Whole Life

Product

Your whole life policy pays a death benefit when the insured person dies. A cash value will be paid if the policy is surrendered prior to death. Participating whole life policies pay dividends based on the insurance company’s earnings on the participating whole life fund.

Assuris Protection

If your life insurance company fails, Assuris will ensure that, the coverage under your whole life policy will continue and we will seek to transfer your policy to a solvent company.

  • Assuris guarantees that you will retain at least 85% of your death benefit. For policies that have a death benefit of $200,000 or less, you will retain the full amount of your benefit.
  • Assuris guarantees that you will retain at least 85% of your cash value. For policies that have a cash value benefit of $60,000 or less, you will retain the full amount of your benefit.

Dividends will continue to be paid. However, the amount of the dividends paid may be adjusted.

Example 1

Death Benefit

$150,000
Original Benefit Amount

In calculating your Assuris protection, you will retain up to $200,000 or 85% of your death benefit, whichever is higher.

Since the amount is less than $200,000, your death benefit is fully protected.

$150,000
Adjusted Benefit

Cash Value Benefit

$50,000
Original Benefit Amount

In calculating your Assuris protection, you will retain up to $60,000 or 85% of your cash value benefit, whichever is higher.

Since the amount is less than $60,000, your cash value benefit is fully protected.

$50,000
Adjusted Benefit

Example 2

Death Benefit

$700,000
Original Benefit Amount

In calculating your Assuris protection, you will retain up to $200,000 or 85% of your death benefit, whichever is higher.

Since the amount is more than $200,000, the 85% protection is applied to your death benefit.

$595,000
($700,000 × 85%)
Adjusted Benefit

Cash Value Benefit

$100,000
Original Benefit Amount

In calculating your Assuris protection, you will retain up to $60,000 or 85% of your cash value benefit, whichever is higher.

Since the amount is more than $60,000, the 85% protection is applied to your cash value benefit.

$85,000
($100,000 × 85%)
Adjusted Benefit

The liquidator, appointed to manage the failed company, will sell the assets and transfer the liabilities with the aim to get the best value for policyholders. This will determine the recovery percentage.

Your benefits will be adjusted to the greater of the Assuris protection or the recovery percentage achieved by the liquidator.

For example, if your death benefit is greater than $200,000 and the liquidator recovers 90% of the assets, your policy will be adjusted to 90% instead of Assuris’ guarantee of 85%.

Original Benefit Amount

Death Benefit $400,000

Recovery

Liquidator Recovery:
$360,000
($400,000 × 90%)

Assuris Protection:
$340,000
($400,000 × 85%)

Explanation

Since the liquidator’s recovery is greater than Assuris’ protection, you will retain $360,000.

Questions and Answers

1. What happens if you have more than one policy?

Each member company has separate Assuris protection. If you have more than one policy with the same member company, all similar benefits are added together before Assuris’ protection is applied.

2. How are policy loans treated?

A policy loan allows you to borrow from the cash value of your whole life policy.

Assuris’ protection is calculated at the date of failure. This means if you borrowed from your cash value before the date of failure, Assuris’ protection for policy loans will be calculated based on the net death benefit and the net cash value under the policy, after deduction of any policy loans.

Example

Step 1 – Identify the net cash value benefit and net death benefit

$400,000
Original Death Benefit Amount
$50,000
Original Cash Value Benefit Amount
$20,000
Your Loan

Net Death Benefit Amount:
$380,000
($400,000 – $20,000)

Net Cash Value Benefit:
$30,000
($50,000 – $20,000)

Step 2 – Apply Assuris’ protection

$380,000
Net Death Benefit Amount
$30,000
Net Cash Value Benefit

Assuris’ protection on the death benefit: Since the amount is more than $200,000, the 85% protection is applied to your death benefit.
$323,000
($380,000 x 85%)

Assuris’ protection on the cash value benefit: Since the amount is less than $60,000, your cash value benefit is fully protected.
$30,000

3. What if you have an associated account with your whole life policy?

Whole life policies may also have an associated investment account. This may be used to hold pre-paid premiums or accumulated cash dividends. These types of accounts receive Assuris’ Accumulated Value Protection.

Associated Benefits

Whole life insurance may have other benefits and riders added to the policy. Please see below for a list of potential other benefits and riders and how Assuris’ protection will apply:

Accidental Death Benefit

An accidental death benefit pays an additional amount if the insured person dies in an accident.

If the death benefit is reduced, your accidental death benefit will be reduced in the same proportion.

Example

$250,000
Death Benefit
Pays an additional
$250,000
Accidental Death Benefit

Assuris’ protection on the death benefit: Since the amount is higher than $200,000, the 85% protection is applied to your death benefit.
$212,500
($250,000 x 85%)

Assuris’ protection on the accidental death benefit: Since the amount of the death benefit was reduced by 85%, the accidental death benefit is also reduced by 85%.
$212,500
($250,000 x 85%)

Accidental Dismemberments Benefit

An accidental dismemberment benefit pays an amount if the insured person loses the use of their limbs or their sight as detailed in each contract.

If the basic death benefit is reduced, your accidental death benefit will be reduced in the same proportion.

Guaranteed Insurability Rider

A guaranteed insurability rider allows you to increase the death benefit without additional underwriting. This means that the insured will not be asked additional questions or for additional medical tests.

If the basic death benefit is reduced, your guaranteed insurability rider will be reduced in the same proportion.

Disability Waiver Rider

A disability waiver rider continues your coverage without having to pay your premiums if you are disabled and cannot earn an income.

If the basic death benefit is reduced, your disability waiver will be reduced in the same proportion. Your disability waiver is protected separately from any other monthly income benefits when adding benefits together.

Disability Income Rider

A disability income rider provides you with an income if you are disabled and unable to earn an income.

If the basic death benefit is reduced, your disability income rider will be reduced in the same proportion. The disability income rider is protected under Assuris’ Monthly Income protection and added to other benefits under that protection.

Return of Premium Rider

A return of premium rider provides for a return of all or part of the premiums you have paid if you do not die during the term of the policy.

If your basic death benefit is reduced, your return of premium rider will be reduced in the same proportion.

Living Benefit

A living benefit pays a portion of the death benefit if you become terminally ill.

If the basic death benefit is reduced, your living benefit will be reduced in the same proportion.