Categories or "classes" of investments in your policy

As part of your VGUL insurance you can allocate your net premiums to various account options. Each variable account invests in a portfolio managed specifically for the account option. In addition to those variable account options, you are able to choose a "guaranteed"¹ type of account which provides safety of principal while the contract remains in force, while crediting a competitive interest rate. Each of your policy's variable account options concentrates on an investment category or "class" of investments. The categories are described below:

Equities

When you invest in equities or equity portfolios (also known as stocks or stock portfolios), you are part owner of a company or companies. Equities rise or fall in value according to how attractive they are to buyers and the general conditions of the broad stock market. Equities can be further categorized into the following classes:

• Large company and small company stocks: Stocks of large, well-established companies with a long earnings history are considered large capitalization equities or large company stocks. Historically, performance of large company stocks has been less volatile than small stocks. Keep in mind though, past performance is not necessarily indicative of future results. That's because large companies often have broader, more diversified product offerings and stronger financial bases. In contrast, small companies often sell a more limited range of products, can have marginal financing and a relatively small management group, but they can grow faster than large companies, and their stocks reflect this. They often have the potential for fast growth but more risk than larger companies.
• Domestic and international stocks: Equity portfolios that invest primarily in U.S. companies are considered domestic equity portfolios. Equity portfolios that invest primarily in foreign companies are known as international equity portfolios. There are risks inherent in international investing. These include political and economic instability, currency fluctuations and differences in accounting standards.
• Value and growth stocks: Value and growth refer to two distinct approaches to investing. Value stocks are stocks that are considered to be undervalued, either according to their book value or their current or projected earnings. These stocks can be those of smaller, less well-known companies and may be more volatile than those of larger companies. Growth stocks are stocks that have shown or are expected to show rapid earnings and revenue growth. Growth stocks are riskier investments than most other stocks and usually make little or no dividend payments to shareholders. Historically, value and growth stocks have tended to show investment growth at different points in the economic cycle, which is why many investors include both of them as a method of diversifying their portfolios. Past performance, however, is not necessarily indicative of future results.

Fixed Income

Fixed income investments are interest-bearing vehicles, the most common of which are bonds. Bonds are essentially "IOUs" plus interest issued by corporations or the government to raise money over a specific period of time. That duration of time can be short-term (1-3 years), intermediate (4 to 10 years) or long-term (10 years or more). Depending on interest rate fluctuations, a bond's value in the market may rise and fall. Generally, the longer the maturity of the bond, the higher the interest rate risk. Bonds issued by institutions that are financially weak will generally have higher interest rates and may have generally higher risk of default than bonds of strong issuers.

Money Market

Money market² portfolios invest in the very short-term IOUs of the government and highly rated corporations. Although money market instruments are generally viewed as relatively safe investments, their potential return is fairly low.

¹ The guarantees for the Guaranteed Account are solely based on the financial strength and claims paying ability of Minnesota Life. Allocation to the Guaranteed Account and transfers to or from the Guaranteed Account may be restricted. Please consult your policy and/or prospectus or contact Minnesota Life.

² An investment in the money market portfolio is neither insured, nor guaranteed by the United States Government or any Federal Agencies. There is no assurance that the portfolio will be able to maintain a stable net asset value of $1.00 USD per share, and when redeemed may be worth more or less than original invested.

The information provided in the Investment Basics portion of this web site is presented for general educational purposes only and should not be construed as investment advice. Before investing and periodically thereafter, you should read the prospectus and consider additional research to ensure that your investments satisfy your goals and objectives.

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