How Can I Upgrade My Insurance — Tax-Free?

Responding to the changing needs of consumers, the life insurance industry has developed some exciting alternatives. These alternatives can possibly go much further in satisfying a variety of financial needs and objectives than traditional types of insurance and annuities.

Advancements

Modern contracts offer much more financial flexibility than traditional alternatives. For example, universal life and variable universal life insurance policies allow you to adjust premiums and death benefits to suit your financial needs.

Modern contracts can also provide you with much more financial control. While traditional vehicles like whole life insurance and fixed annuities provide returns that are determined by the insurance company, newer alternatives enable you to make the choices that will determine your returns. For example, variable annuities and variable universal life insurance allow you to allocate your premiums among a variety of investment subaccounts. These subaccounts range from conservative choices, such as fixed-interest and money market portfolios, to more aggressive, growth-oriented portfolios. Your returns will be based on the performance of these subaccounts.

Withdrawals made from a variable annuity prior to age 59¹/2 may be subject to a 10 percent penalty. Generally, a surrender penalty will apply if the withdrawal is made during the early years of the policy. Variable annuity subaccounts fluctuate with changes in market conditions. When surrendered, your principal may be worth more or less than the original amount invested.

There are many differences between variable- and fixed-insurance products. Variable universal life insurance offers several investment subaccounts that invest in a portfolio of securities whose principal and rate of return fluctuate. Also, there are additional fees and charges associated with a variable universal life insurance policy that are not found in a whole life policy, such as management fees. Whole life insurance offers a fixed account, generally guaranteed by the issuing insurance company.

Please consider the charges, risks, expenses, and investment objectives carefully before purchasing a variable annuity or a variable life insurance product.  For a prospectus containing this and other information, please contact a financial professional.  Read it carefully before you invest or send money.

Annuities are long-term financial products designed for retirement purposes.  In essence, annuities are contractual agreements in which payment(s) are made to an insurance company, which agrees to pay out an income or a lump sum amount at a later date.  There are contract limitations and fees and charges associated with annuities, which include, but are not limited to, mortality and expense risk charges, sales and surrender charges, administrative fees, and charges for optional benefits.  A financial professional can provide cost information and complete details.

A life insurance policy is a contractual agreement in which premiums are made to an insurance company.  In return for these premium payments, the insurance company will provide benefits to a beneficiary upon the insured's death.  A whole life insurance policy also provides the opportunity to contribute to a policy cash value.  In variable life insurance, amounts in the policy cash value are invested in a variety of variable investment portfolios.  Life insurance policies have exclusions, limitations, and terms for keeping them in force.  Fees and charges associated with variable life insurance include, mortality and expense risk charges, cost of insurance, surrender charges, administrative fees, investment management fees and charges for optional benefits.

This material was written and prepared by Emerald Publications.

GE 37833 (03/07)