Universal life ProdUct GUide - · PDF fileUniversal life ProdUct GUide Updated march 26, 2012. ... Joint life coverages 18 ... 42 Optimizer Option 42

e v e r y l i f e h a s a s t o r y .

Universal life ProdUct GUide

Updated march 26, 2012.

ADVISORS PLEASE NOTE: Effective April 23, 2012, the following Designated Indices are being substituted with Designated Indices with similar investment objectives. Accordingly, the names of the corresponding Managed Index Interest Options are updated to reflect the new Designated Indices, as listed below.

Designated Index

imaxx Canadian Equity Value Fund

imaxx U.S. Equity Growth Fund

imaxx U.S. Equity Value Fund

imaxx Global Equity Value Fund

NEW Designated Index

Dynamic Value Fund of Canada

AGF American Growth Class

CI American Value Fund

Dynamic Global Discovery Fund

This material has been prepared for the use of

Transamerica’s advisors in conjunction with other product

information. The intent of this guide is to provide an

overview of the WealthAdvAntAge and EstateAdvAntAge

plans. For a precise understanding of the rights and

obligations of the policyowner and Transamerica, please

refer to the WealthAdvAntAge and EstateAdvAntAge

contracts.

IMPORTANT: This guide is not designed to provide tax,

legal, accounting or other professional advice. If you are

not a qualified tax advisor, we recommend that you advise

your client to seek the advice of a tax professional. It is

the owner’s responsibility to determine the consequences

to him or her under relevant income tax legislation, and

Transamerica assumes no liability to the owner.

The sections that reference tax information provide a

summary only of the current principal Canadian federal

income tax consequences arising under the Income Tax

Act (Canada) and the regulations thereunder to prospective

owners of WealthAdvAntAge and EstateAdvAntAge policies

who are residents of Canada.

The tax information contained in this guide is based

upon the provisions of the Income Tax Act (Canada), the

regulations thereunder currently in effect, all proposed

amendments thereto publicly released by the Department

of Finance (Canada) prior to the date of printing this

guide and upon Transamerica’s understanding of the

administrative practices and policies of the Canada

Revenue Agency (CRA) currently in effect. The tax

About this guideThis guide contains product information for WealthAdvAntAge and EstateAdvAntAge policies. This guide is effective

November 28, 2011, and contains product information for WealthAdvAntAge and EstateAdvAntAge policies.

information, wherever contained in this product guide,

neither anticipates any changes in law, whether by

legislative, governmental or judicial action, nor does it take

into account provincial or foreign income tax legislation or

considerations.

about the guarantees

Transamerica makes certain guarantees with respect to

WealthAdvAntAge and EstateAdvAntAge. These guarantees

do not include:

• The portion of the total fund value attributable to

a particular Index Interest Option. This varies in

accordance with fluctuations in the daily interest rate

formula for each Index Interest Option.

• The interest rate applicable to the Index Interest Options.

In fact, this interest rate may be either positive or

negative, depending on the performance of a particular

index. A negative interest rate will reduce the benefits

and values under this policy, which include but are not

limited to the total fund value, the cash surrender value,

the net cash surrender value, the maximum benefit

amount for a Living Benefit and the death benefit.

Transamerica does not accept responsibility for any errors

or omissions contained in these materials. The information

contained within this document is current as of the date of

publication and is subject to change.

WealthAdvAntAge

EstateAdvAntAge with Accumulation Bonus EstateAdvAntAge – Low-Fee

This product is intended to suit policyholders who plan to invest more aggressively and have longer-term financial goals and investment planning time frames.

These products are intended to suit more conservative policyholders with shorter-term financial goals and investment planning time frames.

Why choose Transamerica’s WealthAdvAntAge and EstateAdvAntAge universal life?

Financial strength and stabilityTransamerica has been helping Canadians achieve

financial security since 1927. Over the years, we’ve

learned that financial peace of mind means different things

to different people. Whether it’s saving for retirement,

protecting family and assets or helping clients achieve

their specific goals, their needs are unique. That’s why

we offer a diverse range of solutions. We want to be there

with the insurance and investment options needed at

every stage of life.

Every life story is unique, and that’s why we offer more than one universal life plan. Each plan addresses different needs, so together with your client, you can choose the plan that is best for now...and for the future.

Transamerica Life Canada is a wholly-owned subsidiary

of AEGON N.V., one of the largest insurers in the

world. Based in the Netherlands, it has major company

operations in Hungary, Spain and the U.K., in addition to

the Netherlands and Americas. Transamerica is one of

Canada’s leading providers of life insurance and investment

products. Its financial strength is complemented by a solid

network of 18,000 accredited advisors located in all major

cities across Canada.

Universal Life Product Guide

Table of contents1. Product Overview 1

2. Insurance coverages 4

Coverage and rider issue ages and amounts 4

Coverage types 5

Death benefit options 5 Increasing death benefit 5 Level death benefit 6 During the COI period 6 After the COI period (varies with the COI option) 6

Cost of Insurance (COI) options 7 Mixing COI options 8 Switching COI options 8 Built-in premium tax 8 COI banding 8

Underwriting programs 8 Non-medical underwriting 9 Medical underwriting 9 Overview of required forms 10 Underwriting risk classifications 10 Summary of underwriting program and applicable

risk classification by age and face amount 11 Underwriting requirement 12 Underwriting materials 12 Ratings 12

Policies with multiple universal life coverages 14 Multiple universal life coverages 14 Base universal life coverage 15 Multiple life special options 15 Severance Option 17 Change of Primary Life Insured Option 17

Joint life coverages 18 Joint last-to-die 18 Joint first-to-die 21 Switching between joint options 23

Riders 24 Level Cost Rider 24 TermSelect Riders 24

3. Investment choices 25

Interest Options 25 Relative risk rating 26

T-Bill Interest Option and Fixed-Rate Interest Options 27

Index Interest Options 28

Asset allocation solutions 32 Investor Profile Questionnaire 32

Index Allocation Interest Options (passive) 33

Managed Portfolio Options 34 imaxx TOP Portfolio Index Interest Options 34

Transamerica Interest Option fact sheets 35

Rates of return 35

Interest Option transactions 35 Allocation instructions 35 Interest Option transfers 35

4. Client bonuses 36

Meeting market needs with client bonuses 36

Different bonuses for different needs 36 WealthAdvAnTAge Performance Bonus 36 EstateAdvAnTAge Accumulation Bonus option 36 EstateAdvAnTAge low-fee option 37 A closer look at the universal life client bonuses 38 WealthAdvAnTAge Performance Bonus example 39

5. Optimizing investments while maintaining tax-exempt status 40

Tax-exempt testing and policy anniversary processing 40

Tax-exempt testing 40 If a policy fails a tax-exempt test 41 If a policy passes a tax-exempt test 41 The 250% rule (or “anti-dump-in” rule) 41

Maximum premium estimate 41 Recalculating maximum premium estimates) 42

Optimizer Option 42 Eligibility 42 How Optimizer works 42 Optimizing policies with multiple universal

life coverages 42 Changing the Optimizer option 43 Termination 43 Illustrating Optimizer on LifeView 43

Side Account 44 Side Account as a “safety net” 44

How the Side Account works 44


6. Plan flexibility 45

Easy access to funds when needed 45 Policy loans 45 Policy and coverage surrenders 47 Withdrawal order 50 Taxation of loans, withdrawals and surrenders 50

Easy Interest Option changes when needed 51 Allocation instructions for premiums 51 Interest Option transfers 51 Market Value Adjustments (MVAs) 52

Premium flexibility 53 Planned periodic premiums 53 Minimum premiums 53 Maximum premiums 53

Easy insurance coverage adjustments when needed 54

Increasing the face amount 54 Decreasing the face amount 54 Death benefit option changes 54 COI option changes 54

7. Living Benefits 55

Qualification 55

Types of disability 55

Benefit amount 56

Payment of benefit amount 56

Face amount adjustment 56

Claims for Living Benefits 56 Occupational disability claim 56 Critical condition disability claim 56

Continuous disability 57

Living Benefits: Definitions and highlights 57

Exclusions for disability claims 58 General exclusions 58 Exclusions for pre-existing conditions 58

8. Optional Benefits 59

Accidental Death and Dismemberment Rider 59 Schedule of losses 59 Definition of “accident” 59 Termination 59 Exclusions 59

Children’s Insurance Rider 60 Coverage availability 60 Eligibility 61 Paid-up term insurance 61 Conversion 61 Coverage termination 61 Rider termination 61

Payor Waiver Riders 62 Payor Waiver of Monthly Deductions on Death

or Disability (PWMD) Rider 62 Payor Waiver of Planned Premiums on Death

or Total Disability (PWPP) Rider 62 Common terms and conditions for payor

waiver riders 63

Waiver Riders 64 Waiver of Monthly Deductions Rider 64 Waiver of Planned Premiums 65

9. Policy administration 67

Monthly deductions 67

Lapse and reinstatement process 67 Shortage 67 Key benefits 67 Lapse 67 Reinstatements 67

Anniversary statements and eStatement Library 68

Claims processing 68 Payment of death claims 68

Placing an order for marketing material or forms 69 Special note about edition dates 69 Other sources for marketing materials 69 Illustration systems (LifeView) 69

10. How to structure UL insurance for the market you are in 70

Guaranteed UL: Is it possible? 70

Using UL as an investment vehicle 70

Comparing and illustrating UL plans 70

Conclusion 72

Glossary of common terms 73

Index 75


[ 1 ]

1. Product overviewFollowing is an overview of the coverages offered and some of the key options and features available with those coverages.

Insurance coverages Issue amounts and ages

Coverage options

• Single • Joint• Multiple Life

Minimum issue amounts

Wealth AdvAntAge

Estate AdvAntAge

Adults: Min. face amount

$100,000 $25,000

Max. face amount

$20,000,000 (ART COI)

$10,000,000 (Level COI)

$20,000,000 (ART COI)

$500,000 (Level COI)

Juveniles: (0 to 15)

Min. face amount

$25,000

(If an additional coverage; otherwise, the minimum face amount of $100,000 applies.)

$25,000

Joint life $100,000

Level COI Rider $100,000 $25,000

TermSelect Riders $50,000

Death benefit options

• Level (with ART COI only).• Increasing (with ART or level COI).

(Only one option can be selected per policy.)

Cost of Insurance (COI) option

• Annual Renewable Term (ART) to age 100.• ART 85/20.• Level COI.

Policy fee $10 per month; no extra charge for extra lives.

Premium tax None: built into cost of insurance.

Joint life

Joint life coverage options

Joint last-to-die

• Deductions to last death (up to 5 lives).• Deductions to first death (maximum 2 lives).• Fund value payout options on each death or last

death allowed on policies rated up to 300%.• Single life insurance option.

Joint first-to-die (up to five lives)

• Single life insurance option.• Survivor Option.• Additional death benefit.• Switch option from joint first-to-die to joint

last-to-die deductions to last death (two lives).

Issue ages (age nearest birthday)

Non-smoker: 0 to 80

Smoker: 16 to 80

(Non-smoker classification for juveniles)

Multiple UL coverages Underwriting

• Up to 15 insurance coverages.• Fund value payout options on each death, last

death or proportionate, allowed with insured rated up to 300%.

• Severance Option allows coverages to be severed from the policy but continue as issued.

• Change of primary life insured.

Underwriting programs

Non-medical underwriting program for face amounts below $250,000 and ages 45 and under.

Preferred underwriting program at $250,000 and above and ages 16+.

* The total face amount for all level cost of insurance coverages and Level Cost Riders for a life insured under all EstateAdvAntAge policies may not exceed $500,000.


[ 2 ]

Riders Cost of Insurance bands

termSelect Rider

10-, 20- or 30-year renewable and convertible terms.

Band structure $25,000 to $49,999

$50,000 to $99,999

$100,000 to $249,999

$250,000 to $499,999

$500,000*(For TermSelect Riders only, there are additional COI bands of $500,000 to $999,999, $1,000,000 to $2,499,9999, and $2,500,000+.)

Combined banding combines face amounts of all non-joint universal life and rider coverages to determine underwriting program and requirements for each life insured.

Level COI Rider

Level (to 100)(available with level death benefit option only).

Investment choices

T-Bill Interest Option

Fixed-Rate Interest Options: One-, five- and 10-year terms (minimum $500).

Guaranteed minimum returns:

Individual Index Interest Options

Thirty-two Interest Options providing passive and managed solutions, including: • six passive total return Interest Options• four passive currency-neutral Interest Options• sixteen third-party managed options that index historically

consistent, above-average performance from managed investment Canadian mutual funds

• four imaxx mutual funds that feature outstanding Canadian and international investment managers with proven performance

Portfolio Index Interest Options

Eight Interest Options providing both passive and managed solutions, including:• four passive index allocation portfolio options• four managed imaxx TOP asset allocation options indexed to

top-performing Canadian, U.S. and international mutual funds

WealthAdvAntAge and

EstateAdvAntAge with Accumulation Bonus

EstateAdvAntAge with low-fee option

1-year: 0%5-year: 0.5%10-year: 1.5%

1-year: 0%5-year: 1.75%10-year: 2.75%

Client bonuses

WealthAdvAntAge EstateAdvAntAge

Performance Bonus

• Credited in years 2+.• Percentage tied to policy rate of return (with

guaranteed minimums).• Applied to the average fund value in the

previous year, net of loans.

Accumulation Bonus

• Credited in years 2+.• Fixed percentage (1.25%).• Applied to the average fund value in the

previous year, net of loans.

Low Fee • No bonus available.

Plan flexibility

Policy loans • 10% charged annual loan rate.• 8% credited annual interest rate on Security

Account.• Internal loan repayment provision available in

year 16.

Withdrawal order for monthly deductions

• Monthly Deduction Interest Option.• Policyowner picks one Interest Option;

otherwise, the default withdrawal order applies.



[ 3 ]

Plan flexibility (continued)

Surrender charges

WealthAdvAnTAge EstateAdvAnTAge

Duration: 10 years Duration: 7 years

Coverage surrender charges (also applies on face amount reductions).

Partial withdrawal surrender charges: a percentage of the withdrawal amount (minimum withdrawal $500).

10% free partial withdrawal

After the second anniversary, the client can withdraw up to 10% of the net fund value. The maximum amount available for a free surrender is equal to the lesser of:

• 10% of the net fund value• the net fund value, minus three monthly

deductions, minus half the total policy coverage surrender charges

Optimizer • Eligible with face amounts of $250,000 or more.• Earliest start is in year 6.• Maximum decrease of 15% over years 6 to 10.

Interest Option transfers

Four free transfers per policy year.

Optional benefits

Accidental Death and Dismemberment Rider

• Pays an additional benefit amount if the life insured dies or loses sight or limbs as a direct result of an accident (not available with joint life coverages).

Children’s Insurance Rider

• Provides low-cost term coverage on the lives of the life insured’s children (including stepchildren or legally adopted children).

• Allows each child to convert his or her coverage for up to five times the initial coverage amount, subject to certain conditions.

• Provides paid-up term insurance if the life insured dies before the children, prior to their 25th birthday (other conditions may apply).

Waiver and Payor Waiver of Monthly Deductions Rider

• Monthly deductions are waived for life if the insured becomes totally disabled before age 60, and between ages 60 and 65, monthly deductions are waived for the later of two years and age 65.

• Payor Waiver of Monthly Deductions Rider is also available to insure the payor on a child’s policy (usually a parent).

Waiver and Payor Waiver of Planned Premium Rider

• Premiums, up to a max. of $1,000 per month, are waived if the insured becomes totally disabled before age 65.

• The amount being waived will be the lesser of the average premiums paid during the 12-month period before disability and $1,000.

• Payor Waiver of Planned Premium Rider is also available to insure the payor on a child’s policy (usually a parent), up to $400 per month.

Built-in, no-cost additional benefits

Living Benefits Living Benefits enable your clients to access their fund value by making a request for a lump sum benefit amount upon disability. The policy definition of “disability” includes both (1) “occupational disability” and (2) “critical condition disability” (see contract for 26 covered conditions). There is no age restriction for this built-in feature, which uses new industry-standardized critical illness definitions.

Compassionate Assistance Program (CAP)

This non-contractual feature currently offered by Transamerica allows an owner to receive a loan against the death benefit of his or her policy if the life insured is suffering from a terminal illness and has a life expectancy of two years or less. Upon the death of the life insured, the death benefit payable to any beneficiaries will be reduced by the loan amount, accrued interest and any premiums waived after the loan was issued. (Living Benefit must first be exhausted.)


[ 4 ]

Illustrations with face amounts above the stated maximum must be reviewed by Transamerica’s Head Office.

Any LifeView illustration above the stated maximum will not be valid without Head Office review, and a disclaimer

will be printed on the illustration report pages.


** Preferred underwriting is automatically applied when the underwriting requirement or a life insured is $250,000 and greater and the insured is 16 years of age or older.

2. Insurance coveragesCoverage and rider issue ages and amounts

Coverage options

Minimum face amount Maximum face amountMinimum issue age

Maximum issue ageWealthAdvAntAge EstateAdvAntAge WealthAdvAntAge EstateAdvAntAge

Single life $100,000** $25,000**

$20,000,000 (ART COI)

$10,000,000 (Level COI)

$20,000,000 (ART COI)

$500,000* (Level COI)

0 80

$25,000 juveniles (ages 0 to 15)

Joint life $100,000**

Multiple life Minimum issue amounts apply based on single or joint coverages added as part of the multiple life coverage.

Rider Options

termSelect10Single life: $50,000**

Joint life: $100,000**

$10,000,000 0 70

termSelect20 $20,000,000 0 60

termSelect30 $20,000,000 0 50

Level Cost Rider

Single $100,000**

Joint $100,000**

Single $25,000**

Joint $100,000**$10,000,000 $500,000* 0 80


[ 5 ]

Coverage types

Coverage types describe combinations of death benefit

and Cost of Insurance (COI) options, and the type selected

by the client is noted on the data page of each issued

policy and other Transamerica reports.

Only one death benefit option may be selected per policy.

Death benefit options

Both WealthAdvAnTAge and EstateAdvAnTAge provide level

and increasing death benefit options to reflect different

insurance needs and budgets. Regardless of the death

benefit option selected, the total death benefit is the Net

Amount at Risk (NAAR), defined below, plus the fund

value, less any outstanding policy loans, accrued interest

and premiums due.

However, with some of the Fund Value Payout Options,

the fund value may not always be included with each death

benefit. (See “Joint life coverages” or “Multiple universal

life coverages.”)


Death benefit option COI options

Level death benefit ART to 85/20 years

Level death benefit ART to 100

Increasing death benefit ART to 85/20 years

Increasing death benefit ART to 100

Increasing death benefit Level to 100

Increasing death benefitThe death benefit includes the face amount (the amount

of insurance coverage selected), plus the fund value, less

any outstanding loans, accrued interest, withdrawals and

premiums due. The NAAR is equal to the face amount

selected at issue and remains constant, subject to tax-

exempt increases. (See “Tax-exempt testing” on page 40

for further details.)

This option is available with all COI options.

The fund value is paid upon death, in addition to the face

amount, unless a different Fund Value Payout Option is

specified. (See “Joint life coverages” or “Multiple universal

life coverages”.)

= NAAR

= Fund value

= Death benefit

Avoiding pitfallsThe death benefit is affected by the performance of the Interest Options. A negative interest rate will reduce the benefits and values under this policy, which include, but are not limited to, the total fund value, the cash surrender value, the net cash surrender value, the maximum benefit amount for a Living Benefit and the death benefit.

Potential marketFund Value Payout Options are available for increasing death benefit policies with multiple universal life coverages and/or joint last-to-die coverages.


[ 6 ]

Level death benefitThis option is available only with ART COI.

This option keeps the face amount at a fixed, level amount

of coverage. Therefore, as the investment portion of the

plan grows, the NAAR decreases, which may result in

decreasing the COI over time.

During the COI period (varies with the COI option)The death benefit is equal to the face amount or the

proportionate fund value, whichever is greater. The

NAAR is equal to the face amount less the fund value.

As the fund value increases, the NAAR decreases, which

reduces the amount of insurance risk for which COI is

charged. The fund value is not guaranteed, and may

increase or decrease, depending on market conditions and

the volatility of the Interest Options chosen. The annual

renewable term (ART) COI rates per $1,000 of NAAR will

increase annually until age 100 (for ART to 100 COI) and to

the later of age 85 or 20 coverage years (for ART to 85/20).

Example: If the amount of insurance is $150,000 and the

allocated amount for that coverage is $25,000, the NAAR

is $125,000. The death benefit paid would be $150,000,

but monthly costs would be based on the guaranteed COI

rate, multiplied by the NAAR of $125,000.

After the COI period (varies with the COI option)The death benefit is equal to the NAAR as of the last day

of the COI period, plus the fund value. The face amount

is reset at the NAAR effective on the last day of the COI

period and fixed until the policy terminates. The death

benefit effectively switches to an increasing death benefit

= NAAR

= Fund value

= Death benefit

Avoiding pitfallsUnder the level death benefit option, after the end of the COI period (i.e., at the later of age 85 or 20 years, for ART to 85/20 years, or after reaching age 100), the death benefit effectively switches to an increasing death benefit option. Thereafter, the death benefit is affected by the performance of the Interest Options. A negative interest rate will reduce the total fund value and the death benefit. If the fund value has exceeded the original face amount, there may be no guaranteed face amount, and the death benefit will be entirely a function of the total fund value. Clients in this situation should consider switching to Fixed-Rate Interest Options and other low-risk options to minimize this risk.

On a multiple life policy with a level death benefit option, the proportion of the fund value paid with each death decreases the fund value. Also, the cost of any other coverages that have not yet reached the end of the COI period will continue to be deducted.

The face amount may increase under the level death benefit option where there are exempt-test face increases (page 41).

Potential marketThis plan design is especially efficient when clients have a level need for insurance protection and an increasing need for wealth accumulation.

In general, the level death benefit also makes insurance more affordable as the client ages, since the NAAR, and in many cases the total COI deducted, decreases as the fund value increases. However, this depends on the performance of the fund value and the applicable COI rates in later years.

Those who wish to minimize the COI in later years and who have decreasing insurance needs may consider the Optimizer feature (page 42).

option. The death benefit, thereafter, is affected by the

performance of the Interest Options. However, the death

benefit cannot fall below the reset NAAR.

Example: If the amount of insurance is $150,000 and the

amount allocated to that coverage is $160,000, the NAAR

would be zero. The death benefit paid would be $160,000.

Monthly COI costs would be zero.


[ 7 ]

Key benefitsWith either universal life plan, clients may combine coverages with ART and coverages with level COI.

Potential marketART to 100 COI will appeal to clients with level or decreasing protection needs and long-term accumulation needs, especially when combined with the Optimizer Option. It provides them with the lowest COI in early policy years, which allows for faster fund accumulation.

ART to 85/20 COI is attractive for individuals who do not want to worry about the high COI charges after age 85 (or 20 coverage years, if later).

Both ART to 100 and ART to 85/20 COI should be used when the funding level is above the minimum premium and when the insurance need is expected to remain level or decrease over time.

Level COI is attractive for individuals who have a permanent insurance protection need.

Avoiding pitfallsWith ART COI, if the policy is in danger of going into shortage within a 12-month period of the anniversary, then:

• If paying by Pre-Authorized Debit (PAD) and paying minimum premiums, Transamerica will automatically increase the PAD amount each year to reflect the increased COI rates for that policy year. This is done to reduce the risk of the policy lapsing. We plan to inform clients about the increased amounts approximately 30 days prior to their policy anniversary. This automatic increase is explained in the PAD agreement in the Application and our current Request for PAD form. Please ensure your client reviews this component of the Application and understands the implications.

• If paying on a direct billing basis, Transamerica will automatically increase the amount displayed on the billing notice that is sent to clients approximately 20 days prior to their policy anniversary.

Cost of Insurance (COI) options

All of Transamerica’s COI options are fully guaranteed.

The following COI options are available:

• Annual renewable term (ART) COI with rates

increasing yearly on an attained-age basis. Rates for

the applicable coverage will be $0 at the end of the

applicable COI period:

– ART to 85/20: The COI period ends at the later of age

85 or 20 coverage years.

– ART to 100: The COI period ends at age 100.

• Level COI:* term to 100, with rates based on issue age.

Level rates are guaranteed for the COI period, to age

100, providing the insurance coverage does not change.

While the COI period ends at age 100, the coverage

remains in force thereafter until death.

Note that the level COI option is only available with an

increasing death benefit option.

Note that joint last-to-die, with deductions to first death,

is only available with an increasing death benefit with

level COI.

* The total face amount for all level COI coverages and Level Cost Riders for a life insured under all EstateAdvAntAge policies may not exceed $500,000.

Projected values on illustrations using ART are very

sensitive to investment returns. It is critical to illustrate at

conservative interest rates.


[ 8 ]

Mixing COI optionsCOI options can be mixed when a policy is issued on

multiple lives. This can be illustrated on LifeView by

beginning with a base universal life coverage and then

adding a new coverage with a different COI option. Note

that level COI is only available with the increasing death

benefit.

Switching COI optionsIn some instances, we allow the COI option for a particular

coverage to be changed in a future year. (Please refer to

“Plan flexibility” in this guide for details.)

The COI factors are guaranteed for the life of the policy

unless there is a material change, such as a change of the

life insured or the total face amount per life insured.

The COI factors are expressed as a rate per $1,000 and

vary by gender, smoking status, preferred underwriting

classification (if applicable), amount of insurance and issue

age (attained age for ART) of the life insured.

The monthly COI is adjusted by any applicable ratings.

Monthly deductions include the monthly COI, rider costs

and the policy fee.

Built-in premium taxWith both WealthAdvAnTAge and EstateAdvAnTAge, the

COI factors include the provincial premium taxes, and we

guarantee that we will not charge your clients an additional

fee to cover any fluctuations in provincial premium tax. This

guarantee is spelled out in the contract and can be found in

Section 7: Monthly Deductions.

COI deductionsThe COI is calculated and deducted on a monthly basis from the tax-deferred fund value, regardless of the mode of premium payment. The monthly COI is calculated as the NAAR multiplied by the applicable annual COI factor (found in the policy data page of the contract), divided by 12. With the level death benefit option, the NAAR fluctuates from month to month; therefore, the COI will fluctuate in tandem.

COI bandingThe COI factor applicable to all coverages for a life insured

on any given month will vary, based on the total face

amount at the beginning of that month for that life insured.

To determine the appropriate COI band for a life insured,

we add the face amount of all coverages (including

TermSelect™ and additional coverage riders) for that life

insured. This “combined banding” approach can result in

a discount at higher face amounts. Please note that this

feature does not apply to joint life coverages.

COI bands

WealthAdvAntAge total face amount

EstateAdvAntAge total face amount

$25,000 to $49,999 juveniles $25,000 to $49,999 all ages

$50,000 to $99,999 juveniles $50,000 to $99,999 all ages

$100,000 to $249,999 $100,000 to $249,999

$250,000 to $499,999 $250,000 to $499,999

$500,000+ $500,000+

(Juveniles = 15 days to 15 years)

Key benefitsCombined banding and built-in premium tax are attractive COI features that are rare in the industry. Most of our competitors charge the provincial premium tax on the full premium, even on the deposits in excess of the COI.

Underwriting programs

(These rules are applicable to all Transamerica life

insurance products.)

Transamerica offers two underwriting programs:

• non-medical

• medical


[ 9 ]

Age Face amount

0–16 <$500,000

17–45 <$250,000

46–55 <$100,000

56+ Not available

Age Face amount

0–16 $500,000+

17–45 $250,000+

46–55 $100,000+

56+ All face amounts

In order to qualify for non-medical underwriting, the proposed

insured must have lived in Canada for at least 12 months.

RequirementsThe current Long Form Application (LP257) is required.

Note that Transamerica reserves the right to request

additional medical requirements for any proposed insured

(such as blood and urine testing, physician’s report,

medical examination, etc.) based on the initial assessment

of the application.

If it is determined by the underwriter that any of the above

four medical requirements are necessary, the applicant will

fall under what we call “medical underwriting.”

MisrepresentationIt’s important to ensure that the questions on the

application and any questionnaires are answered truthfully

and completely. Any misrepresentation can lead to voided

contracts and unpaid claims.

Medical underwriting also applies where the underwriter

assesses the need for further information about a client,

based on the information provided on the Long Form

Application for non-medical underwriting.

MisrepresentationIt’s important to ensure that the questions on the

application and any questionnaires are answered truthfully

and completely. Any misrepresentation can lead to voided

contracts and unpaid claims.

RequirementsThe Long Form (LP257) or Short Form (LP411) Application

can be used for medical underwriting. While the Long

Form Application is not required, it can help provide the

underwriter with more complete knowledge about your

client, which can result in faster underwriting and a better

rate for your client.

Tip: Providing complete details for all questions that are

answered with a “yes,” and ensuring that your application

is in good order, can help the underwriter to quickly make a

decision and avoid processing delays.

Medical underwriting“Medical underwriting” means the proposed insured’s

insurability will be assessed by the underwriter based on

the information provided in a Life Insurance Application,

along with specific medical requirements.

Face amount and age availabilityMedical underwriting applies as follows:

Non-medical underwritingOur non-medical approach to underwriting is designed

for ease – making it easier for your clients to get the

protection they need for themselves and their families,

while making it easier for you to do business. Providing

a better experience for your clients, quicker processing

of applications and speedy delivery of policies, our

non-medical approach makes it easy to recommend

Transamerica Life Canada.

Face amount and age availabilityOur convenient non-medical underwriting applies as follows:


[ 10 ]

Overview of required formsFor more information on requirements for our underwriting programs, refer to Transamerica’s

Underwriting Handbook (LP1393).

Underwriting risk classificationsWe offer five underwriting risk classifications:

We will offer cigar smokers standard non-smoker rates if the cigar use is limited to 12 cigars per year and the urine test

results are negative for cotinine (nicotine). For those qualifying for non-medical underwriting, a urine test is not needed.

Elite non-smokersPreferred non-smokers

Standard non-smokers Preferred smokers Standard smokers

Tobacco use

Have not used cigarettes, cigarillos (little cigars), cigars, pipe, shisha/hookah (water pipe), nicotine patch, Nicorette® chewing gum or any other smoking cessation products, marijuana, hashish, betel nuts, snuff or tobacco in any other form in the last 24 months.

Have not used cigarettes, cigarillos (little cigars), cigars, pipe, shisha/hookah (water pipe), nicotine patch, Nicorette® chewing gum or any other smoking cessation products, marijuana, hashish, betel nuts, snuff or tobacco in any other form in the last 12 months.

Do not use tobacco products.

Smoke more than 12 cigars per year, use a pipe or chewing tobacco, but do not use any other tobacco products.

Are users of tobacco products.

HealthExcellent medical and non-medical history.

Good medical and non-medical history.

Average medical and non-medical history.

Good medical and non-medical history.

Average medical and non-medical history.

LifestyleStatistically “excellent risks.”

Statistically “good risks.”

Statistically “average” risks.

Statistically “good risks.”

Statistically “average” risks.

Underwriting program Application required Additional requirements

Non-medical

A current Long Form Application (LP257) must be completed.*

Be sure to provide complete details on the application, particularly for any “yes” answers.

Include a cover letter or use the remarks section if you need more room.

Medical

Current Short Form Application (LP411) can be used.*

The Long Form Application (LP257) may also be used, and can help to provide more details to the underwriter, which can result in speedier processing of your application. It could help you manage your client’s expectations with regards to the risk classification the underwriter applies.

Refer to the Underwriting Requirements Chart (LP501).*

* To determine the most current edition of our applications, visit Transamerica’s website at www.transamerica.ca or click on Marketing Materials/Forms and Applications in our LifeView illustration software.

® NICORETTE is a registered trademark of the GlaxoSmithKline Group of Companies.


[ 11 ]

Preferred and elite underwriting risk classesPreferred underwriting is automatically applied when the underwriting amount* for a life insured is $250,000 and greater

and the insured is 16 years of age or older.

For preferred underwriting, we consider facts that go beyond the gender and smoking habits of your clients. We look

at other health-related factors, such as physical build, lifestyles and personal and family health history, to consider their

eligibility for an elite, preferred or standard classification. If your clients have a longer life expectancy, based on these

factors, our preferred underwriting program can substantially reduce their life insurance premiums.

Summary of underwriting program and applicable risk classification by age and face amount

Age Face amount Applicable underwriting program Applicable risk classifications

0–16<$500,000 Non-medical

Standard non-smoker$500,000+ Medical

17–45

<$250,000 Non-medicalStandard non-smoker

Standard smoker

$250,000+ Medical

Elite non-smoker

Preferred non-smoker

Standard non-smoker

Preferred smoker

Standard smoker

46–55

<$100,000 Non-medical Standard non-smoker

Standard smoker$100,000–$249,999 Medical

$250,000+ Medical

Elite non-smoker


Standard non-smoker

Preferred smoker

Standard smoker

56+

<$250,000

Medical

Standard non-smoker

Standard smoker

$250,000+

Elite non-smoker


Standard non-smoker

Preferred smoker

Standard smoker

* The underwriting requirements and amount are based on the total amount of life insurance for a particular life insured, including single life and joint life coverages and riders (within 6 months).


[ 12 ]

INSURED 1 INSURED 2

Coverage 1

Single life universal life for $200,000

Coverage 2

Single life TermSelect

$70,000

Coverage 3Single life

universal life for $180,000

Insured 2 is eligible for a preferred or elite underwriting risk classification, because the total amount of life insurance ($70,000 + $180,000) is $250,000, and therefore qualifies for preferred or elite.

Insured 1 is not eligible for a preferred or elite underwriting risk classification, as the total amount of life insurance is $200,000, and preferred and elite underwriting risk classification begin at $250,000 and greater.

Underwriting requirementThe underwriting requirement is based on the total amount

of life insurance for a particular life insured on one policy,

including single life and joint life coverages, as well as

riders (Level Cost and TermSelect Riders).

Example

Underwriting materialsThe following is a list of underwriting materials that can be

ordered through our icanorder website. Some materials

are only available in PDF format, and are available online

through our Transamerica.ca website or through our

illustration software, LifeView.

Avoiding pitfallsIn this example, if Insured 2 cancelled the TermSelect rider, this would drop the sum insured below the $250,000 amount, and thus the preferred rate classification for the remaining coverage (coverage 3) would no longer apply, and Insured 2 would be paying non-preferred rates from then on.

Avoiding pitfallsAs determining the appropriate class can only be done after all evidence has been submitted and assessed, it is recommended you use care when speaking to your clients about their risk classification, so as best to manage your client’s expectations and to avoid potential disappointments. While it is all right to let them know there’s a possibility that they may qualify for a preferred or elite underwriting risk classification – if you indeed think that they will be eligible – it is still best to provide quotes for only the standard classes. This helps prevent the client from being disappointed if the premium quoted later is higher, because they did not qualify for the better risk classification.

Form numberAvailable for order

or through Transamerica.ca

Long Form Life Application

LP257 Order

Supplement to the Life Insurance Application – also automatically populated in LifeView with illustration.

LP343Website

(PDF only)

Underwriting Age and Amount Requirements Chart

LP501Website

(PDF only)

Underwriting Handbook LP1393 Order

RatingsWhat is a rating?Certain factors such as our gender, age, family history,

current conditions, lifestyle choices and whether or not we

smoke can impact when we are likely to die. Depending

on these factors, one individual may have a greater risk of

dying earlier than another. If there is an increased risk of

an individual dying earlier than normal, then the individual’s

mortality is also considered to be higher than normal. To

offset that risk, an individual who presents a greater than

average risk with regards to mortality, may be charged a

higher premium rate. In the insurance industry, individuals

with a higher mortality are said to have Extra Mortality.


[ 13 ]

The increased risk, and thus the extra premium charged,

of an individual is quantified using one of two methods:

• Extra percentage tables; and

• Permanent and temporary flat extra premiums

Extra percentage tablesWhen there are health issues, for example, elevated

blood pressure, the extra percentage tables are used.

The increased risk or Extra Mortality, of an individual is

quantified as a percentage where 100% represents the

normally expected health risk (mortality). This percentage

is then applied to the standard premium or cost of

insurance.

As an example, consider two individuals, Anne and Sally.

Both are female, both age 35 and both are non-smokers.

However, Anne has a health condition, which increases

her risk of dying sooner compared to Sally, who is healthy.

Thus, Anne would receive a rating for elevated mortality.

Say that Anne’s health condition has a rating of 50%, this

would mean Anne’s insurance policy would carry a rating

of 150% (100% Normal Mortality + 50% Extra Mortality).

If Anne’s health condition improves over time, the rating

may be reduced or removed if she applies to have it

reviewed and if the underwriting is favourable with

regard to the entire medical history. An application for a

rating review can be made at least two years after the

rating was applied.

In some cases, when the risk is particularly high (typically

higher than 400%), an insurance company may not be

prepared to assume the risk and the proposed insured

may be declined.

Permanent and temporary flat extra premiumsPermanent

This approach calls for a fixed extra premium per

thousand dollars of sum insured/face amount over and

above the standard premium charge. The additional

mortality risk is likely to be present over a certain

period of time.

For example, Bob has a history of reckless driving and

has received five speeding tickets over the last two years.

Because those who drive recklessly are more likely to die

sooner than those who don’t, Bob will receive a rating.

If Bob changes his driving habits and no longer speeds,

he may apply after two years to have the rating removed

or decreased.

Some avocations such as scuba diving or mountain

climbing could draw an extra premium for the life of the

policy or until the lifestyle of the insured has changed and

an application is made to have it removed.

Temporary

Similar to permanent, this approach also calls for a fixed

extra premium per thousand dollars of sum insured/face

amount over and above the standard premium charge.

However, unlike a permanent flat extra a temporary flat

extra is on a temporary basis or a designated period of

time. The extra premium may only be charged for a fixed

number of years.

For example, Gary is a hobby pilot and does not have

enough experience time according to his record. In two

years, he will have achieved his required number of

experience hours. So, Gary receives a temporary rating for

those two years, which will drop off automatically without

the need for application or review.

Reconsideration of ratings and declinesIf your client receives a rating, he or she may be eligible for

future reconsideration of that rating. Likewise, if your client

has been declined, there may be circumstances under

which we would review that decision. Reconsideration will

only be possible if the overall medical history and lifestyle

has improved.


[ 14 ]

Policies with multiple universal life coverages

Multiple universal life coveragesWith WealthAdvAnTAge and EstateAdvAnTAge, more than one

universal life coverage can be included under the same

policy without any additional policy fee.

Each coverage must satisfy the minimum and maximum

face amount requirements. (See “Coverage and rider

issue ages and amounts” on page 4.)

The main difference between multiple universal life

coverages and a Level Cost Rider (see “Riders” on

page 24 for more information) is that when calculating

the death benefit or NAAR, no fund value is attributed

to the face amount payable for the Level Cost Rider.

As well, no surrender charges are applicable for additional

coverage. Since there are no surrender charges associated

with riders, the maximum tax-exempt room is lower than

when using UL coverages.

Within the universal life contracts, a “primary life insured”

is someone who is insured under a universal life coverage.

There may be several “primary life insureds” on a policy

having multiple universal life coverages.

In general, upon the death of any life insured, his or her

death benefit will be paid to the beneficiary specified

for that coverage, and the policy will continue with the

remaining lives insured, provided at least one primary life

insured is surviving.

Under the level death benefit option, the fund value that is

attributed to each coverage in order to calculate the NAAR

and the associated COI is determined proportionately,

based on the face amount for each coverage.

The policy matures when the last universal life coverage

terminates.


Good to knowGenerally percentage and permanent extra premiums can only be reviewed after two years and new medical evidence will be required. The change of the rating is subject to the new evidence received and the assessment by the underwriter at that time.

Good to knowFor joint life policies, for the rating of any of the lives to be reviewed, new medical evidence is required on all lives insured. The rating reconsideration may be declined if any of the lives insured are no longer in the same risk class as when the policy was originally issued.

Good to knowFor the review of certain lifestyle ratings, such as those related to an avocation, we will request only the appropriate questionnaires and will not require medical requirements or information. For other ratings, however, we will complete a full review, which can include medical, financial, travelling and lifestyle underwriting.

Reconsideration of medical ratings is not always possible.

Some conditions are unlikely to improve over time. For

example, consider Type 1 diabetes (insulin dependent).

The longer the client has Type 1 diabetes, the greater the

risk of complications and thus the greater the mortality.

As such, Type 1 diabetic ratings are unlikely to be eligible

for reduction in subsequent years.

Knowing that reconsiderations may be a possibility will

help you deliver the rated policy to your client. It will also

provide you with a basis to follow up with your client in

the future with the chance to review the rating or to turn

a declined individual into a client (insured).


[ 15 ]

Base universal life coverageThere are certain privileges attributed to the base universal

life coverage. For example, on a multiple life policy, the

Optimizer Option will reduce the face amount for the base

universal life coverage only. As well, some riders and

optional benefits are only available with the base universal

life coverage, such as the Children’s Insurance Rider. The

base universal life coverage is usually indicated as “Life 1”

on the life insurance application or “Base Coverage” on the

LifeView illustration software.

Key benefits• Only one policy fee applies.

• The investment component is conveniently administered through centralized policy Interest Options.

• Premium billing and policy administration are applied to the entire policy, rather than to each life insured.

• Up to 15 coverages (any combination of base coverages and riders) can be included under one policy, including the support of up to five lives on joint first-to-die coverages.

• The policyowner can assign separate beneficiaries for each coverage under the policy.

• If your clients select the increasing death benefit option, they may have either ART or level COI options for different lives.

• Any coverage can be severed from the original policy and continued under a different policy, at any time. (See “Severance Option.”) A policy fee will be added to a severed coverage under its own policy.

• A life insured for a specific coverage can be changed (See “Change of Primary Life Insured Option.”)

Potential marketMultiple life coverages are attractive to both businesses (corporations and partnerships) and families, because they offer great flexibility, without additional policy fees.

Multiple life special optionsFund Value Payout OptionsUnless a different Fund Value Payout Option is specified,

the death benefit will include the applicable proportionate

fund value, based on the total face amount for the life

insured. Proportionate fund value payout is specified in

the contract and does not require a separate contract

endorsement.

Alternate Fund Value Payout Options are available at time of

issue with an increasing death benefit option. Transamerica

offers Fund Value Payout Options for all lives who are

issued without a rating or are rated up to a maximum of

300%. The Fund Value Payout Options must be illustrated

with LifeView and specified on the Supplement to the Life

Insurance Application. These options are added to the

policy as contract endorsements and will be specified on

the data page and policy statement.

Depending on the option selected, in addition to the face

amount for each coverage, the death benefit will be as

follows:

• Proportionate: The proportionate fund value is payable

upon each death (default).

• Each death: The total fund value, less three monthly

deductions, is payable upon each death (minimum

$500 payout).

• Last death: The total fund value is payable at last

death only.


[ 16 ]

Insured 1 Insured 2 Insured 3

Face amount $200,000 Face amount $100,000 Face amount $100,000

Total fund value = $80,000 at date of deathMonthly deduction = $1,000

Example of how Fund Value Payout Options work:

Example of proportionate fund value payout


Proportionate fund value $40,000 Proportionate fund value $20,000 Proportionate fund value $20,000

If Insured 1 dies first, the death benefit = $240,000



Each death


Death benefit = face amount + total fund value – 3 monthly deductions




Last death



If Insured 2 dies second, the death benefit = $100,000

If Insured 3 dies last, the death benefit = $100,000 + fund value


[ 17 ]

Multiple extras or table ratingsFund Value Payout Options are available for cases rated

with a total mortality equal to 300% or less.

Severance OptionThe Severance Option is a provision within the base

universal life contracts that allows universal life coverages

to be severed from the original policy and continued under

another policy.

How does it work?Over time, changes in circumstances may lead the

owners of a multiple life policy to re-evaluate their needs.

The Severance Option allows the policyowners to sever

a coverage from the multiple life policy and maintain that

coverage independently, and, if applicable, to keep the

remaining coverages together on the multiple life policy.

Change of Primary Life Insured OptionThe Change of Primary Life Insured Option is a provision

within the base universal life contracts that allows an

owner to change one primary life insured for another

primary life insured. The new person to be insured, who

must be less than 70 years of age, is fully underwritten,

and the COI will be payable based on the current age of

the newly added life insured. Currently, an administrative

fee of $150 is charged for this service.

A severed coverage is a continuation of the original

coverage and will include the same coverage date, face

amount, rates, surrender charge schedule, owner and

proportionate fund value. The funds that are transferred

to a severed coverage do not incur surrender charges and

are not considered taxable, providing that ownership of the

coverage has not changed. Currently, no administrative fee

is charged for this service; however, Transamerica reserves

the right to charge a fee.

Life 2 Life 3 Life 4Life 1 –

Primary insured

Life 1:1. Wants to leave

the policy.2. Passes away.

Life 2, 3 and 4 may:1. Apply for separate single

life policies.2. Stay together on a

multiple life policy.

Key benefitsUseful for corporate-owned policies where an employee has left the company. If ownership for the severed coverage is changed to the insured, this may be considered to be a taxable disposition.

Useful for families that might want to sever coverages due to a dissolution of marriage, or for children who have become adults and wish to have separate insurance coverage.

Key benefitsUseful for business purposes when one employee is leaving the company and the business is insuring a new employee. Useful in situations involving a dissolution of marriage.

Avoiding pitfallsAlthough ownership can be changed at any point after the coverage is severed, the change may be deemed a taxable disposition. Under spousal rollover rules, a taxable disposition may not take place if ownership changes to spouse, child or grandchild.


[ 18 ]

Key benefitsOn a joint last-to-die basis, there is usually a lower COI, compared with single life coverage on either of the individuals.

On a joint first-to-die basis, there is usually a lower COI, compared to the total cost of separate coverages on each life (e.g., one joint face amount of $500,000, versus having two separate coverages with face amounts of $500,000 each). For example, say a husband and wife ages 35 and 30, respectively, who are both non-smokers, require $500,000 of level life insurance. The cost for separate coverages is $2,995 and $1,950; if they purchase a joint-first-to-die universal life plan, the cost would be $3,875. These costs do no reflect the policy fee.

On each joint coverage, up to five lives can be supported.

Potential marketTraditionally, joint life coverages have been used in family situations: joint first-to-die is used for income protection needs, and joint last-to-die is used for estate planning needs.

There is an increasing trend toward using joint life coverage to insure business interests. For example, joint first-to-die can be used to fund a buy-sell agreement, or for key person insurance.

Joint life coverages

Transamerica’s universal life contracts can also be issued

with joint first-to-die or joint last-to-die coverages. Joint

life coverages are provided as an endorsement to the

contract. The lives insured under a joint life coverage, the

joint insureds, share a single death benefit, and the lives

are combined to produce a Single Equivalent Age (SEA)

and underwriting class for the purpose of calculating the

COI. Joint life coverages may be combined with single

life coverages on one universal life policy. We require

a minimum face amount of $100,000 for each joint life

coverage. In the event of simultaneous deaths, or where

the sequence of deaths cannot be determined, the death

benefit will be divided by the number of the deceased

joint insureds. Joint last-to-die and joint first-to-die

coverages are identified on the contract data page with

the applicable SEA.

Optional benefits, including the Accidental Death and

Dismemberment Rider, the Waiver Rider and the Payor

Waiver Rider, are not available with joint life coverages.

The Children’s Insurance Rider is available on the first

life of a joint first-to-die coverage, providing this coverage

is the base universal life coverage (identified as Life 1 in

the application).

Joint last-to-dieJoint last-to-die universal life coverages are available with

two options for deductions: deductions to first death and

deductions to last death.

The deduction option must be specified on the LifeView

illustration report that is submitted to Transamerica,

as well as on the Supplement to the Life Insurance

Application. This option is added to the policy as a contract

endorsement and is displayed on both the data page and

on the policy statement.

Instead of using different insurance rates for these two

options, different SEA formulas are used. Deductions to

last death is less expensive (based on a younger single

equivalent age) than deductions to first death. The Fund

Value Payout Options and the Single Life Insurance Option

are available with both deductions to first death and

deductions to last death. However, you may not combine

deductions to first death with deductions to last death on

one contract.

Refer to the “Glossary of common terms” for a definition

of SEA.


[ 19 ]

Deductions to first deathThis option is only available on a base universal life joint

last-to-die coverage with level COI and an increasing death

benefit. This option is limited to two lives, with each joint

insured being between 18 and 80 years of age; neither of

the joint insureds may be a substandard risk. When this

option is selected and the first joint insured dies, insurance

charges for this joint last-to-die coverage cease.

Deductions to last deathThis option is available for any joint last-to-die coverage and

includes up to five lives, including substandard lives. When

this option is selected, insurance charges are applicable for

this coverage until the death of the last life insured.

Fund Value Payout Options These options are available only at time of issue, on

policies with one joint last-to-die universal life coverage

with an increasing death benefit option, issued without

ratings, or where a joint life insured is rated up to a

maximum of 300%.

The Fund Value Payout Options must be specified on

the LifeView illustration report that is submitted to

Transamerica and specified on the Supplement to the Life

Insurance Application.

These options are added to the policy as contract

endorsements and will be specified on the data page and

policy statement. If the client does not specify an option,

“last death” will be selected automatically as the default.

Avoiding pitfallsIf the policy only includes one joint last-to-die with deductions to first death, upon the death of a joint insured, no further monthly deductions, including the policy fee, will be deducted. However, the deductions to first death option does not cover insurance costs for multiple life coverages, additional coverage riders and optional benefits that are included on the same policy. It only covers the COI for the applicable joint last-to-die coverage. As well, for policies with multiple universal life coverages, the policy fee will continue as long as deductions are taken from the fund value for the other insurance coverages, optional benefits and riders.

If a potential joint insured is rated during the underwriting process, the joint last to-die with deductions to first death coverage will not be available. However, joint last-to-die with deductions to last death may be issued.

* These administrative rules are non-contractual and are subject to change and other criteria based on administrative guidelines in effect on the date of the request.

Potential marketA joint last-to-die policy with deductions to first death is attractive for estate preservation, covering the COI for the surviving insured, and is often purchased in combination with the “each death” Fund Value Payout Option (see following section).

Switching between joint last-to-die deduction options*

From To Administrative rules

Deductions to first death

Deductions to last death

• No underwriting is required.

• Signed illustration with new SEA based on attained ages.

• Up to five lives.

Deductions to last death

Deductions to first death

• Underwriting is required: Part 2 of Policy Change Application (LP386).

• Signed illustration with new SEA based on attained ages.

• Level COI (only after change).

• Available with two lives.

• No substandard risk.

ART to 100 level COI deductions continue to SEA age 100, and ART 85/20 to the later of age 85 of SEA and 20 years.


[ 20 ]

Single Life Insurance OptionThis option is included in both joint last-to-die

endorsements (deductions to first death and deductions to

last death), and is available at no extra charge. It allows a

joint last-to-die universal life coverage to be split into two

or more separate coverages (depending on the number

of joint lives insured under the original coverage) without

further evidence of insurability. The split coverage is a

continuation of the original coverage. The proportionate

fund value will be transferred to each of the split coverages

without incurring surrender charges. This transfer should

not trigger taxation, providing that ownership has not

changed. (See “Avoiding pitfalls” under “Multiple Life

Special Options: Severance Option” on page 17.)

Multiple extras or table ratingsFund Value Payout Options are available for insureds rated

with a total mortality equal to 300% or less.

Key benefitsWith each Fund Value Payout Option, a different beneficiary can be specified for the fund value and for the face amount. In this way, for example, the children may be designated as beneficiaries for the face amount to offset estate taxes, and the surviving spouse may be designated as beneficiary for the fund value to help cover funeral expenses and other costs. This can be specified in the general comments section of the Life Insurance Application or provided to Transamerica as a letter from the owner.

Example of “each death” Fund Value Payout Option

Insured 1 Insured 2

Face amount: $500,000Monthly deduction = $500Total fund value = $50,000

Total fund value – 3 monthly deductions = $48,500Remaining policy fund value = $1,500

Insured 1 dies

Example of “last death” Fund Value Payout Option

Insured 1 Insured 2

Face amount: $500,000Monthly deduction = $500Total fund value = $50,000

No fund value is paid out. The face amount and total fund value

are paid at last death.

Insured 1 dies

Life 1 $500,000 Life 2 $500,000

Life 1 – Life 2 (up to five)$1,000,000 payable on first death

Divorce or dissolution of a business partnership

Depending on the option selected, in addition to the face

amount for each coverage, the death benefit is as follows:

• last death: the total fund value at last death (default)

• each death: the total fund value, less three monthly

deductions, upon each death (minimum $500 payout),

with the remaining fund value paid at the last death


[ 21 ]

This special option is similar to the Multiple Life Severance

Option and the joint first-to-die Single Life Insurance

Option. The most significant differences are that with the

joint last-to-die version, the split may only occur subject to

the specified contingent events, and the NAAR is allocated

equally among the joint insureds.

Eligibility

• Must be exercised prior to age 70 of the oldest of the

joint life insureds.

• Not available if any of the joint lives are issued as

substandard risks.

• Although no medical evidence of insurability is required,

we reserve the right to financially underwrite any one

of the joint insureds prior to the time the new policy

takes effect. Please refer to a sample contract for the

detailed terms.

Contingent events

• Within 180 days of a Certificate of Divorce being issued

for the joint life insureds.

• On the dissolution of the corporation or partnership,

except in the case of bankruptcy, providing that the

coverage was being used to fund a bona fide purchase

obligation under a written partnership or shareholder’s

agreement, contingent on the death of a joint insured.

Terms of the Single Life Insurance Option

• The current coverage date is used.

• The maximum death benefit is the lesser of the original

face amount divided by the number of joint lives insured

and $1,000,000 (for amounts that exceed $1,000,000,

underwriting is required).

• Original rates apply, based on attained age.

Key benefits

• Provides future flexibility in case of dissolution of

marriage or business dissolution.

Joint first-to-dieSurvivor OptionThis option is included in the joint first-to-die endorsement

and is available at no extra charge. Within 90 days of the death

of the first joint insured, the surviving insured(s) may apply

for single insurance coverage without medical evidence

of insurability. The new insurance coverage is based on

current age and rates and uses the current issue date.

Eligibility for exercising the option

• Not available for substandard risks.

• Not available if any of the surviving joint insureds

have reached age 70.

• Available within 90 days of the date of death of the

first to die.

• Available if the policy was in force and all monthly

deductions have been paid to the date of death of

the first to die.

Terms of new insurance policy

• Same plan of insurance.

• Maximum face amount for each joint insured is the

NAAR applicable for the original coverage immediately

prior to the date of death of the first to die.

• The new policy will take effect on the 90th day following

the date of death of the first to die, providing at least

three monthly deductions have been received.

• An annual policy fee will apply.

Life 1 $1,000,000

Life 3 $1,000,000

Life 4 $1,000,000

Life 1 – Life 2 – Life 3 – Life 4$1,000,000 payable on first death

Death of Life 2


[ 22 ]

Additional death benefitThe additional death benefit is included in the joint first-

to-die endorsement and is available at no extra charge.

It provides for an additional death benefit to be paid,

providing that the second death occurs within 90 days

of the first death and is not the result of suicide or self-

inflicted injury. Single Life Insurance OptionThis option is included in the joint first-to-die endorsement

and is available at no extra charge. This option allows

a joint first-to-die universal life coverage to be split into

two or more policies (depending on the number of joint

lives insured under the original coverage) without medical

evidence of insurability.

The split coverage is a continuation of the original

coverage. The proportionate fund value will be transferred

to the split policy without incurring surrender charges.

This transfer should not trigger taxation, provided that

ownership has not changed. (See “Avoiding pitfalls” under

“Multiple Life Special Options: Severance Option.”)


• Not available if any of the joint lives insured under the

applicable coverage are substandard risks or are 70

years of age or older at issue of the original policy.

• Not available if an application for a new life insurance

policy was made for the surviving insureds.

Subject to the terms of the additional death benefit.

• Not available if either death is the result of suicide or

self-inflicted injury.

• The additional death benefit is equal to the NAAR

applicable for the joint first-to-die coverage at the time

of the first death.

• It excludes any additional benefits or riders that may be

attached to the policy.

• The additional death benefit is payable only once,

regardless of the subsequent deaths of other joint

insureds within the same 90-day period.

• The age of the person insured is based on the date of

the new policy (attained age).

• Same class of risk as original coverage.

• Although no medical evidence of insurability is required,

we reserve the right to financially underwrite any one

of the joint insureds prior to the time the new policy

takes effect.

Potential marketAttractive for the income protection market.

Potential marketBeneficial for the income protection market. Provides an additional source of income to a family should both parents die within a short period of time.

Key benefitsA surviving joint insured can purchase new insurance protection without submitting new medical evidence of insurability.

Life 2 passes away – $300,000 death benefit paid.

Life 1 survives – coverage terminates.

Life 3 passes away within 90 days of Life 2: $300,000 additional death benefit.

Life 1 – Life 2 – Life 3$300,000 payable on first death

90 Days


[ 23 ]

Life 1 – Life 2 (up to five)$1,000,000 payable on first death

Coverage needs change

Life 1 $1,000,000

Life 2 $1,000,000

This special option is similar to the Multiple Life Severance

Option and the joint last-to-die Single Life Insurance

Option. The most significant differences are that with the

joint first-to-die version, the split is at the discretion of the

owner and is not subject to contingent events, and the

NAAR for each split coverage is equal to the NAAR prior

to the split.


• Must be exercised prior to age 70 of the oldest of the

joint life insureds.

• Transamerica reserves the right to require medical

evidence of insurability for joint insureds classified as

substandard at time of issue.

• Transamerica reserves the right to financially underwrite

any of the joint insureds for whom the split coverage is

requested.

Terms of the Single Life Insurance Option

• The current coverage issue date is used.

• The maximum face amount is as follows:

– with a level death benefit, equal to the original face

amount less the proportionate fund value

– with an increasing death benefit, equal to the original

face amount

• Original rates apply, based on attained age.

• An administrative fee may apply.

Please refer to a sample contract for the detailed terms.

Key benefitsProvides future flexibility in case there is a need to split the insurance coverage.

Key benefitsAdaptable to lifecycle needs as income replacement gives way to estate succession or tax liability coverage.

Switching between joint options The switch option allows clients to change from joint

first-to-die to joint last-to-die, should their insurance

needs change. The SEA will be calculated based on the

individual ages and the original issue date of the joint first-

to-die coverage. In other words, the clients will get the

same SEA had they purchased a joint last-to-die coverage

originally. The issue date is preserved when the switch

option is exercised.

From To Administrative rules

Joint first-to-die

Joint last-to-die (deductions to last death only)

• No underwriting required.

• Available any time after 10th policy anniversary.

• Must be exercised prior to policy anniversary nearest the oldest insured’s 70th birthday.

• This feature applies to two lives insured only.

Joint last-to-die

Joint first-to-die

Not available.


[ 24 ]

Key benefitsRiders are conveniently administered through the universal life policy.

We offer “combined banding,” which means that we combine the face amounts of all non-joint insurance coverages and riders on one life to set the rate band for these coverages.

There are no additional policy fees.

Riders can be used to increase the tax-deferral (MTAR) room in the policy, especially in the early years when the base coverage MTAR is growing.

TermSelect riders are convertible, which means that they may be converted to a eligible universal life plan at attained age (and at the then-current rates) at any time up to age 71, without further evidence of insurability.

Avoiding pitfalls• Dropping, severing or converting any rider causes

the tax-deferral MTAR room to drop.

• Special joint life options (such as additional death benefit, Survivor Option, deductions to first death, etc.) are not applicable for the additional coverage or TermSelect riders.

Riders

Your clients may require temporary or long-term additional

insurance protection to cover additional lives or to protect

loan payments, mortgages or university expenses.

Riders may be added at the time of issue or once the

policy is in force. Full underwriting is required, based on

current age and amount.

The two main differences between base coverages and

riders is that:

• No fund value is allocated to the rider.

• Surrender charges are not applicable to riders.

Level Cost Rider The Level Cost Rider is similar to the level COI universal

life coverage, and may be established as either single life

or joint life insurance protection. The advantage of adding

this rider is that it is available with no surrender charges,

for the same cost as level COI coverage. The Level Cost

Rider can only be purchased with a level death benefit

policy and an ART COI base universal life coverage.

By adding the Level Cost Rider to either a WealthAdvAnTAge

or an EstateAdvAnTAge plan, your clients benefit from one

policy fee, combined premium payments and enhanced

tax-deferral opportunities. Since the rider does not share

in the fund value, it is able to coexist with a level death

benefit policy, unlike traditional level COI coverage.

A Level Cost Rider may be severed and maintained as

a stand-alone plan; however, some differences will be

applicable, including surrender charges and policy fees.

termSelect RidersTermSelect Riders provide low-cost term insurance for

10-, 20- and 30-year terms. It should be noted that

mortality costs are deducted monthly, and accordingly,

the costs should be compared to a stand-alone term

product on a monthly PAD basis.

For minimum and maximum issue amounts, refer to

“Coverage and rider issue ages and amounts” on page 4.


[ 25 ]

3. Investment choicesInterest OptionsThe power of universal life lies in its tax-deferred investment growth. Funds invested in Transamerica’s universal

life policies accumulate on a tax-deferred basis within limits set out in the Income Tax Act and its regulations

and form part of the tax-free* death benefit and Living Benefits. One key benefit is that the pre-tax investment

earnings can be used to pay for the COI. Over the long term, tax-deferred funds generally have the advantage of

generating higher net returns than taxable investments with the same risk/return profile.

Once you determine the need for life insurance, you can use LifeView, Transamerica’s illustration software, to

show your clients the benefits of investing in universal life rather than taxable investments.

Your clients may choose any combination of Interest Options:

Daily Interest Option

Fixed-Rate Interest Options

Passive Index Interest Options Managed Index Interest Options

Individual Options Portfolio Options Individual Options Portfolio Options

Treasury Bill (T-Bill) Interest Option

Terms of one, five and 10 years

Currency-exposed total return

• Canadian Equity Total Return

• U.S. Large Cap Total Return

• U.S. New Technologies Total Return

• Japanese Equity Total Return

• European Equity Total Return

• Canadian Bond II

Index Allocation Program (IAP)

• Conservative• Balanced• Growth• Aggressive Growth

imaxxFunds

• imaxx Cdn. Bond• imaxx Cdn. Fixed Pay• imaxx Cdn. Equity Growth• imaxx Global Equity Growth

• imaxx TOP Conservative Portfolio

• imaxx TOP Balanced Portfolio

• imaxx TOP Growth Portfolio

• imaxx TOP Aggressive Growth Portfolio

Currency-neutral

• Can-U.S. Large Cap• Can-U.S. 21st Century• Can-European• Can-Asian

Third-party managed

• Mackenzie Cundill Canadian Balanced

• Fidelity Cdn. Balanced• TD Dividend Growth • CI Signature Select Canadian• Fidelity Canadian Disciplined

Equity®

• CI Cdn. Small/Mid Cap• Mutual Beacon • CI Value Trust Corporate

Class• AGF International Stock Class• Invesco International Growth

Class• Mackenzie Cundill Value• Fidelity NorthStar® • Dynamic Value Fund of

Canada (as of April 23, 2012) • AGF American Growth Class

(as of April 23, 2012)• CI American Value (as of

April 23, 2012)• Dynamic Global Discovery

(as of April 23, 2012)


[ 26 ]

Relative risk ratingRelative risk represents Transamerica Life’s assessment of the potential volatility of the Interest Option selected, relative

to other Interest Options. While higher-risk Interest Options may be more volatile in the short term, they generally offer

the potential for higher returns over the long term.

Relative risk

Low Moderate High Very high

Daily Interest Option

T-Bill Interest Option

Fixed-Rate Interest Options

Terms of one, five and 10 years

Passive Index Interest Options

• Canadian Bond II • Balanced Index (IAP)• Conservative Index

(IAP)

• Canadian Equity Total Return

• European Equity Total Return

• U.S. Large Cap Total Return

• Can-European• Can-U.S. Large Cap• Growth Index (IAP)• Aggressive Growth

Index (IAP)

• U.S. New Technologies Total Return

• Japanese Equity Total Return

• Can-Asian• Can-U.S. 21st Century

Managed Index Interest Options

• imaxx Canadian Bond • imaxx TOP Conservative Portfolio

• imaxx TOP Balanced Portfolio

• Mackenzie Cundill Canadian Balanced Fund

• Fidelity Canadian Balanced Fund

• imaxx Cdn. Fixed Pay• imaxx Cdn. Equity

Growth• imaxx TOP Growth

Portfolio• imaxx TOP Aggressive

Growth Portfolio• Dynamic Value

Fund of Canada (as of April 23, 2012)

• AGF American Growth Class (as of April 23, 2012)

• CI American Value Fund (as of April 23, 2012)

• Dynamic Global Discovery Fund (as of April 23, 2012)

• CI Signature Select Canadian Fund

• TD Dividend Growth Fund

• Fidelity Cdn. Disciplined Equity® Fund

• Mutual Beacon Fund• CI Value Trust Corporate

Class• AGF International Stock

Class• Invesco International

Growth Class• Mackenzie Cundill Value

Fund• Fidelity NorthStar® Fund

• CI Canadian Small/Mid Cap Fund


[ 27 ]

T-Bill Interest Option and Fixed-Rate Interest Options

WealthAdvAnTAge = WAV7, EstateAdvAnTAge with accumulation bonus = EAV7, EstateAdvAnTAge, low-fee = EAN7

Interest Option

Provides interest based on the return of

Guaranteed calculation Guaranteed minimum

WAV7 and EAV7 EAN7 WAV7 and EAV7 EAN7

T-Bill InterestOption

Government of CanadaTreasury Bills

90% of the yield of Government of Canada Treasury Bills with terms to maturity of up to one year, less 2.75% calculated daily.

90% of the yield of Government of Canada Treasury Bills with terms to maturity of up to one year, less 1.50% calculated daily.

0% per annum

In addition to being available as an Interest Option, the T-Bill Interest Option also holds money until the $500 minimum deposit requirement is met for Fixed-Rate Interest Options. The automatic transfer feature can be applied for on the Supplement to the Life Insurance Application or the Allocation form (PS425).

One-, five- and 10-yearFixed-Rate Interest Options

Government of Canada bonds, one-, five- and 10- year terms.

Interest fixed at time of premium payment ; 90% of the yield of a comparable Government of Canada bond, less 2.75%.

Interest fixed at time of premium payment ; 90% of the yield of a comparable Government of Canada bond, less 1.50%.

One 0% per annum 0% per annum

Five0.50% per annum

1.75% per annum

Ten1.50% perannum

2.75% perannum

All Fixed-RateInterest Options

A Market Value Adjustment (MVA) will apply if money is withdrawn from a Fixed-Rate Interest Option prior to the maturity of the term (except MVAs do not apply for monthly deductions (covering the COI and policy fee) and the payment of death benefits).

Minimum deposit requirements:

• T-Bill Interest Option: no minimum

• All Fixed-Rate Interest Options: $500

Potential marketThese Interest Options may suit very risk-averse clients who want secure fund growth.

They can be used for a portion of a client’s portfolio, to balance more aggressive investment options.

The T-Bill Interest Option is ideal when used with the Monthly Deduction Interest Option. (Please refer to page 46.)

Key benefitsTransamerica guarantees the availability of at least one Fixed-Rate Interest Option within each of the universal life contracts with a minimum guarantee of 1.5% for WealthAdvAnTAge and EstateAdvAnTAge with Accumulation Bonus, and 2.75% for EstateAdvAnTAge, low-fee.

Unlike some competitors, Transamerica does not charge an MVA on monthly deductions from our Fixed-Rate Interest Options.


[ 28 ]

Index Interest OptionsTransamerica’s Index Interest Options are index-linked

interest accounts, as opposed to mutual funds, in which

clients own an interest in underlying securities. To qualify

as a tax-exempt insurance policy, the funds in a universal

life policy must form part of Transamerica’s general assets.

Transamerica offers both currency-neutral and currency-

exposed options that link to foreign market indexes, as

well as managed Index Interest Options that link to mutual

funds and portfolios.

Designated index The credited interest rate for each Index Interest Option

is related to the performance of an underlying financial

instrument or index, such as units of a mutual fund or

segregated fund, equity shares, a particular stock, bond

or other financial index, and/or a combination of such

instruments or indices. Each such financial instrument, index

or combination thereof, is referred to as a designated index.

Transamerica reserves the right to substitute one

designated index, or component thereof, for another

designated index with similar investment objectives, and to

adjust the percentage weightings of particular components

of any composite designated index in accordance with

market conditions.

Interest rate calculationThe return on any Index Interest Option is guaranteed to be

100% of the comparative daily increase or decrease of the

corresponding designated index, including any dividends,

adjusted to Canadian dollars (where applicable), less an

Interest Option fee.

To simplify how the Interest Option fee works, we’ve separated the Interest Options into three key categories:

• Passive Index Interest Options (includes Index Allocation Portfolios)

• Passive currency-neutral Index Interest Options

• Managed Index Interest Options

Note that for all Index Interest Options, the Interest Option

fee is deducted on each calendar day.

Passive and managed currency-exposed

Index Interest Options

The Interest Option fee is guaranteed not to change, and

the fee is deducted on each calendar day. The Interest

Option fee for the Index Allocation Portfolios results from

the combination and weightings of each passive Index

Interest Option making up the portfolios.

Passive currency-neutral Index Interest Options

The Interest Option fee is equal to or less than:

• the guaranteed total fee for such Index Interest Option

(see tables), less

• an amount equal to the management fee, not including

taxes, of the corresponding underlying index, as applicable.


Having no discretionary portfolio management, passive

Index Interest Options closely follow the performance of

major stock and bond benchmarks such as the S&P/TSX

60 or the S&P 500. This includes price variations – both

negative and positive – of the component stocks and any

dividends they pay.

Currency-exposed Index Interest Options

Currency-exposed Index Interest Options are subject to

the fluctuations between the currency of the underlying

investment and the Canadian dollar. The daily credited

return is affected by each day’s change in the Canadian

dollar exchange rate. Therefore, while the investment is

held, a declining Canadian dollar enhances returns, and a

rising dollar diminishes returns.

Some clients may have difficulty understanding the

currency-exposed Interest Options available in UL plans. We

have developed a tool to help you explain to your clients that

their returns are affected by the exchange rate between the

Canadian dollar and the currency of the country where the

option’s underlying investments have been made, and that

because of this, exchange rates can significantly increase or

decrease the return of an Interest Option, regardless of the

investments’ return in their native country.*


[ 29 ]

Currency-neutral Index Interest Options

Currency-neutral Index Interest Options use “hedging” strategies to emulate the performance of a foreign index, while

minimizing the effect of fluctuations in the Canadian dollar.

* Go to Transamerica.ca and download “The Informed Consumer, Lisa’s Condo – A lesson in currency exchange.”1 The indexed dividend is an index number that represents the dividend distribution on securities comprising the applicable index, and such number will be obtained from such

internationally recognized quotation service as Transamerica may choose from time to time.2 The applicable exchange rate on any day will be calculated by Transamerica on the basis of the end-of-day value of the Canadian dollar as compared with the relevant foreign currency

as determined by Transamerica. Such end-of-day value of the Canadian dollar will be the rate obtained from such internationally recognized quotation service as Transamerica may choose from time to time.

3 Transamerica’s universal life policies and contracts are not issued, sponsored, endorsed, sold or promoted by Toronto Stock Exchange, Standard & Poor’s (The McGraw-Hill Companies Inc.), The Nasdaq Stock Market, Inc., STOXX Limited (Dow Jones & Company, Inc.), FT-SE International Limited, Nihon Keizai Shimbun, Inc., or Scotia Capital Inc., AGF Funds Inc., Invesco Trimark., Brandes Investments Partners & Co., CI Investments Inc., Fidelity Investments, Franklin Templeton Investments Corp., TD Asset Management Inc. and Mackenzie Financial Corporation. None of such entities or their affiliates makes any representation or warranty, express or implied, whatsoever regarding the advisability of selecting any Interest Option, making any investment or acquiring the policy contract, and none of such entities bears any liability with respect to the policy or contract.


Index Interest Option Designated indexIndexed

dividend1

Foreign currency exchange2

Guaranteed Interest Option fee (annual equivalent)

WAV7 and EAV7 EAN7

Canadian Equity Total Return

S&P/TSX 60 Composite Stock Price Index3 Yes Not applicable

0.00809863%(3.00%)

0.00475316%(1.75%)

U.S. Large Capitalization Total Return

Standard & Poor’s 500 Composite Stock Price Index3

Yes Yes

U.S. New Technologies Total Return

NASDAQ 100 Stock Index3 Yes Yes

European Equity Total Return

75% Dow Jones EURO STOXX 50 Price Index 25% Financial Times Stock Exchange (FTSE) 100 Share Index3

Yes Yes

Japanese Equity Total Return

Nikkei 225 Stock Average3 Yes Yes

Canadian Bond II Scotia Capital Markets Universe Bond Index3 Yes Not applicable

Passive Currency-neutral Index Interest Options

Guaranteed total fee

WAV7 and EAV7 EAN7

Can-U.S. Large Capitalization

Can-Am Fund (Variable Investment Option)

N/A N/A

0.00809863%(3.00%)

0.00475316%(1.75%)

Can-U.S. 21st Century Can-Daq 100 Fund (Variable Investment Option)

N/A N/A

Can-European Can-Euro Fund (Variable Investment Option)

N/A N/A

Can-Asian Can-Asian Fund (Variable Investment Option)

N/A N/A


[ 30 ]

Individual managed Index Interest Options

Managed Index Interest Options link returns to the performance of AEGON Fund Management’s imaxxFunds, imaxxTOP

Portfolios and sixteen third-party mutual funds, including funds from AGF Funds, Invesco Trimark, CI Investments,

Dynamic Funds®, Franklin Templeton Investments, Fidelity, Mackenzie Investments and TD Asset Management Inc.

These Interest Options are not mutual funds; they simply “index” the performance of certain mutual funds. Clients

are not purchasing units in the mutual funds, but are receiving an interest rate that is credited each business day and

is guaranteed to be 100% of the funds’ retail class return, net of the retail class mutual fund management fee, less an

Interest Option fee (if applicable).

imaxxFunds

imaxx mutual funds feature outstanding Canadian and international investment managers with proven performance track

records. Interest Options based on imaxxFunds are a popular choice and provide a strong platform for meeting your clients’

investment objectives. imaxx™ Index Interest Options are held within the tax-exempt universal life plan and should not be

confused with imaxxFunds themselves, which are purchased separately through AEGON Fund Management.

® Dynamic Funds is a registered trademark of its owner, used under license, and a division of GCIC Ltd.

imaxx Funds Managed Index Interest Options

Index Interest Option Designated index


WAV7 and EAV7 EAN7

imaxx Canadian Bond imaxx Canadian Bond Fund

0.00340349%(1.25%)

0%imaxx Canadian Fixed Pay imaxx Canadian Fixed Pay Fund

imaxx Canadian Equity Growth imaxx Canadian Equity Growth Fund

imaxx Global Equity Growth imaxx Global Equity Growth Fund


[ 31 ]

Third-party managed Index Interest Options

The addition of twelve managed Index Interest Options rounds out the investment lineup for Transamerica’s universal

life plans. These options were selected for their historically consistent, above-average performance and proven money

managers. They were chosen using a process that is similar to the one used for selecting the underlying funds for TOPs.

These third-party managed Index Interest Options are a great complement to the management styles and asset classes

offered through imaxxFunds.

Third-party managed Index Interest Options

Index Interest Option Designated index


WAV7 and EAV7 EAN7

Mackenzie Cundill Canadian BalancedMackenzie Cundill Canadian Balanced Fund

0.00407916%(1.50%)

0%

Fidelity Canadian Balanced Fidelity Canadian Balanced Fund

TD Dividend Growth TD Dividend Growth Fund

CI Signature Select Canadian CI Signature Select Canadian Fund

Fidelity Canadian Disciplined Equity® Fidelity Canadian Disciplined Equity® Fund

CI Canadian Small/Mid Cap CI Canadian Small/Mid Cap Fund

Mutual Beacon Mutual Beacon Fund

CI Value Trust Corporate Class CI Value Trust Corporate Class Fund

AGF International Stock Class AGF International Stock Class Fund

Invesco International Growth Class Invesco International Growth Class Fund

Mackenzie Cundill Value Mackenzie Cundill Value Fund

Fidelity NorthStar® Fidelity NorthStar® Fund

Dynamic Value Fund of Canada Dynamic Value Fund of Canada

0.00340349%(1.25%)

0%AGF American Growth Class AGF American Growth Class

CI American Value CI American Value Fund

Dynamic Global Discovery Dynamic Global Discovery Fund

® Disciplined Equity and NorthStar are registered trademarks of FMR Corp.


[ 32 ]

Avoiding pitfallsIndex Interest Options are not advisable if your client is making only minimum or near-minimum deposits.

It is a good planning technique to test projections made using LifeView illustration software under various interest scenarios to understand the potential for variability.

CLHIA guidelines require that an alternate rate of return also be illustrated to demonstrate interest sensitivity; LifeView illustration software provides this, for your convenience.

While the potential long-term rewards of our Index Interest Options may be greater than for our Fixed-Rate Interest Options, the risk associated with the Index Interest Options is also higher. A negative interest rate will reduce the benefits and values under this policy, including, but not limited to, the total fund value, the net cash surrender value and the death benefit.

Key benefitsThe Interest Option fee is guaranteed not to change for each managed Index Interest Option and passive Index Interest Option. Note that other competitors may not guarantee the daily fee and may only state an approximate annual fee.

All Interest Options offer competitive Interest Option fees.

No minimum investment in any Index Interest Option is required to gain access to the expertise of imaxxFunds managers.

The Investment Income Tax (IIT) is built in to our fees, and we will not deduct any amount above the guaranteed total fee or the Interest Option fee.

• imaxx TOP Portfolio Index Interest Options combine

the skills of a variety of leading mutual fund managers to

produce superior “managed” investment returns.

The two programs feature options with specific risk/return

profiles that make it easy to strike the right balance.

Investor Profile QuestionnaireThe Investor Profile Questionnaire (built into LifeView or

available for ordering through informco, our distribution

warehouse, Form LP1402) helps you identify your clients’

investment risk tolerance so that you can advise them of

the appropriate investment mix. We encourage you to use

this questionnaire to structure a dialogue about investment

strategies with your clients, even if your client chooses his

or her own investment mix.

For a comprehensive investment solution, you can

recommend one or more asset allocation portfolios based

on the IAP and imaxx TOP Portfolio Index Interest Options.

The Investor Profile Questionnaire may suggest that your

client invest in the T-Bill Interest Option or Fixed-Rate

Interest Options, where there is no risk of negative returns.

Asset allocation solutionsTransamerica offers two powerful ways to offer an asset

allocation strategy based on your clients’ risk tolerance and

investment goals:

• Index Allocation Interest Options combine major

stock and bond market indexes to capture investment

returns passively.

Investor profile Passive option Managed option

Index Allocation TOP Portfolio

Very conservative

T-Bill Interest Option or Fixed-Rate Options

Not applicable

Conservative Conservativeimaxx TOP Conservative Portfolio

Moderate Balancedimaxx TOP Balanced Portfolio

Aggressive Growthimaxx TOP Growth Portfolio

Very Aggressive

Aggressive Growthimaxx TOP Aggressive Growth Portfolio


[ 33 ]

Index Allocation Interest Options (passive)The mixes within each Index Allocation Interest Option cover a broad range of world indexes, and the daily return of

each Interest Option is the daily weighted return of the specified mix of underlying passive Index Interest Options. This

method of calculating the interest rate ensures that your clients’ investment mix is rebalanced daily. The Interest Option

fee is a weighted average of the Interest Option fees of the underlying Index Interest Options.

AEGON Capital Management’s experienced team of investment management professionals will be monitoring the Index

Allocation Interest Option mixes regularly to ensure that market conditions are reflected. As part of this service, we

reserve the right to substitute, add or delete any underlying Interest Option. This service is available at no additional fee,

and there is no minimum balance required.

If your clients’ financial goals or risk tolerance levels change, they may switch to another Index Allocation Interest

Option at any time.

The following table provides the current weightings for each Index Allocation Interest Option.

Index Interest Option Conservative Balanced Growth Aggressive Growth

T-Bill Interest Option 10% 5% 0% 0%

Canadian Bond Index Interest Option II 50% 35% 20% 0%

Canadian Equity Total Return 20% 25% 30% 35%

U.S. Large Capitalization Total Return 15% 25% 30% 35%

U.S. New Technologies Total Return 0% 0% 0% 5%

European Equity Total Return 5% 10% 15% 20%

Japanese Equity Total Return 0% 0% 5% 5%

Total 100% 100% 100% 100%

Index Interest Option Designated index Indexed dividend1

Foreign currency exchange2


WAV7 and EAV7 EAN7

Conservative

See above chart for the index weightings.

Refer to applicableunderlying index (noted on page 28 under passive Index Interest Options.)

Refer to applicableunderlying index (noted on page 28 under passive Index Interest Options.)

0.00783249%(2.90%)

0.00468584%(1.73%)

Balanced0.00796559%

(2.95%)0.00471950%

(1.74%)

Growth0.00809863%

(3.00%)0.00475316%

(1.75%)

Aggressive growth0.00809863%

(3.00%)0.00475316%

(1.75%)


[ 34 ]

Key benefits• Encourages the diversification of investments to help minimize volatility.

• Automatic daily rebalancing of investment mix.

• Guaranteed Interest Option fees.

• The flexibility to choose passive and/or professionally managed Interest Options.

Managed Portfolio Options

imaxx TOP Portfolio Index Interest OptionsRanging from conservative to aggressive growth, imaxx TOP Portfolios are ideal for investors seeking a comprehensive

investment solution. imaxx TOP Portfolio Index Interest Options are held within the tax-exempt universal life plan, and

should not be confused with the imaxx TOP Portfolios offered through AEGON Fund Management. These Interest

Options are not mutual funds; they simply “index” the performance of certain imaxx TOP Portfolios.

AEGON Fund Management Inc. was quantitatively assisted

in the process of designing the asset mix and selecting

the underlying mutual funds for imaxx TOP Portfolios

by Mercer Investment Consulting. All final investment

decisions were made by AEGON Fund Management Inc.

imaxx TOP portfolios comprise mutual funds from leading

mutual fund companies such as AGF, Invesco Trimark,

Brandes Investments Partners, CI Investments, Fidelity

Investments, Franklin Templeton Investments, Mackenzie

Investments and TD Asset Management Inc.

Each imaxx TOP Portfolio:

• employs a “fund of funds” approach and is

optimized for a specific risk profile

Index Interest Option Designated index WAV and EAV EAN

imaxx TOP Conservative Portfolio imaxx TOP Conservative Portfolio*

0.00340349%(1.25%)

0%imaxx TOP Balanced Portfolio imaxx TOP Balanced Portfolio*

imaxx TOP Growth Portfolio imaxx TOP Growth Portfolio*

imaxx TOP Aggressive Growth Portfolio imaxx TOP Aggressive Growth Portfolio*

• allocates assets among equity and/or fixed-income

mutual funds managed by some of Canada’s most

proven money managers

• is continuously monitored and rebalanced to ensure that

it stays within its target fund mix

Remember, any portion of the fund value held in the index

allocation or imaxx TOP Portfolio Interest Options is not

guaranteed and fluctuates with the performance of the

underlying options.

* The asset allocations and/or sector weightings set out herein are target estimates only, provided for general information and illustrative purposes only. The underlying mutual fund used for the Index Interest Option is not necessarily required to have identical allocations.


[ 35 ]

Transamerica Interest Option fact sheetsWe are committed to keeping you up to date on the

performance of our Interest Options. Our Interest

Option fact sheets contain information that will assist

you in selecting and monitoring Interest Options that

are consistent with your clients’ evolving financial goals.

The fact pages include historical rates of return, top 10

holdings, sector weightings, fees and relative risk rankings.

The Interest Option fact sheets are available on

our website.

Rates of returnRates of return for our universal life Interest

Options are displayed on the Transamerica website

(www.transamerica.ca). Rates of return are measures

of historical performance at a specific point in time.

They are not indicative of future interest returns.

Interest Option transactions

Allocation instructionsInterest Option allocation instructions can be modified at

any time to take full advantage of market conditions and to

meet your clients’ financial objectives.

Interest Option transfersYour clients can request fund transfers between Interest

Options at any time. Transfers can also be made to and

from the Fixed-Rate Interest Options (although an MVA

will apply if the transfer is made before the applicable

terms mature). Contractually, your clients may make four

transfers per policy year within their universal life policies

without incurring transfer fees. We reserve the right to

charge a fee if more than four transfers are made per

policy year.

For your convenience, we’ve separated the allocation

form from our Fund Code Chart (LP946), resulting in two

cleaner, simpler forms. Please refer to the Allocation Form

(PS425) for Interest Option transfers.


[ 36 ]

4. Client bonusesWealthAdvAnTAge and EstateAdvAnTAge offer client bonuses designed to enhance their effectiveness in meeting

the needs of their target markets. WealthAdvAnTAge has a Performance Bonus, while EstateAdvAnTAge includes an

Accumulation Bonus and, for cost-sensitive clients, offers a low-fee option without a bonus.

Transamerica offers guaranteed, unconditional bonuses that do not vary with the type of investment option

selected. This means that every single client receives a bonus (if the bonus option is chosen).

Meeting market needs with client bonuses


Performance Bonus Accumulation Bonus option Low-fee option

Market and policyowner behaviour

• Focus on growth and tax-deferred accumulation of funds.

• Higher investment risk tolerance; more likely to invest in a diversified portfolio more heavily weighted in equities.

• Focus on insurance protection and guarantees.

• More conservative; likely to invest in portfolios more heavily weighted in lower-returning fixed-income investments.

• Note: A choice between the Accumulation Bonus and the low-fee option must be made at issue.

Bonus design • Fund-based bonus linked to policy rate of return with higher accumulation potential. Performance Bonus most beneficial when funds perform well.

• Guaranteed minimums ensure a competitive bonus is always credited.

• Fixed percentages that do not vary based on fund performance.

• No bonus.

Different bonuses for different needs

WealthAdvAntAge Performance Bonus

Higher potential, with guaranteesMany products available in the market today base their

bonuses on interest earned, without a minimum guarantee.

This means your clients may not get a bonus in the years

they need it most – when rates of return are low. The

variable WealthAdvAnTAge Performance Bonus offers the

higher accumulation potential of a variable bonus, but with

a strong guaranteed minimum.

EstateAdvAntAge Accumulation Bonus option

Predictable, fixed-rate bonus paymentsPredictable, stable, easy-to-understand bonuses can

be important to the income replacement and estate

preservation markets. The EstateAdvAnTAge Accumulation

Bonus rate is level and fixed for the life of the policy;

accordingly, this bonus does not have the same upside

(or downside) potential as the WealthAdvAnTAge

Performance Bonus.


[ 37 ]

EstateAdvAntAge low-fee optionClients at the estate-planning stage of life may not have enough time to benefit from long-term UL bonuses. Other clients

may want higher cash values in the earlier years of the policy and more liquidity. Still others may want to take advantage

of managed Interest Options and minimize the cost of active money management.

We created a low-fee EstateAdvAnTAge plan to meet these needs – and more. Compared with the WealthAdvAnTAge

Accumulation Bonus, clients receive more value immediately, such as lower guaranteed Interest Option fees (at least

1.25% lower) and higher interest rates (at least 0.50%) for the Fixed-Rate Interest Options.

Comparing the bonus rates for all three bonuses

The chart below compares the WealthAdvAnTAge Performance Bonus to the EstateAdvAnTAge Accumulation Bonus.

3.00%

2.50%

2.00%

1.50%

1.00%

0.50%

0.00%

WealthAdvAntAge Minimum WealthAdvAntAge Maximum

EstateAdvAntAge Accumulation Bonus

POLICy yEARS

BO

NU

S %

2 6 10 14 18 22 26 30 34 38 42 46 50 54 58


[ 38 ]

A closer look at the universal life client bonuses

Common features of all bonuses

• Guaranteed.

• Unconditional.

• Do not vary based on investment option selected.

• Bonus percentages are applied to the previous year’s

average monthly fund value (excluding policy loans –

i.e., the Security Account – and the Side Account).

• Payable at the beginning of the policy year.

• Credited proportionately to each Interest Option in

accordance with most recent allocation instructions

(an advantage in contrast to some competitors who

credit to a specified account).


Performance Bonus Accumulation Bonus

years credited • Payable at the beginning of each policy year commencing year two.

• Payable at the beginning of each policy year commencing year two.

Features • Bonus percentage is based on policy’s rate of return.

• Guaranteed maximum and minimum bonus interest percentages increase over time and can substantially improve long-term policy performance.

• Bonus percentage is fixed for life of policy.

Calculation A = B x C

Where:

A is the bonus amount in respect of a policy year.

B is the sum of the fund value (net of policy loans and Side Account) on each monthly date in the previous policy year, divided by 12.

C is a percentage determined according to the second column of the following table, but in no event will the percentage be greater than the maximum specified or less than the guaranteed minimum as follows:

A = B x C

Where:

A is the bonus amount in respect of a policy year.

B is the sum of the fund value (net of policy loans and Side Account) on each monthly date in the previous policy year, divided by 12.

C = 1.25%.

Policy years PercentageGuaranteed

minimum Maximum

2–16 17.75% x D 0.75% 1.50%

17–26 23.25% x D 1.00% 1.85%

27 and thereafter

30.00% x D 1.00% 2.60%

D is the policy rate of return for the previous policy year, calculated using the Modified Dietz Method


[ 39 ]

WealthAdvAntAge Performance Bonus example

Policy rate of return

0% 6% 12%

Average fund value during year 16

$30,000 $30,000 $30,000

year 17 bonus % 23.25% 23.25% 23.25%

Multiplied by the factor 0.000% 1.395% 2.790%

Actual bonus % applied1.00%

(minimum)1.395%

1.85% maximum)

Let’s look further at the example using a 0% policy return:

WealthAdvAntAge Performance Bonus exampleAverage fund value during year 16: $30,000

Policy rate of return: 0%

Year 17 bonus %: 23.25%

Bonus (A): Average fund value (B) x [year 17 factor x policy rate of return (D)]

= Factor x policy rate of return (D)

= $30,000 (B) x factor x policy rate of return (D)

= $30,000 x [23.25% x 0%]

= $30,000 x 1.000% (C)

= $300.00

Note: Year 17 factor x policy rate of return (C) = 0.000%, lower than the minimum 1.0%; therefore, the guaranteed minimum of 1.0% was used for (C) in the calculation.

EstateAdvAntAge Accumulation Bonus example

Average fund value during year 16: $30,000

Bonus %: 1.25%

Bonus (A) = Average fund value (D) x Bonus % (E)

= $30,000 * 1.25%

= $375

Key benefitsTransamerica deposits the bonuses deposited based on the client’s investment allocation, unlike some competitors, who deposit the bonus to their equivalent of the T-Bill Interest Option on each bonus anniversary.

Some competitors’ UL bonuses are conditional on a minimum fund value, and/or vary depending on the choice of Interest Option. Further, some illustrations compound the bonus at the illustration interest rate, even though the bonus is automatically invested in a Treasury Bill Interest Option with a lower rate of return. These variables can seriously compromise your illustrations. You can count on Transamerica’s illustrations, because our bonuses are guaranteed, not conditional on investment choice, not conditional on policyholder activity and are automatically credited to the client’s existing investment options.


[ 40 ]

5. Optimizing investments while maintaining tax-exempt status

We test each policy on its annual policy anniversary date and, if necessary, make the adjustments required

to ensure that it retains its tax-exempt status under the current legislation. We offer features, such as the

Optimizer Option and the Side Account, that work in conjunction with this process to provide your client with

optimal tax deferral.

Tax-exempt testing and policy anniversary processing

Tax-exempt testingIt is the intention of Transamerica that each policy will maintain its tax-exempt status as defined in Section 148 of the

Income Tax Act (Canada). This section defines a notional exempt-test policy and an associated accumulating fund that

sets the benchmark for maximum tax-exempt cash surrender value accumulation in any given policy year.

The following graph illustrates how the accumulating fund for a $1,000,000, ART to 85/20 years COI exempt-test policy

grows over time for a male non-smoker, starting at age 45.

ART exempt-test policy (ETP) line

“MTA

R” A

mou

nt (

$,00

0)

Policy year

1 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 x

1,200

1,000

800

600

400

200

0


[ 41 ]

Policy year

In order to maintain tax-exempt status, policies must

pass an exempt test. We will test each policy at the

policy anniversary to ensure that the total cash surrender

value, including outstanding policy loans, is less than the

accumulating fund of the applicable exemption test policy,

as defined within the Income Tax Act (Canada) and its

regulations.

If a policy fails a tax-exempt testOne or both of the following actions will occur to maintain

the tax-exempt status of the policy.

1. Process exempt-test face increases

Subject to legislative maximums and other conditions,

we will increase the sum insured (face amounts plus

any previous exempt-test face adjustments, for all

coverages, including additional coverage and term

riders) without evidence of insurability. In general, the

death benefit (including the fund value) can increase a

maximum 8% per policy year.

2. Process a withdrawal of excess funds and deposit

it in the Side Account

This withdrawal does not incur surrender charges, but

may incur a MVA (if applicable). The withdrawal would

only occur if the policy does not pass the tax-exempt

test even after an exempt test face increase has been

administered.

If a policy passes a tax-exempt testTransamerica will reduce exempt-test face increases that

were previously made to the face amount by an amount

that maintains the tax-exempt status of the policy, up to

the total amount of exempt-test face increases. If the

Optimizer Option has been elected, all exempt-test face

increases must be reduced to nil before the Optimizer can

be applied.

The 250% rule (or “anti-dump-in” rule)Starting at the 10th policy anniversary, Transamerica will

ensure that each policy passes the test for the 250% (anti-

dump-in) rule at each policy anniversary. In general terms,

starting at the end of the 10th policy year and every year

thereafter, we must ensure that the cash surrender value

of the universal life policy is not greater than 250% of the

cash surrender value three years earlier. In the worst-case

scenario, in which the cash surrender value is equal to zero

at the end of the seventh year, the policy in the 10th year

will have close to the same exempt room as a policy in its

third year (in other words, the duration of the policy will be

reset for exempt-test purposes).

Please note, however, that if your clients do not make any

excess deposits until after the seventh year, then it does

not mean they will not be able to invest any excess funds

after that point. In fact, our Maximum Taxable Actuarial

Reserve (MTAR) process will effectively reset the policy’s

MTAR duration such that the policy will start an exempt

line. However, your clients will have more room to shelter

funds if they actually invest prior to the end of year seven.

Maximum premium estimateUpon settling a policy, and at the beginning of each

subsequent policy year, a maximum premium estimate is

calculated for the policy year, based on the current tax-

exempt testing requirements, the policy status and an

assumed accumulation rate used to project the total fund

value. This estimate is illustrated on LifeView and is shown

on the policy statements. It is used as follows:

• Throughout the year, when premiums are being paid,

Transamerica will accept premiums up to the maximum

premium estimate, and the balance of excess funds

will be deposited in the Side Account on behalf of the

owner and not deposited within the tax-exempt Interest

Options as a UL premium.

• At the beginning of any policy year, if there are funds

in the Side Account, we will automatically transfer

funds from the Side Account back into the universal

life policy’s tax-exempt Interest Options, subject to the

maximum premium estimate for that policy year, without

subjecting them to premium tax.


[ 42 ]

Optimizer OptionThis option is suitable for clients who use their universal

life plan to maximize tax-deferred investment growth and,

over time, to minimize insurance charges. The Optimizer

works in conjunction with the tax-exempt processing by

automatically monitoring and reducing the face amount,

where possible, to the Optimizer minimum face amount

that has been specified by the owner. (This minimum

may be no lower than the plan minimum $100,000 for

WealthAdvAnTAge and $25,000 for EstateAdvAnTAge.)

The owner also selects the starting year (which may be no

earlier than the end of the sixth policy year) and the capped

face amount (below which the face amount will not drop).

EligibilityAlthough this feature is available on both universal life

plans, it will have greater appeal to WealthAdvAnTAge

policyholders and to the accumulation market, especially

in conjunction with ART to 100 COI rates.

Avoiding pitfallsA policy may still fail a tax-exempt test even though premiums have been accepted into the policy and are less than the maximum premium estimate. This can occur if the investment performance of the policy exceeds the return projected in calculating the maximum premium estimate.

Please caution your clients that the Income Tax Act (Canada) may change at any time, and this may affect the tax status of their policy. Transamerica reserves the right to refund premiums paid and to modify policies in order to reflect changes in applicable income tax laws or Canada Revenue Agency requirements, including the requirements for tax-exempt status.

This option may be elected at the time of issue or after

the policy is issued, providing the applicable starting face

amount is at least $250,000 and the COI type is ART.

How Optimizer worksWe will notify your client 60 days in advance of the

Optimizer start date. Then we will automatically reduce

the face amount on each policy anniversary following

the Optimizer start date, providing the policy has passed

the tax-exempt test and all applicable exempt test face

increases have been removed. The annual amount of

optimization will be equal to the maximum decrease that

can be made while maintaining the tax-exempt status of

the policy and while respecting the Optimizer minimum

face amount. However, in the following circumstances,

optimization will not occur, or the rate of optimization will

be limited:

• Optimization will not occur if there is more than $100 in

the Side Account. We reserve the right to change this

minimum amount.

• Optimization will not reduce the face amount below the

client-specified Optimizer minimum face amount.

• Optimization will not reduce the face amount below

the plan minimum: $100,000 for WealthAdvAnTAge and

$25,000 for EstateAdvAnTAge.

• The annual rate of optimization for policy years 6 through

10 is limited to 15%. This safeguard helps protect your

clients against market fluctuations in the early years of

the policy.

• Any reductions in face amount will occur in decrements

of $1,000, rounding down to the nearest $1,000.

Optimizing policies with multiple universal life coveragesWith multiple universal life coverages, only the face amount

for the base (first) universal life coverage will be optimized.

This coverage is identified on the contract data page.

Recalculating maximum premium estimatesThe maximum premium estimate is recalculated if a

coverage face amount increases or decreases, or if there

are material non-financial changes, such as a change in

smoker status, lives insured, etc.


[ 43 ]

Changing the Optimizer option• The Optimizer start year may be changed, provided

that we receive a written request to do so at our Head

Office at least 30 days prior to the date optimization is

scheduled to begin.

• The Optimizer minimum face amount may be changed,

provided that we receive a written request to do so at

least 30 days prior to the next scheduled optimization

date. This amount may not be lower than the minimum

face amount for the plan ($100,000 for WealthAdvAnTAge

and $25,000 for EstateAdvAnTAge) or higher than the

applicable face amount immediately prior to the effective

date of the change.

• Client-requested termination: Clients may choose to

terminate the Optimizer Option. Notice must be received

at our Head Office at least 30 days prior to the next

optimization date.

TerminationThe Optimizer Option will terminate when one of the

following occurs:

• The COI period has ended for the coverage being

optimized.

• The COI is changed from ART to level.

• The policy lapses.

• We receive a written request for termination from the

owner.

If optimization has been terminated, it can be reactivated

at any time.

Illustrating Optimizer on LifeViewIn order to limit the potential for unjustifiable face amounts

from an underwriting perspective, we require that

premiums be spread over a few years. The specific rule we

will enforce is that the first-year premium cannot exceed

40% of the total premiums for all years up to and including

the Optimizer start date.

Key benefitsThe Optimizer performs best when premium streams have stopped or are reduced to minimal amounts. You don’t have to start optimization at the end of the sixth policy year, but that is the earliest start date allowed.

The rate limit of 15% that is in place until the end of the 10th policy year protects the performance of the policy in its early years from an accelerated decrease that might result from market declines, leaving little room for future increases in value.

Potential market• Attractive in situations where a universal life

policy is purchased for accumulation purposes, and where there will be a decreasing need for life insurance protection over time.

• The Optimizer is available for single life, joint life and multiple life coverages. However, on multiple life policies, the Optimizer can only be applied to the first coverage.

• The Optimizer usually works best with a level death benefit. However, some clients understand “face plus fund,” or increasing death benefit, better than a level death benefit; in these cases, the Optimizer may be appropriately added to an increasing death benefit.

For example

If your client wants to deposit a total of $100,000 into the tax-exempt policy, we will allocate $40,000 to year one and calculate the face amount needed to deposit that amount. The excess $60,000 will be deposited into the Side Account.

The excess funds will be deposited into the Side Account

and will come back into the policy when this is allowable in

conjunction with tax-exempt rules.


[ 44 ]

Key benefitsThe Side Account benefits generally from the same creditor protection rules that apply to an annuity contract issued by a life insurance company.

The Side Account is automatically issued with every universal life policy; you don’t have to request it.

Avoiding pitfalls• In some cases, it may be more efficient to select

a lower starting face amount and deposit the excess funds in the Side Account. Taxes for these excess funds may be less than the COI of the higher initial face amount.

• Large withdrawals, fund value payouts, Living Benefits, policy splits or severances, and large market fluctuations may affect the rate of optimization. When a significant amount of the fund value is withdrawn from a policy with the Optimizer Option, you should explain the potential impact to your clients, i.e., a potentially large decrease in the face amount.

• If optimization results in the adjusted face amount falling into a lower rate band, higher COI rates may apply. You might want to consider keeping the Optimizer minimum face amount within the same rate band as the starting face amount to prevent this from happening.

Side AccountThe Side Account is a deferred annuity contract established

between the owner and Transamerica in conjunction with

each UL policy.

Side Account as a “safety net”The main function of the Side Account is to act as a

processing account or “safety net” in conjunction with tax-

exempt processing. Throughout the year, when premiums

are processed, any premiums in excess of the maximum

premium estimate will be transferred to the Side Account.

At the policy anniversary, if a policy fails the tax-exempt

test, funds may have to be transferred to the Side Account.

In the new policy year, funds are transferred from the Side

Account back into the policy, up to the maximum premium

estimate for the new policy year.

How the Side Account works

Application and ownership

We don’t require a separate application for the Side

Account. When your client applies for a universal life policy,

the Supplement to the Life Insurance Application also

includes a request for the Side Account deferred annuity

contract, and this contract is automatically issued with

every WealthAdvAnTAge and EstateAdvAnTAge policy. In this

way, the owner of the universal life policy will also be the

owner of the Side Account, and will retain control of his or

her funds regardless of where the funds reside.

Of course, the owner may remove funds from the Side

Account at any time, at no additional cost, and without any

surrender charges.

Side Account interest rates

The Side Account matches the return of the T-Bill Interest

Option; however, the interest is not tax-deferred. Interest

is taxed, and a T-5 slip (Relève 3 for Quebec) is issued

each year.

Deferred annuity contract

As a deferred annuity contract, the funds are paid out

at the death of the annuitant as a tax-free benefit to the

beneficiary. However, the owner must pay taxes annually

on the accrued interest. The annuitant is defined as the last

surviving life insured from the linked universal life policy,

and the beneficiary for the Side Account is the beneficiary

designated for that life insured. The maturity date is equal

to the 100th birthday of the last surviving life insured under

the applicable universal life policy. In most cases there will

be no funds remaining in the Side Account at maturity.

However, if there are funds remaining in the Side Account,

they are paid as an annuity when the contract matures.


[ 45 ]

6. Plan flexibilityIn addition to the other benefits of WealthAdvAnTAge and EstateAdvAnTAge, there is a substantial amount of

flexibility to accommodate future changes.

Easy access to funds when neededFunds accumulate within Transamerica’s universal life

plans on a tax-deferred basis. The policy fund value is

accessible to your client, subject to surrender charges, and

can be used for a variety of purposes, or the funds can

remain within the policy and become payable as a tax-

free death benefit. Your clients may access their net cash

surrender value by making partial withdrawals or by fully

surrendering their policies.

The net cash surrender value equals the total fund value

minus any applicable surrender charges, MVAs and any

outstanding policy loans and accrued interest.

Clients may also access funds through policy loans.

Accessing cash from a policy may result in tax

consequences (refer to “Taxation of loans, withdrawals

and surrenders”).

Let’s look at an example in policy year four (male non-

smoker, age 40, $250,000 WealthAdvAnTAge face amount,

level death benefit, ART 100 COI, illustrated at 4% with a

$5,000 premium) that shows the maximum amount based

on different withdrawal options.

Policy loansThe fund value of the policy can be used as collateral for a

loan from Transamerica.

The mechanics of a policy loan

A policy loan can be requested by completing the

applicable section of the Policy Service Application

(PS 339) or through a letter from the policyowner.

The policyowner must provide the policy number, and can

either request a specific amount or request the maximum

policy loan available. When requesting the maximum policy

loan, there are two different calculations available:

• The maximum policy loan is the contractual maximum

amount available to the policyowner. This amount is

the total fund value less any outstanding loans and

accrued interest, less half the applicable surrender

charges, any applicable MVAs (for Fixed-Rate Interest

Options) and the sum of three monthly deductions. This

calculation also reserves an additional 0.5% to allow for

approximately three months of loan interest.

• For Investment Loan Strategy (ILS) marketing concepts,

or if the client is taking out the policy loan at the

beginning of the policy year and wants to protect the

policy from lapsing, the maximum investment policy loan

is recommended. The maximum investment policy loan

calculation is similar to that for maximum policy loan,

but it reserves sufficient funds to cover at least three

monthly deductions and loan interest for the remainder

of the policy year.

Example

Policy year four

Fund value $19,864

Cash surrender value $6,614

Maximum loan amount $13,055


[ 46 ]

Both the maximum policy loan and the maximum

investment policy loan can be illustrated using the LifeView

software. The maximum loan amount is also displayed on

policy statements and on webCAPPOW. The maximum

investment policy loan is displayed on webCAPPOW if the

policy has been identified as ILS and the “INVL” marketing

concept code is displayed.

The minimum loan amount a policyowner may choose is

$500 (after any applicable MVAs).

Unlike a cash withdrawal, the total fund value of the

policy is not reduced by the amount of the loan. In fact,

the funds backing the loan do not leave the policy: the

loan amount is transferred to the Security Account

Interest Option, following any applicable MVA (for Fixed-

Rate Interest Options). The loan amount is moved to

the Security Account Interest Option according to the

default withdrawal order or according to the policyowner’s

instructions (see “Withdrawal order”). Note that if the

money is in the managed Index Interest Options, taking a

policy loan may be a two-day process.

The funds held in the Security Account Interest Option

may not be withdrawn or transferred to another Interest

Option until the loan or a portion of the loan is repaid. The

cash surrender value of the policy, as well as the death

benefit, is reduced by the amount of the outstanding policy

loan and accrued interest. These funds are also excluded

from the bonus calculation.

Loan interest rates

The policyowner is charged 10% annual interest on the

loan, calculated daily.

While the funds backing the loan reside in the Security

Account Interest Option, loan interest at the guaranteed

annual rate of 8% is applied, and the resulting interest

is credited to the Treasury Bill Interest Option on a daily

basis. Funds in the Treasury Bill Interest Option can

be transferred to other Interest Options or used to pay

monthly deductions.

All interest rates are fully guaranteed within our contract.

Loan repayment

Transamerica offers owners several options for loan

repayment.

No loan repayment

If a loan repayment is not received before the policy

anniversary, Transamerica will replace the existing policy

loan with a loan that will comprise the original loan

amount, plus any interest accrued since the previous policy

anniversary. When this occurs, funds are transferred from

other Interest Options to the Security Account Interest

Option, using the default withdrawal order, such that there

are sufficient funds backing the loan amount. In the policy

year, interest will accrue on the loan amount.

Loan repayment

An owner may decide to pay any amount towards the

loan. Any loan repayment must be clearly marked as such;

otherwise, it will be considered a premium payment and

will be allocated to the fund value in accordance with the

owner’s premium allocation instructions. When all or a

portion of the loan amount has been paid, the equivalent

amount will be released from the Security Account Interest

Option to the Treasury Bill Interest Option or in accordance

with the owner’s specific instructions. Loan repayments

pay down outstanding loan balances first, and then

accrued interest.

Internal loan repayment

At anytime after the 15th policy anniversary, the owner

may request the repayment of all or part of any outstanding

loan and/or accrued interest by internal loan repayment,

meaning first, from the portion of the total fund value then

allocated to the Security Account Interest Option, and then

from any another Interest Option, in accordance with the

owner’s instructions.


[ 47 ]

Key benefitsPolicy loans provide owners with greater access to the equity of their universal life policy in the early contract years than cash withdrawals.

Loan interest rates are fully guaranteed for life within the policy contracts.

The LifeView illustration system is equipped to illustrate policy loans and the repayment of loans, including the impact of a particular loan on a policy and internal policy repayments.

If the policy loan has been made for “qualified investment” purposes, the interest may be a tax-deductible investment expense. The owner is responsible for submitting a T2210 tax form to Transamerica for verification. Transamerica will verify an amount up to the amount of interest accrued since the last policy anniversary, and within certain limitations. If you are interested in learning more about this strategy, refer to Transamerica’s Investment Loan Strategy.

Avoiding pitfallsIf loan interest is not paid out of pocket (from outside the policy), the owner increases the risk that the policy will lapse.

Owners should be made aware of the possible tax consequences of taking out a policy loan (see “Taxation of loans, withdrawals and surrenders”).

Owners are advised to consult with a tax professional to discuss questions about whether the interest can be tax-deducted, and to discuss the amount of the deduction for the specific circumstances.

For further information on the taxation of loans, see

“Taxation of loans, withdrawals and surrenders.”

Policy and coverage surrendersMonthly deductions are structured to spread the cost of

compensation, underwriting, administration and set-up of

the universal life policies over a number of years.

However, when policyowners cancel their plans or

coverages, or reduce the face amount early, Transamerica

collects a surrender charge in order to recover some of

the up-front costs, so those who continue their insurance

policies aren’t penalized.

Both WealthAdvAnTAge and EstateAdvAnTAge may be fully

surrendered (full surrender of all coverages) at any time

for their net cash surrender value. Net cash surrender

value refers to the total fund value of the policy, less any

applicable policy loans (including principal and accrued

interest), surrender charges and MVAs (if applicable).

Types of surrenders

The owner may request the following types of surrenders.

• Coverage surrenders

– Full: the full surrender of a coverage and the

associated proportional fund value associated with the

coverage. The surrender of all coverages in a policy

constitutes a full surrender of the policy.

– Partial: a reduction of the face amount of a particular

coverage.

• Partial surrender: a withdrawal from the fund value.

The policy is fully surrendered when fewer than three

months of deductions remain within the policy after

a withdrawal.

The total surrender charge on a policy is the sum of the

surrender charges for all coverages under the policy.

The surrender charge will be deducted from the fund

value, based on the default withdrawal order (as defined in

the policy and described on page 51).


[ 48 ]

Coverage surrenders For coverage surrenders for ART and level COI coverages,

surrender charges run for:

• ten years from the coverage effective date for

WealthAdvAnTAge

• seven years from the coverage effective date for

EstateAdvAnTAge

The surrender charges are based on the age and sex of the

life insured, the face amount and the length of time the

coverage has been in force.

Calculating coverage surrender charges

Coverage surrender charge = 0.001 x A x B

A = a surrender factor specified in the contract; it varies by

the age of the life insured on the coverage date

B = the face amount being surrendered or the amount of a

face amount reduction

Let’s look at an example using a coverage with a current

face amount of $100,000:

Surrender factor: $10

1. Full coverage surrender

Surrender charge = 0.001 x $10 x $100,000 = $1,000

2. Face reduction of $25,000

Surrender charge = 0.001 x $10 x $25,000 = $250

The Optimizer Option provides automatic face amount

reductions in conjunction with tax-exempt testing without

incurring surrender charges. (For more information,

please refer to “Optimizer Option” in this guide, below

“Optimizing investments while maintaining tax-exempt

status.”)

Partial surrenders

10% free partial surrender amount once per year

Your clients can make cash withdrawals from their

WealthAdvAnTAge and EstateAdvAnTAge plans. In each

policy year after the second policy anniversary, the owner

may request one free partial surrender amount, to which

surrender charges will not apply (“free partial surrender”).

The maximum amount available for a free partial surrender

is equal to the lesser of:

• 10% of the net fund value

• the net fund value, minus three monthly deductions,

minus half the total policy coverage surrender charges

The written request, dated and signed, for a partial surrender must specifically indicate that the right of free partial surrender is being exercised; failure to do so will result in the forfeiture of that right for the applicable partial surrender request. The right may be used for a subsequent partial surrender request within that policy year. The right of free partial surrender may be used for any one partial surrender request in each policy year.

WealthAdvAnTAge free partial surrender example

Net fund value = $10,000

Total policy coverage surrender charges

= $3,000

Net cash surrender value = $7,000

Monthly deduction = $100

Maximum amount available for free partial surrender

= lesser of [ 10% x $10,000; $10,000 - (3 x $100) - (1⁄2 x $3,000) ]

= lesser of [ $1,000 ; $10,000 - $300 - $1,500 ]

= lesser of [$1,000 ; $8,200 ]

= $1,000


[ 49 ]

Partial surrender charges

A fixed percentage surrender charge, specified in the

contract, which varies by year, applies for all partial

surrenders that do not qualify for the free partial surrender

during:

• the first seven years of the policy for EstateAdvAnTAge

• the first 10 years of the policy for WealthAdvAnTAge

Minimum withdrawal: $500

Maximum withdrawal: Net cash surrender value,

minus three monthly deductions

The minimum amount that may be surrendered from a

policy is $500. The maximum that may be requested as a

partial surrender is equal to the net cash surrender value,

less three monthly deductions. Any request for surrender

greater than the maximum would constitute a request for

full surrender.

The schedule of partial surrender charges is shown below.

Partial surrender charges are deducted from the surrender

amount requested, and the net amount is paid to the client.

The client may ask for a net surrender amount, and we will

calculate what the gross amount needs to be.

If a withdrawal of more than $58,800 is requested, the

withdrawal would be considered a full surrender request.EstateAdvAnTAge

Year 1 2 3 4 5 6 7

% 18 12 10 9 8 7 6

WealthAdvAnTAge

Year 1 2 3 4 5 6 7 8 9 10

% 13 10 9 8 7 6 5 5 4 3

EstateAdvAnTAge partial surrender charge example

Fund value = $100,000

Net cash surrender value = $60,000

Monthly deduction = $400

Maximum withdrawal = $58,800

Partial surrender request = $45,000

Year two partial surrender charge %

= 12%

Partial surrender charge = $ 5,400

Net payment = $ 39,600

Avoiding pitfallsAn MVA will apply to any withdrawals from Fixed-Rate Interest Options.

The death benefit is always reduced by any partial surrenders.

In addition, if the level death benefit option has been selected, a cash withdrawal will cause the face amount to be reduced by the amount of the funds withdrawn; for a multi-life policy, the reduction will be proportional across all UL coverages.


[ 50 ]

Withdrawal order

Monthly Deduction Interest Option

Clients can use the Supplement to the Life Insurance

Application to specify one Interest Option from which their

monthly deductions are to be withdrawn. Contractually,

clients may change the Monthly Deduction Interest Option

once a year at no charge; however, we reserve the right to

charge a fee if this option is changed more frequently.

Default withdrawal order

If a Monthly Deduction Interest Option is not specified, the

default withdrawal order applies for monthly deductions as

follows:

1. T-Bill Interest Option.

2. Index Interest Options, in proportion to the value in

each option, compared to the total value of all Index

Interest Options.

3. Fixed-Rate Interest Options: funds are removed from

Fixed-Rate Interest Options last, to minimize the

number of MVAs required. Funds that are closest to

maturity are selected first.

Partial surrenders

For withdrawals, funds will first be taken from the Side

Account. When these funds are depleted, the default

withdrawal order applies, or the order specified by the

policyowner.

Surrender charges deducted upon face amount reduction

These are deducted using the default withdrawal order.

Policy loans

The default withdrawal order applies to funds (sufficient to

back the loan) being transferred into the Security Account

Interest Option for policy loan purposes. However, the

client may request that funds be transferred from specific

Interest Options.

Taxation of loans, withdrawals and surrendersClients should be made aware that any partial surrender

or loan might be subject to taxation. Policy loan taxation

differs from the taxation of partial surrenders. Policy loans

reduce the Adjusted Cost Basis (ACB) on a dollar-for-dollar

basis. On the other hand, withdrawals are taxed using a

proportional ACB amount.

Taxation of policy loans

Any policy loan up to the policy’s ACB is not taxable, but it

reduces the ACB dollar-for-dollar. Once the ACB is reduced

to zero, any additional loan is fully taxable. In general, the

ACB is defined as the total amount of deposits received

at a given point, less the cumulative net cost of pure

insurance, as defined in the Income Tax Act, and less the

taxable portion of previous loans and withdrawals.

On client statements, the “Maximum Amount Available

for Loan on a Tax-Free Basis” is displayed. However, for

more up-to-date information, we recommend that you

contact your distributor office just prior to a request for a

loan and ask them for the maximum amount available for a

loan on a tax-free basis. Your distributor office has access

to our webCAPPOW system, which will provide them

with information based on the policy fund value on the

previous business day. Note that the amount quoted is not

guaranteed and is subject to change, due to fluctuations

of the policy fund value and depending on the date we

receive the signed request.


[ 51 ]

Cash surrender value = $60,000

Adjusted cost basis (ACB) = $30,000

Partial surrender request = $20,000

Proportional ACB 30,000 x 20,000 / 60,000

= $10,000

Taxable amount of partial surrender = $20,000 – $10,000 = $10,000

Easy Interest Option changes when needed

Allocation instructions for premiumsInterest Option allocation instructions can be modified at

any time to take full advantage of market conditions and to

meet your clients’ financial objectives.

Interest Option transfersYour clients can request fund transfers between Interest

Options to reflect their changing risk profile or financial

objectives.

Transfers can also be made to and from the Fixed-Rate

Interest Options (although a MVA will apply if the transfer

is made before the applicable terms mature).

Contractually, your clients may make four transfers per

policy year within their universal life policies without

incurring transfer fees. We reserve the right to charge a

fee if more than four transfers are made per policy year.

The current fee is $25 per transfer.

Key benefitsYou might want to consider using the four free Interest Option transfers per policy year as part of a quarterly review of your clients’ financial portfolio mix. With Transamerica, you have access to quarterly electronic UL statements.

Fund transfers within a universal life policy are not subject to taxation.

Taxation of withdrawals and surrenders*

If the cash surrender value is greater than the ACB, then

a portion of the withdrawal will be taxable. If your clients

choose to make a withdrawal from the contract’s cash

surrender value, or if the entire contract is surrendered,

the tax liability will be based on the realized gain of the

total cash surrender value. This realized gain is defined as

follows:

• upon surrender: the excess of the total cash surrender

value over the adjusted cost basis

• upon partial surrender: the excess of the withdrawal over

the proportional amount of the contract’s adjusted cost

basis, where:

proportional adjusted cost basis = adjusted cost

basis of contract x partial withdrawal total cash

surrender value

ACB example

The following assumes the partial surrender occurs after

the surrender charge period.

* Based on current interpretation of the Income Tax Act Canada, its regulations and any other relevant legislation.


[ 52 ]

MVA example

A client puts $1,000 into a five-year-term Fixed-Rate Interest Option with a guaranteed interest rate of 5%. Two years later, the client wants to withdraw this money from the Fixed-Rate Interest Option. An MVA reduces the value of the surrender amount if interest rates for the remaining term are greater than the original interest rate, less 1%.

For example, if the interest rate for an equivalent three-year term period at that time is 4% or less, an MVA would not apply. However, an MVA is applicable if the interest rate for an equivalent three-year term is greater than 4%. For example, if the interest rate at that time is 6%, the MVA is calculated as follows:

A = the value of the original deposit at the end of two years

= $1000 x (1 + 5%) ^ 2 = $1,102.50

B = MVA % = 1 - [(1 + C)/ (1+D) ] ^ (E / 365)

= 1 - [ (1 + 5%) / (1+ (1% + 6%)) ] ^ ( 3 x 365 / 365)

= 5.503%

where

C is the per annum interest rate for the applicable Fixed-Rate Interest Option term, the funds allocated to which are to be transferred, surrendered or withdrawn.

D is 1% per annum plus Transamerica’s then-current per annum interest rate applicable to the Fixed-Rate Interest Option on the effective date of the transfer, surrender or withdrawal for the closest term to E (below).

E is the number of full days remaining to the maturity date of the applicable Fixed-Rate Interest Option term, the funds allocated to which are to be transferred, surrendered or withdrawn.

The MVA charge is then 5.503% x $1,102.50 = $60.67

Market Value Adjustments (MVAs)An MVA applies to funds that are withdrawn from the

Fixed-Rate Interest Options, including transfers, Living

Benefit payouts, partial surrenders and policy surrenders.

MVAs do not apply for monthly deductions or the payment

of a death benefit. The MVA is determined separately for

each amount being withdrawn or transferred, and will

start with the Fixed-Rate Interest Option closest to

maturity. An MVA also applies to forced surrenders due

to tax-exempt testing.

In general, MVAs are fees that are charged for early

withdrawal of funds from the Fixed-Rate Interest Options;

they help recover the costs that Transamerica incurs for

the early termination of the investment.

MVA = current value of requested surrender amount –

discounted value of requested surrender amount

The discounted value is the projected value at the

guaranteed rate to the end of the term, discounted to the

current date at the current interest rate + 1%.

The MVA formula compares the actual credited interest

rate for the account being redeemed against the current

rate credited for a Fixed-Rate Interest Option with a term

closest to the remaining term. It reflects this calculation

against the number of days left to maturity divided by 365

days. The MVA formula can only result in a decrease in the

value of the withdrawal (i.e., no credits will be given).


[ 53 ]

Premium flexibilityYour clients will have the flexibility to increase or decrease

premiums, pay at unscheduled dates or stop and restart

payments, providing the policy does not go into shortage

(for more details, refer to Section 9 of this guide).

Planned periodic premiumsWhen you illustrate your clients’ financial solution and

apply for insurance coverage, you will be asked to specify

the planned periodic premiums (also known as the sundry

amount) and the mode of premium payment (monthly or

quarterly PAD, or quarterly, semi-annual or annual direct

payment). Unlike term insurance, the premium mode does

not change the manner in which the COI is calculated: all

costs, including the policy fee, are deducted monthly from

the fund value. For universal life insurance, the equivalent

of the monthly mode is always used for optional benefits

and term riders in conjunction with the monthly deductions.

The planned periodic premiums and the premium mode

can be changed at your clients’ convenience.

Minimum premiumsPremiums are subject to minimum requirements to keep

the coverage in force, as well as maximum limits, to keep

the policy tax-exempt.

The minimum premium for the first three years is stated on

the contract data page; it is equal to:

• the policy fee ($120), plus

• (the total year one COI for all ART coverages x 150%),

plus

• (the total year one COI for all ART coverages x 150%),

multiplied by (Waiver of Monthly Deduction Rider %

and/or Payor Waiver of Monthly Deduction Rider %, if

applicable), plus

• the total COI for all level COI and riders (excluding the

WMD and PWMD riders).

Avoiding pitfallsPlease be sure to explain to your clients the risk of market fluctuations and that additional premiums may be required to keep the policy in force.

If the policy is in danger of going into shortage within a 12-month period of the anniversary, then:

• If paying by PAD (PAD and paying minimum premium), Transamerica will automatically increase the PAD amount each year to reflect the increased COI rates for that policy year. This is done to reduce the risk of the policy lapsing. We plan to inform clients about the increased amounts approximately 30 days prior to their policy anniversary.

• If paying on a direct billing basis, Transamerica will automatically increase the amount displayed on the billing notice that is sent to clients approximately 20 days prior to their policy anniversary.

This automatic increase is explained in the PAD agreement in the Application and our current PAD request form. Please ensure your client reviews this component of the Application and understands the implications.

Maximum premiumsUpon settling a policy, and at the beginning of each

subsequent policy year, a maximum premium estimate is

calculated for the policy year. Premium payments made

throughout the year that exceed the maximum premium

estimate will be credited to the Side Account. As well,

each policy is tested at every policy anniversary, and

Transamerica takes certain measures to retain the tax-

exempt status of a policy, including transferring excess

funds to the Side Account. A maximum premium for the

following year is calculated at every policy anniversary and

In year four and onward, the minimum premium is equal to:

• the policy fee ($120), plus

• the total COI for all coverages and riders.

Note: The minimum monthly premium for either of

Transamerica’s universal life plans is $15.00.


[ 54 ]

Death benefit option changesThe client may change the death benefit option after the

policy has been issued. If the NAAR increases as the

result of the death benefit option change, underwriting

will be required, and a policy change fee (the current fee

is $150) will apply for this service. If the NAAR does not

increase as the result of the death benefit option change,

underwriting will not be required, and no fee is charged

for this service.

COI option changesThe following coverage type options may be changed at

any time, at current rates, on an attained age basis:

No further medical evidence of insurability is required.

Other changes to coverage types may be allowed, subject

to Transamerica’s current business practices.

If the NAAR is increased as the result of a COI change,

two options are available:

• The face amount(s) may be adjusted to maintain the risk

to Transamerica at the time of change, with no further

evidence of insurability required.

• The client may choose to increase the NAAR. However,

this change will be subject to underwriting, and a $150

policy change fee will be charged for this service.

EstateAdvAntAge

The total face amount for all level COI coverages and Level

Cost Riders for a life insured may not exceed $500,000.00

for all EstateAdvAnTAge policies.

From: • Increasing death benefit with ART

to 85/20 years

• Increasing death benefit with ART to 100

• Level death benefit with ART to 85/20 years

• Level death benefit with ART to 100

To: • Increasing with level cost

Up to age 80

shown on the policy statement. (For more information

about the maximum premium estimate and tax-exempt

testing, please refer to “Tax-exempt testing and policy

anniversary processing.”)

Easy insurance coverage adjustments when neededYour clients’ universal life insurance coverages may

be modified after the policy has been issued to reflect

changing needs.

Increasing the face amountThe face amount for a coverage may be increased at any

time, subject to evidence of insurability, underwriting and

the plan face amount maximum. The minimum increase

amount is $25,000. A new surrender charge schedule will

apply to each increase in the face amount, and new suicide

and incontestability periods are established for the increase.

No administrative fee is currently charged for this service;

however, we reserve the right to charge a fee in the future.

Decreasing the face amountThe face amount may be reduced at any time without any

underwriting requirements. The minimum decrease amount

is $25,000, and the face amount may not be reduced below

the plan minimum. However, when a client requests a

reduction in face amount within the surrender charge period

(for ART and level COI only), a partial surrender charge will

apply in proportion to the amount of the face amount being

reduced. No administrative fee is charged for this service;

however, we reserve the right to charge a fee in the future.

(For more information about the surrender charges as the

result of decreasing the face amount, please refer to “Policy

and coverage surrenders.”) The Optimizer Option provides

automatic face amount reductions in conjunction with tax-

exempt testing without incurring surrender charges. (For

more information, please refer to “Optimizer Option” in this

guide, below “Optimizing investments while maintaining

tax-exempt status”.)


[ 55 ]

7. Living BenefitsLiving Benefits enable your clients to access their fund value by making a request for a lump sum benefit

amount upon a disability. The policy definition of disability includes “occupational disability” and “critical

condition disability.” Living Benefits are a powerful feature that can help your clients deal with the financial

hardships caused by a disability.

QualificationTo qualify for the Living Benefit, the following conditions

must be satisfied:

• The life insured is not excluded by amendment.

• The disability exists on the date the claim is made.

• One of the following occurs while the policy is in force:

– The life insured is diagnosed with an occupational

disability and continues to be disabled without

interruption until the waiting period has expired.

– The life insured is diagnosed with a critical condition

disability and the survival period has expired.

Types of disabilityA critical condition disability is a disability that results

from either:

• a critical condition that occurs while the policy is in force,

and prevents the life insured from performing the regular

substantial activities the life insured was engaged in

prior to the onset of the critical condition

• any condition that has been diagnosed as terminal

and is expected to result in death within 24 months of

diagnosis

This benefit is included in the base contract. Eligibility is based on the following:

• issue ages: 0–80 for non-smokers and 16–80 for smokers (same as base plan)

• available on policies with single life, multiple life and joint coverages

• available to coverages where none of the lives insured have a rating greater than 300% total mortality

A critical condition disability excludes any disability

resulting from a cause described under the “Exclusions”

section of the policy.

An occupational disability is a disability that:

• results from a disease that first appears or a bodily injury

that first occurs after the effective date, while the policy

is in force

• continues without interruption during the applicable

waiting period

• prevents the life insured from either of the following:

i. performing substantially all of the material duties of his

or her occupation

ii. if the life insured is not engaged in a gainful

occupation, prevents the life insured from performing

the regular substantial activities the life insured was

engaged in prior to the onset of the Injury or sickness

An occupational disability excludes any disability resulting

from a cause described under the “Exclusions” section of

the policy.


[ 56 ]

Benefit amount The benefit amount is determined according to the

following formula:

BA = A – (B + C + D)

where:

BA is the benefit amount.

A is the total fund value.

B is the sum of all principal, accrued interest and other

amounts outstanding in respect of any loans under the

policy.

C is the sum of all monthly deductions due but not then

paid.

D is the sum of three monthly minimum premiums.

Payment of benefit amountThe benefit amount is payable as a lump sum.

The benefit amount payable to the policyowner will be the

benefit amount, less the MVA (if applicable). The benefit

amount and MVA (if applicable) will be deducted from the

total fund value, based on the policyowner’s instructions.

If the policyowner does not provide such instructions, then

the benefit amount will be deducted in accordance with

the default withdrawal order.

Face amount adjustmentIf a Living Benefit has been paid, the face amount(s) for

the policy will be adjusted to preserve the NAAR that is in

effect on the date the benefit amount is paid.

A payment of the Living Benefit will reduce the death

benefit(s) and the total fund value of the policy by the

benefit amount (and MVA, if applicable) paid.

Claims for Living BenefitsA claim for Living Benefits may be made by written

request to the Head Office, and must include the evidence

described below.

Occupational disability claimA claim for a Living Benefit resulting from an occupational

disability must be received within one year from the date

the occupational disability occurred. Transamerica must

receive, at the Head Office, evidence satisfactory to it of:

• the life insured being diagnosed with the occupational

disability

• the date(s) on which the occupational disability began

• the life insured remaining under the normal and

customary care of a doctor, such doctor being

competent to provide appropriate care for the condition

causing occupational disability

• such supplementary evidence as required by

Transamerica, from time to time, including, without

limitation, an examination of the life insured by a doctor

or doctors designated by Transamerica

Critical condition disability claimA claim for a Living Benefit resulting from a critical

condition disability must be received within 90 days

from the diagnosis of the critical condition disability.

Transamerica must receive, at the Head Office, evidence

satisfactory to it of:

• the life insured being diagnosed with the critical

condition disability

• the date(s) on which the critical condition disability was

diagnosed

• such supplementary evidence as required by

Transamerica, from time to time, including, without

limitation, an examination of the life insured by a doctor

or doctors designated by Transamerica


[ 57 ]

Continuous disabilityThe waiting period or survival period for a Living Benefit

claim is waived when:

• Such claim is made within 12 months of a previous

claim, and both claims are for the same or a related

cause for which the waiting period or survival period

has expired, such determination to be made by

Transamerica.

• Such disability begins within 12 months of the date on

which the previous disability has ceased.

Living Benefits: Definitions and highlights“Critical condition” means any one of the following

conditions:

• Alzheimer’s disease

• Aortic surgery

• Aplastic anemia

• Bacterial meningitis

• Benign brain tumour

• Blindness

• Cancer (life-threatening)

• Coma

• Coronary angioplasty

• Coronary artery bypass surgery

• Deafness

• Heart attack

• Heart valve replacement

• Kidney failure

• Loss of independent existence

• Loss of limbs

• Loss of speech

• Major organ failure; on waiting list

• Major organ transplant

• Motor neuron disease

• Multiple sclerosis

• Occupational HIV infection

• Paralysis

• Parkinson’s disease

• Severe burns

• Stroke

“Survival period” means the period starting on the date of

diagnosis of the critical condition disability and ending 30

days following the date of diagnosis of the critical condition

disability, except where modified elsewhere under the

policy. The survival period does not include the number of

days on life support. The life insured must be alive at the

end of the survival period and must not have experienced

irreversible cessation of all functions of the brain.

For those conditions which have a qualifying period, for

example, 90 days for bacterial meningitis and paralysis,

the survival period runs concurrently with that condition’s

qualifying period.

“Waiting period” means the 90-day period following the

date on which the occupational disability first occurs, as

provided under the terms of the policy.


[ 58 ]

Exclusions for disability claims

General exclusionsTransamerica will pay no benefit amount if the disability in

respect of the life insured results directly or indirectly from:

• any bodily injury that occurs while a life insured has been

determined to be legally intoxicated, under the influence

of any alcohol, non-prescription drugs, including, but

not limited to, narcotics or sedatives, or using or taking

any prescription drugs other than as prescribed by a

doctor and in accordance with a doctor’s instructions

when the use of such substances was a proximate

cause for the disability

• the voluntary taking of poison, inhalation of gas,

or taking of a non-prescription drug or chemical

• the life insured’s commission of or attempted

commission of a criminal act, or any loss sustained

while incarcerated for a criminal act

• the life insured’s engaging in an illegal occupation

• the operation of any vehicle, however powered, while

the life insured has alcohol in the blood in excess of

the legal limit

• declared or undeclared war, invasion, hostility, acts of

a foreign enemy or any act incident to war or any armed

conflict, including service in the armed forces

• the life insured’s participating in any riot, civil

commotion, revolution, rebellion, insurrection, explosion

of war weapons or terrorist activities

• the life insured’s intentional self-inflicted injury or any

act of, or attempt to commit suicide regardless of

whether the life insured is sane or insane

• service, travel, flight or descent from any kind of aircraft

if the life insured acted in any capacity other than as a

fare-paying passenger

Key benefitsLiving Benefits provide added peace of mind for your clients. They provide tax-free and surrender-charge-free benefits.* Clients do not have to worry about the funds in a long-term contract when they need emergency access in case of disability.

Avoiding pitfallsClients with a rating greater than 300% total mortality are not covered by the benefit.

Exclusions for pre-existing conditionsNo Living Benefit will be payable if Transamerica

determines that the life insured, in respect of whom a

Living Benefit would otherwise be payable, suffered

from a disability or a disease, bodily injury or critical

condition causing the disability at the issue date or a date

of reinstatement of this policy. That determination will

be based on disabilities, diseases, bodily injuries, critical

conditions or other conditions specifically identified in,

or that can reasonably be inferred to have existed at that

time of, the Application, an application of reinstatement, a

related declaration of health or other information available

to Transamerica.

The policyowner is cautioned that a payment of the Living

Benefit will reduce the death benefit(s) and the total fund

value of the policy by the total of all benefit amounts and

MVA (if applicable) paid.

* Based on Transamerica’s interpretation of the Income Tax Act, claims for Living Benefits disability benefits are not currently administered as taxable dispositions from our universal life policies. However, Transamerica does not guarantee, and is not responsible for, the tax treatment applicable to this policy feature. Transamerica’s interpretation does not constitute advice or an opinion to clients regarding taxation of this policy feature, and relevant tax authorities could decide to challenge it. Please advise your clients to consult their legal or tax experts for an opinion on this matter in relation to their particular circumstances.


[ 59 ]

8. Optional benefits

The Accidental Death and Dismemberment (AD&D)

Rider provides an additional benefit amount between

$25,000 and $350,000 should your client die, lose limbs

or lose sight as a direct result of an accidental injury. This

additional benefit amount may not be greater than the face

amount for the base coverage.

This additional benefit amount doubles should your client

die or lose limbs or sight as a direct result of an accident

while travelling in a building elevator, as a passenger in a

public conveyance or as a direct result of fire or explosion

in a public building.

Schedule of lossesThe full benefit amount is payable for:

• loss of life

• total and irrecoverable loss of sight of both eyes

• loss of both hands

• loss of both feet

• loss of one hand and one foot

• loss of sight of one eye and the loss of either one hand

or one foot

One-half the benefit amount is payable for:

• loss of both thumb and index finger on one hand

• loss of one hand or one foot

• total and irrecoverable loss of sight of one eye

Accidental Death and Dismemberment Rider

Definition of “accident”For the purpose of this rider, the loss must be a direct

result of bodily injury caused exclusively by an external

violent and accidental means, without negligence on

the rider life insured’s part, and resulting directly and

independently of any disease, sickness, medical disorder

or medical treatment, or any other causes specified in the

exclusions while the rider is in force.

In addition, the accidental death must occur within one

year from the date of the accident and before the policy

anniversary nearest the life insured’s 65th birthday.

TerminationThis rider terminates at the earlier of:

• the date a benefit amount is paid

• the policy anniversary nearest the life insured’s 65th

birthday

ExclusionsA benefit is not paid if the loss results directly or

indirectly from:

• Any accidental death or bodily injury that occurs while

a rider life insured has been determined to be legally

intoxicated, under the influence of any alcohol, non-

prescription drugs, including, but not limited to narcotics

or sedatives, or using or taking any prescription drugs

other than as prescribed by a physician, when the use of

such substances was the proximate cause for the loss.

• The voluntary taking of poison, inhalation of gas or taking

of a drug or chemical.

• The rider life insured’s commission of or attempted

commission of a criminal act, or any loss sustained while

incarcerated for a criminal act.

• The rider life insured’s engaging in an illegal occupation.

• Bodily or mental infirmity, disease of any kind, or

medical or surgical treatment of that infirmity or disease.

• Issue ages: 15 to 55.

• This rider must be added at time of issue.

• Available with single life or multiple life coverages.

• Not available with joint life coverages.


[ 60 ]

Coverage availability• This rider may be added after issue.

• Available with single life.

• Available with joint first-to-die coverages.

• Only available on the base universal life coverage.

• Not available with joint last-to-die coverage.

This rider is designed to provide low-cost life insurance

coverage for the unmarried children (including legally

adopted and stepchildren) of the base life insured, to age

25, as long as they are members of the life insured’s

household, whether residing with the insured or at

school full-time, and not married. It includes an attractive

conversion option that can provide up to five times the

initial coverage amount without evidence of insurability.

If the parent dies, the rider provides paid-up term life

insurance up to the child’s 25th birthday or marriage (if

earlier).

Children’s Insurance Rider

This benefit amount is payable for every child insured

under the rider.

This does not include bacterial infections resulting from

an accidental cut or wound or accidental ingestion of a

poisonous food substance.

• Injuries which are not evidenced by a visible contusion

or wound on the outside of the rider life insured’s body.

This provision will not apply in the case of a drowning

or exposure, and it also will not apply to internal injuries

caused by accidental means revealed by an autopsy.

• The operation of any vehicle, however powered, while

having alcohol in the blood in excess of the legal limit.

• Declared or undeclared war, invasion, hostility, acts of a

foreign enemy or any act incident to war or any armed

conflict, including service in the armed forces.

• Participating in any riot, civil commotion, revolution,

rebellion, insurrection, explosion of war weapons or

terrorist activities.

• Suicide, self-inflicted injury or any act of, or attempt to

commit suicide as stated in the provisions of the policy

to which the rider is attached.

• Service, travel, flight in or descent from any kind of

aircraft if the rider life insured acted in any capacity other

than as a fare-paying passenger.

Key benefitsThis rider provides quality accidental death and dismemberment benefits at a low cost, and the cost is conveniently included in the monthly deductions.

If an insured loses limbs or sight as a direct result of an accidental injury, the family may need extra money to provide for lost income or to provide for home modifications and other extra expenses not covered.

Avoiding pitfallsThe Accidental Death and Dismemberment Rider should not be confused with the Accidental Death Benefit (ADB) Rider that was offered as part of a special marketing program for a limited time to qualifying Transamerica clients. The ADB Rider is not for sale outside of this special program.

Benefit Amount

Minimum benefit amount $5,000

Maximum benefit amount (sold in units of $5,000)

$30,000

• Issue ages: 15 days to not yet 19 years old for children.

• Age 20 to 55 years old for the parent (the policyowner).


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EligibilityThe children must be at least 15 days old and not yet

19 years of age. While this rider is in force, additional

children born to or legally adopted by the life insured

are automatically included, providing they are at least 15

days old and not yet 19 years of age. This rider provides

coverage for the children until they have married or have

reached 25 years of age, whichever occurs first.

Although this rider does not trigger any age and amount

medical requirements, both the life insured and the children

are underwritten on the basis of a medical questionnaire

that is included within the Life Insurance Application.

• A child who is considered a substandard risk at the time

of issue will not be covered under this rider.

• Parents who are considered a substandard risk greater

than a 200% total mortality rating may not purchase the

Children’s Insurance Rider.

Paid-up term insuranceIf the life insured dies before the children, the rider will be

exchanged for a non-participating paid-up term insurance

policy for each unmarried child under the age of 25.

Each paid-up term insurance policy:

• provides the same amount of coverage as the rider

• terminates on the child’s 25th birthday or 90 days after

marriage, whichever is earlier

• contains the same conversion privileges as the rider

ConversionEach child may convert the rider to any eligible permanent

or universal life insurance plan for up to five times the

child’s coverage (but not less than the published minimum

for the plan) without evidence of insurability. We must

receive the conversion request in writing within a 31-day

period following the earliest of any of the following events:

• the expiry date of the rider (parent’s age 65)

• the date the child marries (within 90 days following

the event)

• any time between the child’s 21st and 25th birthday

Coverage terminationThe rider provides insurance coverage for the children until

the earliest of:

• the date the children have reached age 25

• the date the children are married

• the termination of the rider

Rider terminationThis rider terminates at the earliest of:

• the policyowner’s request to terminate the rider

• the date of lapse due to insufficient premiums

• the policy anniversary nearest the parent’s 65th birthday

• the death of the parent

Avoiding pitfallsAlthough insurance coverage ends for a child when he or she turns 25 or is married, the rider will continue on the policy, and COI will continue to be deducted as part of the monthly deductions. Since we allow children to be added without notice after the rider has been issued, we cannot know when the rider should be terminated. For this reason, we remind the owner about the rider coverage period and expiry date on both the contract’s data page and the policy statements. We require the owner to provide instructions to terminate this rider before age 65, if no more children are covered.

To ensure all eligible children are covered, please notify Transamerica’s Head Office when insuring any children.

This rider is available to Life 1, as specified on LifeView and the Supplement to the Life Insurance Application. If insurance is required for children of another or a different insured, you may wish to suggest a TermSelect rider or another insurance coverage.

Key benefits• Provides inexpensive coverage for children

without requiring a separate policy.

• Includes an attractive conversion option that ensures that your clients’ children will qualify for life insurance.


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Payor Waiver RidersWe offer two Payor Waiver Riders that provide additional

protection for single life policies issued to children and

insure the payor, usually a parent of the child, for the

amount of the premiums or monthly deductions. If the

payor dies or becomes totally disabled, he or she may

no longer be able to make planned premium payments

or cover the cost of monthly deductions for their child’s

insurance policy, and this may have a serious effect on the

planned growth of the fund value.

Payor Waiver of Monthly Deductions on Death or Disability (PWMD) Rider

Monthly deductions (see “Glossary of common terms”)

are waived when the payor dies or is considered totally

disabled under the terms of the rider (see “Definition of

total disability” and “Maximum benefit period duration” at

the end of “Payor Waiver Riders”).

This rider terminates at the earliest of the following events:

• the policy anniversary nearest the child’s 25th birthday

• the policy anniversary nearest the payor’s 65th birthday

Rider cost and minimum premium

The cost for this rider is calculated on a monthly basis as a

percentage of total monthly deductions (including multiple

and flat extra ratings), excluding the costs of this rider and

any other Payor Waiver Rider.

• Issue ages: 15 days to 15 years (child) 20 to 55 years (payor).

• This rider may not be added after issue.

• Available with single life policies only.

• Available for one or two payors.

• Not available with joint life coverages or policies with multiples coverages.

• Issue ages: 15 days to 15 years (child) 20 to 55 years (payor).


• Available with single life policies only.

• Available for one or two payors.

• Not available with joint life coverages or policies with multiple coverages.

The minimum premium for this rider is calculated as a

percentage of total minimum premiums for the child’s

coverage, excluding the minimum premium of this rider

and any other Payor Waiver Rider. The minimum premium

is listed on the data page. The applicable percentage varies

with the age of the payor and the maximum possible

waiver benefit period.

Payor Waiver of Planned Premiums on Death or Total Disability (PWPP) Rider

This rider waives premiums should the payor be

considered totally disabled under the terms of the rider

(see “Definition of total disability” and “Benefit period for

waiver benefits” at the end of “Payor Waiver Riders”). This

rider also waives premiums should the payor die.

At time of application, the owner must specify the insured

annual waiver amount (up to a maximum of $4,800), and

the rider premium is based on a percentage rate multiplied

by this amount. This percentage varies with the age of the

payor and the maximum possible waiver benefit period.

When a claim for this rider is approved, the monthly waiver

amount will be the lesser of the insured annual waiver

amount and the total amount of premiums paid to the

policy 12 months directly before total disability began, or

when death occurs, divided by 12. The monthly waiver

amount will not exceed $400.

This rider terminates at the earlier of the following events:

• the policy anniversary nearest the child’s 25th birthday

• the policy anniversary nearest the payor’s 65th birthday


[ 63 ]

Please note that the benefit actually ends at the end of the

disability, if earlier.

Death benefit under payor waivers

If the payor dies, the benefit amount is payable until the

policy anniversary nearest the child’s 25th birthday.

Total disability begins

Before age 60 Earlier of child’s age 25 and payor’s age 65.

Between ages 60 and 65 Later of:

• two years

• earliest of child’s age 25 and payor’s age 65

Common terms and conditions for payor waiver riders

Definition of “total disability”

To qualify for benefits under these riders, we require

satisfactory proof of total disability.

In addition, the total disability must begin before the policy

anniversary nearest the payor’s 65th birthday (and before

the policy anniversary nearest the child’s 25th birthday).

During the first 24 months, “total disability” means the

payor is unable to practise his or her regular occupation.

After the first 24 months, “total disability” means the

payor is unable to practise any occupation for which

the payor is, or may be, reasonably suited by reason of

education, training or experience.

The payor will also be considered totally disabled if he or

she experiences the entire and irrecoverable loss of the

sight of both eyes, or of the use of both hands, or of both

feet, or of one hand and one foot.

Waiting period

To qualify for benefits under these riders, payment of the

rider premium must continue during a waiting period of at

least six months.

For the Payor Waiver of Monthly Deductions Rider, any

monthly deductions made during this six-month waiting

period will be refunded once the claim is approved. For

the Payor Waiver of Planned Premiums Rider, the monthly

waiver amounts that would have been credited to the

policy during the waiting period will be payable once the

claim is approved.

Exclusions

Benefits under these riders will not be paid if the disability

results directly or indirectly from:

• an attempt to commit suicide or any intentional, self-

inflicted injury, regardless of whether the life insured is

sane or insane

• an attempt to commit a crime

• the operation of a motor vehicle while having alcohol in

the blood in excess of the legal limit

• any act or occurrence related to war or insurrection

• the flight in, or descent from, any aircraft if the insured

acted in any capacity other than as a fare paying

passenger

• the use of any drug or substance, including the use

of narcotics and sedatives, other than as prescribed

and administered in accordance with a physician’s

instructions

• the voluntary inhalation or taking of any gas or poison

Maximum duration of benefit period

The maximum benefit period for the waiver benefits

depends on when the disability begins, as follows.


[ 64 ]


Before age 60 Continues for life

Between ages 60 and 65 Later of:

• two years

• age 65

Waiver RidersBecoming totally disabled may affect your clients’ ability to

maintain the planned growth of their fund value. This may

have a serious impact on their retirement strategy or their

plans to preserve their estate for future generations.

We offer two types of Waiver Riders that can only

be added at time of issue, for waiving either monthly

deductions or planned premiums. Both riders may be

added to one policy.

Clients can become eligible for rider benefits following

either an “occupational total disability” or a “severe total

disability.” (Please refer to “Common terms and conditions

for Waiver Riders”).

Waiver of Monthly Deductions Rider

This rider waives the monthly deductions for the policy

should the life insured under this rider be considered

totally disabled under the terms of the rider (please refer to

“Common terms and conditions for Waiver Riders”).

This rider does not cover any premium payments in excess

of the monthly deductions (premium payments can still

be made into the plan, even when monthly deductions are

being waived).



• Issue ages: 16 to 55 years.


• Available on each life insured with a multiple life policy.


Rider cost and minimum premium

The cost for this rider is calculated on a monthly basis

as a percentage of total monthly deductions, excluding

the costs of this rider and any other waiver rider. The

applicable percentage used for the calculation of the cost

for this rider is:

• male: 9%

• female: 12%

The percentage used for calculation is shown on the

contract’s data page.

The minimum premium for this rider is calculated as a

percentage of total minimum premiums, excluding the

minimum premium of this rider and any other waiver rider.

The minimum premium is listed on the data page.




[ 65 ]

This rider waives premiums should the life insured under

this rider be considered totally disabled under the terms of

the rider. (Please refer to “Common terms and conditions

for Waiver Riders.”)

At time of application, your client must specify the insured

annual waiver amount (up to a maximum of $12,000). The

monthly rider premium will be based on a percentage of

1/12th of the insured amount:

• Male: 3% for the first $400 per month and

5% thereafter

• Female: 5% for the first $400 per month and

7% thereafter

When a claim for this rider is approved, the monthly waiver

amount will be the lesser of:

• the insured monthly waiver amount

• the total amount of premiums paid to the policy 12 months

directly before total disability began, divided by 12

The monthly waiver amount payable under this rider will

not exceed $1,000.

This rider terminates if premiums have been made on a

monthly (PAD) basis and premiums are not received for a

period of 90 consecutive days prior to a claim for benefits.





Common terms and conditions for waiver riders

Definition of “total disability”

The rider insured may qualify for waiver or fund value

payout benefits providing we receive satisfactory proof that

the rider insured meets the definition of “total disability,”

and that the condition causing disability is not an excluded

condition and began after rider issue date.

“Total disability” is defined as either “occupational total

disability” or “severe total disability.”


Before age 60 Age 65

Between ages 60 and 65

The provision page of planned premiums state:

Waiver Benefit Period:

a. If Total Disability occurs before Age 60, then the waiver benefit period will be:

i. the Waiting Period; and

ii. the period of Total Disability continuing after such Waiting Period up to the Rider Life Insured’s Age 65.

b. If Total Disability begins at or after Age 60 and before Age 65, then the benefit period will be:

i. the Waiting Period; and

ii. the period of Total Disability continuing after such Waiting Period, until the later of Age 65 and thatdate which is two years after the first monthly date on which a Benefit Amount is waived under this Rider.

It is important to note that these definitions differ

from the Living Benefits and Payor Waiver definitions.

• Issue ages: 16 to 55 years.


• Available on the base coverage for multiple life policies.


Waiver of Planned Premiums


[ 66 ]

Waiver benefits that would have been credited to the

policy during the waiting period will be payable once the

claim is approved.

Avoiding pitfallsWaiver Riders are only available at time of issue. Many people buy life insurance when they are young, and make the mistake of thinking they’ll never need Waiver Riders. At a later time in their life, due to deteriorating health or uncertain employment, they may not qualify for stand-alone disability insurance coverage, or may have to pay very high premiums for this coverage.

Key benefitsWaiver Riders provide valuable disability protection. After all, when clients becomes disabled and are unable to pay their monthly deductions or planned premiums, this will affect more than their life insurance coverage. It will also affect the growth of their fund value, and that may seriously affect their retirement plans, estate preservation needs, etc.

Consider protecting both monthly deductions and planned premiums in situations where fund value growth is critical to your client’s plans.

Occupational total disability

180 days

Severe total disability 90 days

Occupational total disability

The disability must begin before the policy anniversary nearest

the life insured’s 65th birthday, and is defined as follows:

• During the first 24 months, “total disability” means

the life insured under the rider is unable to practise his or

her regular occupation.

• After the first 24 months, “total disability” means the

life insured under the rider is unable to practise any

occupation for which the life insured is, or may be,

reasonably suited by reason of education, training or

experience.

Severe total disability

The disability is defined as any one of the following:

• Total and irrecoverable loss of sight in both eyes, loss of use

of both hands, or of both feet, or of one hand and one foot.

• The rider insured is terminally ill and the condition is

expected to result in death within 24 months.

• The rider insured is unable to perform two or more basic

activities of daily living without receiving substantial daily

physical assistance from another person. Basic activities

of daily living include bathing, dressing, toileting,

continence, eating and cognitive functioning. If the rider life

insured is able to perform the two basic activities of daily

living with modification or adaptive devices, he or she will

not be considered disabled under the terms of this rider.

Eligibility for benefits: Waiting period

To qualify for benefits under these riders, payment of

the rider premium must continue for the duration of the

waiting period. The waiting period varies by definition of

total disability, as follows.

Exclusions

Benefits under these riders will not be paid if the disability

results directly or indirectly from:

• an attempt to commit suicide or any intentional, self-

inflicted injury, regardless of whether the life insured is

sane or insane

• an attempt to commit a crime

• the operation of a motor vehicle while having alcohol in

the blood in excess of the legal limit

• any act or occurrence related to war or insurrection

• the flight in, or descent from, any aircraft if the insured

acted in any capacity other than as a fare-paying

passenger

• the use of any drug or substance, including the use

of narcotics and sedatives, other than as prescribed

and administered in accordance with a physician’s

instructions

• the voluntary inhalation or taking of any gas or poison


[ 67 ]

9. Policy administration

Monthly deductionsMonthly deductions are charged against the total fund

value at each monthiversary (the first day of each policy

month, which is based on the policy issue date), and

include the costs for base coverages, riders and benefits,

as well as the $10 guaranteed monthly policy fee.

Lapse and reinstatement processYour clients will have the flexibility to increase or decrease

premiums, pay at unscheduled dates or stop and restart

premiums, providing the policy does not go into shortage.

ShortageEssentially, “shortage” is a warning to your client that

their policy is at risk of lapsing A policy is considered to

be in shortage when either of the two following shortage

conditions is met:

• The net fund value is less than the then-current monthly

deduction.

• The net fund value less half of the applicable surrender

charges is less than 0, and A is less than B, where:

– A is the sum of all premiums received by Transamerica

prior to such time, less any partial surrenders and all

principal, accrued interest and other amounts then

outstanding in respect of any loans.

– B is:

for the first three policy years, the sum of all

monthly minimum premiums calculated from the

policy date to such time

beginning in the fourth policy year, the sum of all

monthly deductions calculated from the policy date

to such time

When a policy meets either of these two conditions,

and providing it is not already in shortage, the owner will

receive a shortage notice from Transamerica. A policy will

lapse if a premium equal to or greater than the shortage

amount (so that the policy no longer meets either of the

shortage conditions) is not received during the 31-day

grace period. We recommend that at least the equivalent

of three additional monthly deductions be paid as a buffer,

to reduce the risk of lapsing. In this situation, your clients

may also want to increase their planned periodic premium

amount.

If a primary life insured dies during the grace period, the

portion of any overdue monthly deduction applicable to any

insurance coverages for that individual will be deducted

from the death benefit.

Key benefitsAnother way of interpreting the shortage conditions is

that as long as the net fund value is sufficient to cover

the monthly deductions, and as long as the minimum

premiums have been paid to date (net of withdrawals and

outstanding loans), then the policy will remain in force.

This is more liberal than the way some other insurers

administer their UL plans, where policies lapse if there isn’t

sufficient cash surrender value to cover the COI.

LapseIf a policy is in shortage and a premium equal to or greater

than the shortage amount is not received within the 31-

day grace period, the policy lapses as of the date that the

shortage first occurred.

ReinstatementsReinstatements are allowed on lapsed policies, but are

not available on policies that have been surrendered or

otherwise terminated. Requests for reinstatement must

be made in writing within two years of the effective date

of lapse, and are subject to Transamerica’s underwriting

requirements. Any outstanding policy loans at the time

of lapse, if any, together with interest at the rate set by

Transamerica for such purposes, will have to be repaid.


[ 68 ]

All monthly deductions between the effective date of the

lapse and the date of reinstatement must be paid, plus

three months of deductions.

Anniversary statements and eStatement LibraryAccess your client’s universal life eStatements today.

There is no better source of sales revenue than your

existing clients. Transamerica’s eStatement library is a

powerful way to nurture stronger relations and develop

more business with your clients. To support you in building

your business, Transamerica offers electronic universal life

client statements through the secure Transamerica.ca

website under My Business/eBusiness tools or the

eBusiness Tools links found throughout the site.

With eStatement access, you no longer need to maintain

paper copies of client statements, as the library provides

quarterly and annual eStatements for the past 18 months.

eStatements’ powerful features offer you the flexibility

and ease of accessing your clients’ eStatements quickly.

You will be able to search by policy number, owner’s or

insured’s name, advisor or date. You have the option to

view, download, email and print the eStatements. The

online “Help” feature provides client statement definitions

that will assist you when meeting your clients.

The eStatement library also provides a series of helpful

reports to assist you in managing your in-force business.

Imagine a listing of clients with universal life statements

in the upcoming month, or a listing of clients from the

previous 30 or 90 days. These listings and more are all

contained in the eStatement Library.

If you are not currently registered for Transamerica’s

secure Transamerica.ca and/or eStatements, you may

register online. Go to transamerica.ca for access and click

“Register” under Advisor login. Complete and submit the

registration form, and an email will be sent to you to set

your confidential password – your email address is your

username.

Access to your client’s universal life eStatements was

never so easy!

Claims processing

Payment of death claimsUnless specified otherwise, we require the claimant to

provide the following.

Claimant entitlement

• The claimant’s statement, completed by the claimant,

and signed by a witness and by either the named

beneficiary or the executor of the estate. This form

details the beneficiary’s name, address, social insurance

number, age and reasons for filing the claim.

• The original WealthAdvAnTAge or EstateAdvAnTAge

policy contract.

• A notarized copy of the probated will (in Quebec, the

notarial will) or Letters of Administration required

for any claim that is payable to a life insured’s estate

(not required when the claim is payable to a named

beneficiary).

Proof of life insured’s age

• A copy of the life insured’s birth certificate or driver’s

licence.

Proof of death

• The death certificate (an original or notarized copy must

be supplied).


[ 69 ]

• The physician’s statement, completed by the attending

physician documenting the medical condition causing

death. It also outlines the details of the diagnosis,

the date when the condition was first diagnosed and

whether the death was accidental or resulted from

suicide or homicide.

• Disclosing the reason for death is important, because it

could affect the amount of the claim, depending on the

contract’s benefits or riders. For example, the Accidental

Death and Dismemberment Rider provides an additional

benefit amount to the named beneficiary for a death that

is the direct result of an accident.

Suicide limitation

The death benefit is not payable if within two years from

the later of the effective date of the policy or the last

reinstatement or change of the policy, the life insured

dies by suicide or an attempt to commit suicide. This is

regardless of whether the life insured is sane or insane.

Instead, Transamerica’s liability will be limited to refunding

the lesser of:

• the amount by which the total fund value exceeds any

outstanding policy loans (including accrued interest)

• the total of all premiums received for the life insured,

less any withdrawals or premium refunds

Placing an order for marketing material or formsinformco is responsible for warehousing most of our

promotional materials and forms. All materials requested

through informco can be ordered directly from informco.

Simply place your order online through icanorder, which

is conveniently located on the Transamerica.ca website.

Before having the order placed, make sure to have the

form numbers and proper address.

Some materials may only be available in PDF format.

Special note about edition datesIf you order the item from informco, you should receive

the most recent version.

Because there is a constant flow of materials being

developed throughout the year, additional materials will

become available, while others will become discontinued.

To address this, the Transamerica.ca website and LifeView

will be updated constantly to reflect any changes.

Other sources for marketing materialsLifeView is another great source for information, and can

be updated through downloads from the Transamerica.ca

website (see the marketing materials directories for more

information).

Illustration systems (LifeView)LifeView is a versatile interactive system that is a fully

integrated sales tool, enabling you to collect client

information, identify the client’s most pressing insurance

needs and run the appropriate illustration.

Once installed, LifeView will automatically, and

continuously, check for updates to the program through

an “auto check” feature when connected to the Internet.

In the future, we will be producing only limited quantities

of CDs, as Transamerica.ca allows you to update your

software quickly and regularly online. Want to make

sure you have the latest solves, sales concepts,

enhancements and pricing changes for our products?

LifeView will now automatically check for updates each

time you open the LifeView software when you are

connected to the internet. If an update is found, you will

be prompted to download the latest version. For your own

personal CD copy, you can still request a copy through

informco, our distribution warehouse.


[ 70 ]

10. How to structure UL insurance for the market you are in

Guaranteed UL: Is it possible?How do you structure our universal life products to be fully

guaranteed? With EstateAdvAnTAge and WealthAdvAnTAge,

you can structure Transamerica’s universal life plans to be

fully guaranteed using a number of guaranteed features,

including:

• Guaranteed COI: The COI rates per $1,000 of face

amount are fully guaranteed and stated in the policy

contract.

• Built-in premium tax: Premium taxes are not deducted

from each premium payment, even with excess funds.

Premium taxes are built into the annual COI rates

per $1,000 of face amount and are guaranteed not to

increase, even if provinces increase the premium tax.

This is a unique feature in the industry.

Using UL as an investment vehicleUL promises guaranteed insurance coverage as long as

monthly insurance costs are funded by the client, and as an

investment vehicle, it is extremely effective for the clients

who have already maximized their RRSP contributions.

Why use the investment side of universal life insurance?UL permits tax-deferred investing. Annual investment

income is not subject to tax as long as it remains within

the policy during the lifetime of the life insured. This makes

UL a powerful wealth-building tool.

Investing a significant lump sum in a UL plan also allows

clients to prepay future COI using pre-tax investment

dollars. In other words, to pay annual COI of $500 using

taxable income such as a salary would require $750

to $1,000 of a client’s pre-tax income. However, those

same clients could invest $8,333 in a UL plan, and if they

earned a 6% return, they would realize $560 per year in

investment income with which to pay their COI.

How do I maximize the investment inside UL insurance?• Determine the client’s long-term insurance need.

• Determine the amount and time frame for premiums.

• Select a level death benefit option with ART COI.

• Select the Optimizer Option (to start after the premium

payment period).

• Specify the minimum face amount in conjunction with

the Optimizer to be equal to the long-term insurance need.

• Use LifeView to solve for the minimum face amount that

will shelter the premium.

Which sales concepts leverage UL insurance as an investment vehicle?There are several sales concepts that emphasize the

investment benefits of UL insurance, including:

• Family Wealth Transfer Plan

• Corporate Estate Transfer Strategy

• Transamerica’s Insured Retirement Strategy

Comparing and illustrating UL plansHere are a few things to remember when illustrating

different universal life plans.


[ 71 ]

Don’t forget to deduct all investment fees when choosing an illustration interest rate!The interest rate assumption is usually the most powerful

assumption in an illustration, due to the effects of

compounding over many years. A small difference in this

assumption can change results dramatically. Remember to

look at the following criteria when selecting an interest rate:

• Extra costs such as management fees, investment

income tax and/or administration fees must be

deducted.

• Make sure to deduct a fee that matches the investment

mix. Here are some general tips:

– Canadian bonds and fixed-income management/

administration fees tend to be the lowest – generally

between 2% and 3%.

– Canadian equity index-linked funds (such as the TSX)

tend to have higher management fees.

– U.S. and international index-linked funds usually have

the highest management fees.

When recommending investment options indexed to

managed funds (e.g., mutual funds), make sure to account

for both the UL investment fees and the underlying mutual

fund MERs.

This is just a guide: each company will disclose its

particular fees (Transamerica’s can be found in Section

3, “Investment choices”). But because of variations in

fees, two different companies offering the same index-

linked funds and the same interest rate can actually yield

completely different results!

The following table shows how various management fees will change the illustration rate of return, based on a gross

return of 8%.

Balanced portfolio25% Canadian equity, 25% U.S. equity, 10% international equity, 40% bond

TLC Company B Company C Company D Company E Company F

Adjusted management fee 3.00% 3.04% 3.05% 3.25% 3.30% 3.20%

Rate-adjusted interest 5.00% 4.96% 4.95% 4.75% 4.70% 4.80%


[ 72 ]

ConclusionDespite our extensive guarantees, it’s important to

differentiate Transamerica’s UL plans from those of

other issuers who offer “guaranteed UL.” Most of these

“guaranteed” plans only provide an increasing death

benefit, Fixed-Rate Interest Options with no bonus, and

no benefits or riders – and some of these plans don’t

guarantee the premium tax! What if you sold your client

a minimum-premium level COI policy so that you could

safely tell them that you’ve guaranteed both their death

benefit and their premium? What would happen if the

premium tax was raised? Your client’s next bill would

include that increase – and you would get a call asking

for an explanation of why the “guaranteed” premium had

gone up! This won’t happen with Transamerica, because

we have built the premium tax into the guaranteed COI.

Transamerica is one of the few companies that can truly

guarantee both the death benefit and the premium.

WealthAdvAnTAge and EstateAdvAnTAge can offer the same

guarantees, accountability and long-term peace of mind,

without sacrificing the valuable features and flexibility that

your clients may need in the future.

Other considerations when illustrating competing UL insurance• How is the premium tax paid? Unless premium tax is

part of the guaranteed COI or guaranteed at a certain

level, changes in tax legislation could cut into your

clients’ investment capital, distorting initial illustrations.

Further, funds kicked out of the policy due to exempt-

testing, and then transferred back in at a later date, may

be subject to premium tax a second time.

• How are MERs calculated? Beware of daily compounded

MERs that are actually higher than the published

(estimated) numbers on an annual basis.

• Are bonuses conditional? Watch out for policies that

reduce or eliminate the investment bonuses on certain

options or in certain market environments.

• Do bonuses change based on investment option

selected? Make sure you illustrate the clients moving to

fixed rates as they get older.

• How are bonuses invested? If bonuses are invested

somewhere other than the clients’ chosen investment

option, and this is not factored into the illustration, actual

long-term investment results could be reduced by up to

20%, unless the advisor or the clients are prepared to

request a fund transfer every year.

• Does the product charge MVAs when insurance charges

are drawn from Fixed-Rate Interest Options? If so,

you will need to ensure that there are sufficient funds

invested in other investment options that potentially earn

lower investment returns.


[ 73 ]

Glossary of common termsACB or Adjusted Cost Basis is the policyowner’s net

cost of the policy as defined by the Canada Revenue

Agency. This amount is used to determine whether

monies surrendered from a policy are subject to tax,

and it also affects the amount of CDA credit for

corporate-owned policies.

Age means the age of a life insured on his or her nearest

birthday.

Attained age is the insured’s current age (attained) age,

as opposed to his or her original age (the age of the person

when the policy took effect).

Base universal life coverage is usually “Life 1” on

the Life Insurance Application or “Base Coverage” on

LifeView. There are certain privileges attributed to the

base universal life coverage. For example, on a multiple life

policy, the Optimizer Option will reduce the face amount

for the base universal life coverage only.

Cash surrender value is the amount of cash accessible to

the policyowner, excluding any applicable MVA adjustment.

Should the policyowner choose to make a withdrawal from

the policy during the surrender charge period, the cash

surrender value amount will reflect the fund value net of

applicable surrender charges and any outstanding loans.

The catastrophic events provision of the UL contracts

addresses situations in which we are prevented from

carrying on regular business functions due to events

beyond our control. It is intended to provide Transamerica

with additional time to discharge its obligations during

extenuating circumstances. The provision is as follows:

If Transamerica’s performance of any of its obligations

under the contract is delayed or otherwise made

impractical by reason of any flood, riot, fire, acts of

nature, labour unrest or any other causes beyond its

control, such obligations shall be postponed until such

time as the cause ceases to preclude or make impractical

Transamerica’s performance of such obligations.

The Cost of Insurance (COI) period is the period of

time during which a charge is payable for an applicable

coverage.

Currency-neutral Index Interest Options deliver the

performance of a foreign index in Canadian dollars. As

the term “currency-neutral” implies, the unique structure

of these options means they minimize exposure to

international currency fluctuations. Whatever happens to

the foreign index will most likely be reflected in the return

of the currency-neutral Index Interest Option.

The exempt-test face increase is the amount by which a

face amount is increased, subject to legislative maximums

and other conditions, as part of the policy anniversary

exempt-test processing to keep a policy tax-exempt.

This increased amount may be removed (“clawed back”)

in subsequent years.

The face amount is the face amount of a coverage, as

increased or decreased from time to time; it does not

include the face amount or the amount of insurance

payable under a rider.

Market Value Adjustment (MVA) applies to funds that

are withdrawn from the Fixed-Rate Interest Options,

including transfers, cash withdrawals and policy

surrenders, if the interest rate at the time of withdrawal

is greater than or equal to the guaranteed rate at the time

of deposit. MVAs do not apply to monthly deductions or

the payment of a death benefit.


[ 74 ]

Monthly deductions include the monthly COI, rider costs

and the policy fee, all of which are deducted monthly from

the fund value.

Net Amount at Risk (NAAR) is the amount of insurance

for which the COI is charged. The NAAR for a coverage is

calculated by subtracting the proportionate fund value from

the death benefit.

Net cash surrender value is the cash surrender value,

less any applicable MVA.

Policy date is the date used to determine the monthly

dates, policy anniversaries and policy years with respect

to the policy.

A primary life insured is someone who is insured under

a universal life coverage. There may be several primary life

insureds under a policy having multiple life coverages.

Proportionate fund value is the amount obtained

when the total fund value is multiplied by a fraction, the

numerator of which is the face amount for the primary life

insured, and the denominator of which is the sum of the

face amounts for all primary life insureds.

Quick pay means maximizing premium payments in

early policy years.

The Side Account is a separate, taxable, deferred

annuity contract that is automatically issued with every

EstateAdvAnTAge and WealthAdvAnTAge policy. The Side

Account is used to hold monies that exceed the maximum

amount that can be deposited in the tax-exempt Interest

Options of the universal policy.

Single/joint Equivalent Age (SEA) is the insurance

age at which premium rates are based for joint coverage.

It reflects the combined life expectancy of all the

individuals on the joint coverage.

Sum insured means the face amount, plus any

exempt-test face increase.


[ 75 ]

IndexAAccumulation Bonus ........................................ 2, 36, 37, 38, 39

Bonus design ........................................................................ 36Guaranteed calculation ......................................................... 38Minimum ........................................................................... 1, 36Comparing the bonus rates .................................................. 38Features ................................................................................ 38Years Credited ...................................................................... 38

Accumulation Market ............................................................ 42

Additional Death Benefit .................................................. 1, 22

AEGON Capital Management ............................................... 33

Adjusted cost basis (ACB) ........................................ 51, 51, 73

Asset allocation ..................................................................... 32

BBonuses (See Accumulation Bonus, Performance Bonus, Low-Fee Deferred Bonus)

Benefit Riders .................................................................... 59-66Accidental Death and Dismemberment (AD&D) .............. 3, 59Children’s Insurance Rider .......................................... 3, 60, 61Paid-up term insurance ..................................................... 3, 61Conversion Option .......................................................... 60-61Payor waiver riders ..................................................... 3, 62, 63Rider cost and minimum premium ................................. 62, 64

CCost of Insurance ..................................................... 1, 2, 5, 7, 73

Annual renewable term ...................................................... 7, 8ART 100 .......................................................................1, 45, 70Cost of insurance band structure ....................................... 2, 8Combined banding .............................................................. 2, 8

Conversions ........................................................................ 60-61Children’s Insurance Rider ............................................... 60-61

CoveragesMultiple life coverages ..................................................... 14-17Joint first-to-die ..................................................... 1, 18, 21-23Joint last-to-die .................................................. 1, 7, 18-21, 23Joint life coverages .......................................................1, 18-23Single life ......................................................... 1, 12, 18, 20-24Additional coverage riders .......................................... 8, 14, 41

Claims processing .............................................................68, 69Payment of death claims ...................................................... 68Claimant entitlement ............................................................ 68Proof of death ....................................................................... 69Suicide limitation ................................................................... 69

Combined banding ...............................................................2, 8

Collateral loans .......................................................................45

Creditor protection .................................................................44

Corporate-owned policies ............................................... 17, 73

Currency exposed .............................................................25, 28

Contingent events ............................................................21, 23

Currency neutral ...............................................2, 25, 28, 29, 73

Client statements .............................................................50, 68

Currency exchange ............................................................29, 33

Critical condition .......................................................... 3, 55-58

Children’s Insurance Rider ............................................... 60-61

DDeath Benefit ................................................................................

..........1, 5, 6, 12, 35, 41, 45-46, 52, 54, 56, 58, 63, 68, 69, 70, 72Level death benefit ................................................................. 6Increasing death benefit ......................................................... 5Death benefit option changes ............................................ 5, 6

Deposit loads (See premium tax)

Deferred annuity contract ...............................................44, 74

Disability ............................................................................ 55-58

Dow Jones EURO STOXX ......................................................29

EEdition dates ...........................................................................69

Other sources for marketing materials .................................. 69

Excess funds ..........................................................41, 43, 53, 70

eStatements ............................................................................68

Exempt test face increase ................................................ 41, 42

Exchange Traded Funds (ETFs) .............................................29

FFace amount ...................................................................... 1, 4-6,

8, 9, 11, 14-18, 20, 21, 23, 41-44, 47-50, 54, 56, 59, 70, 73, 74Minimum issue amounts ..................................................... 1, 4Increasing the face amount ....................................................54Decreasing the face amount ..................................................54

Fees ..............................................................24, 32-35, 37, 51, 71

Fund transfers ....................................................................35, 51

Fund Value Payout .................................. 1, 5, 15, 16, 17, 20, 65

Flat extras ..........................................................................13, 62

Fixed rate bonus .....................................................................72


[ 76 ]

Financial Times Stock Exchange (FTSE) 100 Share Index .....29

GGuarantees ...............................................................................36

Cost of insurance rates ....................................6, 42, 52, 53, 70Policy fees .............................................1, 8, 15, 21, 24, 53, 67Interest option fees .................................................... 28-24, 37Client Bonuses ............................................................. 2, 36-39Number of market index options .......................................2, 28Minimum returns for fixed-rate interest options ... 2, 27, 37, 72Premium tax ...................................................... 1, 8, 41, 70, 71Interest rates for policy loans .............................................2, 46

IInterest Option Fees .................................................... 28-24, 37

Guarantees .................................................... 29-31, 33, 34, 37Fees ........................................................................... 28-24, 37Transfers ................................................................................51Calculations ............................................................................52

Illustration software .......................................12, 15, 25, 32, 69LifeView ....4, 8, 12, 15, 18, 19, 25, 32, 41, 43, 46, 47, 61, 69, 73How to order ...........................................................................69Comparing and illustrating UL plans .................................70-72

Index interest options .....................2, 25, 26, 28-34, 46, 50, 73 Guarantees .................................................................27, 29-31Fund transfers ........................................................................35Calculations ............................................................................28Passive Index Interest Option ................................................29Managed Index Interest Option ....................................... 30-31imaxxFunds ........................................................ 25, 26, 30, 34imaxx TOP Portfolios .......................................... 25, 26, 32, 34Fixed-Rate Interest Options ..........................................2, 6, 26, ......................................... 27, 32, 35, 37, 45, 46, 50-52, 72, 73

Index Allocation interest option ..................................... 32-34

JJuveniles ............................................................................1, 4, 8

Joint life coverages ............................ 12, 18-23, 59, 62, 64, 65

LLapse .........................................................................................67

Shortage ................................................................................67Reinstatement .......................................................................67Grace period ..........................................................................67

LifeView .... 4, 8, 12, 15, 18, 19, 25, 32, 41, 43, 46, 47, 61, 69, 73How to order ..........................................................................69Downloading the illustration software ...................................69

Low-Fee, Deferred Bonus .............................................2, 36, 37Bonus design .........................................................................36Guaranteed calculation ..........................................................38Minimum ..................................................................................2Maximum .................................................................................2 Comparing the bonus rates ....................................................39 Features .................................................................................38Years Credited .......................................................................38

Living Benefits ................................................................... 55-58Qualification ...........................................................................55benefit amount ......................................................................56Payment Options ...................................................................56Claims .....................................................................................56Continuous Disability or Critical Condition ............................57

Loans ....................................................................................2, 45

Level rider .................................................................4, 14, 24, 54

Loan repayment ..................................................................2, 46

MMultiple extras or table ratings (See underwriting)

Maximum premium estimate .......................................... 40-42Maximum Taxation Actuarial Reserve (MTAR) ..........24, 40, 41

Monthly Deduction Interest Option ............................2, 27, 50How to apply ..........................................................................50

Monthly deductions ...................................................................

.............2, 3, 8, 15, 16, 19-21, 27, 45-50, 52-53, 56, 62-64, 67, 74

Minimum issue amounts ......................................................1, 4

Multiple coverages ............................................................14-17

Minimum premiums ....................................7, 53, 56, 62, 64, 67

Maximum premiums ..............................................................53

Mercer Investment Consulting .............................................34

Market fluctuation ..................................................... 42, 44, 53

NNon-smoker ...................................... 1, 10, 11, 13, 18, 40, 45, 55

Net amount at risk .........................5, 6, 8, 14, 21-23, 54, 56, 74

Nikkei 225 Stock Average ......................................................29

Net cash surrender value ........................... 5, 32, 45, 47-49, 74

NASDAQ 100 ............................................................................29

OOptimizer ................................................3, 40-44, 48, 54, 70, 73

Optimizer minimum face amount ..........................................42


[ 77 ]

Tax-exempt testing ................................................................42Side account ..........................................................................42Maximum premium estimate .......................................... 41, 42250% rule .............................................................................. 41Termination ............................................................................43Illustrating Optimizer on LifeView ..........................................43

PPerformance Bonus ....................................................... 2, 36-39

Bonus design .........................................................................36Guaranteed calculation ..........................................................38Minimum ................................................................................38Maximum ...............................................................................38Comparing the bonus rates ...................................................39Features .................................................................................38Years Credited .......................................................................38

Preferred underwriting (See underwriting)

Premium allocationInstructions ............................................................................46

Policy loans ......................................................................... 45-47Interest rate charged ..............................................................46Interest rate credited .............................................................46The mechanics ................................................................ 45-46Repayment ...................................................................... 46-47

Premiums ...................................................................... 51, 53-54Planned periodic premiums ...................................................53Minimum premiums ..............................................................53Maximum premiums .............................................................53

Policy fee ................................ 1, 8, 14, 15, 18, 19, 21, 24, 53, 67

Premium tax ........................................................ 1, 8, 41, 70, 72

Probate .....................................................................................68

Policy Change Application .....................................................19

Planned periodic premiums ............................................53, 67

Payor waiver riders .......................................................3, 62, 63

Payor Waiver of Planned Premiums ...........................3, 62, 63

Payor Waiver of Monthly Deductions ........................3, 62, 63

Policy date ......................................................................... 67, 74

Primary life insured .....................................1, 14, 15, 17, 67, 74

Proportionate fund value ............... 6, 15, 16, 17, 20, 22, 23, 74

RRatings (See underwriting)

Riders ........................................ 1, 2, 4, 12, 24, 41, 53, 54, 59-66

Term riders ......................................... 1, 2, 4, 12, 24, 41, 53, 61 Level and increasing term riders ..........................................4, 5Children’s Insurance Rider ...............................................60, 61

Relative risk rating .................................................................26

Reinstatement ............................................................. 28, 67-69

SSide Account ................................................................ 40-44, 74

Taxation .................................................................................. 41Application and ownership ....................................................44Side Account interest rates ...................................................44Deferred annuity contract ......................................................44

Sum insured (See face amount)

Surrenders (See withdarawals)

Shortage ...................................................................................67Net Fund Value ......................................................................67Lapse .....................................................................................67Reinstatements .....................................................................67

Statements ...............................................................................68eStatement Library ................................................................68Quarterly statements .............................................................68Annual statements .................................................................68

Smoker ............................................................... 1, 10, 11, 42, 55

Surrender charges ....................................................... 3, 14, 17,

.................................. 20, 22, 24, 41, 44, 45, 47, 48-50, 54, 67, 73

Severance Option ...................................................................17

Single Life Insurance Option ..................................1, 18, 20-23

Substandard risk ..................................................19, 21, 22, 61

Single equivalent age ........................................... 18, 19, 23, 74

S&P/TSX 60 .......................................................................28, 29

Standard & Poor’s 500 .....................................................28, 29

Scotia Capital Markets Universe Bond Index .....................29

TTaxation .............................................................................50, 51

Policy loans ............................................................................50Withdrawals ...........................................................................51Side account .......................................................................... 41

Term InsuranceTermSelect ........................................................ 1, 2, 4, 8, 12, 24

Tax-deferred ......................................... 8, 25, 36, 42, 44, 45, 70

Table ratings ............................................................................17

UUnderwriting .....................................................................1, 8-14

Cover letter ............................................................................10


[ 78 ]

Combined banding ...............................................................2, 8Underwriting requirements ............................................... 9, 12Preferred underwriting .......................................................... 11Elite underwriting .................................................................. 11Ratings .............................................................................. 12-14Multiple extras or table ratings .............................................. 17

Unconditional bonuses ..........................................................36

Universal life statements ......................................................68

WWithdrawals

Cash surrender value .......................... 40, 41, 45-51, 67, 73, 74Policy loans ...................................................................... 45-47Policy and coverage surrenders ........................................47-49Partial surrenders ........................................................47-52, 54Surrender charges ........................................................3, 14, 17, ................................ 20, 22, 24, 41, 44, 45, 47, 48-50, 54, 67, 73Withdrawal order .............................................2, 46, 47, 50, 56Monthly Deduction Interest Option ............................. 2, 27, 50Market value adjustments (MVAs) ........................................52

Weightings ...................................................................28, 33, 35

Withdrawal order ..............................................2, 46, 47, 50, 56

Waiting period .......................................................55, 57, 63, 66

Waiver of Monthly Deductions ............................ 3, 62, 63, 64

Waiver of Planned Premiums ............................... 3, 62, 63, 65

LP660 11/11

Transamerica Life Canada is a leading life insurance company in Canada. Through a number of distribution

channels, resulting in a national network of thousands of independent advisors, Transamerica provides a full

spectrum of individual life insurance and protection products designed to help Canadians take responsibility

for their financial future. For over 100 years, we’ve stood by a simple idea: deliver on our promises so we

can keep making the things that make tomorrow better.

Transamerica Life Canada is an AEGON company. AEGON is an international life insurance, pension and

asset management company. With headquarters in The Hague, the Netherlands, AEGON has businesses in

over twenty markets in the Americas, Europe and Asia. AEGON companies employ approximately 27,000

people and serve over 40 million customers.

Understanding the health and wellness issues affecting Canadians, Transamerica Life Canada commits

funds annually to our in the spirit of hope charitable giving program, which supports our neighbours and

communities through donations to numerous non-profit organizations.

TM Trademarks of AEGON Canada ULC and/or its affiliated companies.® AEGON and the AEGON logo are registered trademarks of AEGON N.V. AEGON Canada ULC and its affiliated companies are licensed to use such marks.® Transamerica and the pyramid design are registered Trademarks of Transamerica Corporation. Transamerica Life Canada is licensed to use such marks.® NorthStar and Disciplined Equity are registered Trademarks of FMR Corp.

5000 Yonge StreetToronto, Ontario M2N 7J8

www.transamerica.ca

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Universal life ProdUct GUide - · PDF fileUniversal life ProdUct GUide Updated march 26, 2012. ... Joint life coverages 18 ... 42 Optimizer Option 42