: $30,000.00Premium Election:
Allocation Hypothetical IndexStrategy Type Percentage Credit/Interest RateS&P 500 1 Year Point to Point Indexed Strategy 25% 6.67%2 Year Global Indexed Strategy 50% 7.93%5 Year Global Indexed Strategy 25% 7.62%
Policy Loan Type: Select Loans
EMPLOYER COSTS EXECUTIVE COSTS EXECUTIVE BENEFITS
End Total Bonus After-Tax Executive Net Net Netof Yr Policy to Cost Of Premium Tax on Annual Retirement Surrender Death
Yr Age Premium Executive Bonus Outlay Bonus Outlay Benefits Value Benefit
1 40 30,000 30,000 19,800 0 8,400 0 0 0 1,729,0962 41 30,000 30,000 19,800 0 8,400 0 0 8,100 1,719,6583 42 30,000 30,000 19,800 0 8,400 0 0 20,619 1,709,6534 43 30,000 30,000 19,800 0 8,400 0 0 34,623 1,699,0485 44 30,000 30,000 19,800 0 8,400 0 0 50,563 1,687,807
150,000 150,000 99,000 0 42,000 0 0
6 45 30,000 30,000 19,800 0 8,400 0 0 68,160 1,675,8927 46 30,000 30,000 19,800 0 8,400 0 0 92,783 1,663,2618 47 30,000 30,000 19,800 0 8,400 0 0 122,114 1,649,8739 48 30,000 30,000 19,800 0 8,400 0 0 152,054 1,635,682
10 49 30,000 30,000 19,800 0 8,400 0 0 185,806 1,620,638 300,000 300,000 198,000 0 84,000 0 0
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICEA Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 13 of 64
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EMPLOYER COSTS EXECUTIVE COSTS EXECUTIVE BENEFITS
End Total Bonus After-Tax Executive Net Net Netof Yr Policy to Cost Of Premium Tax on Annual Retirement Surrender Death
Yr Age Premium Executive Bonus Outlay Bonus Outlay Benefits Value Benefit
11 50 0 0 0 0 0 0 0 197,348 1,613,597* 12 51 0 0 0 0 0 0 0 209,312 1,606,132
13 52 0 0 0 0 0 0 0 222,677 1,598,22014 53 0 0 0 0 0 0 0 236,451 1,589,83415 54 0 0 0 0 0 0 0 251,037 1,580,944
300,000 300,000 198,000 0 84,000 0 0
16 55 0 0 0 0 0 0 0 266,937 1,571,52017 56 0 0 0 0 0 0 0 284,757 1,561,53118 57 0 0 0 0 0 0 0 303,168 1,550,94319 58 0 0 0 0 0 0 0 323,450 1,539,72020 59 0 0 0 0 0 0 0 343,645 1,527,823
300,000 300,000 198,000 0 84,000 0 0
21 60 0 0 0 0 0 0 0 367,634 1,515,21322 61 0 0 0 0 0 0 0 392,823 1,501,84523 62 0 0 0 0 0 0 0 420,781 1,487,67624 63 0 0 0 0 0 0 0 449,427 1,472,65725 64 0 0 0 0 0 0 0 479,733 1,456,736
300,000 300,000 198,000 0 84,000 0 0
26 65 0 0 0 0 0 0 0 512,580 1,439,86027 66 0 0 0 0 0 -51,482 51,482 495,095 1,367,40128 67 0 0 0 0 0 -51,482 51,482 475,840 1,290,59429 68 0 0 0 0 0 -51,482 51,482 457,260 1,209,17930 69 0 0 0 0 0 -51,482 51,482 435,028 1,122,878
300,000 300,000 198,000 0 84,000 -205,928 205,928
31 70 0 0 0 0 0 -51,482 51,482 416,316 1,031,40032 71 0 0 0 0 0 -51,482 51,482 396,361 934,43333 72 0 0 0 0 0 -51,482 51,482 378,538 831,64834 73 0 0 0 0 0 -51,482 51,482 358,965 722,69635 74 0 0 0 0 0 -51,482 51,482 339,822 607,207
300,000 300,000 198,000 0 84,000 -463,338 463,338
36 75 0 0 0 0 0 -51,482 51,482 323,227 484,78937 76 0 0 0 0 0 -51,482 51,482 312,155 396,91238 77 0 0 0 0 0 -51,482 51,482 301,002 392,07939 78 0 0 0 0 0 -51,482 51,482 293,003 390,96940 79 0 0 0 0 0 -51,482 51,482 279,412 384,427
300,000 300,000 198,000 0 84,000 -720,748 720,748
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICEA Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 14 of 64
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EMPLOYER COSTS EXECUTIVE COSTS EXECUTIVE BENEFITS
End Total Bonus After-Tax Executive Net Net Netof Yr Policy to Cost Of Premium Tax on Annual Retirement Surrender Death
Yr Age Premium Executive Bonus Outlay Bonus Outlay Benefits Value Benefit
41 80 0 0 0 0 0 -51,482 51,482 274,616 387,58142 81 0 0 0 0 0 -51,482 51,482 268,712 390,06643 82 0 0 0 0 0 -51,482 51,482 267,928 398,44544 83 0 0 0 0 0 -51,482 51,482 264,200 404,28845 84 0 0 0 0 0 -51,482 51,482 261,374 411,661
300,000 300,000 198,000 0 84,000 -978,158 978,158
46 85 0 0 0 0 0 -51,482 51,482 262,255 423,54847 86 0 0 0 0 0 -51,482 51,482 271,513 444,88848 87 0 0 0 0 0 -51,482 51,482 277,345 463,32849 88 0 0 0 0 0 -51,482 51,482 290,349 490,03850 89 0 0 0 0 0 -51,482 51,482 291,710 505,306
300,000 300,000 198,000 0 84,000 -1,235,568 1,235,568
51 90 0 0 0 0 0 -51,482 51,482 311,714 540,97952 91 0 0 0 0 0 -51,482 51,482 328,268 573,91053 92 0 0 0 0 0 -51,482 51,482 361,636 572,67154 93 0 0 0 0 0 -51,482 51,482 396,336 566,13555 94 0 0 0 0 0 -51,482 51,482 442,185 563,710
300,000 300,000 198,000 0 84,000 -1,492,978 1,492,978
56 95 0 0 0 0 0 -51,482 51,482 506,346 571,67657 96 0 0 0 0 0 -51,482 51,482 600,225 600,22558 97 0 0 0 0 0 -51,482 51,482 695,413 695,41359 98 0 0 0 0 0 -51,482 51,482 815,020 815,02060 99 0 0 0 0 0 -51,482 51,482 922,191 922,191
300,000 300,000 198,000 0 84,000 -1,750,388 1,750,388
61 100 0 0 0 0 0 -51,482 51,482 1,079,288 1,079,28862 101 0 0 0 0 0 0 0 1,299,107 1,299,10763 102 0 0 0 0 0 0 0 1,559,770 1,559,77064 103 0 0 0 0 0 0 0 1,827,123 1,827,12365 104 0 0 0 0 0 0 0 2,121,414 2,121,414
300,000 300,000 198,000 0 84,000 -1,801,870 1,801,870
66 105 0 0 0 0 0 0 0 2,454,147 2,454,14767 106 0 0 0 0 0 0 0 2,850,612 2,850,61268 107 0 0 0 0 0 0 0 3,261,843 3,261,84369 108 0 0 0 0 0 0 0 3,737,959 3,737,95970 109 0 0 0 0 0 0 0 4,201,364 4,201,364
300,000 300,000 198,000 0 84,000 -1,801,870 1,801,870
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICEA Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 15 of 64
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EMPLOYER COSTS EXECUTIVE COSTS EXECUTIVE BENEFITS
End Total Bonus After-Tax Executive Net Net Netof Yr Policy to Cost Of Premium Tax on Annual Retirement Surrender Death
Yr Age Premium Executive Bonus Outlay Bonus Outlay Benefits Value Benefit
71 110 0 0 0 0 0 0 0 4,784,462 4,784,46272 111 0 0 0 0 0 0 0 5,399,322 5,399,32273 112 0 0 0 0 0 0 0 6,110,144 6,110,14474 113 0 0 0 0 0 0 0 6,844,309 6,844,30975 114 0 0 0 0 0 0 0 7,646,913 7,646,913
300,000 300,000 198,000 0 84,000 -1,801,870 1,801,870
76 115 0 0 0 0 0 0 0 8,540,221 8,540,22177 116 0 0 0 0 0 0 0 9,580,298 9,580,29878 117 0 0 0 0 0 0 0 10,663,096 10,663,09679 118 0 0 0 0 0 0 0 11,896,945 11,896,94580 119 0 0 0 0 0 0 0 13,117,777 13,117,777
300,000 300,000 198,000 0 84,000 -1,801,870 1,801,870
81 120 0 0 0 0 0 0 0 14,606,023 14,606,02382 121 0 0 0 0 0 0 0 16,175,654 16,175,65483 122 0 0 0 0 0 0 0 18,594,904 18,594,90484 123 0 0 0 0 0 0 0 20,260,025 20,260,02585 124 0 0 0 0 0 0 0 22,023,895 22,023,895
300,000 300,000 198,000 0 84,000 -1,801,870 1,801,870
86 125 0 0 0 0 0 0 0 23,700,397 23,700,397 300,000 300,000 198,000 0 84,000 -1,801,870 1,801,870
* Year 12, Month 8Based on the maximum guaranteed costs, the assumed premium election, and the guaranteed minimum interest credit rate of0.00% credited to the Indexed Strategy, and no index credit, the policy would lapse and cannot be illustrated beyond the yearshown. Additional premiums would be required to continue the coverage.
The employer pays a bonus to the executive equal to the employer paid portion of the illustrated policy premium. The bonus istax deductible to the employer and results in taxable income to the executive.
The tax rates illustrated are assumptions based on information furnished by the employer and executive about their respectivefederal (and state, if included) income tax rates. The actual tax rates experienced at any time may be more or less than thoseillustrated.
The Total Policy Premium illustrated is the amount of premium which will be billed to the policyowner. It also includes loaninterest paid by the policyowner, if any.
The Executive Premium Outlay is the amount of policy premium paid by the executive and is not included in any bonus fromthe employer.
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The Retirement Benefits represent the amount of cash distributed to the executive from the policy. It could include withdrawalsand policy loans. Policy loans and partial withdrawals may vary by state, reduce available surrender value and death benefit orcause the policy to lapse. Generally, policy loans and partial withdrawals will not be income taxable if there is a withdrawal tothe cost basis (usually premiums paid), followed by policy loans (but only if the policy qualifies as life insurance, is not amodified endowment contract and is not lapsed or surrendered).
The values illustrated are based on the illustrated policy interest rate, index credit rate and current cost assumptions.
The values illustrated are not guaranteed. They assume that the illustrated non-guaranteed elements of the policy will continueunchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown.This page must be accompanied by the basic Policy Illustration, which includes the guaranteed elements of the policy and otherimportant information.
Select Loans have the risk that policy performance may be lower than projected in the illustration if the amount credited to theaccount value in the Fixed Strategy and/or Indexed Strategy is less than the fixed 6% interest charged on the policy loan.Detailed additional information about policy loans is located in the accompanying personalized policy illustration.
The net death benefit will generally be received income tax free. The net death benefit will be subject to estate tax at the deathof the insured, if the insured was the owner of the policy at death, or if the insured possessed any ownership rights in the policywithin three years of death. Loans and withdrawals will reduce the policy's death benefit and available cash values.
The Voya Life Companies and their agents and representatives do not give tax or legal advice. This information is general innature and not comprehensive; the applicable laws change frequently and the strategies suggested may not be suitable foreveryone. You should seek advice from your tax and legal advisors regarding your individual situation.
These materials are not intended to and cannot be used to avoid tax penalties; and they were prepared to support the promotionor marketing of the matter addressed in this document. Each taxpayer should seek advice from an independent tax advisor.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICEA Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 17 of 64
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EMPLOYER LEDGERSingle Bonus
The purpose of this supplemental illustration is to show a Voya Indexed Universal Life-Global Choice policy using the Single BonusPlan and the corresponding affect to the Employer.
Prepared for:
Employer Tax Rate: 34%
Mr. Valued Client Tax Rate: 28%State of Issue: California
End Total Afterof Yr Policy Bonus Tax Tax
Yr Age Premiums Paid Savings Cost
1 40 30,000 30,000 10,200 19,8002 41 30,000 30,000 10,200 19,8003 42 30,000 30,000 10,200 19,8004 43 30,000 30,000 10,200 19,8005 44 30,000 30,000 10,200 19,800
150,000 150,000 51,000 99,000
6 45 30,000 30,000 10,200 19,8007 46 30,000 30,000 10,200 19,8008 47 30,000 30,000 10,200 19,8009 48 30,000 30,000 10,200 19,800
10 49 30,000 30,000 10,200 19,800 300,000 300,000 102,000 198,000
11 50 0 0 0 012 51 0 0 0 013 52 0 0 0 014 53 0 0 0 015 54 0 0 0 0
300,000 300,000 102,000 198,000
16 55 0 0 0 017 56 0 0 0 018 57 0 0 0 019 58 0 0 0 020 59 0 0 0 0
300,000 300,000 102,000 198,000
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End Total Afterof Yr Policy Bonus Tax Tax
Yr Age Premiums Paid Savings Cost
21 60 0 0 0 022 61 0 0 0 023 62 0 0 0 024 63 0 0 0 025 64 0 0 0 0
300,000 300,000 102,000 198,000
26 65 0 0 0 027 66 0 0 0 028 67 0 0 0 029 68 0 0 0 030 69 0 0 0 0
300,000 300,000 102,000 198,000
31 70 0 0 0 032 71 0 0 0 033 72 0 0 0 034 73 0 0 0 035 74 0 0 0 0
300,000 300,000 102,000 198,000
36 75 0 0 0 037 76 0 0 0 038 77 0 0 0 039 78 0 0 0 040 79 0 0 0 0
300,000 300,000 102,000 198,000
41 80 0 0 0 042 81 0 0 0 043 82 0 0 0 044 83 0 0 0 045 84 0 0 0 0
300,000 300,000 102,000 198,000
46 85 0 0 0 047 86 0 0 0 048 87 0 0 0 049 88 0 0 0 050 89 0 0 0 0
300,000 300,000 102,000 198,000
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End Total Afterof Yr Policy Bonus Tax Tax
Yr Age Premiums Paid Savings Cost
51 90 0 0 0 052 91 0 0 0 053 92 0 0 0 054 93 0 0 0 055 94 0 0 0 0
300,000 300,000 102,000 198,000
56 95 0 0 0 057 96 0 0 0 058 97 0 0 0 059 98 0 0 0 060 99 0 0 0 0
300,000 300,000 102,000 198,000
61 100 0 0 0 062 101 0 0 0 063 102 0 0 0 064 103 0 0 0 065 104 0 0 0 0
300,000 300,000 102,000 198,000
66 105 0 0 0 067 106 0 0 0 068 107 0 0 0 069 108 0 0 0 070 109 0 0 0 0
300,000 300,000 102,000 198,000
71 110 0 0 0 072 111 0 0 0 073 112 0 0 0 074 113 0 0 0 075 114 0 0 0 0
300,000 300,000 102,000 198,000
76 115 0 0 0 077 116 0 0 0 078 117 0 0 0 079 118 0 0 0 080 119 0 0 0 0
300,000 300,000 102,000 198,000
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End Total Afterof Yr Policy Bonus Tax Tax
Yr Age Premiums Paid Savings Cost
81 120 0 0 0 082 121 0 0 0 083 122 0 0 0 084 123 0 0 0 085 124 0 0 0 0
300,000 300,000 102,000 198,000
86 125 0 0 0 0 300,000 300,000 102,000 198,000
The employer pays a bonus to the executive equal to the employer paid portion of the illustrated policy premium. The bonus is taxdeductible to the employer and results in taxable income to the executive.
The tax rates illustrated are assumptions based on information furnished by the employer and executive about their respective federal(and state, if included) income tax rates. The actual tax rates experienced at any time may be more or less than those illustrated.
The Voya Life Companies and their agents and representatives do not give tax or legal advice. This information is general in nature andnot comprehensive; the applicable laws change frequently and the strategies suggested may not be suitable for everyone. You shouldseek advice from your tax and legal advisors regarding your individual situation.
These materials are not intended to and cannot be used to avoid tax penalties; and they were prepared to support the promotion ormarketing of the matter addressed in this document. Each taxpayer should seek advice from an independent tax advisor.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICEA Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 21 of 64
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EXECUTIVE LEDGERSingle Bonus
The purpose of this supplemental illustration is to show a Voya Indexed Universal Life-Global Choice policy using the Single BonusPlan and the corresponding affect on cash value and death benefit.
Prepared for:
Employer Tax Rate: 34%
Mr. Valued Client Male 39 Standard No Tobacco Tax Rate: 28%State of Issue: California
Initial Total Face Amount: $1,738,000Initial Death Benefit Option: 1 (Level)Initial Annual Premium: $30,000.00Premium Election:
Allocation Hypothetical IndexStrategy Type Percentage Credit/Interest RateS&P 500 1 Year Point to Point Indexed Strategy 25% 6.67%2 Year Global Indexed Strategy 50% 7.93%5 Year Global Indexed Strategy 25% 7.62%
Policy Loan Type: Select Loans
EmployerEnd Total Bonus Policy Net Net
of Yr Policy to Tax on Value Net Annual Surrender DeathYr Age Premium Executive Bonus Distributed Outlay Value Benefit
1 40 30,000 30,000 8,400 8,400 0 0 1,729,0962 41 30,000 30,000 8,400 8,400 0 8,100 1,719,6583 42 30,000 30,000 8,400 8,400 0 20,619 1,709,6534 43 30,000 30,000 8,400 8,400 0 34,623 1,699,0485 44 30,000 30,000 8,400 8,400 0 50,563 1,687,807
150,000 150,000 42,000 42,000 0
6 45 30,000 30,000 8,400 8,400 0 68,160 1,675,8927 46 30,000 30,000 8,400 8,400 0 92,783 1,663,2618 47 30,000 30,000 8,400 8,400 0 122,114 1,649,8739 48 30,000 30,000 8,400 8,400 0 152,054 1,635,682
10 49 30,000 30,000 8,400 8,400 0 185,806 1,620,638 300,000 300,000 84,000 84,000 0
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EmployerEnd Total Bonus Policy Net Net
of Yr Policy to Tax on Value Net Annual Surrender DeathYr Age Premium Executive Bonus Distributed Outlay Value Benefit
11 50 0 0 0 0 0 197,348 1,613,59712 51 0 0 0 0 0 209,312 1,606,13213 52 0 0 0 0 0 222,677 1,598,22014 53 0 0 0 0 0 236,451 1,589,83415 54 0 0 0 0 0 251,037 1,580,944
300,000 300,000 84,000 84,000 0
16 55 0 0 0 0 0 266,937 1,571,52017 56 0 0 0 0 0 284,757 1,561,53118 57 0 0 0 0 0 303,168 1,550,94319 58 0 0 0 0 0 323,450 1,539,72020 59 0 0 0 0 0 343,645 1,527,823
300,000 300,000 84,000 84,000 0
21 60 0 0 0 0 0 367,634 1,515,21322 61 0 0 0 0 0 392,823 1,501,84523 62 0 0 0 0 0 420,781 1,487,67624 63 0 0 0 0 0 449,427 1,472,65725 64 0 0 0 0 0 479,733 1,456,736
300,000 300,000 84,000 84,000 0
26 65 0 0 0 0 0 512,580 1,439,86027 66 0 0 0 51,482 -51,482 495,095 1,367,40128 67 0 0 0 51,482 -51,482 475,840 1,290,59429 68 0 0 0 51,482 -51,482 457,260 1,209,17930 69 0 0 0 51,482 -51,482 435,028 1,122,878
300,000 300,000 84,000 289,928 -205,928
31 70 0 0 0 51,482 -51,482 416,316 1,031,40032 71 0 0 0 51,482 -51,482 396,361 934,43333 72 0 0 0 51,482 -51,482 378,538 831,64834 73 0 0 0 51,482 -51,482 358,965 722,69635 74 0 0 0 51,482 -51,482 339,822 607,207
300,000 300,000 84,000 547,338 -463,338
36 75 0 0 0 51,482 -51,482 323,227 484,78937 76 0 0 0 51,482 -51,482 312,155 396,91238 77 0 0 0 51,482 -51,482 301,002 392,07939 78 0 0 0 51,482 -51,482 293,003 390,96940 79 0 0 0 51,482 -51,482 279,412 384,427
300,000 300,000 84,000 804,748 -720,748
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EmployerEnd Total Bonus Policy Net Net
of Yr Policy to Tax on Value Net Annual Surrender DeathYr Age Premium Executive Bonus Distributed Outlay Value Benefit
41 80 0 0 0 51,482 -51,482 274,616 387,58142 81 0 0 0 51,482 -51,482 268,712 390,06643 82 0 0 0 51,482 -51,482 267,928 398,44544 83 0 0 0 51,482 -51,482 264,200 404,28845 84 0 0 0 51,482 -51,482 261,374 411,661
300,000 300,000 84,000 1,062,158 -978,158
46 85 0 0 0 51,482 -51,482 262,255 423,54847 86 0 0 0 51,482 -51,482 271,513 444,88848 87 0 0 0 51,482 -51,482 277,345 463,32849 88 0 0 0 51,482 -51,482 290,349 490,03850 89 0 0 0 51,482 -51,482 291,710 505,306
300,000 300,000 84,000 1,319,568 -1,235,568
51 90 0 0 0 51,482 -51,482 311,714 540,97952 91 0 0 0 51,482 -51,482 328,268 573,91053 92 0 0 0 51,482 -51,482 361,636 572,67154 93 0 0 0 51,482 -51,482 396,336 566,13555 94 0 0 0 51,482 -51,482 442,185 563,710
300,000 300,000 84,000 1,576,978 -1,492,978
56 95 0 0 0 51,482 -51,482 506,346 571,67657 96 0 0 0 51,482 -51,482 600,225 600,22558 97 0 0 0 51,482 -51,482 695,413 695,41359 98 0 0 0 51,482 -51,482 815,020 815,02060 99 0 0 0 51,482 -51,482 922,191 922,191
300,000 300,000 84,000 1,834,388 -1,750,388
61 100 0 0 0 51,482 -51,482 1,079,288 1,079,28862 101 0 0 0 0 0 1,299,107 1,299,10763 102 0 0 0 0 0 1,559,770 1,559,77064 103 0 0 0 0 0 1,827,123 1,827,12365 104 0 0 0 0 0 2,121,414 2,121,414
300,000 300,000 84,000 1,885,870 -1,801,870
66 105 0 0 0 0 0 2,454,147 2,454,14767 106 0 0 0 0 0 2,850,612 2,850,61268 107 0 0 0 0 0 3,261,843 3,261,84369 108 0 0 0 0 0 3,737,959 3,737,95970 109 0 0 0 0 0 4,201,364 4,201,364
300,000 300,000 84,000 1,885,870 -1,801,870
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICEA Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
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EmployerEnd Total Bonus Policy Net Net
of Yr Policy to Tax on Value Net Annual Surrender DeathYr Age Premium Executive Bonus Distributed Outlay Value Benefit
71 110 0 0 0 0 0 4,784,462 4,784,46272 111 0 0 0 0 0 5,399,322 5,399,32273 112 0 0 0 0 0 6,110,144 6,110,14474 113 0 0 0 0 0 6,844,309 6,844,30975 114 0 0 0 0 0 7,646,913 7,646,913
300,000 300,000 84,000 1,885,870 -1,801,870
76 115 0 0 0 0 0 8,540,221 8,540,22177 116 0 0 0 0 0 9,580,298 9,580,29878 117 0 0 0 0 0 10,663,096 10,663,09679 118 0 0 0 0 0 11,896,945 11,896,94580 119 0 0 0 0 0 13,117,777 13,117,777
300,000 300,000 84,000 1,885,870 -1,801,870
81 120 0 0 0 0 0 14,606,023 14,606,02382 121 0 0 0 0 0 16,175,654 16,175,65483 122 0 0 0 0 0 18,594,904 18,594,90484 123 0 0 0 0 0 20,260,025 20,260,02585 124 0 0 0 0 0 22,023,895 22,023,895
300,000 300,000 84,000 1,885,870 -1,801,870
86 125 0 0 0 0 0 23,700,397 23,700,397 300,000 300,000 84,000 1,885,870 -1,801,870
The employer pays a bonus to the executive equal to the employer paid portion of the illustrated policy premium. The bonus is taxdeductible to the employer and results in taxable income to the executive.
The tax rates illustrated are assumptions based on information furnished by the employer and executive about their respective federal(and state, if included) income tax rates. The actual tax rates experienced at any time may be more or less than those illustrated.
The Total Policy Premium illustrated is the amount of premium which will be billed to the policyowner. It also includes loan interestpaid by the policyowner, if any.
The Policy Value Distributed represents the amount of cash distributed to the executive from the policy. It could include withdrawalsand policy loans. Policy loans and partial withdrawals may vary by state, reduce available surrender value and death benefit or cause thepolicy to lapse. Generally, policy loans and partial withdrawals will not be income taxable if there is a withdrawal to the cost basis(usually premiums paid), followed by policy loans (but only if the policy qualifies as life insurance, is not a modified endowmentcontract and is not lapsed or surrendered).
The values illustrated are based on the illustrated policy interest rate, index credit rate and current cost assumptions.
The values illustrated are not guaranteed. They assume that the illustrated non-guaranteed elements of the policy will continueunchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown. This pagemust be accompanied by the basic Policy Illustration, which includes the guaranteed elements of the policy and other importantinformation.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICEA Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 25 of 64
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Select Loans have the risk that policy performance may be lower than projected in the illustration if the amount credited to the accountvalue in the Fixed Strategy and/or Indexed Strategy is less than the fixed 6% interest charged on the policy loan. Detailed additionalinformation about policy loans is located in the accompanying personalized policy illustration.
The net death benefit will generally be received income tax free. The net death benefit will be subject to estate tax at the death of theinsured, if the insured was the owner of the policy at death, or if the insured possessed any ownership rights in the policy within threeyears of death. Loans and withdrawals will reduce the policy's death benefit and available cash values.
The Voya Life Companies and their agents and representatives do not give tax or legal advice. This information is general in nature andnot comprehensive; the applicable laws change frequently and the strategies suggested may not be suitable for everyone. You shouldseek advice from your tax and legal advisors regarding your individual situation.
These materials are not intended to and cannot be used to avoid tax penalties; and they were prepared to support the promotion ormarketing of the matter addressed in this document. Each taxpayer should seek advice from an independent tax advisor.
VOYA INDEXED UNIVERSAL LIFE-GLOBAL CHOICEA Flexible Premium Adjustable Life Insurance Policy 07/22/2015 10:27 PM
Designed for Mr. Valued Client Page 26 of 64
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Income Tax Free Death Benefit~
Life insurance death proceeds help your family remain financially secure without generally being subject tofederal income taxation. Death proceeds will generally be subject to estate taxation.
Tax Deferred Growth
No income taxes are payable while your money is accumulating.
Tax Free Income^
At retirement, you may obtain tax free income^ through a combination of policy withdrawals and loans.Loans and withdrawals may generate an income tax liability if not properly structured. Income tax freedistributions are achieved by withdrawing to the cost basis (premiums paid) then using policy loans, or simplyusing policy loans and no withdrawals. These tax advantages may apply as long as the policy qualifies as lifeinsurance and does not lapse. If the policy lapses or is surrendered, the IRS will tax distributions receivedover the life of the policy and at termination that are in excess of total premiums paid. Policy withdrawals andloans will reduce the policy cash value and the death benefit payable to your beneficiaries. They may alsoreduce or eliminate index credits and cause the policy to lapse.
Flexible Contributions
Premium payments can be designed around the changing needs of your life. After the policy's first year, youhave the option to pay more or less than the stated premium, and make payments more or less often than statedin the initial policy. If your financial priorities change, you can skip premium payments or stop payingpremiums provided your policy has built a sufficient cash surrender value.
Of course, stopping premiums will affect policy values. Policy values will also fluctuate based upon changesin interest rates and changes in index credits. Consequently, it may be necessary to pay additional premiumsto achieve your financial goals. If the policy lapses, there may be significant tax consequences. The policywill remain in force as long as policy values are sufficient to support the monthly deduction or the deathbenefit guarantee remains active. All claims are based on the financial ability of Security Life of DenverInsurance Company to pay those claims.
No IRS Distribution Requirements or Penalties^
Distributions can occur before age 59-1/2 without penalty, and there is no required minimum distribution atage 70-1/2.
Complete Control of the Policy
You, not your employer or the government, decide how and when money goes into or comes out of yourpolicy.
Will not affect Social Security
Wages after retirement could cause you to lose Social Security Benefits, or to be taxed on them; income fromlife insurance will not affect these benefits.
^ Tax free income is achieved by withdrawing from the policy cash value an amount equal to the total premiums paid (your cost basis), then using policy loansfor the balance. If the policy is allowed to lapse with a loan outstanding, the amount of the loan in excess of your cost basis will be taxable as ordinaryincome. If the policy is a Modified Endowment Contract (IRC Section 7702 A), distributions from the policy (by loan or withdrawal) will be taxable asordinary income to the extent of the gain in the policy, and may be subject to a 10% income tax penalty prior to age 59-1/2.
~ The life insurance policy death benefit will generally be received income tax free. The death benefit may be subject to estate tax at the death of the insured, ifthe insured was the owner of the policy at death, or if the insured possessed any ownership rights in the policy within three years of death.
07/22/2015 10:27 PMWhat Are the Potential Advantages of Life Insurance? Page 27 of 64
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You choose with Voya IUL-Global Choice!
The power of Voya Indexed Universal Life-Global Choice is the valuable death benefit protection supported by policy cash valuescalculated under a Fixed Strategy and your choice of three Indexed Strategies. You have the option to choose any of these strategies or acombination of them to accumulate cash values and provide the protection you need.
Fixed Strategy Current fixed interest rate is 4.25% effective for 12 months. At each policy anniversary, the rate may be adjusted for the next year. Interest rate credited will never be less than 2.00%
Indexed Strategies
S&P 500 1 Year Point to Point Indexed Strategy Simple strategy with a short time horizon Annual reset so index credits, if any, are locked in every year Based on a U. S. index that is easily tracked 100% current participation rate (Guaranteed Minimum!); 13% current cap
2 Year Global Indexed Strategy Built in global diversification by using three indexes from around the world Only the best two-out-of-three indexes are used in interest crediting Benefit of a multi-index strategy, but with ability to lock in index credits, if any, every two years vs. five years 65% current participation rate and no current cap on index credits
5 Year Global Indexed Strategy Built in global diversification by using three indexes from around the world Only the best two-out-of-three indexes are used in interest crediting Has potential to produce higher returns over long time horizon 90% current participation rate and no current cap on index credits
No matter what strategy or combination of strategies you select, you can choose with confidence knowing that all of them have a 0%Guaranteed Minimum Interest Rate. Meaning even if the Indexes have negative performance the resulting Index Credit Rate will neverbe less than 0%.
Experience the Power of Choice 07/22/2015 10:27 PMLife insurance offered by Security Life of Denver Insurance Company Page 28 of 64
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Global Index Strategies
The Global Index Strategies are based on the finishing positions of the following three indexes:
S&P 500 Index (S&P 500) - An index of stock performance of 500 publicly traded companies. It does not reflectdividends payable on the underlying stocks.
EURO STOXX 50 Index (EURO STOXX 50) - An index of blue-chip stocks that are represented by 50 stocks coveringthe largest sector leaders in the EURO STOXX 50 Index. It does not reflect dividends payable on the underlying stocks.
Hang Seng Index - An index of the largest and most liquid stocks listed on the Stock Exchange of Hong Kong. It does notreflect dividends payable on the underlying stocks.
See the Explanation of Policy Illustration to learn more about how the Indexed Strategy works and the IMPORTANT INDEXDISCLAIMERS for more information about each index.
The Value of Hindsight
Hindsight, as they say, is 20/20 and quite valuable. Voya IUL-Global Choice with both a two-year and a five year look-back period isdesigned to provide the benefit of this hindsight. It calculates the index credit under a formula using a weighted portion of each indexchange rate, where the weighting favors the two better performing of three indexes, as follows:
75% of the highest index change rate, plus 25% of the next highest index change rate, plus 0% of the lowest index change rate
In essence, at the end of each two or five-year period, the index change rate for each index is determined and then weighted, with theresult subject to an index cap and a minimum of 0%. This means that a portion of the top two indexes are used in the calculation and theindex with the lowest change rate is not used. There is no need to try and predict the better performing indexes in the beginning. Theresult of this calculation is subject to a participation rate. Accordingly, once the index change rates are determined for each of the threeindexes, the index credit can then be calculated for that block. This continues for each 2 or 5-year block as long as the policy remains inforce. For each block, the participation rate and the index cap are set on a blocks start date and are guaranteed not to change for thatblock. The policy must be in force when a block matures to receive any index credit.
Please Note: While policy values may be affected by external indexes, this policy is not an investment in the stock market and does notparticipate in any index fund, stock or equity investments. Voya IUL-Global Choice is not a variable product or any type ofinvestment contract.
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The graphs below show the number of times each of the Indexes has finished 1st, 2nd and 3rd for hypothetical two-year and five-yearblocks maturing during the period indicated. This information shows that the EURO STOXX 50, S&P 500 and Hang Seng Indexeshave each demonstrated volatility over the periods shown. The 2 Year and 5 Year Global Indexed Strategies attempt to minimize thatvolatility by using three indexes under a weighted formula.
These unmanaged indexes are not intended to represent specific investments. This product is not a variable contract or any type of investment contractwhere cash value is based upon performance of client selected variable investment options. While your policy values may be affected by externalindexes, your policy is not an investment in the stock market and does not directly participate in any index fund, stock equity investment. Past indexperformance does not represent future performance of these indexes. The finishing positions for each index were determined based on the changes inthe value of each hypothetical index block between the block maturity date and the same date two or five years earlier. The percentages shown reflectthe number of times that each index had the highest (1st place), second highest (2nd place), and lowest (3rd place) 2-year or 5-year index change rateduring the period. The data provided provides only a comparison of the indexes to each other and provides no information relative to the performanceof the indexes during the period shown.
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Strategy Results - Block Maturity Historical ReturnsThe following graphs were developed using historical index data and current non-guaranteed index parameters that are reflected belowfor three indexed strategies and the hindsight index crediting methodology used in the Voya IUL-Global Choice policy. The uneven linereflects what the annualized index credit rate could have been for each index strategy based on the block maturity date shown and theindexed strategy assumptions listed below.
S&P 500 1 Year Point to Point
Simple Strategy - Blocks Mature Annually
Guaranteed Minimum Interest Rate: 0%
Current Index Cap: 13%
Current Participation Rate: 100%
2 Year Global
Diversification Blocks Mature Every Two Years
Guaranteed Minimum Interest Rate: 0%
Current Index Cap: Unlimited
Current Participation Rate: 65%
5 Year Global
Diversification Blocks Mature Every Five Years
Guaranteed Minimum Interest Rate: 0%
Current Index Cap: Unlimited
Current Participation Rate: 90%
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Long term strategy results 20 Year Historical ReturnsThe following graphs show the hypothetical annualized returns over 20 years periods ending in the month and year shown assumingsequential hypothetical index blocks for each indexed strategy. Percentiles are used to give some idea of the variability of historicalindex returns when measured in 20 year segments within a 34 year overall timeframe. For example, the line drawn at the 80th percentileon each graph shows the point at which approximately 80% of the 20 year segment results calculated over this 34 year period equaled orexceeded that annualized rate over the period shown. Note that due to the significant overlap in measurement periods used indeveloping 20 year returns, historical percentile returns should not be used to provide any confidence concerning the stability orlevel of future index crediting rates. Nor does the percentile information reflect the higher volatility returns likely to beexperienced on individual blocks.
Historical Percentile
100th
90th
80th
70th
60th
50th
Average
Rate
6.67%
7.41%
7.62%
7.79%
7.96%
8.11%
8.11%
Historical Percentile
100th
90th
80th
70th
60th
50th
Average
Rate
7.93%
10.03%
10.81%
11.32%
11.78%
12.33%
12.41%
Historical Percentile
100th
90th
80th
70th
60th
50th
Average
Rate
7.62%
9.37%
10.28%
11.48%
12.34%
13.01%
12.75%
These rates are based on historical information and should not be used as an indication of future performance.
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EXPLANATION OF POLICY ILLUSTRATIONA Narrative Summary
Policy Introduction: The Voya Indexed Universal Life-Global Choice product illustrated on the accompanyingpages is a flexible premium adjustable life insurance policy which can provide a lifetime
death benefit. The death benefit is adjustable and may depend on the account value in the
policy. The account value is based on the timing and amount of your premiums, policy and
rider charges, the index credit rate, index credit, if any, and the interest credited to the policy.
This illustration assumes all premiums are received by the Company on the first day of each
illustrated year. This product is offered by Security Life of Denver Insurance Company, a
member of the Voya family of companies, and is filed as Policy Form Series #1186-09/12
(which may vary by state).
This product has two strategies: a Fixed Strategy and an Indexed Strategy. Premiums paid,
minus any premium expense charges (the net premiums) are initially credited to the Fixed
Strategy. Thereafter, amounts in the Fixed Strategy can be elected to the Indexed Strategy.
The Indexed Strategy is made up of three strategies: S&P500 1 Year Point to Point, 2 Year
Global and 5 Year Global. This illustration assumes 25% of the premium is elected to the
S&P 500 1 Year Point to Point Indexed Strategy, 50% of the premium is elected to the 2
Year Global Indexed Strategy, and 25% of the premium is elected to the 5 Year Global
Indexed Strategy. This product is not a variable contract or any type of investment contract
where cash value is based upon performance of client selected variable investment options.
While your policy values may be affected by external indexes, your policy is not an
investment in the stock market and does not directly participate in any index fund, stock or
equity investment. This product is not meant to be an investment vehicle. Voya Indexed
Universal Life-Global Choice is not a variable product or any type of investment
contract.
This illustration is not the actual life insurance policy you will receive nor is it part of the
contract. This illustration is intended only to show you how the life insurance policy might
react based on the interest rate, index credit rate, index credit, if any, and premium payment
assumptions contained in the illustration. Due to your individual circumstances, your policy,
upon issue, may differ from what is illustrated. In that event, the terms of your policy control.
Following is a description of some of the key terms and features of this life insurance product.
Guaranteed Values:0.00% Guaranteed Minimum
Interest Rate Indexed Strategy
The guaranteed values are the minimum values that will accrue, assuming you pay the
premiums as illustrated. These values are calculated based on the guaranteed minimum
interest rate of 0.00% on the Indexed Strategy, no index credit, the guaranteed maximum cost
of insurance rates, and the guaranteed maximum expenses in the policy.
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Non-Guaranteed Values:
Illustrated Hypothetical
Annualized Index Credit Rate(s):
6.67% S&P 500 1 Year
Point to Point
7.93% 2 Year Global
7.62% 5 Year Global
The non-guaranteed values are based on the illustrated hypothetical index credit rate(s),
current index cap(s) and participation rate(s), current cost of insurance rates, and current
expense charges. The actual amount credited to the policy will vary based on the strategy
described below. The cost of insurance rates, policy expense charges, index cap(s), index
credit(s), participation rate(s), and the interest crediting rate are subject to change. This
illustration assumes that the illustrated non-guaranteed elements will continue
unchanged for all years shown. This is not likely to occur, and actual results will be
more or less favorable than those shown. Security Life of Denver Insurance Company
reserves the right to change the non-guaranteed benefits and values of this illustration.
Fixed Strategy: The Fixed Strategy credits interest on a portfolio interest rate basis. This means that yourentire account value in the Fixed Strategy is credited at the same interest rate.
The Fixed Strategy offers a guarantee of both principal and interest at a minimum annual rate
of return of 2.00%. The current credited interest rate declared by Security Life of Denver
Insurance Company for the Fixed Strategy is 4.25% and is in effect for the first 12 months.
After the first 12 months, this rate is subject to change, but changes may not occur to your
contract more frequently than annually. Policy charges are deducted first from the Fixed
Strategy until depleted and then on a pro rata basis from each of the Indexed Strategy blocks.
You may elect amounts from the Fixed Strategy to the Indexed Strategy on the election date.
Your illustration is based on your initial election of premiums between the Fixed Strategy and
the Indexed Strategy. Details on election restrictions are contained in your policy.
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Indexed Strategy: The Indexed Strategy is a strategy available under the policy through which the policyownermay elect to have all or part of the Account Value receive Index Credits based in part on
changes in the values of the Indexes. The available indexed strategies are the S&P 500 1
Year Point to Point Indexed Strategy, 2 Year Global Indexed Strategy, and 5 Year Global
Indexed Strategy. The value of the Indexed Strategy equals the sum of the values of the
indexed strategies.
On each block maturity date, an index credit, if any, is added to the value of the block(s). The
index credit is subject to an index cap and is based on the index change rate or weighted index
change rate for each index, the participation rate, and guaranteed minimum interest rate of
each indexed strategy.
The S&P 500 1 Year Point to Point Indexed Strategy is based on the performance of the
S&P 500 Index, which is an index of stock performance of 500 publicly traded companies.
It does not reflect dividends payable on the underlying stocks.
The 2 Year Global and 5 Year Global Indexed Strategies are comprised of an index crediting
formula that takes into consideration three different indexes: EURO STOXX 50 Index,
Hang Seng Index, and S&P 500 Index. EURO STOXX 50 Index is an index of blue-chip
stocks that are represented by 50 stocks covering the largest sector leaders in the EURO
STOXX 50 Index. It does not reflect dividends payable on the underlying stocks. Hang
Seng Index is an index of the largest and most liquid stocks listed on the Stock Exchange of
Hong Kong. It does not reflect dividends payable on the underlying stocks. S&P 500 is an
index of stock performance of 500 publicly traded companies. It does not reflect dividends
payable on the underlying stocks.
See IMPORTANT INDEX DISCLAIMERS for more information about each index.
Index Change Rate: The index change rate for each index is equal to (b) minus (a), divided by (a), where: (a) is the value of the Index at the close of business on the block start date, and
(b) is the value of the Index at the close of business on the block maturity date.
For the S&P 500 1 Year Point to Point Indexed Strategy only, the Index Change Rate will
never be less than zero and will never be more than the Index Cap.
Weighted Index
Change Rate:
The weighted index change rate is only applicable to the 2 Year Global Indexed Strategy and
5 Year Global Indexed Strategy. The weighted index change rate equals the lesser of the
index cap and (a) plus (b) plus (c), where:
(a) is the highest index change rate multiplied by 75%; and
(b) is the next highest index change rate multiplied by 25%; and
(c) is the lowest index change rate multiplied by 0%.
The weighted index change rate is guaranteed not to be less than zero and will never be more
than the applicable Index Cap.
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Index Cap: The index cap is a limit on the index change rate for the S&P 500 1 Year Point to PointIndexed Strategy and a limit on the weighted index change rate for the 2 and 5 Year Global
Indexed Strategies. The index cap for each block is set on the block start date and will not
change for that block. The index cap can be changed by us at any time for new blocks,
subject to any guaranteed minimum index cap.
Indexed Strategy Guaranteed Current
S&P 500 1 Year 3.5% 13%
2 Year Global 10% Unlimited
5 Year Global 100% Unlimited
Participation Rate: The participation rate is the percentage of the index change rate on the S&P 500 1 YearPoint to Point Indexed Strategy and the weighted index change rate that will be recognized in
the calculation of the index credit for the 2 and 5 Year Global Indexed Strategies. For each
block, the participation rate will be the participation rate on the block start date and it will not
change for that block.
Indexed Strategy Guaranteed Current
S&P 500 1 Year 100% 100%
2 Year Global 20% 65%
5 Year Global 15% 90%
Index Credit Rate: The index credit rate equals: The index credit rate for the S&P 500 1 Year Point to Point Indexed Strategy and
the weighted index change rate for the 2 and 5 Year Global Indexed Strategies;
multiplied by
The applicable participation rate.
Index Credit: An index credit is calculated and added to a block at the close of business on the blockmaturity date only. The index credit on the block maturity date is equal to (a) divided by (b)
multiplied by (c), where:
(a) is the index credit rate calculated on the block maturity date;
(b) is the index credit calculation rate times the index crediting period; and
(c) is the total index credit calculation interest calculated on the block from
the block start date to the block maturity date, prior to the addition of
the index credit.
Index Credit Calculation Interest is calculated on the daily value of each Block for purposes
of calculating the index credit only. The Index Credit Calculation Interest is not added to the
Block.
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Hypothetical
Annualized Index
Credit Rate:
The non-guaranteed policy values shown in this life insurance illustration are based on
hypothetical index credit rates that are selected for each index that may not exceed the
maximum hypothetical index credit rate for each respective indexed strategy. The current
maximum hypothetical annualized credit rate for the S&P 500 1 Year Point to Point
Indexed Strategy is 8.08% The current maximum hypothetical index credit rate for the 2 Year
Global Indexed Strategy is 18.81%, which corresponds to an annualized rate of 9.00%. The
current maximum hypothetical index credit rate for the 5 Year Global Indexed Strategy is
61.05%, which corresponds to an annualized rate of 10.00%. Index credits, if any, are
applied to an index block at block maturity.
This illustration assumes that non-guaranteed illustrated elements, including the
hypothetical index credit rate, current index caps and current participation rates will
continue for all years shown. This is not likely to occur, and actual results will be more
or less favorable than those shown. In addition, hypothetical rates cannot be relied upon
as an indication of future performance and there is no guarantee that future index
performance will generate index credits. The actual index credit rate for any particular
index block under the policy may vary from the hypothetical index credit rates allowed
to be shown in this illustration. Actual future credits depend on future index
performance, performance caps, and participation rates applicable to future index
blocks.
To be sure this is the right type of life insurance product for you, you should consider
alternative scenarios using multiple hypothetical index credit rates below the maximums
including variation in short term and long term performance to see the effect that changing
hypothetical index credit rate assumptions will have on the policys Account Value, Net
Surrender Value, Net Death Benefit and the premiums required to continue your insurance
coverage.
Premium Outlay: The premium outlay is the net annualized outlay to the policyowner. It is equal to scheduledpremium payments and loan repayments less any partial withdrawals and policy loans. In
general, a negative value in this column indicates that more money was distributed from the
policy, either as a loan or partial withdrawal, than was paid as premium in that year.
First-Year Scheduled
Premium: $30,000.00
The scheduled premiums are shown in the yearly detail of this illustration. Note that
coverage may end at different times under guaranteed and non-guaranteed illustrated
assumptions.
Guideline Level Premium:
$24,734.67
The guideline level premium is the maximum premium that can be paid into the policy, based
on current tax law, if level premiums are paid each year. This guideline level premium will
change if any coverage increases, decreases, or changes are made to the policy.
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Minimum Monthly
Premium: $1,099.78
The minimum monthly premium is the minimum premium required to issue the policy. The
minimum monthly premium must be paid during each of the first 9 policy years to qualify for
the special continuation period. The special continuation period guarantees that your policy
will not lapse if the following two conditions are met: the policy account value less any policy
loan must be positive and the sum of the premiums paid since the policy date, less all partial
withdrawals, and less any policy loans, must be equal to or greater than the sum of the
Minimum Monthly Premiums. This minimum monthly premium does not include, if
applicable, scheduled increases and will change if increases or decreases are made in any of
the policy benefits. Following this period, premium payments higher than this minimum
premium may be required to keep the policy in force. Paying only the minimum premium
does not guarantee continuation of the policy. In addition, you may be foregoing the
advantage of potentially building the policy's account value.
Rider Benefits
Included:
Listed below are rider benefits illustrated on this policy illustration. Charges for these
benefits, unless otherwise stated, reduce the account value.
Accelerated Benefit Rider: The Accelerated Benefit Rider allows a portion of the death benefit to be paid to thepolicyowner prior to the death of the insured in the event the insured becomes terminally ill or
in the event of other catastrophic Qualifying Conditions. There is no cost associated with this
rider unless the option to accelerate the death benefit is exercised. For additional details
please see the accompanying Accelerated Benefit Rider Disclosure Form.
Overloan Lapse Protection
Rider:
The Overloan Lapse Protection Rider is designed to keep your policy in force when loan
balances approach 100% of the account value. There is no cost for this rider unless the option
is exercised. This illustration assumes that the Overloan Lapse Protection Rider was not
exercised.
Net Death Benefit:Initial Stated Death Benefit:
$1,738,000
The proceeds are the amount paid to the beneficiary upon the death of the insured. The initial
stated death benefit amount is the death benefit at issue. The death benefit amounts illustrated
are shown as of the end of the year and reflect the stated death benefit provided by the policy
less any outstanding policy loans and accrued loan interest, minus policy charges incurred,
but not yet deducted.
Under Option 1 (Level), the death benefit is equal to the stated death benefit. Under Option 2
(Increasing), the death benefit is equal to the stated death benefit plus the account value.
Under both options, a greater death benefit will apply if the minimum death benefit to qualify
as life insurance based on the Death Benefit Qualification Test exceeds the amounts described
above. The initial Death Benefit Option assumed in this illustration is 1 (Level).
After attained age 121, only Option 1 will be available. All policies will be converted to
Option 1 policies and the stated death benefit will be equal to the death benefit immediately
prior to the policy anniversary nearest to attained age 121.
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Account Value: The account value is the sum of the Fixed Strategy, the Indexed Strategy, and the policy loanaccount. Deductions from the account value are made every month throughout the life of the
policy until attained age 121, regardless of whether premiums are paid or not paid.
Deductions are subtracted from the Fixed Strategy until depleted and then on a pro rata basis
from each of the Indexed Strategy blocks. The account value will vary based on the timing
and amount of your premiums, policy and rider charges, index credit, if any, and the interest
credited to the policy. See your policy for details.
This policy also has an Alternate Guaranteed Account Value. The Alternate Guaranteed
Account Value is the value that, if greater than the account value, is used instead of the
account value only at the time of death or surrender in the calculation of the base death
benefit or surrender value. The Alternate Guaranteed Account Value is calculated in the same
manner as the account value except that it uses a cumulative Alternate Guaranteed Account
Value Interest Rate of 1.00% per year. See your policy for details. The Alternate Guaranteed
Account Value is not reflected in this illustration's Account Value or Surrender Value.
However, it is reflected in the net death benefit amount when applicable.
Net Surrender Value: The net surrender value is equal to the account value of the policy reduced by the amount ofany surrender charges and any outstanding policy loan amounts including accrued but unpaid
policy loan interest, less any unpaid monthly deductions. This is the amount payable on
surrender. Because the index credit is applied on the block maturity date, upon surrender,
blocks that have not matured will not receive an index credit. A portion of the net surrender
value may also be available for partial withdrawals or policy loans.
Policy Loans:This illustration includes
a proposed loan using the
Select Loans.
Two types of policy loans are available; Traditional Loans and Select Loans. These are
available anytime on or after the first policy month. Policy loans will reduce the policys
available net surrender value. The annual interest expense is charged in arrears. If loan
interest is not paid in cash, it is added to the outstanding loan amount. The unpaid loan
interest will then increase the amount borrowed and, in turn, result in increased loan interest
charges. If the insured dies while there is an outstanding loan, the loan amount will be
deducted from the death proceeds.
The policy may only have one loan type at a time. The loan type is selected the first time a
policy loan is requested and each time Select Loans are requested. Once the owner chooses
Traditional Loans, the owner may never change to Select Loans. The owner may switch from
Select Loans to Traditional Loans only one time during the life of the policy, but may never
change back to Select Loans. See Select Loans below for additional detail on changing the
loan type.
Policy loans (and withdrawals) may reduce or eliminate index credits, generate an income tax
liability, reduce available surrender value and reduce the death benefit, or cause the policy to
lapse.
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Select Loans: Select Loans are policy loans in which an amount equal to each new loan or loan interest due
is added to the loan amount while the account value remains in the Fixed Strateg