Rider - Supplemental Term Insurance Agreement
The Penn Mutual Life Insurance Company agrees, subject to the provisions of the
Policy and this agreement, to provide this Term Insurance Benefit. The Company
also agrees to provide all of the other benefits which are stated in this
agreement.
This agreement is a part of the Policy to which it is attached. It is subject to
all of the provisions of the Policy unless stated otherwise in this agreement.
Term Insurance Benefit. The amount of the Term Insurance Benefit provided under
the Policy as added by this agreement is shown in the Policy Specifications.
Basic Death Benefit. The Basic Death Benefit of the Policy to which this rider
is attached is modified to include the Term Insurance Benefit under this rider.
The Basic Death Benefit prior to the Maturity Date will be as follows:
(a) If the Specified Amount includes the Policy Value, as shown on Page 3, the
Basic Death Benefit will be equal to the greater of:
(1) the Specified Amount of the Policy plus the Term Insurance Benefit; or
(2) the Policy Value multiplied by an attained age factor shown in the Table
of Death Benefit Factors.
(b) If the Specified Amount does not include the Policy Value, as shown on Page
3, the Basic Death Benefit will be equal to the greater of:
(1) the Specified Amount of the Policy plus the Term Insurance Benefit plus
the Policy Value; or
(2) the Policy Value multiplied by an attained age factor shown in the Table
of Death Benefit Factors.
Suicide Exclusion. If the Insured dies by suicide while sane or insane within
two years from the effective date of this agreement, the Term Insurance Benefit
will be limited to the Monthly Deductions associated with such benefit.
If the Insured dies by suicide, while sane or insane, within two years from the
effective date of any increase in the Term Insurance Benefit, the Term Insurance
Benefit with respect to that increase will be limited to the Monthly Deductions
for that increase.
Change in Amount of Coverage. The Term Insurance Benefit may be changed subject
to the following conditions:
(a) Any change in coverage must be at least $5,000;
(b) Any request for an increase must be applied for on a written application
provided by the Company. Evidence of insurability satisfactory to the
Company must be provided;
(c) Any decrease in the Term Insurance Benefit will successively decrease, in
reverse order, the most recent increases, if any.
Mortality and Expense Risk Face Amount Charge. While this agreement is in force,
the Mortality and Expense Risk Face Amount Charge under the Policy will include
the Mortality and Expense Risk Face Amount Charge for this agreement. The
Mortality and Expense Risk Face Amount Charges for this agreement are the sum
of:
(a) the Mortality and Expense Risk Face Amount charge for the original Term
Insurance Benefit; and
(b) the Mortality and Expense Risk Face Amount charge for any increases in the
Term Insurance Benefit.
The Mortality and Expense Risk Face Amount Charges for this agreement will be
determined by the company based on expectations as to future mortality,
investment, expense and persistency experience. The Company will not adjust such
charges as a means of recovering prior losses nor as a means of distributing
prior profits. The rates will not exceed the maximum expense charges as shown on
Page 3.
Cost of Insurance. The Cost of Insurance for the Policy to which this rider is
attached is modified to account for the Term Insurance Benefit under this
agreement. The Cost of Insurance is determined separately for the initial
Specified Amount and Term Insurance Benefit segments as well as for each
additional segment created as the result of an increase in either Specified
Amount or Term Insurance Benefit amount. The total Cost of Insurance for a
policy month is calculated as the sum of (a) plus (b) where:
(a) is the Cost of Insurance for the Specified Amount under this Policy; and
(b) is the Cost of Insurance for the Term Insurance Benefit under this
agreement.
Rider - Supplemental Term Insurance Agreement (continued)
The Cost of Insurance for a policy month for the Specified Amount under this
Policy is equal to (c) multiplied by (d) where:
(c) is the applicable Cost of Insurance Rate for the Policy divided by 1,000;
and
(d) is the Net Amount at Risk attributed to the Specified Amount.
The Cost of Insurance for a policy month for the Term Insurance Benefit under
this agreement is equal to (e) multiplied by (f) where:
(e) is the applicable Cost of Insurance Rate for the Term Insurance Benefit
divided by 1,000; and
(f) is the Net Amount at Risk attributed to the Term Insurance Benefit.
The Net Amount at Risk attributed to the Specified Amount is calculated as (g)
minus (h) where:
(g) is the Specified Amount divided by the Death Benefit Discount Factor; and
(h) is the Policy Value allocated to the Specified Amount at the beginning of
the policy month before the Monthly Deduction is due.
The Net Amount at Risk attributed to the Term Insurance Benefit is calculated as
(i) minus (j) where:
(i) is the Term Insurance Benefit divided by the Death Benefit Discount Factor;
and
(j) is the Policy Value allocated to the Term Insurance Benefit at the beginning
of the policy month before the Monthly Deduction is due.
For purposes of determining the allocation of Net Amount at Risk between the
Specified Amount and the Term Insurance Benefit, the Policy Value will be
allocated as follows: first to the initial Term Insurance Benefit segment, then
to any segments resulting from increases in the Term Insurance Benefit in the
order of the increases, then to the initial Specified Amount segment, and then
to any segments resulting from increases in the Specified Amount in the order of
the increases.
If the Specified Amount does not include the Policy Value, the Policy Value will
be allocated to the initial Specified Amount segment in order to determine the
Net Amount at Risk.
Any increases in the Basic Death Benefit in order to maintain the required
minimum margin between the Basic Death Benefit and the Policy Value will be
allocated to the most recent increase in Specified Amount.
Cost of Insurance Rate. The Cost of Insurance Rate for the initial Term
Insurance Benefit segment is based on the Insured's issue age, sex, risk
classification, and policy duration. The Cost of Insurance Rate for any segment
resulting from an increase in the Term Insurance Benefit will be based on the
Insured's age on the effective date of the increase, sex, risk classification on
that date, and the duration, in years, since that date. Current monthly Cost of
Insurance Rates will be determined by the Company based on expectations as to
future mortality, investment, expense, and persistency experience. However,
these rates will not exceed those shown for this agreement in the Additional
Policy Specifications.
Computation of Values. All values and benefits in this agreement are equal to or
greater than those required by the law of the jurisdiction in which this Policy
is delivered.
Incontestability. This agreement will be incontestable after it has been in
force during the life of the Insured for two years from the effective date.
After this agreement has been in force during the Insured's life for two years
from the effective date of any increase in the amount of insurance, we will not
contest the statements in the application for the increase.
Termination of Agreement. This agreement will terminate upon:
(a) the Termination Date for this agreement shown in the Additional Policy
Specifications; or
(b) lapse of this Policy; or
(c) surrender of this Policy; or
(d) the Monthly Anniversary which coincides with or next follows (i) receipt by
the Company of a written request to terminate this agreement, and (ii)
return of this Policy for appropriate endorsement.
Effective Date. The effective date of this agreement is the same as the Date of
Issue of this Policy unless another effective date is shown below.
The Penn Mutual Life Insurance Company
/s/ Xxxxxx X. Xxxxxxxx
Chairman and
Chief Executive Officer
