The Benefits of Term Insurance

Policies issued by American General Life Insurance Company (AGL) except in New York, where issued by The United States Life Insurance Company in the City of New York (US Life).

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What is Term Insurance?

Basic, inexpensive, and easy to understand.

Life insurance policy that provides coverage for a certain period of time, or a specified “term”

Death benefit is paid out if the insured dies during the specified term period and the policy is inforce.

Income replacement needs for beneficiaries/loved ones

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What is Term Insurance?

Competitive Cost Coverage

Death Benefit Protection

Living Benefits-Critical, Chronic, and Terminal

Peace of Mind

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Low Cost Coverage

Initially much less expensive when compared to permanent life insurance

All the coverage you need, none that you don’t

Premium is fixed for the duration of the initial term period

Affordable for young families and budget focused individuals

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Death Benefit Protection

Specified death benefit pays out if insured dies during coverage period

Generally, the term period is between one year and up to 35 years in length

Purely risk protection, no cash value

Protect the income their families were anticipating from them

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Living Benefits-Chronic, Critical, Terminal

Can accelerate all or part of death benefit

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Peace of Mind

Debt – Know that protection is provided for length of mortgage and/or other debts

Dependent Care –Helping to ensure coverage for young children or until children have completed

college

Policies can be converted to permanent plans regardless of changes in health

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How Does it Work?

• 1, 10, 20, or 35 yearsChoose Duration

• Annual, Semi-annual, quarterly, monthlyPay Premium

• Paid to beneficiary(ies) if insured dies during term periodDeath Benefit

• During conversion period, if applicable, with no additional underwritingConversion

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Types of Term Policies

Level

Annual Renewable

Return of Premium

DecreasingTerm

Insurance

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Level Term

Most common type of term insurance

Death benefit is level for the duration of the term period

Premium is guaranteed to be level for the same duration

Can be renewed for a higher premium after the initial term period, if client meets the renewal guidelines

Conversion possible for same rating as original term policy

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Annual Renewable

Premium is paid for one year of coverage

Policy is guaranteed to be continued each year for a certain number of years– Usually varies from 10-35 year, or to a certain age of the insured

Premiums increase with each renewal period

Eventually, cost becomes prohibitive and would exceed the cost of a permanent policy

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Return of Premium

Returns premium paid during the policy term, minus fees and expenses, if the insured outlives the term duration

Premiums are generally much higher than a level term policy

If policy is terminated early, they sometimes contain step-up provisions that increase the amount returned after each year or after a certain number of years– Example: 10% back after 10 years, 30% back after 15 years, and 100%

back after 30 years

Amount of premium that is returned is received income-tax free

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Decreasing Term

Type of annual renewable policy that provides a death benefit that decreases at a predetermined rate over the life of the policy

The premiums are generally constant throughout the contract

Sometimes referred to as “mortgage insurance” since the policy can be decreased by an amount equal to the remaining balance of your home mortgage

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Our Term Portfolio

Quality of Life…Insurance®

QoL Flex Term

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EventTraditionalTerm Ins

QoL FlexTerm Ins

Death Yes YesInvasive Cancer No Yes!Heart Attack No Yes!

Stroke No Yes!

QoL Flex Term

Compare with Traditional Term InsuranceNot all riders are available in all states, riders may vary by state.

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• Major Heart Attack

• Coronary Artery Bypass

• Stroke

• Invasive Cancer

• Blood Cancers: Leukemia, Lymphoma and Multiple Myeloma

• Major Organ Transplant

• End Stage Renal Failure

• Paralysis

• Coma

• Severe Burn

An illness or physical condition that is certified by a physician to be reasonably expected to result in the insured’s death within 24 months from the date of certification

An illness or condition certified within the last 12 months and affects the insured person so that he or she:

- Is unable to perform at least two of the six Activities of Daily Living (ADLs) or

- Requires substantial supervision by another person to protect the insured person from threats to health and safety due to severe cognitive impairment

ADLs: Bathing, Dressing, Toileting, Transferring, Continence, Eating

Chronic Illness or Condition

1 CriticalIllness or Condition

2 TerminalIllness or Condition

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SelectChoiceSM Accelerated Benefit Rider Features*

PLEASE NOTE: The life insurance offered with SelectChoice Accelerated Benefit Rider is not stand-alone long term care insurance, disability income insurance or other insurance designed to cover specific costs associated with an illness or condition. Receiving benefits under the rider will reduce the amounts available for future acceleration under it and any other Accelerated Benefit Rider attached to the policy. It will also reduce the base life insurance benefit and the funds available to supplement retirement or other needs. In some cases, such reductions can result in policy termination. The benefits paid may be less than what is needed to cover all of the costs associated with an illness or condition."

*SelectChoice not available in CA, CT, or MT.

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SelectChoiceSM ABR Features

1. Flexible Accelerated Benefit:• No-cost Accelerated Benefits

• Automatically added to all eligible Quality of Life…Insurance® UL and term policies

• Allows owner to accelerate some or all of the life insurance benefit in the event the insured is diagnosed with a Qualifying Event: Critical, Chronic or Terminal illness

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*Not available in CA, CT, or MT

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2. Defined Accelerated Benefit*:• Optional and may be purchased for an additional premium with

eligible Quality of Life…Insurance® UL and term policies

• The DAB for the initial Qualifying Event, where a claim is made, is determined by a fixed percentage between 5%-15%

• The DAB for a subsequent Qualifying Event is calculated using a reduced percentage: 20% of initial DAB percentage

• Subject to underwriting approval (Up to Table D)

• Allows the owner to accelerate a defined amount of the life insurance benefit in the event the insured is diagnosed with a Qualifying Event: Critical, Chronic or Terminal illness

SelectChoiceSM ABR Features

*Not available in CA, CT, or MT

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How Does It Work?

You purchases a $250,000 Quality of Life…Insurance product at age 40, which includes the SelectChoice Accelerated Benefit Rider

For an additional premium, you also purchase a 10% Defined Accelerated Benefit

Ten years later you suffer a major heart attack, but the prognosis for recovery is excellent

The medical costs associated with this event are substantial causing you to consider your options. To help cover these expenses, you accelerate the $25,000 Defined Accelerated Benefit for Critical Illness

The remaining death benefit is $225,000 which could also be accelerated under the Flexible Accelerated Benefit

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How Does It Work?

You then file a claim for another $25,000 under the Flexible Accelerated Benefit

AGL determines the benefit and makes an offer based on the severity of your condition and how it will affect your life expectancy

If you accepts this offer, the death benefit will be reduced by $25,000. You will receive less than $25,000 because you are receiving a portion of the death benefit today, rather than at the end of life expectancy (discounting)

In this case, you received an offer from AGL for an amount of $11,222*. You could elect to take all, part or none of the offer

You decide to take the $11,222* today and now have a remaining death benefit is $200,000

*Amount is hypothetical and actual payment will vary be individual case.

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Feature Additional Details

Coverage up to 35 years

-22 level premium periods with guaranteed coverage-Juvenile and senior coverages available

Generous Conversion Guidelines

-Convertible for up to 80% of the initial term period, or age 75-Without evidence of insurability-Can convert with SelectChoice ABRs

QoL Advantage-Bundle more than 1 policy for a multiple policy discounts-Policy fee reductions

QoL Flex Term – Power Features

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QoL Flex Term – Conversion Rules

Conversion Period = 80% of the term periodExample: 30 year term convertible for 24 years

Maximum Conversion Age = 75

Convertible to QoL Universal Life without Evidence of Insurability

Can be converted to any UL policy currently in the portfolio

Conversion Credit = 1st year premium if converted in first 5 years*Pro Rata for partial conversion, applied to accumulated value of UL policy

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QoL Advantage

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It does this by helping consumers meet their financial objectives at an affordable price through a “bundled” solution:

• Policy fee reduction• Volume discount based on aggregate coverage• Bonus crediting on select Universal Life products

QoL Advantage – What is it?

QoL Advantage is a discount program in place to support our commitment to help solve the increased life insurance needs of consumers today.

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QoL FlexTerm – QoL Advantage

Available as a standalone policy; or

Can be purchased with another QoL Universal Life policy as part of QoL Advantage, which may include:

– Policy fee reduction (up to $75/yr per term policy)

– Volume discount based on aggregate amount of coverage between all policies, including Universal Life if applicable.

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When permanent life insurance is the solution, but the premium is out of reach…

QoL Advantage can help to satisfy the “Need”.

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Disclaimer

The information presented herein is not a comprehensive analysis of the topic presented, and the viewer should consult tax and legal advisors to understand all the ramifications of the topics discussed.

No representation or warranty, express or implied, is made by AGL or its affiliates as to the completeness of the information provided. All companies mentioned, their employees, financial professionals and other representatives are not authorized to give legal, tax or accounting advice. Applicable laws and regulations are subject to change and individuals should consult an attorney, tax advisor or accountant. Any tax statements in this material are not intended to suggest the avoidance of U.S. federal, state or local tax penalties.

To ensure compliance with requirements imposed by U.S. Treasury Regulations, we inform you that any tax advice contained in this presentation (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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Policies issued by American General Life Insurance Company (AGL). Issuing company AGL is responsible for financial obligations of insurance products and is a member of American International Group, Inc. (AIG). Guarantees are backed by the claims-paying ability of the issuing insurance company. AGL does not solicit business in the state of New York. Policies issued by American General Life Insurance Company (AGL). Issuing company AGL is responsible for financial obligations of insurance products and is a member of American International Group, Inc. (AIG). Guarantees are backed by the claims-paying ability of the issuing insurance company. AGL does not solicit business in the state of New York. Products may not be available in all states and product features may vary by state. Please refer to your policy. For policy forms ICC14-14579, 14579, ICC10 AGL ABR, AGL ABR, ICC14-14012,14012 ICC14-14018, 14018, ICC14-14390, 14390, AGL 05AHC, AGL EMD-DB, ICC14-14002, 14002, 14306 and state variations. © 2014 American International Group, Inc. (AIG). All rights reserved.

The maximum amount of life insurance death benefits that may be accelerated as to an Insured Person under all accelerated benefit riders is the lesser of the existing amount of such death benefits or a lifetime maximum of $1,500,000. See your policy for details. The insurance company may contest the policy from the date of policy issue, a reinstatement or an increase in coverage, during a period provided by applicable law and described in the policy, for the misstatement or misrepresentation of material fact on the application for such policy, reinstatement, or increase. If an Insured Person dies by suicide within the suicide period provided by applicable law and description in the policy, the death benefit will be limited as provided by the policy. Rider names, benefits and definitions may vary in some states and/or not be available in all states. Neither American General Life Insurance Company nor any agent representing it is authorized to give legal or tax advice.

(1) When filing a claim for Qualifying Critical Illness, Qualifying Terminal Illness or Qualifying Chronic Illness under an Accelerated Benefit Rider, the claimant must provide to the Company a completed claim form (with Certification attached in the case of a Qualifying Chronic Illness) which must be received at its Administrative Center within the time frame specified in the Rider, if any.

(2) If a benefit under an Accelerated Benefit Rider is payable and the Owner elects to receive such benefit, the Company will provide the Owner with one (1) opportunity to elect a Flexible Accelerated Benefit and/or a Defined Accelerated Benefit, if applicable, under  the Policy as to such Qualifying Event. To make such an election, the Owner must complete an election form and return it to AGL within 60 days of receipt of the election form.  The Company will not provide a later opportunity to elect a Flexible Accelerated Benefit and/or a Defined Accelerated Benefit, if applicable, under a Policy as to the same Qualifying Critical Illness or Qualifying Chronic Illness. Under certain circumstances where an insured’s mortality (i.e., our expectation of the insured’s life expectancy) is not significantly changed by a Qualifying Critical Illness or Qualifying Chronic Illness, the accelerated benefit may be zero.

 (3) The failure to provide a required claim form and a required election form (with the requested attachments) within the periods set forth for each in a Policy may preclude payment of a benefit.

(4) Benefits payable under an accelerated benefit rider may be taxable.  Neither American General Life Insurance Company nor any agent representing it is authorized to give legal or tax advice. Please consult a qualified legal or tax advisor regarding questions concerning the information and concepts contained in this material.

(5) Generally, we will send you an IRS Form 1099-LTC if you receive an accelerated death benefit on account of a Chronic Illness or a Terminal Illness.  We will send you an IRS Form 1099-R if you receive an accelerated death benefit on account of a Critical Illness.

The sum that will be included in Box 2 (Accelerated death benefits paid) of IRS Form 1099-LTC or in Box 1 (Gross distribution) of IRS Form 1099-R will be the actual sum you received by check or otherwise minus any refund of premium and/or loan interest included with our benefit payment plus any unpaid but due policy premium, if applicable, and/or pro rata amount of any loan balance. (6) See your policy for details.

Important: Prior to soliciting business, be certain that you are appropriately licensed and appointed with the insurer and that the product has been approved for sale by the insurer in That state. If uncertain, contact your American General Life Companies representative for

assistance.

Important Information

American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries.. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in theUnited States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.

Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIG_LatestNews | LinkedIn: http://www.linkedin.com/company/aig

AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries, and coverage is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.

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