Variable and Group Universal Life combination plans
A winning combination: Group Universal Life insurance and Variable Group Universal Life insurance

An integrated life insurance package

Individual solutions to group needs
What kind of solutions does your group need? Let us help you customize an insurance program that meets the goals and objectives of your organization as well as those of your employees.

What is a combination plan?
A combination plan gives you the best of all worlds, and the combinations we can provide are virtually limitless. Group Universal Life and Variable Group Universal Life presented together as an integrated package offer a unique advantage for your benefits program. This package provides your employees the opportunity to choose the product that best fits their needs:

• Employees looking for basic insurance protection can select GUL and pay only the cost of insurance.

• Employees who want insurance protection and the ability to accumulate cash value on a tax-deferred basis can select GUL and make additional contributions to the plan. A premium tax and expense charge is deducted from additional contributions.

• Employees interested in insurance protection plus individualized investment choices can select VGUL. The product provides an opportunity to accumulate cash value with a variety of options to suit an employee's risk and return objectives. There are additional fees for these added features.

Benefits
Group Universal Life and Variable Group Universal Life combine life insurance protection with the ability to accumulate cash value on a tax-advantaged basis.

Insurance protection
Unlike traditional life insurance policies, the failure to make a premium payment will not cause a GUL or VGUL policy to lapse. There is no requirement to pay premiums as long as the net cash value is sufficient to cover the monthly deduction. Coverage is also portable while the plan remains in force — if employees leave the group or retire, they can take their coverage with them.

Two death benefit options are available to the employer (all those insured must be covered with the same option)
Under the level death benefit option, the death benefit is equal to the face amount of the insurance and remains level over the life of the plan. With the increasing death benefit option, the death benefit is equal to the face amount plus the net cash value and will vary with the performance of the underlying investment subaccounts.

Cash value accumulation
Additional premium contributions are funds contributed in excess of the cost of insurance. These can be periodic or lump-sum payments. Additional contributions are voluntary and flexible — they can be increased, decreased, skipped or stopped at any time. The cash value accumulates on a tax-deferred basis.

Employees earn a competitive rate of return on their contributions to the GUL cash value
Contributions are credited with an interest rate that reflects market conditions on the day received, and earn that rate for approximately four years. At that time, they are updated to the current interest-crediting rate. Our contract guarantees the interest-crediting rate will never go below three percent.

Employees earn a potentially higher rate of return with VGUL's full range of investment options
The investment subaccounts offer a variety of potential risks and rates of return so that employees can individualize their investments to help meet personal financial objectives. Plans may be designed to include a Guaranteed Account that offers a fixed rate of return guaranteed to never fall below three percent. The guarantees for the guaranteed account are based solely on the financial strength and claims-paying ability of Minnesota Life, which are important; however, they do not have any bearing on the performance of the investment options.

GUL/VGUL plan features

Tax advantages
The ability to accumulate cash value on a tax-deferred basis is important when addressing long-term financial objectives such as retirement income, college savings or a vacation home. The cash value can be an important supplement to a 401(k) retirement savings plan. Under current tax laws, there are no penalty taxes for GUL or VGUL withdrawals before age 59-1/2 (as long as the policy has not become a modified endowment contract).

Loans
Policy loans allow employees access to cash when they need it most. The net rate is two percent (eight percent interest charge less six percent crediting rate on the borrowed funds). The minimum loan amount is $100. VGUL amounts available for loan are dependent upon the performance of the subaccount(s) chosen. Loans will reduce both the death benefit and the net cash value.

Withdrawals and surrenders
Partial and full surrenders of the net cash value may be used to provide retirement income or to obtain cash for other objectives. There is no charge for a full surrender. For partial surrenders (withdrawals) there is a transaction charge equal to $10 for GUL and the lesser of $25 or two percent for VGUL. The minimum withdrawal is $100 for GUL and $500 for VGUL. The amount available for VGUL surrender is dependent upon the performance of the subaccount(s) chosen. Partial surrenders will reduce the death benefit and net cash value.

Transfers
VGUL offers transfers of the net cash value, without charge, among the investment subaccounts and between the subaccounts and the Guaranteed Account. This allows participants to easily react to changing market conditions and financial needs. The minimum transfer amount is $250. The maximum transfer amount from the Guaranteed Account is 20 percent of the Guaranteed Account balance (or $250 if greater). Transfers to or from the Guaranteed Account are limited to one per policy year. We reserve the right to place additional restrictions on transfers.

Dollar cost averaging
VGUL dollar cost averaging allows participants to preauthorize automatic transfers from the Money Market subaccount to any other subaccount. This systematic method of investing results in an average cost of securities that is potentially less than the average price over a period of time. Dollar cost averaging requires the participant to maintain the investment during declining markets and does not assure a profit, nor does it prevent loss in declining markets. Minimum balance and transfer amounts will apply.

Continuation of Coverage
This insurance coverage is portable. Employees who retire or leave the group can take their insurance with them (there must be at least $10 of net cash value on the continuation date). This important feature protects your employees from losing insurance coverage. Monthly charges may be altered upon continuation but will never exceed the policy maximums.

Conversion
Alternatively, employees can retain insurance coverage by converting to an individual life insurance policy. Conversion is also available if the group contract terminates.

Claim Settlement Options
While our standard settlement option is a cash payment, we also offer a variety of other options for beneficiaries, including installments, annuities and our interest-bearing Benefit Account which offers check writing privileges.

Is this product right for your group?
Group Universal Life and Variable Group Universal Life — presented together as an integrated package — offer a unique advantage for your benefits program. This package provides your employees the opportunity to choose the product that best fits their needs:

• Employees looking for basic insurance protection can select GUL and pay only the cost of insurance.
• Employees who want insurance protection and the ability to accumulate cash value on a tax-deferred basis can select GUL and make additional contributions to the plan. A premium tax and expense charge is deducted from additional contributions.
• Employees interested in insurance protection plus individualized investment choices can select VGUL. The product provides an opportunity to accumulate cash value with a variety of options to suit an employee's risk and return objectives. There are additional fees for these added features.

» Evaluating Group Universal Life insurance (pdf, 208k)
» Is GUL/VGUL right for you? (pdf, 69k)
» Group Universal Life flyer (pdf, 77k)
» Variable Group Universal Life flyer (pdf, 76k)
» Variable Group Universal Life/ Group Universal Life Combination plans (pdf, 185k)

You should consider the investment objectives, risks, charges and expenses of a portfolio and the variable insurance product carefully before investing. The portfolio and variable insurance product prospectuses contain this and other information. You may obtain a copy of the prospectus from your representative. Please read the prospectuses carefully before investing.

This is a general discussion of the relevant tax laws. It was not intended for nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer. Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues applicable to the specific fact pattern.

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