Diversified Advantage Variable Universal Life |
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FEES AND EXPENSES | ||||||||||
Charges for Early Withdrawals |
If you fully surrender your Policy (meaning you make an early withdrawal of your full Net Cash Surrender Value) within the first 9 years following your purchase of the Policy or within the first For example, if you were to surrender your Policy during the first year after your Policy purchase (and your total premiums paid were $100,000 and your Specified Amount is $500,000), then you could be assessed a Surrender Charge of up to $ For more detailed information, see “ Table of Fees and Expenses;” “ What Are the Fees and Charges Under the Policy?” | |||||||||
Transaction Charges |
In addition to the Surrender Charge for Policy surrenders, you may be charged for other transactions. These include a Percent of Premium Charge (deducted from each premium) and a partial withdrawal processing fee. A Surrender Charge will also be deducted if you increase the Specified Amount of the life insurance death benefit and fully surrender your Policy within 9 years of such increase. We reserve the right to impose transfer charges (when you transfer Policy Value between Investment Options), but we currently do not impose these charges. We may also impose charges if you exercise certain rider benefits. For more detailed information, see “ Table of Fees and Expenses;” “ What Are the Fees and Charges Under the Policy?” | |||||||||
Ongoing Fees and Expenses |
In addition to Surrender Charges and transaction charges, an investment in the Policy is subject to certain ongoing fees and expenses (usually deducted on a monthly basis). Some of these charges, such as the monthly Cost of Insurance Charge, the monthly Expense Charge per Thousand of Specified Amount, and certain Rider charges (for supplemental benefits), are set based on individual characteristics of the insured (e.g., age, sex, and rating classification). Other ongoing charges include the monthly Mortality and Expense Risk Asset Charges, loan interest, Per Policy Expense Charge and certain other Rider charges. Please refer to the Policy Specifications Page for rates and the specific fees applicable to your Policy. Investors will also bear expenses associated with the Funds, as shown in the following table, which shows the minimum and maximum total operating expenses deducted from Fund assets (before any fee waiver or expense reimbursement) during the year ended December 31, 2023. | |||||||||
Total Annual Operating Expenses (expenses that are deducted from Fund assets) |
Annual Fee |
Minimum |
Maximum |
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Variable Investment Options (Fund fees and expenses) |
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For more detailed information, see “ Table of Fees and Expenses;” “ What Are the Fees and Charges Under the Policy?” |
RISKS | ||
Risk of Loss |
You can lose money by investing in this Policy, including loss of your premiums (principal). For more detailed information, see “ Summary of Principal Risks of Investing in the Policy;” “ What is the Value of My Policy?” | |
Not a Short-Term Investment |
This Policy is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The Policy is designed to provide a life insurance benefit or to help meet other long-term financial objectives. Substantial fees, expenses, and tax implications generally make variable life insurance unsuitable as a short-term savings vehicle. Additionally, the Policy limits your ability to withdraw a portion of the Policy Value (also called cash value) through partial withdrawals or loans; you cannot access more than your Net Cash Surrender Value (the Policy Value less the Surrender Charge and less any outstanding Policy loan). | |
Risks Associated with Investment Options |
• An investment in this Policy is subject to the risk of poor investment performance of the Funds you choose, and the value of an investment can vary depending on the performance of the Funds. • Each Investment Option (the Funds and the Fixed Account Investment Options) has its own unique risks. The performance of the Funds will vary among each other, may underperform similar mutual funds not available through the Variable Investment Options, and some are riskier than others. • A discussion of the risks of allocating your premiums or Policy Value to one or more Funds can be found in the prospectuses for the Funds. You should review the prospectuses for the Funds before making an investment decision. • Premiums and Policy Value allocated to the Fixed Account Investment Options may be kept there for an extended period of time due to restrictions on transfers out of the Fixed Account Investment Options. For more detailed information, see “ Summary of Principal Risks of Investing in the Policy;” “ Appendix A — Funds Available Under the Policy;” “ Appendix B — Fixed Account Options and Indexed Loans.” | |
Insurance Company Risks |
An investment in the Policy is subject to the risks related to the Company, including: • Any obligations, guarantees, and benefits of the Policy (including the Fixed Account Options), are subject to the claims-paying ability and financial strength of the Company. • There are risks relating to the Company’s administration of the Policy, including, among others, cybersecurity and infectious disease outbreak risks. • If the Company experiences financial distress, it may not be able to meet its obligations to you. • More information about the Company, including its financial strength ratings, is available upon request from the Company at 1-800-523-0650. For more detailed information, see “ The Penn Mutual Life Insurance Company;” “ Financial Statements;” “ Summary of Principal Risks of Investing in the Policy — Insurance Company Risks;” “ Other Information.” |
Policy Lapse |
If the total premiums you have paid, less any partial withdrawals you made, equal or exceed the no-lapse premium specified in your Policy, multiplied by the number of months the Policy has been in force, your Policy will remain in force, regardless of investment performance for a specified period. The specified period is the shorter of 20 years, or the time until the Policy anniversary nearest the insured’s attained age 80. However, in no case will the specified period be less than 5 years. Outstanding loans will nullify the no-lapse guarantee if the loans equal or exceed the Cash Surrender Value. The no-lapse premium will generally be less than the monthly equivalent of the planned premium you specified. When a Policy lapses, it has no value, and no benefits are paid upon the death of the insured. You will also lose the principal invested. • A Policy can lapse if the Net Cash Surrender Value is insufficient to pay the Policy charges. This can happen due to insufficient premium payments, poor investment performance, withdrawals, unpaid loans or loan interest, and Policy charges (including increases in those charges). • The larger a Policy loan becomes relative to the Policy’s Cash Surrender Value, the greater the risk that the Policy’s Net Cash Surrender Value will not be sufficient to support the Policy’s charges, including any loan interest due, and the greater the risk of the Policy lapsing. • A Policy lapse may have tax consequences. • If the Policy lapses, there are costs and premium requirements associated with reinstatement of the Policy. For more detailed information, see “ Summary of Principal Risks of Investing in the Policy;” “ What Payments Must I Make Under the Policy? — Lapse and Reinstatement.” | |
RESTRICTIONS | ||
Investments |
• You can allocate your Net Premiums to the Variable Investment Options (that invest in the Funds) and the Fixed Account Investment Options. • The minimum amount that you can transfer generally is $25. • If less than the full amount held under an Investment Option is transferred, the amount remaining in the Investment Option must be at least $25. • The maximum amount that you can transfer out of the Traditional Fixed Account in any Policy year is the greatest of (a) 25% of the amount in the Traditional Fixed Account at the previous Policy anniversary, (b) $5,000, or (c) the total amount transferred out of that account in the previous Policy year. • Transfers from the Indexed Fixed Account may be made only on the anniversary of an allocation of an amount to the Indexed Fixed Account. • The amount that may be transferred excludes any amount held in the Policy loan account. • The Company reserves the right to remove or substitute any of the Funds as Investment Options that are available under the Policy. • In addition, we may limit your ability to make transfers involving the Variable Investment Options if it is believed that a transfer may disadvantage or potentially harm or hurt the rights or interests of other Policy owners. • We will also reject or reverse a transfer request if for any reason any of the Funds do not accept the purchase of its shares. For more detailed information, see “ How Are Amounts Credited to the Variable Investment Options of the Separate Account?;” “ How Can I Change the Policy’s Investment Allocations?” |
Optional Benefits |
• We offer several optional benefits in the form of a rider to the Policy. Various optional benefits are available and some have an additional charge. Not all riders are available in every state and some riders may only be added when you apply for your Policy. • We may stop offering an optional benefit at any time. For more detailed information, see “ What Are the Supplemental Riders And Benefits That Are Available?” | |
TAXES | ||
Tax Implications |
Consult with a tax adviser to determine the tax implications of an investment in and payments received under this Policy. • If you purchase the Policy through a tax-qualified plan or individual retirement account (“IRA”), you do not get any additional tax benefit. • Earnings on your Policy (if any) are taxed when you withdraw them (or if a Policy loan is not repaid), at ordinary income tax rates, and may be subject to a tax penalty before age 59 1 ⁄ 2 . For more detailed information, see “ Summary of Principal Risks of Investing in the Policy — Taxes and Tax Risks;” “ How Is the Policy Treated Under Federal Income Tax Law?” | |
CONFLICTS OF INTEREST | ||
Investment Professional Compensation |
Your financial professional may receive compensation for selling this Policy to you, in the form of commissions, asset-based compensation, allowances for expenses, and other compensation programs, and the Company may share the revenue it earns on this Policy with the professional’s firm. (Your financial professional may be your broker, investment adviser, insurance agent, or someone else). For these reasons, these financial professionals may have a financial incentive to recommend this Policy over another policy or investment. | |
Exchanges |
Some financial professionals may have a financial incentive to offer you a new policy in place of the one you own. You should only exchange your Policy if you determine, after comparing the features, fees, and risks of both policies, that it is preferable for you to purchase the new policy rather than continue to own your existing Policy. For more detailed information, see “ What Payments Must I Make Under the Policy? — Tax-Free ‘Section 1035’ Insurance Policy Exchanges.” |
1. |
Purpose of the Policy |
2. |
Premiums |
3. |
Policy Features |
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Option 1 — the death benefit is the greater of (a) the Specified Amount of insurance, or (b) a percentage of the Policy Value (on the date of the insured’s death) equal to the minimum necessary for your Policy to qualify as life insurance under IRC Section 7702; or |
• |
Option 2 — the death benefit is the greater of (a) the Specified Amount of insurance plus your Policy Value on the date of death, or (b) a percentage of the Policy Value (on the date of the insured’s death) equal to the minimum necessary for your Policy to qualify as life insurance under IRC Section 7702. |
Transaction Fees | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Maximum Charge: 1 | ||||
2 |
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Maximum Charge | The Surrender Charge premium multiplied by the appropriate surrender factor. The Surrender Charge premium is a maximum of $ 3 | |||
Surrender Charge for a representative non-tobacco male insured, age 45 in the first Policy year |
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($ 3 | ||||
Partial Withdrawal Processing Fee |
When you take a partial withdrawal from your Policy. | Lesser of $25 or 2.00% of the amount withdrawn. | ||
Maximum Charge $ 4 | ||||
Overloan Protection Benefit Rider |
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One time charge of | ||||
Accelerated Death Benefit Rider |
Transaction Fees | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
One time charge of 12 months’ worth of Policy charges on the accelerated amount, plus an interest charge, which is equal to 12 months’ worth of interest on the accelerated amount based on a rate that is the greater of (a) the current 90-day Treasury bill rate, or (b) the current maximum statutory adjustable Policy loan rate. |
1 |
2 |
3 | The maximum amount reflects the charge that may be assessed in the first Policy year. |
4 |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Base Contract Charges: |
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5 |
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Maximum Charges |
Maximum of $ | |||
Current Charges |
Maximum of $ | |||
non-tobacco male insured, age 45 |
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Maximum Charge |
$0.2117 per $1,000 of Net Amount at Risk. | |||
Current Charge |
$0.1355 per $1,000 of Net Amount at Risk. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
6 |
For first 120 months following the Policy date or an increase in a Policy’s Specified Amount, the charges range from a maximum of $ | |||
non-tobacco male insured, age 45 |
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Maximum Charge |
$0.49 per $1,000 of initial Specified Amount of insurance or an increase in the Specified Amount. | |||
Current Charge |
For the first 60 months following the Policy date or an increase in the Specified Amount, $0.26 per $1,000 of initial Specified Amount of insurance or increase in Specified Amount. For months 61 through 120 following the Policy date or an increase in the Specified Amount, $0.13 per $1,000 of initial Specified Amount of insurance or increase in Specified Amount. | |||
7 |
0.05% monthly (annual rate of | |||
Per Policy Expense Charge 8 |
Guaranteed Maximum $9.00. Current Charge $8.00. | |||
Asset Charge 9 for Enhanced S&P 500 Indexed Account Uncapped S&P 500 Indexed Account |
0.20833% of segment value (annual rate of 2.50%). | |||
OptionalBenefit Charges: |
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Traditional Loans 10 |
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Net Interest Charge 11 |
End of each Policy year | Annual rate of 1.00% until year 11 and then an annual rate of 0.25% (after credit from interest paid on collateral held in Traditional Loan account). 12 | ||
Indexed Loans 10 |
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Net Interest Charge 11 |
End of each Policy year | Maximum annual rate of 5.00%. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Cost of Insurance Charges 13 |
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Current and Maximum Charges |
Maximum of $ | |||
non-tobacco male insured, age 45 |
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Current and Maximum Charges |
$0.0592 per $1,000 of accidental death benefit. | |||
Cost of Insurance Charges 13 |
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Maximum Charges |
Maximum of $ | |||
Current Charges |
Maximum of $45.8333 to minimum of $0.0049 per $1,000 of additional insured term insurance benefit. | |||
non-tobacco male insured, age 45 |
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Maximum Charges |
$0.2117 per $1,000 of additional insured term insurance benefit. | |||
Current Charge |
$0.1355 per $1,000 of additional insured term insurance benefit. | |||
Administrative Charges |
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First year of Rider and first year of increase in term insurance benefit under Rider |
$0.10 per $1,000 of additional insured term insurance benefit. | |||
14 Rider |
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Maximum Charges |
Maximum of $ |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Current Charges |
Maximum of $0.075 to minimum of $0.02 per $1,000 of original or increase in Specified Amount of insurance of the Policy plus any term insurance benefit of a Supplemental Term Insurance Rider for the first nine years of the Policy or the first nine years after an increase in the Specified Amount of insurance of the Policy or term insurance benefit, as applicable. | |||
non-tobacco male insured, age 45 |
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Maximum Charge |
$0.32 per $1,000 of original or increase in Specified Amount of insurance of the Policy plus any term insurance benefit of a Supplemental Term Insurance Rider. | |||
Current Charge |
$0.045 per $1,000 of original or increase in Specified Amount of insurance of the Policy plus any term insurance benefit of a Supplemental Term Insurance Rider. | |||
Cost of Insurance Charges 13 |
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Maximum Charges |
$ | |||
Current Charges |
$ | |||
Cost of Insurance Charges 13,15 |
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Maximum Charges |
Maximum of $ | |||
Current Charges |
Maximum of $0.3192 to minimum of $0.0092 per $1,000 of Net Amount at Risk. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
16 : |
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Disability Waiver of Monthly Deductions Benefit |
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Cost of Insurance Charges 13,15 |
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Maximum Charges |
Maximum of $ | |||
Current Charges |
Maximum of $0.3192 to minimum of $0.0092, per $1,000 of Net Amount at Risk. | |||
Maximum Charge |
$0.0508 per $1,000 of Net Amount at Risk. | |||
Current Charge |
$0.0275 per $1,000 of Net Amount at Risk. | |||
Disability Waiver of Stipulated Premium Benefit |
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Cost of Insurance Charges 13 |
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Current and Maximum Charges |
Maximum of $0.96 to minimum of $0.03 per $100 of the stipulated premium in the Policy. | |||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum and Current Charges |
$0.12 per $100 of the stipulated premium in the Policy. | |||
14 : |
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Expense Charge |
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Maximum Charges |
Maximum of $ | |||
Current Charges |
Maximum of $0.225 to minimum of $0.02 per $1,000 of Specified Amount of insurance of the Policy plus any term insurance benefit of a Supplemental Term Insurance Rider for the first 9 Policy years. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
non-tobacco male insured, age 45 |
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Maximum Charges |
$0.360 per $1,000 of original or increase in Specified Amount of insurance of the Policy plus any term insurance benefit of a Supplemental Term Insurance Rider for the first 9 Policy years. | |||
Current Charges |
$0.165 for Policy years 1 through 3 and $0.045 for Policy years 4 through 9. This charge is per $1,000 of original or increase in Specified Amount of insurance of the Policy plus any term insurance benefit of a Supplemental Term Insurance Rider for the first 9 Policy years. | |||
Cost of Insurance Charges 13 |
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Current and Maximum Charges |
Maximum of $ Amount of this Rider. | |||
non-tobacco male insured, age 45 |
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Current and Maximum Charges |
$0.1133 per $1,000 of the Specified Amount of this Rider. | |||
17,18 |
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Surrender Charge |
When the Policy is surrendered within the first 9 Policy years or within the first 9 years following an increase in the term insurance benefit in the first five Policy years | The Surrender Charge for the Policy is modified for this Rider to include the term insurance benefit. | ||
non-tobacco male insured, age 45 |
$21.50 per $1,000 of the term insurance benefit or decrease in this benefit all multiplied by the surrender factor of 100%. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Cost of Insurance Charges 13 |
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Maximum Charges |
Maximum of $ | |||
Current Charges |
Maximum of $41.67 to minimum of $0.004 per $1,000 of Net Amount at Risk attributable to the term insurance benefit. | |||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum Charge |
$0.2117 per $1,000 of Net Amount at Risk attributable to the term insurance benefit. | |||
Current Charge |
$0.1109 per $1,000 of Net Amount at Risk attributable to the term insurance benefit. | |||
Expense Charge |
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Maximum Charge |
For the first 120 months following the Policy date or an increase in the term insurance benefit, the charges range from a maximum of $1.25 per $1,000 of the term insurance benefit or increase of the term insurance benefit to a minimum of $0.40 per $1,000 of the term insurance benefit or increase of the term insurance benefit. | |||
Current Charge |
For the first 60 months following the Policy date or an increase in the term insurance benefit, the charges range from a maximum of $1.104 per $1,000 of the term insurance benefit or increase of the term insurance benefit to a minimum of $0.132 per $1,000 of the term insurance benefit or increase of the term insurance benefit. After 60 months, the charge is zero. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
non-tobacco male insured, age 45 |
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Maximum Charge |
$ | |||
Current Charge |
$ |
5 |
6 | The Expense Charge per $1,000 of Specified Amount are currently reduced. During the first 60 months following the Policy date, the charges range from $0.11 per $1,000 of initial Specified Amount of insurance to $0.92 per $1,000 of initial Specified Amount of insurance. For months 61 through 120 following the Policy date, the charges range from $0.06 per $1,000 of initial Specified Amount of insurance up to $0.46 per $1,000 of initial Specified Amount of insurance. The charge on an additional Specified Amount of insurance is similarly reduced. The Expense Charges under the Policies vary depending on the risk classification, sex, and age of the insured and the amount of insurance specified in the Policy. The table shows the lowest and the highest Expense Charges for an insured, based on our current rates and on guaranteed maximum rates. The table also shows the first year Expense Charges under a Policy issued to an individual who is representative of individuals we insure. The charge shown in the table may not be representative of the charge that you will pay. Your Policy will state the guaranteed maximum Expense Charges. More detailed information concerning your Expense Charges is available from our administrative offices upon request. For additional information on Expense Charges, see “What Are the Fees and Charges Under the Policy? — Monthly Deductions — Expense Charge per Thousand of Specified Amount” in this Prospectus. |
7 | This charge is currently reduced to zero in all Policy years. See “What Are the Fees and Charges under the Policy? — Monthly Deductions — Mortality and Expense Risk Asset Charge” in this Prospectus for additional information about this charge. |
8 | The charge is currently reduced to $8.00. |
9 | The Asset Charge is assessed to help cover administrative and other expenses, including but not limited to the cost of hedging, associated with making available the Indexed Fixed Accounts. |
10 | You may borrow up to 99% of your Cash Surrender Value. The minimum amount you may borrow is $250. An amount equivalent to the loan is withdrawn from the Variable Investment Options and certain accounts in the Fixed Account Options on a pro-rata basis and is transferred to a Policy loan account, as collateral for the loan. See “What Is a Policy Loan?” in this Prospectus and “Appendix B” for additional information about Policy loans. |
11 | Net Interest Charge for a loan means the difference between the amount of interest we charge on the loan and the amount of interest we credit to your Policy in the Policy loan account. |
12 | The Traditional Loan account is guaranteed to earn interest at 2.00% during the first ten Policy years and 2.75% thereafter. On a guaranteed basis, the Net Interest Charge during the first ten Policy years is 1.00% and 0.25% thereafter. On a current basis, the Net Interest Charge during the first five Policy years is 1.00% and 0.00% thereafter. |
13 | The Cost of Insurance Charges under the Riders vary depending on the individual circumstances of the insured, such as sex, age and risk classification. The charges also vary depending on the amount of insurance specified in the Rider and the year in which the charge is deducted. The charges shown in the table may not be representative of the charge you would pay. The table shows the lowest and the highest Cost of Insurance |
Charges for an insured, based on current rates and on guaranteed maximum rates for individuals in standard risk classifications. The table also shows the first year Cost of Insurance Charges under a Rider issued to an individual who is representative of individuals we insure. The specifications pages of the Policy will indicate the guaranteed maximum Cost of Insurance Charges for the Rider applicable to your Policy. More detailed information concerning your Cost of Insurance Charges is available from our administrative offices upon request. Also, before you purchase the Policy, we will provide you with hypothetical illustrations of Policy Values based upon the insured’s age and risk classification, the amount of insurance specified in the Policy, planned periodic premiums, and Riders requested. The Net Amount at Risk referred to in the table is based upon the difference between the current benefit provided under the Rider and the current Policy Value allocated to the Rider. For additional information about the Riders, see “What Are the Supplemental Riders and Benefits That Are Available?” in this Prospectus. |
14 | This Rider is not available to all persons. See “What Are the Supplemental Riders and Benefits That Are Available? — Waiver of Surrender Charges Rider” or “What Are the Supplemental Riders and Benefits That Are Available? — Cash Value Enhancement Rider” in this Prospectus for additional information. |
15 | If the Policy also has a Children’s Term Insurance Rider in addition to one of the Disability Waiver Riders, there will be an additional charge for the Disability Waiver Rider that is based on each per $1,000 of Specified Amount of the Children’s Term Insurance Rider. The current additional charge is between $0.0050 and $0.0242, and the maximum is between $0.0092 and $0.0408. If the Policy also has an Additional Insured Term Insurance Rider in addition to one of the Disability Waiver Riders, there will be an additional charge for the Disability Waiver Rider that is based on each per $1,000 of Specified Amount of the Additional Insured Term Insurance Rider. The current additional charge is between $0.0050 and $2.33, and the maximum is between $0.0083 and $3.2675. |
16 | The Disability Completion Benefit Rider (AKA Disability Waiver of Stipulated Premium) consists of two benefits, the Disability Waiver of Monthly Deductions plus the Disability Waiver of Stipulated Premium Benefit, and is therefore subject to two separate charges for the two benefits. |
17 | For purposes of determining the allocation of Net Amount at Risk between the Specified Amount of insurance in the Policy, and the term insurance benefit, the Policy Value will be allocated as follows: first to the initial Specified Amount segment, then to any segments resulting from increases in the Specified Amount in the order of the increases, to the initial term insurance benefit segment, and then to any segments resulting from increases in the term insurance benefit in the order of the increases. Any increase in the death benefit in order to maintain the required minimum margin between the death benefit and the Policy Value will be allocated to the most recent increase in the Specified Amount in the Policy. |
18 | The Surrender Charge premium takes into account the individual underwriting characteristics of the insured, such as sex, age and risk classification, and the term insurance benefit of the Policy. The table shows the lowest and the highest Surrender Charge premiums for an insured, based on our current rates and on guaranteed maximum rates for individuals in standard risk classifications. The table also shows the Surrender Charge premium under a rider issued to an individual who is representative of individuals we insure. The Surrender Charge premium shown in the table may not be representative of the charge that you will pay. Your Policy will state your Surrender Charge for the Policy and rider. More detailed information concerning your Surrender Charge premium is available from our administrative offices upon request. For additional information on the Surrender Charge premiums, see “What are the Fees and Charges under the Policy? — Surrender Charge” in this Prospectus. |
Annual Fund Expenses 1 |
Minimum |
Maximum |
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Total Annual Fund Operating Expenses (expenses that are deducted from Fund assets, including management fees, distribution (12b-1) fees, and other expenses) |
1 |
Expressed as a percentage of average net assets for the fiscal year ended December 31, 2023. Fund expenses may be higher or lower in the future. This information is provided by the Funds and their agents. The information is based on 2023 expenses. We have not verified the accuracy of the information provided by the Funds. |
• |
fund management decisions driven by the need to maintain higher than normal liquidity or the inability to sustain an investment objective; |
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increased administrative and Fund brokerage expenses; and/or |
• |
dilution of the interests of long-term investors. |
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• |
Determine when and how much premium you pay to us |
• |
Determine when and how much to allocate to the Variable Investment Options and to the Fixed Account Investment Options |
• |
Borrow money |
• |
Change the beneficiary |
• |
Change the amount of insurance protection |
• |
Change the death benefit option you have selected |
• |
Surrender your Policy for its Net Cash Surrender Value |
• |
Take partial withdrawals from your Policy (up to the Net Cash Surrender Value amount) |
• |
Choose the form in which you would like the death benefit or other proceeds paid out from your Policy |
• |
by wire or by exchange from another insurance company; |
• |
via an electronic funds transfer program (any owner interested in making monthly premium payments must use this method); |
• |
on-line at www.pennmutual.com for initial premium payments which will be drawn electronically from your bank account (you will need to have your Policy number and checking or savings account information on hand); or |
• |
if we agree to it, through a salary deduction plan with your employer. |
(a) | is the total premiums you have paid, less any partial surrenders you made; and |
(b) | is the “no-lapse premium” specified in your Policy, multiplied by the number of months the Policy has been in force. |
(a) | is the net asset value per share of the Fund held in the subaccount, as of the end of the current valuation period, plus the per share amount of any dividend or capital gain distributions by the Fund if the “ex-dividend date” occurs in the valuation period; and |
(b) | is the net asset value per share of the Fund held in the subaccount as of the end of the last prior valuation period. |
• |
Option 1. |
• |
Option 2. plus |
• |
after the change, the Specified Amount of insurance must be at least equal to the minimum Specified Amount under your Policy; and |
• |
no change may be made in the first Policy year and no more than one change may be made in any Policy year. |
• | you must submit an application along with evidence of insurability acceptable to Penn Mutual; |
• | no change may be made in the first Policy year; |
• | any increase in the Specified Amount must be at least $10,000; and |
• | no change may be made if it would cause the Policy not to qualify as insurance under federal income tax law. |
• | no change may be made in the first Policy year; |
• | no change may be made if it would cause the Policy not to qualify as insurance under federal income tax law; |
• | no decrease may be made within one year of an increase in the Specified Amount; |
• | any decrease in the Specified Amount of insurance must be at least $10,000 and the Specified Amount after the decrease must be at least equal to the minimum Specified Amount under your Policy; and |
• | any decrease in the Specified Amount of insurance in the first five Policy years will be subject to a Surrender Charge. |
• |
the Net Premiums you have paid (your premiums less the Percent of Premium Charges); |
• |
plus or minus the investment results in the part of your Policy Value allocated to the Variable Investment Options; |
• |
plus interest credited to the amount in the part of your Policy Value (if any) allocated to the Fixed Account Options; |
• |
minus Policy charges we deduct; and |
• |
minus partial withdrawals you have made. |
(a) | restricting the dollar amount, the number of transfers made during a defined period, and the method used to submit transfers (this could include not allowing telephone, internet, or other electronic transfers); |
(b) | waiving or reducing any or all of the restrictions, uniformly to all members of the same class of Policies, on transfers described in this Policy; |
(c) | revoking any waiver or reduction, uniformly to all members of the same class of Policies; and |
(d) | terminating transfer privileges at any time (for all, some, or specific Policy owners). |
• |
Cost of Insurance Charge. A monthly charge for the cost of insurance protection is subtracted from the Policy Value. The amount of insurance risk we assume varies from Policy to Policy and from month to month. The amount of insurance risk is affected by the investment performance of the Variable Investment Options, payment of premiums, and charges. The Cost of Insurance Charge therefore also varies. To determine the charge for a particular month, we multiply the amount of insurance for which we are at risk by a cost of insurance rate based upon an actuarial table. The amount of insurance is the “Net Amount at Risk,” or the difference between the death benefit and the Policy Value. The table in your Policy will show the maximum cost of insurance rates that we can charge. The cost of insurance rates that we currently apply are generally less than the maximum rates shown in your Policy. The table of rates we use will vary by issue age, Policy duration , sex, and rate class. We place insureds in a rate class when we issue the Policy and when an increase in coverage is effective, based on our examination of information bearing on insurance risk. We currently place people we insure in the following rate classes: a standard tobacco, preferred tobacco, standard non-tobacco, preferred non-tobacco or preferred plus non-tobacco rate class. We may also place certain people in a rate class involving a higher mortality risk than the standard tobacco or standard non-tobacco classes (a “substandard class”). Insureds age 19 and under are placed in a rate class that does not distinguish between tobacco and non-tobacco rates. When an increase in the Specified Amount of insurance is requested, we determine whether a different rate will apply to the increase based on the age of the insured on the effective date of the increase and the rate class of the insured on that date. |
• |
Per Policy Expense Charge. |
• |
Expense Charge per Thousand of Specified Amount. A monthly charge to help cover our administrative costs as described in the paragraph above. For the first 120 months after the Policy date we will deduct the charge based on the initial Specified Amount of insurance, and for the first 120 months after any increase in the Specified Amount we will deduct the charge based on the increase. The charge is equal to the current rate as set forth in your Policy times each $1,000 of the initial and the increased Specified Amount of insurance. The charge varies with the age, sex and rate class of the insured (as measured at issue or on the effective date of the increase). |
• |
Mortality and Expense Risk Asset Charge. |
• |
Optional Supplemental Rider Charges. |
(a) | is the Surrender Charge premium (which is an amount calculated separately for each Policy); and |
(b) | is the applicable surrender factor from the table below in which the Policy year is determined. |
(a) | is the surrender premium based on the age and class of the insured at the time of increase; and |
(b) | is the applicable surrender factor from the table below, assuming for this purpose only that the first Policy year commences with the Policy year in which the increase in the Specified Amount of insurance becomes effective. |
Surrender During Policy Year |
Surrender Factor | |
1 | 1.00 | |
2 | 1.00 | |
3 | 0.98 | |
4 | 0.95 | |
5 | 0.89 | |
6 | 0.78 | |
7 | 0.65 | |
8 | 0.51 | |
9 | 0.34 | |
10+ | 0.00 |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
• Not available for all Policies. • We will pay the additional death benefit only if the insured dies within 180 days following the accidental bodily injury. • No benefit is payable unless the accidental bodily injury was sustained after the Policy anniversary nearest to the insured’s 1st birthday and prior to the Policy anniversary nearest to the insured’s 70th birthday. • Certain exclusions apply, including death resulting directly or indirectly from risky activities (such as bungee jumping and skydiving), disease, infection, intoxication, illegal drugs, crimes, illegal occupation, suicide, etc. | ||||||
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
• Not for sale in individual markets. • If the Rider is terminated by the owner of the Policy, the Rider is terminated with respect to the insurance coverage provided under the Policy and all applicable Surrender Charges would resume. • Not available with the Cash Value Enhancement Rider. | ||||||
early-duration Cash Surrender Values for certain limited corporate market applications. |
• Not available for sale in individual markets. • The Policy must be sponsored by or owned by a business, corporation, or a corporate trust. • The corporation must be at least a partial beneficiary. • A minimum of one life can be covered. • The Rider is terminated and the termination credit will not be applied if the Policy to which this Rider is attached is exchanged for another policy or has its ownership changed to a life insurance company. • Not available with the Waiver of Surrender Charges Rider. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
• Monthly Deductions for this benefit are made until the Policy anniversary nearest the insured’s 65th birthday. • Will terminate upon the anniversary of the Policy which is nearest to the insured’s 65th birthday, provided that such termination will not affect any benefit which is payable because of a total disability of the insured prior to that anniversary. | ||||||
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
• The option may be exercised under the Rider as of any of the regular option dates or as of any alternative option date. • Regular option dates are the anniversaries of the Policy nearest the insured’s birthday at ages 22, 25, 28, 31, 34, 37, 40, 43 and 46. • Alternative option dates are the 90th day following marriage of the insured, live birth of a child of the insured or legal adoption by the insured of a child less than 18 years of age, subject to certain conditions. • The maximum issue age for this Rider is age 40. | ||||||
• Monthly Deductions include an expense charge applied to the amount of term insurance added to the Policy by the Rider. • Monthly Deductions will include a Cost of Insurance Charge for the term insurance added by the Rider. | ||||||
• The new insured must have the same business relationship to the owner as the insured under the Policy to be exchanged. • The new insured must submit satisfactory evidence of insurability. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
• The Policy to be exchanged must be in force and not in a grace period. • The owner must make premium payments under the new Policy to keep it in force at least two months. • Owner must surrender all rights in the Policy to be exchanged. | ||||||
providing the holder with a reduced paid-up policy in the event that the loan-to-surrender value equals or exceeds 96%. |
• Insured’s attained age must be 75 or older. • Policy must be in force for a minimum for 15 years. • Non-taxable withdrawals must equal the total premiums paid. • Subject to a one-time charge of 3.50% of the Policy Value, which is imposed when the Rider is exercised. • Certain changes are made to the Policy as a result of the benefit being exercised. | |||||
• Amount of death benefit proceeds the insured can access must be at least $10,000, but no more than the lesser of 50% of the total death benefit amount or $250,000. Such limits may vary depending upon the state. • Insured must be diagnosed by a licensed physician of the United States as being terminally ill with a life expectance of 12 months or less (24 months or less in Massachusetts). The physician may not be the owner, insured, beneficiary, or relative of the insured. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
• Electing this Rider will reduce the death benefit that is payable under the base Policy upon the death of the insured. | ||||||
• Continuous care in an eligible facility or at home must be expected to be required for the insured’s life. • Limits apply to the accelerated benefit payments. • Chronic illness is defined in the Rider (based on inability to perform specified activities of daily living, or severe cognitive impairment). Chronic illness must be certified by a licensed health care professional (not the insured, owner, or beneficiary or a relative of any of them). • Upon each accelerated benefit payment, the death benefit will be reduced by an amount greater than the payment amount. | ||||||
• Requires that at least $600 be allocated to the Variable Dollar Cost Averaging Account. • The amount transferred each month must be at least $25. • Does not guarantee a profit or prevent a loss. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
re-allocated each month to one or more of the Investment Options you select. |
. |
• Requires that at least $600 be allocated to the Fixed Dollar Cost Averaging Account. • The amount transferred each month must be at least $25. • Does not guarantee a profit or prevent a loss. | ||||
• Requires a minimum Policy Value of $1,000. • Does not guarantee a profit or prevent a loss. |
(a) | the insured has died due to an accidental bodily injury that occurred while this Rider was in force; |
(b) | the accidental death occurred within 180 days following the date of the accidental bodily injury; |
(c) | the accidental bodily injury was sustained prior to the anniversary of this Policy which is nearest to the insured’s 70th birthday; and |
(d) | if this Rider was issued prior to the insured’s first birthday, the accidental bodily injury was sustained on or after the anniversary of this Policy which is nearest to the insured’s first birthday. |
• |
disease or infirmity of mind or body, or medical or surgical treatment for such disease or infirmity; |
• |
an infection not occurring as a direct result or consequence of the accidental bodily injury; |
• |
the voluntary intake or use by any means of any drug, unless prescribed or administered by a physician and taken in accordance with the physician’s instructions; |
• |
intoxication as defined by the jurisdiction where the accident occurred; |
• |
certain risky recreational activities, including bungee jumping, rock or mountain climbing, hang gliding, and skydiving; |
• |
suicide, or intentionally self-inflicted injury, of the insured, while sane or insane; |
• |
the commission or attempted commission by the insured of a felony or other participation in an illegal occupation or activity; |
• |
travel or flight in or descent from an aircraft of any kind while the insured is a pilot, officer or member of the crew of the aircraft; |
• |
war or act of war, or other special hazards incident to service in the military, naval or air forces of any country. |
• |
$500,000 Specified Amount |
• |
$50,000 Net Cash Surrender Value (prior to the termination credit) |
• |
$9,000 Total accumulated Monthly Deductions through year 3 |
• |
75% termination factor |
• |
$10,535 Surrender Charge |
(a) | is the current value in the applicable account; |
(b) | is the term insurance benefit; and |
(c) | is the sum of the term insurance benefit and the Specified Amount of the Policy. |
• |
The Specified Amount of the paid-up life insurance which equals the applicable percentage of the Policy Value adjusted for the one-time charge; or |
• |
The applicable percentage of the greater of the Policy Value or the outstanding Policy Debt. |
• |
the transfer of all values not in the Traditional Fixed Account to the Traditional Fixed Account, which will then be credited with interest; |
• |
if the Policy has an increasing death benefit option, it will be changed to the level death benefit option; |
• |
if the current loan option is the Indexed Loan option it will be changed to the Traditional Loan option; |
• |
all supplemental riders attached to the Policy will be terminated; |
• |
no additional premium payments, partial withdrawals or Policy loans will be allowed; and |
• |
no further changes may be made to the Policy. |
(1) | A withdrawal of $150,000 (the remaining basis) is taken with a withdrawal charge of $25 assessed. |
(2) | A Rider charge of $6,427 is assessed. |
(3) | The Specified Amount of the Policy is reduced to $186,072. |
(4) | Lapses are prevented on the Policy. |
• |
The amount of death benefit proceeds you can access must be at least $10,000, but no more than the lesser of 50% of the total death benefit amount or $250,000. |
• |
The insured must be diagnosed by a licensed physician of the United States as being terminally ill with a life expectancy of 12 months or less. The physician may not be the owner, insured, beneficiary, or relative of the insured. |
• |
Penn Mutual reserves the right, at its own expense, to seek additional medical opinions in order to determine benefit eligibility. |
• |
The Policy owner may request the payment of the accelerated benefit payment in a single lump sum or in a series of equal payments occurring annually, semi-annually, quarterly, or monthly, provided that for Policies issued in Florida prior to January 1, 2020 the accelerated benefit payment is available only once under this Rider. The series of benefit payments will continue as scheduled, as long as the insured is certified as having a Chronic Illness at least every 12 months, until the remaining death benefit reaches the minimum allowed by the Company or the Rider is terminated. No more than 12 accelerated benefit payments will be paid in a 12 month period. The accelerated benefit payment must first be used to repay a pro rata share of any outstanding Policy Debt. |
• |
Penn Mutual will limit the accelerated benefit payment such that: |
• |
The Policy is not disqualified as life insurance according to the Code; |
• |
The accelerated benefit payment is at least $4,800 if taken as a single lump sum, or the sum of scheduled payments for the 12 month period following the election date is at least $4,800 if taken as a series of payments; |
• |
The maximum total amount of accelerated benefit payments in a 12 month period, for all Policies or Riders under which the insured is covered with the Company, will not exceed the least of 24% of the eligible amount, $240,000, or the annual Per Diem Limitation within the meaning of sections 101(g)(3)(D) and 7702B(d) of the Code. The Per Diem Limitation further requires that the total aggregated benefits being received from all coverages do not exceed the IRS annual Per Diem amount, including benefits received from coverages not with Penn Mutual and reimbursements of costs for qualified long-term care services through insurance or otherwise. Accelerated benefit payments are determined after taking into account all other coverage and reimbursements; |
• |
The maximum total amount of accelerated benefit payments during the life of the insured will not exceed $5,000,000; and |
• |
The death benefit remaining after an accelerated benefit payment is not less than $50,000. |
• |
Chronic Illness means that the insured has been certified by a licensed health care practitioner within the last 12 months as: |
• |
Being unable to perform at least two activities of daily living (bathing, continence, dressing, eating, toileting, transferring) without substantial assistance from another person due to a loss of functional capacity for a period of at least 90 days (which must be consecutive, except in California); or |
• |
Requiring substantial supervision by another person for a period of at least 90 days (which must be consecutive, except in California) to protect the insured from threats to health and safety due to severe cognitive impairment. |
• |
Severe cognitive Impairment means deterioration or loss in intellectual capacity that is: |
(1) | Comparable to (and includes) Alzheimer’s disease and similar forms of irreversible dementia; and |
(2) | Measured by clinical evidence and standardized tests which reliably measure impairment in: |
(a) | Short term or long term memory; |
(b) | Orientation to people, places, or time; and |
(c) | Deductive or abstract reasoning. |
• |
For each lump sum benefit payment, or at the beginning of each 12 month period following the election date if benefit payments are scheduled in a series, Penn Mutual must receive written certification from a licensed health care practitioner that the insured has a Chronic Illness. The licensed health care practitioner may be a licensed physician, registered professional nurse, licensed social worker, or other similar health care practitioner approved by the IRS and Penn Mutual. The licensed health care practitioner shall not be the insured, owner, beneficiary, or a relative thereof. Penn Mutual reserves the right to obtain at any time an additional opinion of the insured’s condition from a licensed health care practitioner at Penn Mutual’s expense. Should this opinion differ from that of the insured’s licensed health care practitioner, eligibility for benefits will be determined by a third licensed health care practitioner who is mutually acceptable to the owner and Penn Mutual. |
• |
no more than twelve partial withdrawals may be made in a Policy year; |
• |
each partial withdrawal must be at least $250; |
• |
a partial withdrawal may not be made from an account if the amount remaining in that account would be less than $25; |
• |
the partial withdrawal may not reduce the Specified Amount of insurance under your Policy to less than the minimum Specified Amount under the Policy ($50,000); and |
• |
the partial withdrawal will be subject to a processing fee equal to the lesser of $25 or 2.00% of the amount withdrawn. |
• |
Cash Value Accumulation Test. |
• |
Guideline Premium/Cash Value Corridor Test. The Policy must at all times satisfy a guideline premium requirement and a cash value corridor requirement. Under the guideline premium requirement , the sum of the premiums paid under the Policy may not at any time exceed the greater of the guideline single premium or the sum of the guideline level premiums, for the benefits promised under the Policy. Under the cash value corridor requirement , the death benefit at any time must be equal to or greater than the applicable percentage of the cash surrender value specified in the Code. |
• |
The portion of the Net Cash Surrender Value or death benefit proceeds being applied to the installment benefit; |
• |
The investment in the Policy. |
• |
Policy loans in excess of $50,000, partial withdrawals in excess of $10,000, and full surrenders; |
• |
change of death benefit option, rate class; addition/removal of riders; |
• |
changes in Specified Amount of insurance; |
• |
change of beneficiary; |
• |
election of payment option for Policy proceeds; and |
• |
tax withholding elections. |
• |
Financial professionals may be paid commissions on a Policy they sell based on premiums paid in amounts up to 53.50% of first year premiums of sales, 3.00% on premiums paid during the second through fifteenth Policy years, and 1.20% on premiums paid after the first fifteen Policy years. In lieu of the renewal commissions just described, financial professionals can opt to receive 2.00% of premiums paid during the second through tenth Policy years, 0.00% of the premiums paid after the first ten Policy years, and an asset-based commission equivalent to an annualized rate of 0.20% of Net Policy Value during the second through tenth Policy years, and 0.10% of Net Policy Value after the first ten Policy years. |
• |
Financial professionals may be paid commissions on a Policy they sell based on premiums paid in amounts up to 15% of premiums of sales in the first through fifth Policy years, 3.00% on premiums paid during the sixth through fifteenth Policy years, and 1.20% on premiums paid after the first fifteen Policy years. Alternatively, financial professionals may opt to be paid commissions on a Policy they sell based on premiums paid in amounts up to 11.00% of premiums of sales in the first through fifth Policy years, 2.00% of premiums paid during the sixth through tenth Policy years, 0.00% of the premiums paid after the first ten Policy years, and an asset-based commission equivalent to an annualized rate of 0.45% of Net Policy Value during the second through tenth Policy years, and 0.10% of Net Policy Value after the first ten Policy years. |
FUND TYPE |
FUND AND ADVISER/ SUBADVISER (as applicable) |
CURRENT EXPENSES |
AVERAGE ANNUAL TOTAL RETURNS (as of 12/31/2023) | |||||||
1 YEAR |
5 YEAR |
10 YEAR | ||||||||
FUND TYPE |
FUND AND ADVISER/ SUBADVISER (as applicable) |
CURRENT EXPENSES |
AVERAGE ANNUAL TOTAL RETURNS (as of 12/31/2023) | |||||||
1 YEAR |
5 YEAR |
10 YEAR | ||||||||
Management, Inc. |
( |
( | ||||||||
Capital Management, Inc. |
||||||||||
• | Classic 1% Floor S&P 500 Indexed Account |
• | Enhanced S&P 500 Indexed Account |
• | Uncapped S&P 500 Indexed Account |
Indexed Fixed Account |
Guaranteed Participation Percentage |
Guaranteed Cap Percentage |
Guaranteed Segment Minimum Interest Rate |
Guaranteed Index Credit Enhancement |
Guaranteed Monthly Asset Charge Percentage | |||||
Classic 1% Floor S&P 500 Indexed Account | 100% | 3.00% | 1.00% | N/A | N/A | |||||
Enhanced S&P 500 Indexed Account | 100% | 3.00% | 0.00% | 50% | 0.20833% (annual rate 2.50%) | |||||
Uncapped S&P 500 Indexed Account | 50% | N/A | 0.00% | N/A | 0.20833% (annual rate 2.50%) |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Total Growth |
|||||||||||||||||||
Index Return |
21.00% | -10.00% | 8.00% | 14.00% | -7.00% | 24.70% | ||||||||||||||||||
Cap Percentage |
10.00% | 9.50% | 9.50% | 10.00% | 10.00% | |||||||||||||||||||
Index Performance |
10.00% | 1.00% | 8.00% | 10.00% | 1.00% | |||||||||||||||||||
Annual Index Credits |
$ | 100 | $ | 11 | $ | 89 | $ | 120 | $ | 13 | ||||||||||||||
Ending Segment Value |
$ | 1,100 | $ | 1,111 | $ | 1,200 | $ | 1,320 | $ | 1,333 | 33.30% |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Total Growth |
|||||||||||||||||||
Index Return |
21.00% | -10.00% | 8.00% | 14.00% | -7.00% | 24.70% | ||||||||||||||||||
Cap Percentage |
12.50% | 12.00% | 12.00% | 12.50% | 12.50% | |||||||||||||||||||
Index Performance |
12.50% | 0.00% | 8.00% | 12.50% | 0.00% | |||||||||||||||||||
Annual Index Credits |
$ | 125 | $ | 0 | $ | 91 | $ | 155 | $ | 0 | ||||||||||||||
Index Credit Enhancement |
$ | 63 | $ | 0 | $ | 45 | $ | 78 | $ | 0 | ||||||||||||||
Asset Charge |
$ | 25 | $ | 29 | $ | 28 | $ | 31 | $ | 36 | ||||||||||||||
Ending Segment Value |
$ | 1,163 | $ | 1,133 | $ | 1,241 | $ | 1,443 | $ | 1,407 | 40.70% |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Total Growth |
|||||||||||||||||||
Index Return |
21.00% | -10.00% | 8.00% | 14.00% | -7.00% | 24.70% | ||||||||||||||||||
Participation Percentage |
105% | 100% | 100% | 105% | 105.00% | |||||||||||||||||||
Index Performance |
22.10% | 0.00% | 8.00% | 14.70% | 0.00% | |||||||||||||||||||
Annual Index Credits |
$ | 221 | $ | 0 | $ | 93 | $ | 181 | $ | 0 | ||||||||||||||
Asset Charge |
$ | 25 | $ | 30 | $ | 29 | $ | 31 | $ | 34 | ||||||||||||||
Ending Segment Value |
$ | 1,196 | $ | 1,166 | $ | 1,230 | $ | 1,380 | $ | 1,345 | 34.50% |
Policy Month |
Withdrawals |
Monthly Deductions |
Monthly Anniversary Segment Value |
Interest Credited* |
End of Month Segment Value | |||||
1 |
9.77 | 9,990.23 | 8.29 | 9,998.52 | ||||||
2 |
9.77 | 9,988.75 | 8.29 | 9,997.03 | ||||||
3 |
9.78 | 9,987.25 | 8.28 | 9,995.54 | ||||||
4 |
9.78 | 9,985.76 | 8.28 | 9,994.04 | ||||||
5 |
9.78 | 9,984.26 | 8.28 | 9,992.54 | ||||||
6 |
500 | 9.82 | 9,482.72 | 7.87 | 9,490.59 | |||||
7 |
9.82 | 9,480.77 | 7.86 | 9,488.63 | ||||||
8 |
9.82 | 9,478.81 | 7.86 | 9,486.68 | ||||||
9 |
9.83 | 9,476.85 | 7.86 | 9,484.71 | ||||||
10 |
9.83 | 9,474.88 | 7.86 | 9,482.74 | ||||||
11 |
9.83 | 9,472.91 | 7.86 | 9,480.77 | ||||||
12 |
9.84 | 9,470.93 | 7.86 | 9,478.78 |
About The Penn Mutual Life Insurance Company Penn Mutual helps people become stronger. Our expertly crafted life insurance is vital to long-term financial health and strengthens people’s ability to enjoy every day. Working with our trusted network of financial professionals, we take the long view, building customized solutions for individuals, their families, and their businesses. Penn Mutual supports its financial professionals with retirement and investment services through its wholly owned subsidiary Hornor, Townsend & Kent, LLC, member FINRA/SIPC. Visit Penn Mutual at www.pennmutual.com. |
PM8664 | 05/24 |
Cornerstone Variable Universal Life Insurance IV |
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A-1 |
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B-1 |
Fees and Expenses | ||||||||||
Charges for Early Withdrawals |
If you fully surrender your Policy (meaning you make an early withdrawal of your full Net Cash Surrender Value) within 11 years following your purchase of the Policy or within 11 years of an increase in the Specified Amount of insurance under your Policy, you may be assessed a Surrender Charge equal to (a) plus (b) multiplied by (c), where: (a) is 25% of the lesser of (i) the sum of all premiums paid, and (ii) the maximum Surrender Charge premium (which is an amount calculated separately for each Policy); (b) is an Administrative Charge based on the initial amount of insurance and the insured’s age at the issue date (ranging from $1.00 for attained ages 9 and under to $7.00 for attained ages 60 and over, per $1,000 of initial Specified Amount of insurance); and (c) is the applicable surrender factor in which the Policy year is determined. The Surrender Charge premium is a maximum of $50 per $1000 of the Specified Amount. The surrender factor is equal to 1.00 in the first seven (7) years of coverage and grades to 0.20 in the 11th year. For example, if you were to surrender your Policy during the first year after your Policy purchase (and your total premiums paid were $100,000 and your Specified Amount is $500,000), then you could be assessed a Surrender Charge of up to $9,750. For more detailed information, see “ Table of Fees and Expenses”; “ What Are the Fees and Charges Under the Policy?” | |||||||||
Transaction Charges |
In addition to the Surrender Charge for Policy surrenders, you may be charged for other transactions. These include a Percent of Premium Charge (deducted from each premium) and a Partial Surrender Charge. A Surrender Charge will also be deducted if you increase the Specified Amount of the life insurance death benefit and fully surrender your Policy within 11 years of such increase. We reserve the right to impose transfer charges (when you transfer Policy Value between Investment Options), but we currently do not impose these charges. We may also impose charges if you exercise certain supplemental agreement benefits. For more detailed information, see “ Table of Fees and Expenses”; “ What Are the Fees and Charges Under the Policy?” | |||||||||
Ongoing Fees and Expenses |
In addition to Surrender Charges and transaction charges, an investment in the Policy is subject to certain ongoing fees and expenses (usually deducted on a monthly basis). Some of these charges, such as the monthly Cost of Insurance Charge, the Mortality and Expense Risk Face Amount Charge, and certain supplemental agreement charges (for supplemental benefits), are set based on individual characteristics of the insured (e.g., age, sex, and rating classification). Other ongoing charges include the monthly Mortality and Expense Risk Asset Charge, loan interest, Administrative Charge and certain other agreement charges. Please refer to the Policy Specifications Page for rates and the specific fees applicable to your Policy. Investors will also bear expenses associated with the Funds, as shown in the following table, which shows the minimum and maximum total operating expenses deducted from Fund assets (before any fee waiver or expense reimbursement) during the year ended December 31, 2023. | |||||||||
Total Annual Operating Expenses (expenses that are deducted from Fund assets) |
Annual Fee |
Minimum |
Maximum |
||||||||
Variable Investment Options (Fund fees and expenses) |
0.35% |
1.33% |
||||||||
For more detailed information, see “ Table of Fees and Expenses”; “ What Are the Fees and Charges Under the Policy?” |
Risks | ||||||||||
Risk of Loss |
You can lose money by investing in this Policy, including loss of your premiums (principal). For more detailed information, see “ Summary of Principal Risks of Investing in the Policy;” “ What is the Value of My Policy?” | |||||||||
Not a Short- Term Investment |
This Policy is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The Policy is designed to provide a life insurance benefit or to help meet other long- term financial objectives. Substantial fees, expenses, and tax implications generally make variable life insurance unsuitable as a short-term savings vehicle. Additionally, the Policy limits your ability to withdraw a portion of the Policy Value (also called cash value) through partial surrenders or loans; you cannot access more than your Net Cash Surrender Value (the Policy Value less the Surrender Charge and less any outstanding policy loan). | |||||||||
Risks Associated with Investment Options |
• An investment in this Policy is subject to the risk of poor investment performance of the Funds you choose, and the value of an investment can vary depending on the performance of the Funds. • Each Investment Option (the Funds and the Fixed Interest Options) has its own unique risks. The performance of the Funds will vary among each other, may underperform similar mutual funds not available through the Variable Investment Options, and some are riskier than others. • A discussion of the risks of allocating your premiums or Policy Value to one or more Funds can be found in the prospectuses for the Funds. You should review the prospectuses for the Funds before making an investment decision. • Premiums and Policy Value allocated to the fixed account may be kept there for an extended period of time due to restrictions on transfers out of the fixed account. For more detailed information, see “ Summary of Principal Risks of Investing in the Policy;” “ Appendix A — Funds Available Under the Policy.” | |||||||||
Insurance Company Risks |
An investment in the Policy is subject to the risks related to the Company, including: • Any obligations, guarantees, and benefits of the Policy (including the Fixed Interest Options), are subject to the claims-paying ability and financial strength of the Company. • There are risks relating to the Company’s administration of the Policy, including, among others, cybersecurity and infectious disease outbreak risks. • If the Company experiences financial distress, it may not be able to meet its obligations to you. • More information about the Company, including its financial strength ratings, is available upon request from the Company at 1-800-523-0650. For more detailed information, see “ The Penn Mutual Life Insurance Company;” “ Financial Statements;” “ Summary of Principal Risks of Investing in the Policy — Insurance Company Risks;” “ Other Information.” |
Policy Lapse |
Your Policy will remain in force for the first five (5) Policy years, regardless of investment performance and your Net Cash Surrender Value, if the total premiums you have paid, less any partial surrenders you made, equal or exceed the “no-lapse premium” specified in your Policy, multiplied by the number of months the Policy has been in force. Policy distributions will affect the no-lapse guarantee and outstanding loans will nullify the no-lapse guarantee. • After the first five years, your Policy can lapse even if you pay all of the planned premiums on time. • When a Policy lapses, it has no value, and no benefits are paid upon the death of the insured. You will also lose the principal invested. • A Policy can lapse if the Net Cash Surrender Value is insufficient to pay the Policy charges. This can happen due to insufficient premium payments, poor investment performance, partial surrenders, unpaid loans or loan interest, and Policy charges (including increases in those charges). • The larger a Policy loan becomes relative to the Policy’s Cash Surrender Value, the greater the risk that the Policy’s Net Cash Surrender Value will not be sufficient to support the Policy’s charges, including any loan interest due, and the greater the risk of the Policy lapsing. • A Policy lapse may have tax consequences. • If the Policy lapses, there are costs and premium requirements associated with reinstatement of the Policy. The Guaranteed Continuation of Policy Agreement can prevent the Policy from lapsing if the five-year no lapse feature is not in effect. For more detailed information, see “ Summary of Principal Risks of Investing in the Policy;” “ What Payments Must I Make Under the Policy? — Lapse and Reinstatement;” “ What Are the Supplemental Agreements and Benefits That Are Available? — Guaranteed Continuation of Policy Agreement.” | |||||||||
Restrictions |
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Investments |
• You can allocate your Net Premiums to the Variable Investment Options (that invest in the Funds) or Fixed Interest Options. • The minimum amount that you can transfer generally is $250 (or the amount held under the Investment Options from which you are making the transfer, if less). • If less than the full amount held under an Investment Option is transferred, the amount remaining under the Investment Option must be at least $250. • The Company reserves the right to defer transfers under certain conditions. • Transfers may be made from the fixed account only during a 30-day period following the end of each Policy year; the maximum amount that may be transferred out of the fixed account is limited to the greater of $5,000 or 25% of the accumulated value of the fixed account. • The amount that may be transferred excludes any amount held in the Policy loan account. • The Company reserves the right to remove or substitute any of the Funds as investment options that are available under the Policy. • In addition, we may limit your ability to make transfers involving the Variable Investment Options if it is believed that a transfer may disadvantage or potentially harm or hurt the rights or interests of other Policy owners. • We will also reject or reverse a transfer request if for any reason any of the Funds do not accept the purchase of its shares. For more detailed information, see “ How Are Amounts Credited to the Variable Investment Options of the Separate Account?;” “ How Can I Change the Policy’s Investment Allocations?” |
Optional Benefits |
• A change in the Specified Amount; the addition, deletion, or change of any supplemental agreements; or a change in the insured’s rate class may impact the Guaranteed Continuation of Policy Agreement, and may require the payment of additional premiums to maintain the agreement’s guarantee. • We may stop offering an optional benefit at any time. For more detailed information, see “ What Are the Supplemental Agreements and Benefits That Are Available?” | |||||||||
Taxes |
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Tax Implications |
• Consult with a tax adviser to determine the tax implications of an investment in and payments received under this Policy. • If you purchase the Policy through a tax-qualified plan or individual retirement account (“IRA”), you do not get any additional tax benefit. • Earnings on your Policy (if any) are taxed when you withdraw them (or if a Policy loan is not repaid), at ordinary income tax rates, and may be subject to a tax penalty before age 59 1 ⁄ 2 . For more detailed information, see “ Summary of Principal Risks of Investing in the Policy — Taxes and Tax Risks;” “ How Is the Policy Treated Under Federal Income Tax Law?” | |||||||||
Conflicts of Interest |
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Investment Professional Compensation |
Your financial professional may receive compensation for selling this Policy to you, in the form of commissions, asset-based compensation, allowances for expenses, and other compensation programs, and the Company may share the revenue it earns on this Policy with the professional’s firm. (Your financial professional may be your broker, investment adviser, insurance agent, or someone else). For these reasons, these financial professionals may have a financial incentive to recommend this Policy over another policy or investment. | |||||||||
Exchanges |
Some financial professionals may have a financial incentive to offer you a new policy in place of the one you own. You should only exchange your Policy if you determine, after comparing the features, fees, and risks of both policies, that it is preferable for you to purchase the new policy rather than continue to own your existing Policy. For more detailed information, see “ What Payments Must I Make Under the Policy? — Tax-Free ‘Section 1035’ Insurance Policy Exchanges.” |
1. |
Purpose of the Policy |
2. |
Premiums |
3. |
Policy Features |
• |
Option 1 — the death benefit is the greater of(a) the Specified Amount of insurance, or (b) a percentage of the Policy Value (on the date of the insured’s death) equal to the minimum necessary for your Policy to qualify as life insurance under Section 7702 of the Code; or |
• |
Option 2 — the death benefit is the greater of (a) the Specified Amount of insurance plus your Policy Value on the date of death, or (b) a percentage of the Policy Value (on the date of the insured’s death) equal to the minimum necessary for your Policy to qualify as life insurance under Section 7702 of the Code. |
Transaction Fees | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Percent of Premium Charge |
When a premium is paid. |
7.50% of premium payments. 1 | ||
Surrender Charge |
When the Policy is surrendered within the first 11 Policy years. |
25% of the lesser of (i) premiums paid and (ii) the maximum Surrender Charge premium. 2 | ||
Charge for a representative non-tobacco male insured, age 45 in the first Policy year |
When the Policy is surrendered within the first 11 Policy years. |
25% of the lesser of (i) premiums paid and (ii) $13.67 per $1000 of Specified Amount. 2 | ||
Additional Surrender Charges 3 |
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Minimum Charge |
When the Policy is surrendered within the first 11 Policy years, or within 11 years of any increase in the Specified Amount. |
$1 per $1,000 of initial Specified Amount or increase in Specified Amount, for insured age 9 or younger at the date of issue or increase. | ||
Maximum Charge |
When the Policy is surrendered within the first 11 Policy years, or within 11 years of any increase in the Specified Amount. |
$7 per $1,000 of initial Specified Amount or increase in Specified Amount, for insured age 60 or older at the date of issue or increase. | ||
Charge for a representative non-tobacco male insured, age 45 |
When the Policy is surrendered within the first 11 Policy years, or within 11 years of any increase in the Specified Amount. |
$5 per $1,000 of initial Specified Amount or increase in Specified Amount, for insured age 45 at the date of issue or increase. | ||
Partial Surrender Charge |
When you take a partial surrender from your Policy. |
Lesser of $25 or 2.00% of the amount withdrawn. | ||
Transfer Charge |
When you make a transfer. |
Maximum Charge $10.00. Current Charge $0.00. 4 | ||
Accelerated Death Benefit Agreement |
When benefit is exercised. |
One time charge of 12 months’ worth of Policy charges on the accelerated amount, plus an interest charge, which is equal to 12 months’ worth of interest on the accelerated amount based on a rate that is the greater of (a) the current 90-day Treasury bill rate, or (b) the current maximum statutory adjustable Policy loan rate. | ||
Overloan Protection Benefit Agreement |
When benefit is exercised. |
One time charge of 3.50% of Policy Value. |
1 | The Percent of Premium Charge is currently reduced to 5.00%. This reduction is not guaranteed and may change. |
2 | The “maximum Surrender Charge premium” is determined separately for each Policy and takes into account the individual underwriting characteristics of the insured. The “maximum Surrender Charge premium” is stated in each Policy. Commencing in the eighth Policy year and continuing through the eleventh Policy year, the Surrender Charge decreases each year, after which there is no longer a charge. More detailed information concerning your Surrender Charge is available from our administrative offices upon request. For additional information on the Surrender Charges, see “What Are the Fees and Charges Under the Policy? — Surrender Charge” in this Prospectus. |
3 | The “other Surrender Charge” under the Policies vary depending on the age of the insured at issue. More information concerning the “other Surrender Charge” is stated in each Policy. Commencing in the eighth Policy year and continuing through the eleventh Policy year, the Surrender Charge decreases each year in proportional amounts, after which there is no longer a charge; and commencing eight years after any increase in the Specified Amount of insurance and continuing through the end of eleven years after the increase, the Surrender Charge decreases each year in proportional amounts, after which there is no longer a charge. |
4 |
No transaction fee is currently imposed for making a transfer among the Variable Investment Options and/or the Fixed Interest Options. We reserve the right to impose a $10 fee in the future on any transfer that exceeds twelve transfers in a Policy year (except in the case of transfers of $5,000,000 or more). |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Base Contract Charges: |
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Cost of Insurance Charges 5 |
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Maximum Charges |
Monthly | Maximum of $83.3333 to minimum of $0.0566 per $1,000 of Net Amount at Risk. | ||
Current Charges |
Monthly | Maximum of $22.9004 to minimum of $0.0093 per $1,000 of Net Amount at Risk. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum Charge |
Monthly | $0.2767 per $1,000 of Net Amount at Risk. | ||
Current Charge |
Monthly | $0.2628 per $1,000 of Net Amount at Risk. | ||
Mortality and Expense Risk Charge |
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Mortality and Expense Risk Face Amount Charge | Monthly, for the first 120 months following Policy date or an increase in the Policy’s Specified Amount. | The charges range from a minimum of $0.07 per $1,000 of initial Specified Amount of insurance for female age 5 or under, up to a maximum of $0.29 per $1,000 of initial Specified Amount of insurance, for male age 85 or older. A similar charge applies to an increase in the Specified Amount of insurance. 6 |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Current and Maximum (Guaranteed) Charges |
Monthly | $0.18 per $1,000 of initial Specified Amount. | ||
Mortality and Expense Risk Asset Charge |
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Current and Maximum (Guaranteed) Charge |
Monthly | 0.60% annually of the first $50,000 of Policy Value and 0.30% annually of the Policy Value in excess of that amount. 7 | ||
Administrative Charges |
Monthly | Guaranteed Maximum $9.00. Current Charge $8.00. | ||
Optional Benefit Charges: |
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Policy Loans 8 |
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Net Interest Charge 9 |
End of each Policy year | |||
Maximum (Guaranteed) Charge |
Annual rate of 1.00% until year 11 and then an annual rate of 0.25% (0.00% in New York) (after credit from interest paid on collateral held in Policy loan account). 10 | |||
Current Charge |
Annual rate of 1.00% until year 11 and then an annual rate of 0.00% (after credit from interest paid on collateral held in Policy loan account). | |||
Accidental Death Benefit Agreement: |
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Cost of Insurance Charges 11 |
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Current and Maximum (Guaranteed) Charges |
Monthly | Maximum of $0.1108 to minimum of $0.0533, per $1,000 of accidental death benefit. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Current and Maximum (Guaranteed) Charges |
Monthly | $0.0592 per $1,000 of accidental death benefit. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Additional Insured Term Insurance Agreement |
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Cost of Insurance Charges 11 |
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Maximum (Guaranteed) Charges |
Monthly | Maximum of $4.2109 to minimum of $0.0816, per $1,000 of additional insured term benefit insurance. | ||
Current Charges |
Monthly | Maximum of $3.0371 to minimum of $0.0441, per $1,000 of additional insured term benefit insurance. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum (Guaranteed) Charges |
Monthly | $0.2767 per $1,000 of additional insured term insurance benefits. | ||
Current Charge |
Monthly | $0.2229 per $1,000 of additional insured term insurance benefits. | ||
Administrative Charges |
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First year of Agreement |
Monthly | $0.10 per $1,000 of additional insured term insurance benefit. | ||
First year of increase in term insurance benefit under Agreement |
Monthly | $0.10 per $1,000 of additional insured term insurance benefit. | ||
Business Accounting Benefit Agreement: 12 |
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Administrative Charges |
Monthly, for the first eleven years of Policy or after an increase in the Specified Amount of Insurance | $0.03 per $1,000 of original Specified Amount of insurance. | ||
Children’s Term Insurance Agreement: |
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Cost of Insurance Charges 11 |
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Maximum (Guaranteed) Charges |
$0.24 per $1,000 of children’s term insurance benefit. | |||
Current Charges |
$0.15 per $1,000 of children’s term insurance benefit. | |||
Disability Waiver of Monthly Deductions Agreement: |
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Cost of Insurance Charges 11 |
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Maximum (Guaranteed) Charges |
Monthly | Maximum of $0.5992 to minimum of $0.0117, per $1,000 of Net Amount at Risk. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Current Charges |
Monthly | Maximum of $0.3192 to minimum of $0.0092, per $1,000 of Net Amount at Risk. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum (Guaranteed) Charges |
Monthly | $0.0508 per $1,000 of Net Amount at Risk. | ||
Current Charges |
Monthly | $0.0275 per $1,000 of Net Amount at Risk. | ||
Disability Waiver of Monthly Reduction and Disability Monthly Premium Deposit Agreement: |
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Disability Waiver of Monthly Deduction |
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Cost of Insurance Charges 11 |
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Maximum (Guaranteed) Charges |
Monthly | Maximum of $0.5992 to minimum of $0.0117, per $1,000 of Net Amount at Risk. | ||
Current Charges |
Monthly | Maximum of $0.3192 to minimum of $0.0092, per $1,000 of Net Amount at Risk. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum (Guaranteed) Charge |
Monthly | $0.0508 per $1,000 of Net Amount at Risk. | ||
Current Charge |
Monthly | $0.0275 per $1,000 of Net Amount at Risk. | ||
Disability Monthly Premium Deposit |
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Cost of Insurance Charges 11 |
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Maximum (Guaranteed) Charges |
Monthly | Maximum of $0.96 to minimum of $0.03, per $100 of Net Amount at Risk. | ||
Current Charges |
Monthly | Maximum of $0.96 to minimum of $0.03, per $100 of Net Amount at Risk. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum (Guaranteed) Charges |
Monthly | $0.12 per $100 of Net Amount at Risk. | ||
Current Charges |
Monthly | $0.12 per $100 of Net Amount at Risk. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Guaranteed Continuation of Policy Agreement: |
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Cost of Insurance |
Monthly | $0.01 per $1,000 of Specified Amount of insurance. | ||
Guaranteed Option to Extend Maturity Date Agreement: |
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Cost of Insurance Charges 11 |
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Maximum (Guaranteed) Charges |
Monthly | Maximum of $6.30 to minimum of $2.80, per $1,000 of Net Amount at Risk, applied from age 90-99. | ||
Current Charges |
Monthly | No charge. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum (Guaranteed) Charges |
Monthly | $0 per $1,000 Net Amount at Risk. | ||
Current Charges |
Monthly | No charge. | ||
Guaranteed Option to Increase Specified Amount Agreement: |
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Cost of Insurance Charges 11 |
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Current and Maximum (Guaranteed) Charges |
Monthly | Maximum of $0.145 to minimum of $0.0425, per $1,000 of guaranteed option amount. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Current and Maximum (Guaranteed) Charges |
Monthly | $0.1058 per $1,000 of guaranteed option amount. | ||
Guaranteed Withdrawal Benefit Agreement: |
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Maximum Charge |
Monthly | 1.00% annually of the Policy Value allocated to the Separate Account. | ||
Current Charges |
Monthly | 0.60% annually of the Policy Value allocated to the Separate Account. | ||
Return of Premium Term Insurance Agreement: |
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Cost of Insurance Charges 11 |
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Maximum (Guaranteed) Charges |
Monthly | Maximum of $83.3333 to minimum of $0.0816, per $1,000 of term insurance. | ||
Current Charges |
Monthly | Maximum of $22.9004 to minimum of $0.0244, per $1,000 of term insurance. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum (Guaranteed) Charges |
Monthly | $0.2767 per $1,000 of term insurance. | ||
Current Charges |
Monthly | $0.2728 per $1,000 of term insurance. | ||
Supplemental Term Insurance Agreement: 11,13 |
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Cost of Insurance Charges 11 |
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Maximum (Guaranteed) Charges |
Monthly | Maximum of $83.3333 to minimum of $0.0566, per $1,000 of Net Amount at Risk attributable to the term insurance benefit. | ||
Current Charges |
Monthly | Maximum of $22.9004 to minimum of $0.0070 to, per $1,000 of Net Amount at Risk attributable to the term insurance benefit. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum (Guaranteed) Charges |
Monthly | $0.2767 per $1,000 of Net Amount at Risk attributable to the term insurance benefit. | ||
Current Charge |
Monthly | $0.0450 per $1,000 of Net Amount at Risk attributable to the term insurance benefit. | ||
Mortality and Expense Risk Face Amount Charge |
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Maximum (Guaranteed) Charges |
Monthly | For the first 120 months following Policy date, the charges range from a minimum of $0.12 per $1,000 of the term insurance benefit, for female age 5 or under, up to a maximum of $0.34 per $1,000 of the term insurance benefit, for male age 85 or older. A similar charge applies to an increase in the term insurance benefit, for the first 120 months following the increase. | ||
Current Charges |
Monthly | No charge. | ||
First year charge for a representative non-tobacco male insured, age 45 |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Maximum (Guaranteed) Charges |
Monthly | $0.23 per $1,000 of the term insurance benefit. | ||
Current Charges |
Monthly | $0.00 per $1,000 of the term insurance benefit. |
5 | The Cost of Insurance Charges under the Policies vary depending on the individual circumstances of the insured, such as sex, age and risk classification. The charges also vary depending on the amount of insurance specified in the Policy and the Policy year in which the charge is deducted. The table shows the lowest and the highest Cost of Insurance Charges for an insured, based on our current rates and on guaranteed maximum rates for individuals in standard risk classifications. The table also shows the first year Cost of Insurance Charges under a Policy issued to an individual who is representative of individuals we insure. The charge shown in the table may not be representative of the charge that you will pay. Your Policy will state your guaranteed maximum Cost of Insurance Charges. More detailed information concerning your Cost of Insurance Charges is available from our administrative offices upon request. Also, before you purchase the Policy, we will provide you with hypothetical illustrations of Policy Values based upon the insured’s age and risk classification, the amount of insurance specified in the Policy, planned periodic premiums, and supplemental agreements requested. The Net Amount at Risk referred to in the tables is based upon the difference between the current death benefit provided under the Policy and the current value of the Policy. For additional information on Cost of Insurance Charges, see “What Are the Fees and Charges Under the Policy? — Monthly Deductions — Insurance Charge” in this Prospectus. |
6 | The Mortality and Expense Risk Face Amount Charges are currently reduced. During the first 60 months following the Policy date, the charges range from $0.06 per $1,000 of initial Specified Amount of insurance for females age 7 and under and up to $0.29 per $1,000 of initial Specified Amount of insurance for males age 74 and older. For months 61 through 120 following the Policy date, the charges range from $0.03 per $1,000 of initial Specified Amount of insurance for females age 7 and under and up to $0.15 per $1,000 of initial Specified Amount of insurance for males age 74 and older. The charge on an additional Specified Amount of insurance is similarly reduced. |
7 | This charge is currently reduced. For Policies issued after August 2004, for the first 120 months following the Policy date, to 0.45% annually of the first $25,000 of Policy Value and 0.15% annually of the Policy Value in excess of that amount. After the first 120 months following the Policy date, the charge is currently reduced to zero. See “What Are the Fees and Charges Under the Policy? — Monthly Deductions — Mortality and Expense Risk Charge” in this Prospectus for additional information about this charge. |
8 | You may borrow up to 95% of your Cash Surrender Value. The minimum amount you may borrow is $250. An amount equivalent to the loan is withdrawn from subaccounts and the fixed account on a pro-rata basis (unless you designate a different withdrawal allocation when you request the loan) and is transferred to a Policy loan account, as collateral for the loan. See “What Is a Policy Loan?” in this Prospectus. |
9 | Net Interest Charge for a Loan means the difference between the amount of interest we charge on the loan and the amount of interest we credit to your Policy in the Policy loan account. |
10 | The Policy loan account is guaranteed to earn interest at 3.00% during the first ten Policy years and 3.75% thereafter (4.00% thereafter in New York). On a guaranteed basis, the Net Interest Charge during the first ten Policy years is 1.00% and 0.25% thereafter (0.00% in New York). The Policy loan account currently earns interest at 3.00% during the first 10 Policy years and 4.00% thereafter. On a current basis, the Net Interest Charge during the first 10 Policy years is 1.00% and 0.00% thereafter. |
11 | The Cost of Insurance Charges under the Agreements vary depending on the individual circumstances of the insured, such as sex, age and risk classification. The charges also vary depending on the amount of insurance specified in the Agreement and the year in which the charge is deducted. The charges shown in the table may not be representative of the charge you would pay. The table shows the lowest and the highest Cost of Insurance Charges for an insured, based on current rates and on guaranteed maximum rates for individuals in standard risk classifications. The table also shows the first year Cost of Insurance Charges under an Agreement issued to an individual who is representative of individuals we insure. The specifications pages of the Policy will indicate the guaranteed maximum Cost of Insurance Charge for the Agreement applicable to your Policy. More detailed information concerning your Cost of Insurance Charges is available from our administrative offices upon request. Also, before you purchase the Policy, we will provide you with hypothetical illustrations of Policy Values based upon the insured’s age and risk classification, the amount of insurance specified in the Policy, planned periodic premiums, and agreements requested. The Net Amount at Risk referred to in the table is based upon the difference between the current benefit provided under the Agreement and the current Policy Value allocated to the Agreement. For additional information about the Agreements, see “What Are the Supplemental Agreements and Benefits That Are Available?” in this Prospectus. |
12 | This agreement is not available to all persons. See “What Are the Supplemental Agreements and Benefits That Are Available? — Business Accounting Benefit Agreement” in this Prospectus for additional information. |
13 | For purposes of determining the allocation of Net Amount at Risk between the Specified Amount of insurance in the Policy, and the term insurance benefit, the Policy Value will be allocated as follows: first to the initial term insurance benefit segment, then to any segments resulting from increases in the term insurance benefit in the order of the increases, then to the initial Specified Amount segment, and then to any segments resulting from increases in the Specified Amount in the order of the increases. Any increase in the death benefit in order to maintain the required minimum margin between the death benefit and the Policy Value will be allocated to the most recent increase in the Specified Amount in the Policy. |
Annual Fund Expenses 1 |
Minimum |
Maximum |
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Total Annual Fund Operating Expenses (12b-1) fees, and other expenses) |
0.35% | 1.33% |
1 |
Expressed as a percentage of average net assets for the fiscal year ended December 31, 2023. Fund expenses may be higher or lower in the future. This information is provided by the Funds and their agents. The information is based on 2023 expenses. We have not verified the accuracy of the information provided by the Funds. |
• |
fund management decisions driven by the need to maintain higher than normal liquidity or the inability to sustain an investment objective; |
• |
increased administrative and fund brokerage expenses; and/or |
• |
dilution of the interests of long-term investors. |
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• |
Determine when and how much premium you pay to us |
• |
Determine when and how much to allocate to the Variable Investment Options and to the fixed account |
• |
Borrow money |
• |
Change the beneficiary |
• |
Change the amount of insurance protection |
• |
Change the death benefit option you have selected |
• |
Surrender or partially surrender your Policy for all or part of its Net Cash Surrender Value |
• |
Choose the form in which you would like the death benefit or other proceeds paid out from your Policy |
• |
by wire or by exchange from another insurance company; |
• |
via an electronic funds transfer program (any owner interested in making monthly premium payments must use this method); |
• |
online at www.pennmutual.com for initial premium payments which will be drawn electronically from your bank account (you will need to have your Policy number and checking or savings account information on hand); or |
• |
if we agree to it, through a salary deduction plan with your employer. |
(a) | is the total premiums you have paid, less any partial surrenders you made; and |
(b) | is the “no-lapse premium” specified in your Policy, multiplied by the number of months the Policy has been in force. |
(a) |
is the net asset value per share of the Fund held in the Variable Investment Option, as of the end of the current valuation period, plus the per share amount of any dividend or capital gain distributions by the Fund if the “ex-dividend date” occurs in the valuation period; and |
(b) | is the net asset value per share of the Fund held in the Variable Investment Option as of the end of the last prior valuation period. |
• |
Option 1 |
• |
Option 2 plus |
• |
after the change, the Specified Amount of insurance must be at least $50,000; |
• |
no change may be made in the first Policy year and no more than one change may be made in any Policy year; and |
• |
if you request a change from Option 2 to Option 1, we may request evidence of insurability; if a different rate class is indicated for the insured, the requested change will not be allowed. |
• |
you must submit an application along with evidence of insurability acceptable to Penn Mutual; |
• |
no change may be made in the first Policy year; |
• |
any increase in the Specified Amount must be at least $10,000; and |
• |
no change may be made if it would cause the Policy not to qualify as insurance under federal income tax law. |
• |
no change may be made in the first Policy year; |
• |
no change may be made if it would cause the Policy not to qualify as insurance under federal income tax law; |
• |
no decrease may be made within one year of an increase in the Specified Amount; and |
• |
any decrease in the Specified Amount of insurance must be at least $5,000 and the Specified Amount after the decrease must be at least $50,000. |
• |
the Net Premiums you have paid (your premiums less the Percent of Premium Charges); |
• |
plus or minus the investment results in the part of your Policy Value allocated to the Variable Investment Options; |
• |
plus interest credited to the amount in the part of your Policy Value (if any) allocated to the Fixed Interest Options; |
• |
minus Policy charges we deduct; and |
• |
minus partial surrenders you have made. |
• |
the minimum amount that may be transferred is $250 (or the amount held under the Investment Options from which you are making the transfer, if less); |
• |
if less than the full amount held under an Investment Option is transferred, the amount remaining under the Investment Option must be at least $250; |
• |
we may defer transfers under certain conditions; |
• |
transfers may be made from the fixed account only during the 30 day period following the end of each Policy year; |
• |
the maximum amount that may be transferred out of the fixed account is limited to the greater of $5,000 or 25% of the accumulated value of the fixed account; and |
• |
the amount that may be transferred excludes any amount held in the Policy loan account. |
• |
Percent of Premium Charge . This charge of 7.50% (currently reduced to 5.00% of all premiums paid) is deducted from premium payments before allocation to the Variable Investment Options and Fixed Interest Options. This charge is to partially compensate us for the expense of selling and distributing the Policies, state premium taxes and the federal income tax burden (the Deferred Acquisition Cost or DAC tax) that we expect will result from the premiums. State premium taxes generally range from 0.50% to 3.50%; some states do not impose premium taxes. We can increase this charge in the future (up to a guaranteed maximum of 7.50% of every premium, in all Policy years); we will notify you in advance if we change our current rates. |
• |
Cost of Insurance Charge |
can charge. The cost of insurance rates that we currently apply are generally less than the maximum rates shown in your Policy. The table of rates we use will vary by issue age, Policy duration , sex, and rate class. We place insureds in a rate class when we issue the Policy and when an increase in coverage is effective, based on our examination of information bearing on insurance risk. We currently place people we insure in the following rate classes: a tobacco, preferred tobacco, non-tobacco, preferred non-tobacco or preferred plus non-tobacco rate class. We may also place certain people in a rate class involving a higher mortality risk than the tobacco or non-tobacco classes (a “substandard class”). Insureds age 19 and under are placed in a rate class that does not distinguish between tobacco and non-tobacco rates. In all states except New Jersey, they are assigned to a tobacco class at age 20 unless they have provided satisfactory evidence that they qualify for a non-tobacco class. When an increase in the Specified Amount of insurance is requested, we determine whether a different rate will apply to the increase based on the age of the insured on the effective date of the increase and the rate class of the insured on that date. |
• |
Administrative Charge |
• |
Mortality and Expense Risk Charge |
(1) | Mortality and Expense Risk Face Amount Charge. |
(2) | Mortality and Expense Risk Asset Charge. pro-rata from your Variable Investment Options. |
• |
Optional Supplemental Agreement Charges |
supplemental agreement benefits). Please see the Fee Table “Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses” and “What are the Supplemental Agreements and Benefits That Are Available?” in this Prospectus for more information about these charges. |
(a) | is 25% of the lesser of (i) the sum of all premiums paid, and (ii) the maximum Surrender Charge premium (which is an amount calculated separately for each Policy); |
(b) | is an administrative charge based on the initial amount of insurance and the insured’s age at the issue date (ranging from $1.00 for attained ages 9 and under to $7.00 for attained ages 60 and over, per $1,000 of initial Specified Amount of insurance); and |
(c) | is the applicable surrender factor from the table below in which the Policy year is determined. |
(a) | is an administrative charge based on the increase in the initial amount of insurance and the insured’s attained age on the effective date of the increase (ranging from $1.00 for attained ages 9 and under to $7.00 for attained ages 60 and over, per $1,000 of increase in the Specified Amount of insurance); and |
(b) | is the applicable surrender factor from the table below, assuming for this purpose only that the first policy year commences with the policy year in which the increase in the Specified Amount of insurance becomes effective. |
Surrender During Policy Year |
Surrender Factor | |
1st through 7th | 1.00 | |
8th | 0.80 | |
9th | 0.60 | |
10th | 0.40 | |
11th | 0.20 | |
12th and later | 0.00 |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
AccidentalDeath Benefit Agreement |
Provides an additional death benefit if the insured’s death results from an accidental cause, as defined in the agreement. | Optional. May be elected only at the time the owner purchases the base Policy. | • Not available for all Policies. • Not available if you choose either the Guaranteed Withdrawal Benefit Agreement or the Guaranteed Continuation of Policy Agreement. | |||
AdditionalInsured Term Insurance Agreement |
Provides term insurance on other persons in addition to the insured, in amounts specified in the Additional Policy Specification in the Policy. | Optional. May be elected at any time, as long as the insured meets our underwriting requirements. | • Not available if you choose either the Guaranteed Withdrawal Benefit Agreement or the Guaranteed Continuation of Policy Agreement. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
BusinessAccounting Benefit Agreement |
Provides enhanced early year Cash Surrender Values for Policies sold in certain limited corporate markets. |
Optional. May be elected only at the time the owner purchases the base Policy. |
• To be eligible for this agreement (i) Policies must be corporate owned, (ii) the corporation must be at least a partial beneficiary, and (iii) the Policies must be in support of a corporate sponsored non-qualified deferred compensation plan with a minimum of five insureds under the plan. • If the agreement is terminated by the owner of the Policy, the agreement is terminated with respect to insurance coverages provided under the Policy and all applicable Surrender Charges would apply. | |||
Children’sTerm Insurance Agreement |
Provides term insurance on one or more children of the insured. |
Optional. May be elected at any time. |
• If the named insured in the Policy dies, the term insurance on the insured child will continue until the anniversary of the Policy nearest the insured child’s twenty-third birthday. | |||
DisabilityWaiver of Monthly Deductions Agreement |
Provides a waiver of the Monthly Deductions from the value of the Policy Value upon disability of the insured. |
Optional. May be elected at any time, as long as the insured meets our underwriting requirements. |
• Monthly Deductions for this benefit are made until the Policy anniversary nearest the insured’s 65th birthday. | |||
DisabilityWaiver of Monthly Deduction and Disability Monthly Premium Deposit Agreement |
Provides a waiver of the Monthly Deductions from the Policy Value and payment by us of a stipulated premium upon disability of the insured. |
Optional. May be elected at any time, as long as the insured meets our underwriting requirements. |
• Monthly Deductions for this benefit are made until the Policy anniversary nearest the insured’s 65th birthday. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
GuaranteedContinuation of Policy Agreement |
Provides that the insurance provided under the Policy will not lapse even if the Cash Surrender Value of the Policy goes to zero. | Optional. May be elected only at the time the owner purchases the base Policy. | • The sum of the gross premiums paid less the sum of partial surrenders, Policy loans and unpaid interest must equal or exceed the “total guaranteed continuation of policy premium,” as stated in the Policy. • While this agreement is in force, the allocation or transfer of amounts to Variable Investment Options may restricted. | |||
• Not available with any of the following agreements: Accidental Death Benefit Agreement; Additional Insured Term Insurance Agreement; Guaranteed Withdrawal Benefit Agreement; or Return of Premium Term Insurance Agreement. | ||||||
GuaranteedOption to Extend Maturity Date Agreement |
Provides the owner of the Policy with an option to continue the insurance past the maturity date stated in the Policy without evidence of insurability. | Optional. May be elected at any time prior to age 90. |
• During the maturity extension period, new Policy loans will not be made and premium payments will not be accepted unless required to prevent lapse. • Does not extend the maturity or termination date of other agreements attached to the Policy (other than the Supplemental Term Insurance Agreement). |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/Limitations | |||
GuaranteedOption to Increase Specified Amount Agreement |
Provides the owner of the Policy with the option to increase the Specified Amount of insurance in the Policy without providing evidence of insurability. | Optional. May be elected only at the time the insured purchases the base Policy. | • The option may be exercised under the agreement as of any of the regular option dates or as of any alternative option date. • Regular option dates are the anniversaries of the Policy nearest the insured’s birthday at ages 22, 25, 28, 31, 34, 37 and 40 • Alternative option dates are the 90th day following marriage of the insured, live birth of a child of the insured or legal adoption by the insured of a child less than 18 years of age, subject to certain conditions. • Not available if you elect the Guaranteed Withdrawal Benefit agreement. | |||
GuaranteedWithdrawal Benefit Agreement |
Provides the owner with the ability to receive guaranteed withdrawal amounts from the “Benefit Base.” | Optional. May be elected only at the time the insured purchases the base Policy. | • Owner must satisfy a “Waiting Period” to be eligible for receipt of guaranteed withdrawal amounts (“Guaranteed Withdrawal Period”). • The Waiting Period ends on the earlier of: (a) the fifteenth Policy anniversary; and (b) the Policy anniversary nearest the insured’s attainment of age 70. • The Company reserves the right to make the availability of the agreement contingent upon the investment of the entire Policy Value according to an asset allocation program |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
established by the Company for the entire period the agreement is in effect. • The Guaranteed Withdrawal Period must begin by the Policy anniversary nearest the insured’s attainment of age 70 and will end at the insured’s attainment of age 85. • Election of this agreement will automatically change Death Benefit Option 2 (if in effect) to Death Benefit Option 1 once the Guaranteed Withdrawal Period commences. • If this agreement is elected, you will not be able to elect the following other agreements: (i) Accidental Death Benefit Agreement; (ii) Guaranteed Option to Increase Specified Amount Agreement; (iii) Guaranteed Continuation of Policy Agreement; (iv) Return of Premium Term Insurance Agreement; and (v) Additional Insured Term Insurance Agreement. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
Returnof Premium Term Insurance Agreement |
Provides term insurance equivalent to the sum of all premiums paid under the Policy up to the most recent monthly Policy anniversary less any amount credited to the Policy under a waiver of premium or waiver of Monthly Deductions Agreement. | Optional. May be elected only at the time the insured purchases the base Policy. | • Not available if you choose either the Guaranteed Withdrawal Benefit Agreement or the Guaranteed Continuation of Policy Agreement. | |||
SupplementalTerm Insurance Agreement |
Adds term insurance to the death benefit provided under the Policy. | Optional. May be elected only at the time the insured purchases the base Policy. | • Monthly Deductions may include a Mortality and Expense Risk Face Amount Charge applied to the amount of term insurance added to the Policy by the agreement. • Monthly Deductions will include a Cost of Insurance Charge for the term insurance added by the agreement. | |||
SupplementalExchange Agreement |
Provides within one year following termination of a business relationship between the owner of the Policy and the insured, the Policy may be exchanged for a new Policy on the life of a new insured. | Standard for all corporate- owned Policies. | • The new insured must have the same business relationship to the owner as the insured under the Policy to be exchanged. • The new insured must submit satisfactory evidence of insurability. • The policy to be exchanged must be in force and not in a grace period. • The owner must make premium payments under the new Policy to keep it in force at least two months. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
• Owner must surrender all rights in the Policy to be exchanged. | ||||||
OverloanProtection Agreement |
Allows the Policy owner to access the cash value from the Policy, while providing the holder with a reduced paid-up Policy in the event that the loan-to- |
Optional. May be elected at any time. | • Insured’s attained age must be 75 or older. • Policy must be in force for a minimum for 15 years. • Non-taxable withdrawals must equal the total premiums paid.• Subject to a one-time charge of 3.50% of the Policy Value, which is imposed when the agreement is exercised.• When the agreement is exercised (i) all supplemental agreements attached to the Policy will be terminated, except for the Option to Extend the Maturity Date Agreement and (ii) no additional premium payments, partial surrenders, Policy loans or Policy loan repayments will be allowed. | |||
AcceleratedDeath Benefit Agreement |
Provides the insured access to a portion of death benefit while the insured is living. | Standard. Automatically added to all base Policies with a face amount of greater than $50,000 and issued after January 1, 1996. | • Amount of death benefit proceeds the insured can access must be at least $10,000, but no more than the lesser of 50% of the total death benefit amount or $250,000. Such limits may vary depending upon the state. • Insured must be diagnosed by a licensed physician of the United States as being terminally ill with a life expectancy |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
of 12 months or less (24 months or less in Massachusetts). The physician may not be the owner, insured, beneficiary, or relative of the insured. • Exercising this agreement will reduce the death benefit that is payable under the base Policy upon the death of the insured. | ||||||
DollarCost Averaging |
Automatically makes monthly transfers from the Money Market Subaccount to one or more of the other Variable Investment Options. | Optional . |
• Dollar cost average from the Money Market Subaccount for up to 60 months. • Each planned premium must be at least $600 and the amount transferred each month must be at least $50. • Does not guarantee a profit or prevent a loss. | |||
DollarCost Averaging Account – Twelve-Month Fixed Account |
Allows you to allocate all or a portion of a premium payment to an account where it is automatically re-allocated each month to one or more of the Variable Investment Options you select. |
Optional . |
• Each planned premium must be at least $600 and the amount transferred each month must be at least $50. • Does not guarantee a profit or prevent a loss. | |||
AssetRebalancing |
Automatically reallocates your Policy Value among the Variable Investment Options in accordance with the proportions you originally selected | Optional . |
• Requires a minimum Policy Value of $1,000. • Does not guarantee a profit or prevent a loss. |
(a) | the fifteenth Policy anniversary; and |
(b) | the Policy anniversary nearest the insured’s attainment of age 70. |
(a) | is the Net Policy Value on the last Policy anniversary date which is 5 years prior to the date at which the Guaranteed Withdrawal Period begins, less cumulative withdrawals made during the period between (1) and (2), where: |
(1) | is the day after the last Policy anniversary which is 5 years prior to the date at which the Guaranteed Withdrawal Period begins; and |
(2) | is the date at which the Guaranteed Withdrawal Period begins. |
(b) | is the value of the Guaranteed Withdrawal Account, as defined below, as of the first day of the Guaranteed Withdrawal Period. |
(a) | are “ ” “ ” |
(b) | are partial surrenders taken during the Waiting Period accumulated at the Guaranteed Withdrawal Account Rate, compounded monthly; |
(c) | is the “ No-Lapse Premium,” |
(d) | the outstanding amount of Policy Indebtedness. |
(1) | are the cumulative premiums paid into the Policy; |
(2) | is the Maximum Monthly Guaranteed Withdrawal Account Premium, which is equal to 1/12 of the Policy’s guideline annual premium, multiplied by the number of months since the Policy date; and |
(3) | are the cumulative premiums previously credited to the Guaranteed Withdrawal Account. |
(a) | is the amount of the Excess Withdrawal; and |
(b) | is the Net Policy Value immediately prior to the Excess Withdrawal. |
(a) | is the amount of the Excess Withdrawal; and |
(b) | is the Net Policy Value immediately prior to the Excess Withdrawal. |
(a) | The insured is alive; |
(b) | The Agreement is in force; |
(c) | The Policy has not been surrendered; and |
(d) | The Guaranteed Withdrawal Benefit No-Lapse Premium Requirement is satisfied. |
(a) | the Policy anniversary nearest the insured’s attainment of age 85; |
(b) | surrender of this Policy; |
(c) | lapse of this Policy and no guaranteed withdrawal benefits are due; |
(d) | the date of death of the insured; |
(e) | withdrawals have been taken after the end of the Waiting Period and the Benefit Base is reduced to zero; |
(f) | the Policy anniversary nearest the insured’s attainment of age 70 when no withdrawals were taken after the end of the Waiting Period; |
(g) | an elective increase in face amount after the Guaranteed Withdrawal Period had commenced; |
(h) | payment of any accelerated death benefit amount; or |
(i) | the monthly anniversary which coincides with or next follows (i) the receipt at Penn Mutual’s home office of a written request by the owner to terminate this Agreement, and (ii) the return of this Policy for the appropriate endorsement after the end of the Waiting Period. |
• |
Accidental Death Benefit; |
• |
Guaranteed Option to Increase Specified Amount; |
• |
Guaranteed Continuation of Policy; |
• |
Return of Premium Term Insurance; or |
• |
Additional Insured Term Insurance. |
• |
Option 1. |
• |
Option 2. |
• |
the transfer of all values in the Variable Investment Options to the fixed account, which will then be credited with interest; |
• |
all supplemental Agreements attached to the Policy will be terminated, except for the Option to Extend the Maturity Date Agreement; |
• |
no additional premium payments, partial surrenders, Policy loans or Policy loan repayments will be allowed; and |
• |
no further changes may be made to the Policy. |
(1) | A withdrawal of $150,000 (the remaining basis) is taken with a withdrawal charge of $25 assessed; |
(2) | An Agreement Charge of $6,427 is assessed; |
(3) | The Specified Amount of the Policy is reduced to $186,072; |
(4) | Lapses are prevented on the Policy. |
• |
The amount of death benefit proceeds you can access must be at least $10,000, but no more than the lesser of 50% of the total death benefit amount or $250,000. In New Jersey and South Carolina, the maximum limit is $100,000 per Policy. In New York, the amount of benefit that you can access will be not less than $50,000 or 25% of the face amount, and cannot exceed 50% of the face amount. |
• |
The insured must be diagnosed by a licensed physician of the United States as being terminally ill with a life expectancy of 12 months or less (24 months or less in Massachusetts). The physician may not be the owner, insured, beneficiary, or relative of the insured. |
• |
Penn Mutual reserves the right, at its own expense, to seek additional medical opinions in order to determine benefit eligibility. |
• |
the Net Cash Surrender Value remaining in the Policy after the partial surrender must exceed $250; |
• |
no more than four partial surrenders may be made in a Policy year; |
• |
each partial surrender must be at least $250; |
• |
a partial surrender may not be made from an account if the amount remaining in that account would be less than $250; |
• |
During the first five Policy years, the partial surrender may not reduce the Specified Amount of insurance under your Policy to less than $50,000; and |
• |
the partial surrender will be subject to a processing fee equal to the lesser of $25 or 2.00% of the amount withdrawn. |
• |
Cash Value Accumulation Test. |
• |
Guideline Premium/Cash Value Corridor Test. The Policy must at all times satisfy a guideline premium requirement and a cash value corridor requirement. Under the guideline premium requirement , the sum of the premiums paid under the Policy may not at any time exceed the greater of the guideline single premium or the sum of the guideline level premiums, for the benefits promised under the Policy. Under the cash value corridor requirement , the death benefit at any time must be equal to or greater than the applicable percentage of the cash surrender value specified in the Code. |
• |
The portion of the Net Cash Surrender Value or death benefit proceeds being applied to the installment benefit; |
• |
The investment in the Policy. |
• |
Policy loans in excess of $50,000, partial surrenders in excess of $10,000, and full surrenders; |
• |
change of death benefit option, rate class; addition/removal of supplemental agreements; |
• |
changes in Specified Amount of insurance; |
• |
change of beneficiary; |
• |
election of payment option for Policy proceeds; and |
• |
tax withholding elections. |
FUND TYPE |
FUND AND ADVISER/SUBADVISER (as applicable) |
CURRENT EXPENSES |
AVERAGE ANNUAL TOTAL RETURNS (as of 12/31/2023) | |||||||
1 YEAR |
5 YEAR |
10 YEAR | ||||||||
Money Market |
Money Market Fund Penn Mutual Asset Management, LLC (“PMAM”) |
0.60% |
4.50% |
1.31% |
0.71% | |||||
Fixed Income |
Limited Maturity Bond Fund PMAM |
0.71% |
6.96% |
2.20% |
1.76% | |||||
Fixed Income |
Quality Bond Fund PMAM |
0.68% |
6.78% |
1.64% |
2.23% | |||||
Fixed Income |
High Yield Bond Fund PMAM |
0.74% |
11.22% |
6.38% |
4.99% | |||||
Asset Allocation |
Flexibly Managed Fund PMAM/ T. Rowe Price Associates, Inc.; T. Rowe Price Investment Management, Inc. |
0.88% |
18.56% |
12.58% |
10.28% | |||||
Asset Allocation |
Balanced Fund PMAM |
0.68% |
17.84% |
9.71% |
7.75% | |||||
Equity |
Large Growth Stock Fund PMAM/T. Rowe Price Associates, Inc. |
0.94% |
47.31% |
13.14% |
11.42% | |||||
Equity |
Large Cap Growth Fund PMAM/Massachusetts Financial Services Company |
0.88% |
23.84% |
16.55% |
12.57% | |||||
Equity |
Large Core Growth Fund PMAM/ Delaware Investments Fund Advisers |
0.86% |
35.38% |
6.20% |
7.36% | |||||
Equity |
Large Cap Value Fund PMAM/AllianceBernstein, L.P. |
0.95% |
11.68% |
11.57% |
8.07% | |||||
Equity |
Large Core Value Fund PMAM/Eaton Vance Management |
0.94% |
8.31% |
11.68% |
8.50% | |||||
Equity |
Index 500 Fund PMAM/SSGA Funds Management, Inc. (“SSGA”) |
0.35% |
25.87% |
15.40% |
11.69% |
FUND TYPE |
FUND AND ADVISER/ SUBADVISER (as applicable) |
CURRENT EXPENSES |
AVERAGE ANNUAL TOTAL RETURNS (as of 12/31/2023) | |||||||
1 YEAR |
5 YEAR |
10 YEAR | ||||||||
Equity |
Mid Cap Growth Fund PMAM/Delaware Investments Fund Advisers |
0.98% |
19.90% |
14.87% |
10.84% | |||||
Equity |
Mid Cap Value Fund PMAM/ Janus Henderson Investors US LLC |
0.83% |
11.38% |
5.17% |
4.62% | |||||
Equity |
Mid Core Value Fund PMAM/American Century Investment Management, Inc. |
1.06% |
5.93% |
10.95% |
8.66% | |||||
Equity |
SMID Cap Growth Fund PMAM/Goldman Sachs Asset Management, L.P. |
1.05% |
13.97% |
13.03% |
8.88% | |||||
Equity |
SMID Cap Value Fund PMAM/AllianceBernstein L.P. |
1.19% |
16.65% |
10.07% |
7.17% | |||||
Equity |
Small Cap Growth Fund PMAM/Janus Henderson Investors US LLC |
1.03% |
18.64% |
10.60% |
8.77% | |||||
Equity |
Small Cap Value Fund PMAM/Goldman Sachs Asset Management, L.P. |
1.02% |
11.41% |
8.66% |
6.35% | |||||
Equity |
Small Cap Index Fund PMAM/SSGA |
0.71% |
16.23% |
9.28% |
6.46% | |||||
Equity |
Developed International Index Fund PMAM/SSGA |
0.93% |
17.23% |
7.43% |
3.59% | |||||
Equity |
International Equity Fund PMAM/Vontobel Asset Management, Inc. |
1.09% |
15.25% |
8.28% |
5.68% | |||||
Equity |
Emerging Markets Equity Fund PMAM/Vontobel Asset Management, Inc. |
1.33% |
1.67% |
(0.75%) |
(0.38%) | |||||
Equity |
Real Estate Securities Fund PMAM/Cohen & Steers Capital Management, Inc. |
0.97% |
11.78% |
8.83% |
8.55% | |||||
Asset Allocation |
Aggressive Allocation Fund PMAM |
1.15% |
15.38% |
8.86% |
6.49% | |||||
Asset Allocation |
Moderately Aggressive Allocation Fund PMAM |
1.10% |
14.45% |
8.50% |
6.29% | |||||
Asset Allocation |
Moderate Allocation Fund PMAM |
1.07% |
12.77% |
7.10% |
5.44% | |||||
Asset Allocation |
Moderately Conservative Allocation Fund PMAM |
1.07% |
10.71% |
5.76% |
4.55% | |||||
Asset Allocation |
Conservative Allocation Fund PMAM |
1.05% |
9.02% |
4.04% |
3.35% |
(i) | 25% of the Traditional Fixed Account Value at the previous Policy anniversary ; |
(ii) | $5,000. |
About The Penn Mutual Life Insurance Company Penn Mutual helps people become stronger. Our expertly crafted life insurance is vital to long-term financial health and strengthens people’s ability to enjoy every day. Working with our trusted network of financial professionals, we take the long view, building customized solutions for individuals, their families, and their businesses. Penn Mutual supports its financial professionals with retirement and investment services through its wholly owned subsidiary Hornor, Townsend & Kent, LLC, member FINRA/SIPC. Visit Penn Mutual at www.pennmutual.com. |
PM8668 |
05/24 |
Diversified Growth Variable Universal Life |
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A-1 |
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B-1 |
Fees and Expenses | ||||||||||
Charges for Early Withdrawals |
If you fully surrender your Policy (meaning you make an early withdrawal of your full Net Cash Surrender Value) within the first 9 years following your purchase of the Policy or within the first 9 years following an increase to the Specified Amount, you may be assessed a Surrender Charge equal to: (a) 90% of the lesser of (i) the total premium paid in the first Policy year, (ii) the maximum Surrender Charge premium, and (iii) $45.00 per $1,000 of the Specified Amount multiplied by (b) the appropriate surrender factor. The surrender factor is equal to 1.00 in the first year of coverage and grades to 0.00 in the 10th year and after. For example, if you were to surrender your Policy during the first year after your Policy purchase (and your total premiums paid were $100,000 and your Specified Amount is $500,000), then you could be assessed a Surrender Charge of up to $20,250. For more detailed information, see “ Table of Fees and Expenses;” “ What Are the Fees and Charges Under the Policy?” | |||||||||
Transaction Charges |
In addition to the Surrender Charge for Policy surrenders, you may be charged for other transactions. These include a Percent of Premium Charge (deducted from each premium) and a partial surrender processing fee. A Surrender Charge will also be deducted if you increase the Specified Amount of the life insurance death benefit and fully surrender your Policy within 9 years of such increase. We reserve the right to impose transfer charges (when you transfer Policy Value between Investment Options), but we currently do not impose these charges. We may also impose charges if you exercise certain supplemental agreement benefits. For more detailed information, see “ Table of Fees and Expenses;” “ What Are the Fees and Charges Under the Policy?” | |||||||||
Ongoing Fees and Expenses |
In addition to Surrender Charges and transaction charges, an investment in the Policy is subject to certain ongoing fees and expenses (usually deducted on a monthly basis). Some of these charges, such as the monthly Cost of Insurance Charge, the Mortality and Expense Risk Face Amount Charge and certain supplemental agreement charges (for supplemental benefits), are set based on individual characteristics of the insured (e.g., age, sex, and rating classification). Other ongoing charges include the monthly Mortality and Expense Risk Asset Charge, loan interest, Administrative Charge and certain other agreement charges. Please refer to the Policy Specifications Page for rates and the specific fees applicable to your Policy. Investors will also bear expenses associated with the Funds, as shown in the following table, which shows the minimum and maximum total operating expenses deducted from Fund assets (before any fee waiver or expense reimbursement) during the year ended December 31, 2023. | |||||||||
Total Annual Operating Expenses (expenses that are deducted from Fund assets) | ||||||||||
Annual Fee |
Minimum |
Maximum |
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Variable Investment Options (Fund fees and expenses) |
0.35% |
1.33% |
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For more detailed information, see “ Table of Fees and Expenses;” “ What Are the Fees and Charges Under the Policy?” |
Risks | ||
Risk of Loss |
You can lose money by investing in this Policy, including loss of your premiums (principal). For more detailed information, see “ Summary of Principal Risks of Investing in the Policy;” “ What is the Value of My Policy?” | |
Not a Short-Term Investment |
This Policy is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The Policy is designed to provide a life insurance benefit or to help meet other long- term financial objectives. Substantial fees, expenses, and tax implications generally make variable life insurance unsuitable as a short-term savings vehicle. Additionally, the Policy limits your ability to surrender a portion of the Policy Value (also called cash value) through partial surrenders or loans; you cannot access more than your Net Cash Surrender Value (the Policy Value less the Surrender Charge and less any outstanding Policy loan). | |
Risks Associated with Investment Options |
• An investment in this Policy is subject to the risk of poor investment performance of the Funds you choose, and the value of an investment can vary depending on the performance of the Funds. • Each Investment Option (the Funds and the Fixed Account Investment Options) has its own unique risks. The performance of the Funds will vary, among each other, may underperform similar mutual funds not available through the Variable Investment Options and some are riskier than others. • A discussion of the risks of allocating your premiums or Policy Value to one or more Funds can be found in the prospectuses for the Funds. You should review the prospectuses for the Funds before making an investment decision. • Premiums and Policy Value allocated to the Fixed Account Investment Option may be kept there for an extended period of time due to restrictions on transfers out of the Fixed Account Investment Option. For more detailed information, see “ Summary of Principal Risks of Investing in the Policy;” “ Appendix A — Funds Available Under the Policy;” “ Appendix B – Fixed Account Options and Indexed Loans.” | |
Insurance Company Risks |
An investment in the Policy is subject to the risks related to the Company, including: • Any obligations, guarantees, and benefits of the Policy (including the Fixed Account Options), are subject to the claims-paying ability and financial strength of the Company. • There are risks relating to the Company’s administration of the Policy, including, among others, cybersecurity and infectious disease outbreak risks. • If the Company experiences financial distress, it may not be able to meet its obligations to you. • More information about the Company, including its financial strength ratings, is available upon request from the Company at 1-800-523-0650. For more detailed information, see “ The Penn Mutual Life Insurance Company;” “ Financial Statements;” “ Summary of Principal Risks of Investing in the Policy – Insurance Company Risks;” “ Other Information.” |
Policy Lapse |
If the total premiums you have paid, less any partial surrenders you made, equal or exceed the no-lapse premium specified in your Policy, multiplied by the number of months the Policy has been in force, your Policy will remain in force, regardless of investment performance for a specified period. The specified period is the shorter of 20 years, or the time until the Policy anniversary nearest the insured’s attained age 80. However, in no case will the specified period be less than 5 years. Policy distributions will affect the no-lapse guarantee and outstanding loans will nullify the no-lapse guarantee. The no-lapse premium will generally be less than the monthly equivalent of the planned premium you specified. When a Policy lapses, it has no value, and no benefits are paid upon the death of the insured. You will also lose the principal invested. • A Policy can lapse if the Net Cash Surrender Value is insufficient to pay the Policy charges. This can happen due to insufficient premium payments, poor investment performance, partial surrenders, unpaid loans or loan interest, and Policy charges (including increases in those charges). • The larger a Policy loan becomes relative to the Policy’s Cash Surrender Value, the greater the risk that the Policy’s Net Cash Surrender Value will not be sufficient to support the Policy’s charges, including any loan interest due, and the greater the risk of the Policy lapsing. • A Policy lapse may have tax consequences. • If the Policy lapses, there are costs and premium requirements associated with reinstatement of the Policy. If applicable, the Extended No-Lapse Guarantee Agreement can prevent the Policy from lapsing if the Extended No-Lapse Guarantee requirement is satisfied. For more detailed information, see “ Summary of Principal Risks of Investing in the Policy;” “ What Payments Must I Make Under the Policy? — Lapse and Reinstatement.” | |
Restrictions | ||
Investments |
• You can allocate your Net Premiums to the Variable Investment Options (that invest in the Funds) and the Fixed Account Investment Options. • The minimum amount that you can transfer generally is $250 (or the amount held under the Investment Options from which you are making the transfer, if less). • If less than the full amount held under an Investment Option is transferred, the amount remaining in the Investment Option must be at least $250. • Transfers may be made from the Traditional Fixed Account only during the 30 day period following the end of each Policy year. • Transfers from the Indexed Fixed Account may be made only on the anniversary of an allocation of an amount to the Indexed Fixed Account. • The amount that may be transferred excludes any amount held in the Policy loan account. • The Company reserves the right to remove or substitute any of the Funds as investment options that are available under the Policy. • In addition, we may limit your ability to make transfers involving the Variable Investment Options if it is believed that a transfer may disadvantage or potentially harm or hurt the rights or interests of other Policy owners. • We may defer transfers under certain conditions. • We will also reject or reverse a transfer request if for any reason any of the Funds do not accept the purchase of its shares. For more detailed information, see “ How Are Amounts Credited to the Variable Investment Options of the Separate Account?;” “ How Can I Change the Policy’s Investment Allocations?” |
Optional Benefits |
• We offer several optional benefits in the form of a supplemental agreement to the Policy. Various optional benefits are available and some have an additional charge. Not all agreements are available in every state and some agreements may only be added when you apply for your Policy. • We may stop offering an optional benefit at any time. For more detailed information, see “ What Are the Supplemental Agreements and Benefits That Are Available?” | |
Taxes | ||
Tax Implications |
Consult with a tax adviser to determine the tax implications of an investment in and payments received under this Policy. • If you purchase the Policy through a tax-qualified plan or individual retirement account (“IRA”), you do not get any additional tax benefit. • Earnings on your Policy (if any) are taxed when you withdraw them (or if a Policy loan is not repaid), at ordinary income tax rates, and may be subject to a tax penalty before age 59 1 ⁄ 2 . For more detailed information, see “ Summary of Principal Risks of Investing in the Policy — Taxes and Tax Risks;” “ How Is the Policy Treated Under Federal Income Tax Law?” | |
Conflicts of Interest | ||
Investment Professional Compensation |
Your financial professional may receive compensation for selling this Policy to you, in the form of commissions, asset-based compensation, allowances for expenses, and other compensation programs, and the Company may share the revenue it earns on this Policy with the professional’s firm. (Your financial professional may be your broker, investment adviser, insurance agent, or someone else). For these reasons, these financial professionals may have a financial incentive to recommend this Policy over another policy or investment. | |
Exchanges |
Some financial professionals may have a financial incentive to offer you a new policy in place of the one you own. You should only exchange your Policy if you determine, after comparing the features, fees, and risks of both policies, that it is preferable for you to purchase the new policy rather than continue to own your existing Policy. For more detailed information, see “ What Payments Must I Make Under the Policy? — Tax-Free ‘Section 1035’ Insurance Policy Exchanges.” |
1. |
Purpose of the Policy |
2. |
Premiums |
3. |
Policy Features |
• |
Option 1 – the death benefit is the greater of (a) the Specified Amount of insurance, or (b) a percentage of the Policy Value (on the date of the insured’s death) equal to the minimum necessary for your Policy to qualify as life insurance under IRC Section 7702; or |
• |
Option 2 – the death benefit is the greater of (a) the Specified Amount of insurance plus your Policy value on the date of death, or (b) the percentage of the Policy Value on the date of the insured’s death) equal to the minimum necessary for your Policy to qualify as life insurance under IRC Section 7702. |
Transaction Fees | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Percent of Premium Charge |
When a premium is paid. |
7.50% of premium payments. 1 | ||
Surrender Charge |
When the Policy is surrendered within the first 9 Policy years, or within the first 9 years of any increase in the Specified Amount. |
90% of the lesser of (i) the total premium paid in the first Policy year, (ii) the “maximum Surrender Charge premium”, and (iii) $45.00 per $1,000 of Specified Amount. | ||
Charge for a representative non-tobacco male insured, age 45 |
When the Policy is surrendered within the first 9 Policy years and/ or within the first 9 years following an increase in the Specified Amount. |
90% of the lesser of (i) the total premium paid in the first Policy year, (ii) $16.20 per $1,000 of Specified Amount, and (iii) $45.00 per $1,000 of Specified Amount. 2 | ||
Partial Surrender Charge |
When you partially surrender your Policy. |
Partial surrenders: lesser of $25 or 2.00% of the amount surrendered. | ||
Transfer Charge |
When you make a transfer. |
Maximum Charge $10.00 . Current Charge $0.00. 3 | ||
Overloan Protection Benefit Agreement |
When benefit is exercised. |
One time charge of 3.50% of Policy Value. | ||
Accelerated Death Benefit |
When benefit is exercised. |
One time charge of 12 months’ worth of Policy charges on the accelerated amount, plus an interest charge, which is equal to 12 months’ worth of interest on the accelerated amount based on a rate that is the greater of (a) the current 90-day Treasury bill rate, or (b) the current maximum statutory adjustable policy loan rate. |
1 |
The Percent of Premium Charge imposed is currently reduced to 5.00% on premiums paid in the second Policy year and thereafter. This reduction is not guaranteed and may change. |
2 | The “maximum Surrender Charge premium” is determined separately for each Policy and takes into account the individual underwriting characteristics of the insured. The “maximum Surrender Charge premium” is stated in each Policy. Commencing in the second Policy year after issue or an increase and continuing through the ninth Policy year after issue or an increase, the deferred sales charge decreases each year, after which there is no longer a charge. The Surrender Charge shown may not be representative of the charge you would pay. |
3 |
No transaction fee is currently imposed for making a transfer among the Variable Investment Options and/or the Fixed Account Options. While we do not currently impose a transfer fee, we reserve the right to impose a $10 fee in the future on any transfer that exceeds twelve transfers in a Policy year (except in the case of transfers of $5,000,000 or more). |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Base Contract Charges: |
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Cost of Insurance Charges 4 |
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Maximum Charges |
Monthly | Maximum of $83.33 to minimum of $0.02 per $1,000 of Net Amount at Risk. | ||
Current Charges |
Monthly | Maximum of $83.33 to minimum of $0.01 per $1,000 of Net Amount at Risk. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum Charge |
Monthly | $0.22 per $1,000 of Net Amount at Risk. | ||
Current Charge |
Monthly | $0.10 per $1,000 of Net Amount at Risk. | ||
Mortality and Expense Risk Charge |
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Mortality and Expense Risk Face Amount Charge | Monthly for the first 120 months following the Policy date or an increase in a Policy’s Specified Amount | The charges range from a maximum of $0.95 per $1,000 of Specified Amount of insurance, to a minimum of $0.12 per $1,000 of Specified Amount of insurance. 5 | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum Charge |
Monthly | $0.29 per $1,000 of initial Specified Amount of insurance. | ||
Current Charge |
Monthly | For the first 60 months following the Policy date or an increase in the Specified Amount, $0.26 per $1,000 of initial Specified Amount of insurance. For months 61 through 120 following the Policy date or an increase in the Specified Amount, $0.13 per $1,000 of initial Specified Amount of insurance. | ||
Mortality and Expense Risk Asset Charge | Monthly | 0.60% annually of the first $50,000 of Policy Value and 0.30% annually of the Policy Value in excess of that amount. 6 | ||
Administrative Charges | Monthly | Guaranteed Maximum $9.00 . . |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Optional Benefit Charges: |
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Traditional Loans | ||||
Gross Interest Charge |
End of each Policy year | Annual rate of 4.00% (before credit from interest paid on collateral held in special loan account). | ||
Net Interest Charge 7 |
End of each Policy year | Annual rate of 1.00% (after credit from interest paid on collateral held in special loan account). 8 | ||
Indexed Loans | ||||
Gross Interest Charge |
End of each Policy year | Annual rate of 6.00%. | ||
Accidental Death Benefit: |
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Cost of Insurance Charges 9 |
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Current and Maximum Charges |
Monthly | Maximum of $0.11 to minimum of $0.05, per $1,000 of accidental death benefit. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Current and Maximum Charges |
Monthly | $0.06 per $1,000 of accidental death benefit. | ||
Additional Insured Term Insurance Agreement: |
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Cost of Insurance Charges 9 |
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Maximum Charges |
Monthly | Maximum of $83.33 to minimum of $0.04 per $1,000 of additional insured term insurance benefit. | ||
Current Charges |
Monthly | Maximum of $83.33 to minimum of $0.03 per $1,000 of additional insured term insurance benefit. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum Charges |
Monthly | $0.19 per $1,000 of additional insured term insurance benefit. | ||
Current Charge |
Monthly | $0.15 per $1,000 of additional insured term insurance benefit. | ||
Administrative Charges |
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First year of Agreement and first year of increase in term insurance benefit under Agreement | Monthly | $0.10 per $1,000 of additional insured term insurance benefit. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Business Accounting Benefit: |
Monthly, for the first 9 years of the Policy and first 9 years after an increase in the Specified Amount of insurance | $0.03 per $1,000 of original or increase in Specified Amount of insurance. | ||
Children’s Term Insurance Agreement: |
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Cost of Insurance Charges 9 |
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Maximum Charges |
Monthly | $0.24 per $1,000 of children’s term insurance benefit. | ||
Current Charges |
Monthly | $0.15 per $1,000 of children’s term insurance benefit. | ||
Disability Waiver of Monthly Deduction: |
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Cost of Insurance Charges 9 |
||||
Maximum Charges |
Monthly | Maximum of $0.60 to minimum of $0.01 per $1,000 of Net Amount at Risk. | ||
Current Charges |
Monthly | Maximum of $0.32 to minimum of $0.01 per $1,000 of Net Amount at Risk. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum Charges |
Monthly | $0.05 per $1,000 of Net Amount at Risk. | ||
Current Charge |
Monthly | $0.03 per $1,000 of Net Amount at Risk. | ||
Disability Waiver of Monthly Deduction and Disability Monthly Premium Deposit Agreement: |
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Disability Waiver of Monthly Deduction | ||||
Cost of Insurance Charges 9 |
||||
Maximum Charges |
Monthly | Maximum of $0.60 to minimum of $0.01 per $100 of Net Amount at Risk. | ||
Current Charges |
Monthly | Maximum of $0.32 to minimum of $0.01 per $100 of Net Amount at Risk. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum Charge |
Monthly | $0.05 per $1,000 of Net Amount at Risk. | ||
Current Charge |
Monthly | $0.03 per $1,000 of Net Amount at Risk. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
Disability Monthly Premium Deposit: |
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Cost of Insurance Charges 9 |
||||
Current and Maximum Charges |
Monthly | Maximum of $0.96 to minimum of $0.03 per $100 of the stipulated premium in the Policy. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum and Current Charges |
Monthly | $0.12 per $100 of the stipulated premium in the Policy. | ||
Extended No-Lapse Guarantee Agreement: 10 |
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Cost of Insurance Charges |
||||
Current and Maximum Charge |
Monthly | Maximum of $0.12 to minimum of $0.04 per $1,000 of Specified Amount of insurance in the Policy plus insurance provided by any Supplemental Term Insurance Agreements or Additional Insured Term Agreements. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Current and Maximum Charge |
Monthly | $0.12 per $1,000 of Specified Amount of insurance in the Policy plus insurance provided by any Supplemental Term Insurance Agreements or Additional Term Insurance Agreements. | ||
Cash Value Enhancement Agreement: |
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Current and Maximum Charge |
Monthly | $0.20 per $1,000 of Specified Amount for the first 60 Policy months. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Current and Maximum Charge |
Monthly | $0.20 per $1,000 of Specified Amount for the first 60 Policy months. | ||
Guaranteed Option to Increase Specified Amount: |
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Cost of Insurance Charges 9 |
||||
Current and Maximum Charges |
Monthly | Maximum of $0.15 to minimum of $0.04 per $1,000 of guaranteed option amount. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
First year charge for a representative non-tobacco male insured, age 45 |
||||
Current and Maximum Charges |
Monthly | $0.11 per $1,000 of guaranteed option amount. | ||
Return of Premium Term Insurance: |
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Cost of Insurance Charges 9 |
||||
Maximum Charges |
Monthly | Maximum of $83.33 to minimum of $0.02 per $1,000 of term insurance. | ||
Current Charges |
Monthly | Maximum of $83.33 to minimum of $0.01 per $1,000 of term insurance. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Maximum Charge |
Monthly | $0.22 per $1,000 of term insurance. | ||
Current Charge |
Monthly | $0.10 per $1,000 of term insurance. | ||
Supplemental Term Insurance Agreement: |
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Surrender Charge |
When the Policy is surrendered within the first 9 Policy years or within the first 9 years following an increase in the term insurance benefit or upon a decrease in the term insurance benefit in the first five Policy years | 90% of the lesser of (i) the total premium paid in the first Policy year, (ii) the “maximum Surrender Charge premium” 3 . | ||
First year charge for a representative non-tobacco male insured, age 45 |
When the Policy is surrendered | 90% of the lesser of (i) the total premium paid in the first Policy year, (ii) $16.20 per $1,000 of the Specified Amount of the Policy plus the term insurance benefit 3 , and (iii) $45.00 per $1,000 of the Specified Amount of the Policy plus the term insurance benefit. | ||
Cost of Insurance Charge 9 |
||||
Current and Maximum Charges |
Monthly | Maximum of $83.33 to minimum of $0.01 per $1,000 of Net Amount at Risk attributable to the term insurance benefit. |
Periodic Charges under the Policy Other than the Funds’ Annual Operating Expenses | ||||
Charge |
When Charge is Deducted |
Amount Deducted | ||
First year charge for a representative non-tobacco male insured, age 45 |
||||
Maximum Charge |
Monthly | $0.22 per $1,000 of Net Amount at Risk attributable to the term insurance benefit. | ||
Current Charge |
Monthly | $0.13 per $1,000 of Net Amount at Risk attributable to the term insurance benefit. | ||
Mortality and Expense Risk Face Amount Charge |
||||
Current and Maximum Charges |
Monthly | For the first 60 months following the Policy date or an increase in the term insurance benefit, the charges range from a maximum of $0.93 per $1,000 of the term insurance benefit to a minimum of $0.11 per $1,000 of the term insurance benefit. | ||
First year charge for a representative non-tobacco male insured, age 45 |
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Current and Maximum Charge |
Monthly | $0.26 per $1,000 of the term insurance benefit. |
4 | The Cost of Insurance Charges under the Policies vary depending on the individual circumstances of the insured, such as sex, age and risk classification. The charges also vary depending on the amount of insurance specified in the Policy and the Policy year in which the charge is deducted. The table shows the lowest and the highest Cost of Insurance Charges for an insured, based on our current rates and on guaranteed maximum rates for individuals in standard risk classifications. The table also shows the first year Cost of Insurance Charges under a Policy issued to an individual who is representative of individuals we insure. The charge shown in the table may not be representative of the charge that you will pay. Your Policy will state your guaranteed maximum Cost of Insurance Charges. More detailed information concerning your Cost of Insurance Charges is available from our administrative offices upon request. Also, before you purchase the Policy, we will provide you with hypothetical illustrations of Policy Values based upon the insured’s age and risk classification, the amount of insurance specified in the Policy, planned periodic premiums, and agreements requested. The Net Amount at Risk referred to in the tables is based upon the difference between the current death benefit provided under the Policy and the current value of the Policy. For additional information on Cost of Insurance Charges, see “What Are the Fees and Charges Under the Policy? — Monthly Deductions — Insurance Charge” in this Prospectus. |
5 | The Mortality and Expense Risk Face Amount Charges are currently reduced. During the first 60 months following the Policy date, the charges range from $0.11 per $1,000 of initial Specified Amount of insurance to $0.93 per $1,000 of initial Specified Amount of insurance. For months 61 through 120 following the Policy date, the charges range from $0.06 per $1,000 of initial Specified Amount of insurance up to $0.47 per $1,000 of initial Specified Amount of insurance. In New York, the Mortality and Expense Risk Face Amount Charges during months 61 through 120 are currently zero. The charge on an additional Specified Amount of insurance is similarly reduced. |
6 | This charge is currently reduced, for the first 120 months following the Policy date, to 0.35% annually of the first $25,000 of Policy Value and 0.05% annually of the Policy Value in excess of that amount. After the first 120 months following the Policy date, the charge is currently reduced to zero. See “What Are the Fees and Charges Under the Policy? — Monthly Deductions — Mortality and Expense Risk Change” in this Prospectus for additional information about this charge. |
7 | Net Interest Charge for a Loan means the difference between the amount of interest we charge on the loan and the amount of interest we credit to your Policy in the Policy loan account. |
8 | The special loan account is guaranteed to earn interest at 3.00% during the first ten Policy years and 3.75% thereafter (4.00% thereafter in New York). On a guaranteed basis, the Net Interest Charge during the first ten Policy years is 1.00% and 0.25% thereafter (0.00% thereafter in New York). The special loan account currently earns interest at 3.00% during the first ten Policy years and 4.00% thereafter. On a current basis, the Net Interest Charge during the first ten Policy years is 1.00% and 0.00% thereafter. |
9 | The Cost of Insurance Charges under the Agreements vary depending on the individual circumstances of the insured, such as sex, age and risk classification. The charges also vary depending on the amount of insurance specified in the Agreement and the year in which the charge is deducted. The charges shown in the table may not be representative of the charge you would pay. The table shows the lowest and the highest Cost of Insurance Charges for an insured, based on current rates and on guaranteed maximum rates for individuals in standard risk classifications. The table also shows the first year Cost of Insurance Charges under an Agreement issued to an individual who is representative of individuals we insure. The specifications pages of the Policy will indicate the guaranteed maximum Cost of Insurance Charge for the Agreement applicable to your Policy. More detailed information concerning your Cost of Insurance Charges is available from our administrative offices upon request. Also, before you purchase the Policy, we will provide you with hypothetical illustrations of Policy Values based upon the insured’s age and risk classification, the amount of insurance specified in the Policy, planned periodic premiums, and agreements requested. The Net Amount at Risk referred to in the table is based upon the difference between the current benefit provided under the Agreement and the current Policy Value allocated to the Agreement. For additional information about the Agreements, see “What Are the Supplemental Agreements and Benefits That Are Available?” in this Prospectus. |
10 | While the Extended No-Lapse Agreement is in force, a minimum of 20% of the Policy Value must be allocated to the Indexed Fixed Account at the end of each month. |
11 | For purposes of determining the allocation of Net Amount at Risk between the Specified Amount of insurance in the Policy, and the term insurance benefit, the Policy Value will be allocated as follows: first to the initial term insurance benefit segment, then to any segments resulting from increases in the term insurance benefit in the order of the increases, then to the initial Specified Amount segment, and then to any segments resulting from increases in the Specified Amount in the order of the increases. Any increase in the death benefit in order to maintain the required minimum margin between the death benefit and the Policy Value will be allocated to the most recent increase in the Specified Amount in the Policy. |
Annual Fund Expenses 1 |
Minimum |
Maximum |
||||||
Total Annual Fund Operating Expenses |
0.35% | 1.33% |
1 |
Expressed as a percentage of average net assets for the fiscal year ended December 31, 2023. Fund expenses may be higher or lower in the future. This information is provided by the Funds and their agents. The information is based on 2023 expenses. We have not verified the accuracy of the information provided by the Funds. |
• |
fund management decisions driven by the need to maintain higher than normal liquidity or the inability to sustain an investment objective; |
• |
increased administrative and fund brokerage expenses; and/or |
• |
dilution of the interests of long-term investors. |
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• |
Determine when and how much premium you pay to us |
• |
Determine when and how much to allocate to the Variable Investment Options and to the Fixed Account Investment Options |
• |
Borrow money |
• |
Change the beneficiary |
• |
Change the amount of insurance protection |
• |
Change the death benefit option you have selected |
• |
Surrender or partially surrender your Policy for all or part of its Net Cash Surrender Value |
• |
Choose the form in which you would like the death benefit or other proceeds paid out from your Policy |
• |
by wire or by exchange from another insurance company; |
• |
via an electronic funds transfer program (any owner interested in making monthly premium payments must use this method); |
• |
on-line at www.pennmutual.com for initial premium payments which will be drawn electronically from your bank account (you will need to have your Policy number and checking or savings account information on hand); or |
• |
if we agree to it, through a salary deduction plan with your employer. |
(a) | is the total premiums you have paid, less any partial surrenders you made; and |
(b) | is the “no-lapse premium” specified in your Policy, multiplied by the number of months the Policy has been in force. |
(a) | is the net asset value per share of the Fund held in the Variable Investment Option, as of the end of the current valuation period, plus the per share amount of any dividend or capital gain distributions by the fund if the “ex-dividend date” occurs in the valuation period; and |
(b) | is the net asset value per share of the Fund held in the Variable Investment Option as of the end of the last prior valuation period. |
• |
Option 1. |
• |
Option 2. plus |
• |
after the change, the Specified Amount of insurance must be at least $50,000; |
• |
no change may be made in the first Policy year and no more than one change may be made in any Policy year; and |
• |
if you request a change from Option 2 to Option 1, we may request evidence of insurability; if a different rate class is indicated for the insured, the requested change will not be allowed. |
• |
you must submit an application along with evidence of insurability acceptable to Penn Mutual; |
• |
no change may be made in the first Policy year; |
• |
any increase in the Specified Amount must be at least $10,000; and |
• |
no change may be made if it would cause the Policy not to qualify as insurance under federal income tax law. |
• |
no change may be made in the first Policy year; |
• |
no change may be made if it would cause the Policy not to qualify as insurance under federal income tax law; |
• |
no decrease may be made within one year of an increase in the Specified Amount; |
• |
any decrease in the Specified Amount of insurance must be at least $10,000 and the Specified Amount after the decrease must be at least $50,000. |
• |
the Net Premiums you have paid (your premiums less the Percent of Premium Charges); |
• |
plus or minus the investment results in the part of your Policy Value allocated to the Variable Investment Options; |
• |
plus interest credited to the amount in the part of your Policy Value (if any) allocated to the Fixed Account Options; |
• |
minus Policy charges we deduct; and |
• |
minus partial surrenders you have made. |
• |
the minimum amount that may be transferred is $250 (or the amount held under the Investment Options from which you are making the transfer, if less); |
• |
if less than the full amount held under an Investment Option is transferred, the amount remaining under the Investment Option must be at least $250; |
• |
we may defer transfers under certain conditions; |
• |
transfers may be made from the Traditional Fixed Account only during the 30 day period following the end of each Policy year; |
• |
transfers from the Indexed Fixed Account may be made only on the anniversary of an allocation of an amount to the Indexed Fixed Account; and |
• |
the amount that may be transferred excludes any amount held in the Policy loan account. |
(a) | restricting the dollar amount, the number of transfers made during a defined period, and the method used to submit transfers (this could include not allowing telephone, internet, or other electronic transfers); |
(b) | waiving or reducing any or all of the restrictions, uniformly to all members of the same class of Policies, on transfers described in this Policy; |
(c) | revoking any waiver or reduction, uniformly to all members of the same class of Policies; and |
(d) | terminating transfer privileges at any time (for all, some, or specific Policy owners). |
• |
Cost of Insurance Charge. A monthly charge for the cost of insurance protection is subtracted from the Policy Value. The amount of insurance risk we assume varies from Policy to Policy and from month to month. The amount of insurance risk is affected by the investment performance of the Variable Investment Options, payment of premiums, and charges. The Cost of Insurance Charge therefore also varies. To determine the charge for a particular month, we multiply the amount of insurance for which we are at risk by a cost of insurance rate based upon an actuarial table. The amount of insurance is the “Net Amount at Risk,” or the difference between the death benefit and the Policy Value. The table in your Policy will show the maximum cost of insurance rates that we can charge. The cost of insurance rates that we currently apply are generally less than the maximum rates shown in your Policy. The table of rates we use will vary by issue age, Policy duration , sex, and the insurance risk characteristics. We place insureds in a rate class when we issue the Policy and when an increase in coverage is effective, based on our examination of information bearing on insurance risk. We currently place people we insure in the following rate classes: a standard tobacco, preferred tobacco, standard non-tobacco, preferred non-tobacco or preferred plus non-tobacco rate class. We may also place certain people in a rate class involving a higher mortality risk than the standard tobacco or standard non-tobacco classes (a “substandard class”). Insureds age 19 and under are placed in a rate class that does not distinguish between tobacco and non-tobacco rates. In all states except New Jersey, they are assigned to a standard tobacco class at age 20 unless they have provided satisfactory evidence that they qualify for a standard, preferred, or preferred plus non-tobacco class. When an increase in the Specified Amount of insurance is requested, we determine whether a different rate will apply to the increase based on the age of the insured on the effective date of the increase and the rate class of the insured on that date. |
• |
Administrative Charge. |
• |
Mortality and Expense Risk Charge. |
than anticipated. The expense risk we assume is the risk that expenses incurred in issuing and administering the Policies and the Separate Account will exceed the amount we charge for administration. We will notify you in advance if we change our current rates. We may realize a profit from the charges, and if we do, it will become part of our surplus. |
(1) | Mortality and Expense Risk Face Amount Charge. For the first 120 months after the Policy date we will deduct the charge based on the initial Specified Amount of insurance, and for the first 120 months after any increase in the Specified Amount we will deduct the charge based on the increase. The Policy Specification Page of your Policy will show the maximum Mortality and Expense Risk Face Amount Charge. The Mortality and Expense Risk Face Amount Charge will vary by issue age, Policy duration, gender, and rate class. |
(2) | Mortality and Expense Risk Asset Charge. The current charge during the first 120 months after the Policy date is equivalent to an annual effective rate of 0.35% of the first $25,000 of Policy Value, plus an annual rate of 0.05% of the Policy Value in excess of $25,000. In addition, the current Mortality and Expense Risk Asset Charge is zero beyond the first 120 months after the Policy date. The guaranteed charge for all Policies is equivalent to an annual effective rate of 0.60% of the first $50,000 of Policy Value, plus an annual rate of 0.30% of the Policy Value in excess of $50,000. The charges are deducted pro-rata from your Investment Options. |
• |
Optional Supplemental Agreement Charges. |
(a) | is the maximum Surrender Charge premium (which is an amount calculated separately for each Policy and is listed in the Policy Specifications Page); |
(b) | is the total premium paid in the first 12 months from issue; |
(c) | is $45.00 per $1,000 of initial amount of insurance; and |
(d) | is the applicable surrender factor from the table below in which the Policy year is determined. |
(a) | is the maximum Surrender Charge premium based on the age and class of the insured at the time of increase; |
(b) | is the total premium paid in the first 12 months following the effective date of the increase; |
(c) | is $45.00 per $1,000 of the amount of the increase in Specified Amount; and |
(d) | is the applicable surrender factor from the table below, assuming for this purpose only that the first Policy year commences with the Policy year in which the increase in Specified Amount of insurance becomes effective. |
Surrender During Policy Year |
Surrender Factor | |
1 | 1.00 | |
2 | 0.89 | |
3 | 0.78 | |
4 | 0.67 | |
5 | 0.56 | |
6 | 0.45 | |
7 | 0.34 | |
8 | 0.23 | |
9 | 0.12 | |
10+ | 0.00 |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
AccidentalDeath Benefit Agreement |
Provides an additional death benefit if the insured’s death results from an accidental cause, as defined in the agreement. | Optional. May be elected only at the time the owner purchases the base Policy. | • Not available for all Policies. • Not available if you choose the Extended No-Lapse Guarantee Agreement. | |||
AdditionalInsured Term Insurance Agreement |
Provides term insurance on other persons in addition to the insured, in amounts specified in the Policy Specification Page in the Policy. | Optional. May be elected at any time, as long as the insured meets our underwriting requirements. | • Additional insured must meet underwriting requirements. | |||
BusinessAccounting Benefit Agreement |
Provides enhanced early year Cash Surrender Values for Policies sold in certain limited corporate markets. | Optional. May be elected only at the time the owner purchases the base Policy. | • To be eligible for this agreement (i) Policies must be corporate owned, (ii) the corporation must be at least a partial beneficiary, and (iii) the Policies must be in support of a corporate sponsored non-qualified deferred compensation plan with a minimum of three insureds under the plan.• If the agreement is terminated by the owner of the Policy, the agreement is terminated with respect to insurance coverages provided under the Policy and all applicable Surrender Charges would apply. • Not available with the Cash Value Enhancement Agreement. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
CashValue Enhancement Agreement |
Provides higher early-duration Cash Surrender Values for certain limited corporate market applications. | Optional. | • Not available for sale in individual markets. • The Policy must be sponsored by or owned by a business, corporation, or a corporate trust. • The corporation must be at least a partial beneficiary. • A minimum of one life can be covered. • The agreement is terminated and the termination credit will not be applied if the Policy to which this agreement is attached is exchanged for another policy or has its ownership changed to a life insurance company. • Not available with the Business Accounting Benefit Agreement. | |||
Children’sTerm Insurance Agreement |
Provides term insurance on one or more children of the insured. | Optional. May be elected at any time. | • If the named insured in the Policy dies, the term insurance on the insured child will continue until the anniversary of the Policy nearest the insured child’s twenty-third birthday. | |||
DisabilityWaiver of Monthly Deduction Agreement |
Provides a waiver of the Monthly Deductions from the value of the Policy Value upon the total disability of the insured. | Optional. May be elected at any time, as long as the insured meets our underwriting requirements. | • Monthly Deductions for this benefit are made until the Policy anniversary nearest the insured’s 65th birthday. | |||
DisabilityWaiver of Monthly Deduction and Disability Monthly Premium Deposit Agreement |
Provides a waiver of the Monthly Deductions from the Policy Value and payment by us of a stipulated premium disability of the insured. | Optional. May be elected at any time, as long as the insured meets our underwriting requirements. | • Monthly Deductions for this benefit are made until the Policy anniversary nearest the insured’s 65th birthday. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
ExtendedNo-Lapse Guarantee Agreement |
Provides that the insurance provided under the Policy will not lapse even if the Cash Surrender Value of the Policy goes to zero. | Optional. May be elected only at the time the owner purchases the base Policy. | • Premiums paid less withdrawals, accumulated at 5.00%, must exceed the sum of the Extended No-Lapse Guarantee Premiums accumulated at 5.00% for the requirements of this agreement to be satisfied.• While the agreement is in force, a minimum of 20% of the Policy Value must be allocated to the Indexed Fixed Account at the end of each month. • Not available with any of the following agreements: Accidental Death Benefit Agreement; Guaranteed Option to Increase Specified Amount Agreement; or Return of Premium Term Insurance Agreement. | |||
GuaranteedOption to Increase Specified Amount Agreement |
Provides the owner of the Policy with the option to increase the Specified Amount of insurance in the Policy without providing evidence of insurability. | Optional. May be elected only at the time the insured purchases the base Policy. | • The option may be exercised under the agreement as of any of the regular option dates or as of any alternative option dates. • Regular option dates are the anniversaries of the Policy nearest the insured’s birthday at ages 22, 25, 28, 31, 34, 37 and 40. • Alternative option dates are the 90th day following marriage of the insured, live birth of a child of the insured or legal adoption by the insured of a child less than 18 years of age, subject to certain conditions. • Not available if you choose the Extended No-Lapse Guarantee Agreement. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
Returnof Premium Term Insurance Agreement |
Provides term insurance equivalent to the sum of all premiums paid under the Policy up to the most recent monthly Policy anniversary less any amount credited to the Policy under a waiver of premium or waiver of Monthly Deductions agreement. | Optional. May be elected only at the time the insured purchases the base Policy. | • Not available if you choose the Extended No-Lapse Guarantee Agreement. | |||
SupplementalTerm Insurance Agreement |
Adds term insurance to the death benefit provided under the Policy. | Optional. May be elected only at the time the insured purchases the base Policy. | • Monthly Deductions may include a Mortality and Expense Risk Face Amount Charge applied to the amount of term insurance added to the Policy by the agreement. • Monthly Deductions will include a Cost of Insurance Charge for the term insurance added by the agreement. | |||
SupplementalExchange Agreement |
Provides within one year following termination of a business relationship between the owner of the Policy and the insured, the Policy may be exchanged for a new Policy on the life of a new insured. | Standard for all corporate-owned Policies. | • The new insured must have the same business relationship to the owner as the insured under the Policy to be exchanged. • The new insured must submit satisfactory evidence of insurability. • The Policy to be exchanged must be in force and not in a grace period. • The owner must make premium payments under the new Policy to keep it in force at least two months. • Owner must surrender all rights in the Policy to be exchanged. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
OverloanProtection Agreement |
Allows the Policy owner to access the cash value from the Policy, while providing the owner with a reduced paid-up policy in the event that the loan-to-surrender value equals or exceeds 96%. |
Optional. May be elected at any time. | • Insured’s attained age must be 75 or older. • Policy must be in force for a minimum for 15 years. • Non-taxable withdrawals must equal the total premiums paid.• Subject to a one-time charge of 3.50% of the Policy Value, which is imposed when the agreement is exercised.• When the agreement is exercised (i) all supplemental agreements attached to the Policy will be terminated and (ii) no additional premium payments, partial surrenders, Policy loans or Policy loan repayments will be allowed. | |||
AcceleratedDeath Benefit Agreement |
Provides the insured access to a portion of the death benefit while the insured is living. | Standard. | • Amount of death benefit proceeds the insured can access must be at least $10,000, but no more than the lesser of 50% of the total death benefit amount or $250,000. Such limits may vary depending upon the state. • Insured must be diagnosed by a licensed physician of the United States as being terminally ill with a life expectancy of 12 months or less (24 months or less in Massachusetts). The physician may not be the owner, insured, beneficiary, or relative of the insured. • Electing this agreement will reduce the death benefit that is payable under the base Policy upon the death of the insured. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
ChronicIllness Accelerated Benefit Agreement |
Provides access to a portion of the death benefit while the insured is living, if the insured is certified with a chronic illness. | Optional. Can be added to the Policy after issue subject to our restrictions. | • Continuous care in an eligible facility or at home must be expected to be required for the insured’s life. • Limits apply to the accelerated benefit payments. • Chronic illness is defined in the agreement (based on inability to perform specified activities of daily living, or severe cognitive impairment). • Chronic illness must be certified by a licensed health care professional (not the insured, owner, or beneficiary or a relative of any of them). • Upon each accelerated benefit payment, the death benefit will be reduced by an amount greater than the payment amount. | |||
DollarCost Averaging Account |
Automatically makes monthly transfers from the money market investment option to one or more of the other Variable Investment Options and to the Indexed Fixed Account. | Optional . |
• Each planned premium must be at least $600. • The amount transferred each month must be at least $50. • Does not guarantee a profit or prevent a loss. |
Name of Benefit |
Purpose |
Is this Benefit Standard or Optional? |
Brief Description of Restrictions/ Limitations | |||
DollarCost Averaging Account – Twelve Month Fixed Account |
Allows you to allocate all or a portion of a premium payment to the Fixed Dollar Cost Averaging Account, where it is automatically re- allocated each month to one or more of the Investment Options you select. |
Optional. | • Each planned premium allocated to it must be at least $600. • The amount transferred each month must be at least $50. • Does not guarantee a profit or prevent a loss. | |||
AssetRebalancing |
Automatically reallocates your Policy Value among the Variable Investment Options in accordance with the proportions you originally selected. | Optional . |
• Requires a minimum Policy Value of $1,000. • Does not guarantee a profit or prevent a loss. |
• |
$500,000 Specified Amount |
• |
$50,000 Policy Value |
• |
$9,000 total accumulated Monthly Deductions through year 3 |
• |
75% termination factor |
• |
$10,535 Surrender Charge |
(a) | is the term insurance benefit; and |
(b) | is the sum of the term insurance benefit and the Specified Amount of the Policy. |
• |
the transfer of all values in the Variable Investment Options to the Traditional Fixed Account, which will then be credited with interest; |
• |
all supplemental Agreements attached to the Policy will be terminated; |
• |
no additional premium payments, partial surrenders, Policy loans or Policy loan repayments will be allowed; and |
• |
no further changes may be made to the Policy. |
(1) | A withdrawal of $150,000 (the remaining basis) is taken with a withdrawal charge of $25 assessed. |
(2) | An Agreement Charge of $6,427 is assessed. |
(3) | The Specified Amount of the Policy is reduced to $186,072. |
(4) | Lapses are prevented on the Policy. |
• |
The amount of death benefit proceeds you can access must be at least $10,000, but no more than the lesser of 50% of the total death benefit amount or $250,000. In New Jersey and South Carolina, the maximum limit is $100,000 per Policy. In New York, the amount of benefit that you can access will be not less than $50,000 or 25% of the face amount, and cannot exceed 50% of the face amount. |
• |
The insured must be diagnosed by a licensed physician of the United States as being terminally ill with a life expectancy of 12 months or less (24 months or less in Massachusetts). The physician may not be the owner, insured, beneficiary, or relative of the insured. |
• |
Penn Mutual reserves the right, at its own expense, to seek additional medical opinions in order to determine benefit eligibility. |
• |
The Policy owner may request the payment of the accelerated benefit payment in a single lump sum or in a series of equal payments occurring annually, semi-annually, quarterly, or monthly. The series of benefit payments will continue as scheduled, as long as the insured is certified as having a Chronic Illness at least every 12 months, until the remaining death benefit reaches the minimum allowed by the Company or the agreement is terminated. No more than 12 accelerated benefit payments will be paid in a 12 month period. The accelerated benefit payment must first be used to repay a pro rata share of any outstanding Indebtedness. |
• |
Penn Mutual will limit the accelerated benefit payment such that: |
• |
The Policy is not disqualified as life insurance according to the Code; |
• |
The accelerated benefit payment is at least $4,800 if taken as a single lump sum, or the sum of scheduled payments for the 12 month period following the election date is at least $4,800 if taken as a series of payments; |
• |
The maximum total amount of accelerated benefit payment in a 12 month period, for all Policies or agreements under which the insured is covered with the Company, will not exceed the least of 24% of the eligible amount, $240,000, or the annual Per Diem Limitation within the meaning of sections 101(g)(3)(D) and 7702B(d) of the Code. The Per Diem Limitation further requires that the total aggregated benefits being received from all coverages do not exceed the IRS annual Per Diem amount, including benefits received from coverages not with Penn Mutual and reimbursements of costs for qualified long-term care services through insurance or otherwise. Accelerated benefit payments are determined after taking into account all other coverage and reimbursements; |
• |
The maximum total amount of accelerated benefit payments during the life of the insured, for all Policies or agreements under which the insured is covered with Penn Mutual, will not exceed $5,000,000; and |
• |
The death benefit remaining after an accelerated benefit payment is not less than $50,000. |
• |
Chronic Illness means that the insured has been certified by a licensed health care practitioner within the last 12 months as: |
• |
Being unable to perform at least two activities of daily living (bathing, continence, dressing, eating, toileting, transferring) without substantial assistance from another person due to a loss of functional capacity for a period of at least 90 days; or |
• |
Requiring substantial supervision by another person for a period of at least 90 days to protect the insured from threats to health and safety due to severe cognitive impairment. |
• |
Cognitive Impairment means deterioration or loss in intellectual capacity that is: |
(1) | Comparable to (and includes) Alzheimer’s disease and similar forms of irreversible dementia; and |
(2) | Measured by clinical evidence and standardized tests which reliably measure impairment in: |
(a) | Short term or long term memory; |
(b) | Orientation to people, places, or time; |
(c) | Deductive or abstract reasoning; and |
(d) | Judgment as it relates to safety awareness. |
• |
For each lump sum benefit payment, or at the beginning of each 12 month period following the election date if benefit payments are scheduled in a series, Penn Mutual must receive written certification from a licensed health care practitioner that the insured has a Chronic Illness. The licensed health care practitioner may be a licensed physician, registered professional nurse, licensed social worker, or other similar health care practitioner approved by the IRS and Penn Mutual. The licensed health care practitioner shall not be the insured, Policy owner, beneficiary, or a relative thereof. Penn Mutual reserves the right to obtain at any time an additional opinion of the insured’s condition from a licensed health care practitioner at Penn Mutual’s expense. Should this opinion differ from that of the insured’s licensed health care practitioner, eligibility for benefits will be determined by a third licensed health care practitioner who is mutually acceptable to the owner and Penn Mutual. |
• |
the Net Cash Surrender Value remaining in the Policy after the partial surrender must exceed $1,000; |
• |
no more than twelve partial surrenders may be made in a Policy year; |
• |
each partial surrender must be at least $250; |
• |
a partial surrender may not be made from an Investment Option if the amount under the option would be less than $250; |
• |
during the first five Policy years, the partial surrender may not reduce the Specified Amount of insurance under your Policy to less than $50,000; and |
• |
the partial surrender will be subject to a processing fee equal to the lesser of $25 or 2.00% of the amount withdrawn. |
• |
Option 1 - Interest Income. |
• |
Option 2 - Income for a Fixed Period. |
• |
Option 3 - Income of a Specified Amount. |
• |
Option 4 - Life Income. |
• |
Option 5 - Life Income with Guaranteed Period. |
• |
Option 6 - Life Income with Refund Period. |
• |
Option 7 - Joint and Survivor Life Income. |
• |
Cash Value Accumulation Test. |
• |
Guideline Premium/Cash Value Corridor Test. The Policy must at all times satisfy a guideline premium requirement and a cash value corridor requirement. Under the guideline premium requirement , the sum of the premiums paid under the Policy may not at any time exceed the greater of the guideline single premium or the sum of the guideline level premiums, for the benefits promised under the Policy. Under the cash value corridor requirement , the death benefit at any time must be equal to or greater than the applicable percentage of cash surrender value specified in the Code. |
• |
The portion of the Net Cash Surrender Value or death benefit proceeds being applied to the installment benefit; |
• |
The investment in the Policy. |
• |
Policy loans in excess of $50,000, partial surrenders in excess of $10,000, and full surrenders; |
• |
change of death benefit option, rate class; addition/removal of supplemental agreements; |
• |
changes in Specified Amount of insurance; |
• |
change of beneficiary; |
• |
election of payment option for Policy proceeds; and |
• |
tax withholding elections. |
FUND TYPE |
FUND AND ADVISER/SUBADVISER (as applicable) |
CURRENT EXPENSES |
AVERAGE ANNUAL TOTAL RETURNS (as of 12/31/2023) |
|||||||||||||||
1 YEAR |
5 YEAR |
10 YEAR |
||||||||||||||||
Money Market |
Money Market Fund Penn Mutual Asset Management, LLC (“PMAM”) |
0.60% |
4.50% |
1.31% |
0.71% |
|||||||||||||
Fixed Income |
Limited Maturity Bond Fund PMAM |
0.71% |
6.96% |
2.20% |
1.76% |
|||||||||||||
Fixed Income |
Quality Bond Fund PMAM |
0.68% |
6.78% |
1.64% |
2.23% |
|||||||||||||
Fixed Income |
High Yield Bond Fund PMAM |
0.74% |
11.22% |
6.38% |
4.99% |
|||||||||||||
Asset Allocation |
Flexibly Managed Fund PMAM/ T. Rowe Price Associates, Inc.; T. Rowe Price Investment Management, Inc. |
0.88% |
18.56% |
12.58% |
10.28% |
|||||||||||||
Asset Allocation |
Balanced Fund PMAM |
0.68% |
17.84% |
9.71% |
7.75% |
|||||||||||||
Equity |
Large Growth Stock Fund PMAM/T. Rowe Price Associates, Inc. |
0.94% |
47.31% |
13.14% |
11.42% |
|||||||||||||
Equity |
Large Cap Growth Fund PMAM/Massachusetts Financial Services Company |
0.88% |
23.84% |
16.55% |
12.57% |
|||||||||||||
Equity |
Large Core Growth Fund PMAM/ Delaware Investments Fund Advisers |
0.86% |
35.38% |
6.20% |
7.36% |
|||||||||||||
Equity |
Large Cap Value Fund PMAM/AllianceBernstein, L.P. |
0.95% |
11.68% |
11.57% |
8.07% |
|||||||||||||
Equity |
Large Core Value Fund PMAM/Eaton Vance Management |
0.94% |
8.31% |
11.68% |
8.50% |
|||||||||||||
Equity |
Index 500 Fund PMAM/SSGA Funds Management, Inc. (“SSGA”) |
0.35% |
25.87% |
15.40% |
11.69% |
FUND TYPE |
FUND AND ADVISER/SUBADVISER (as applicable) |
CURRENT EXPENSES |
AVERAGE ANNUAL TOTAL RETURNS (as of 12/31/2023) |
|||||||||||||||
1 YEAR |
5 YEAR |
10 YEAR |
||||||||||||||||
Equity |
Mid Cap Growth Fund PMAM/Delaware Investments Fund Advisers |
0.98% |
19.90% |
14.87% |
10.84% |
|||||||||||||
Equity |
Mid Cap Value Fund PMAM/ Janus Henderson Investors US LLC |
0.83% |
11.38% |
5.17% |
4.62% |
|||||||||||||
Equity |
Mid Core Value Fund PMAM/American Century Investment Management, Inc. |
1.06% |
5.93% |
10.95% |
8.66% |
|||||||||||||
Equity |
SMID Cap Growth Fund PMAM/Goldman Sachs Asset Management, L.P. |
1.05% |
13.97% |
13.03% |
8.88% |
|||||||||||||
Equity |
SMID Cap Value Fund PMAM/AllianceBernstein L.P. |
1.19% |
16.65% |
10.07% |
7.17% |
|||||||||||||
Equity |
Small Cap Growth Fund PMAM/Janus Henderson Investors US LLC |
1.03% |
18.64% |
10.60% |
8.77% |
|||||||||||||
Equity |
Small Cap Value Fund PMAM/Goldman Sachs Asset Management, L.P. |
1.02% |
11.41% |
8.66% |
6.35% |
|||||||||||||
Equity |
Small Cap Index Fund PMAM/SSGA |
0.71% |
16.23% |
9.28% |
6.46% |
|||||||||||||
Equity |
Developed International Index Fund PMAM/SSGA |
0.93% |
17.23% |
7.43% |
3.59% |
|||||||||||||
Equity |
International Equity Fund PMAM/Vontobel Asset Management, Inc. |
1.09% |
15.25% |
8.28% |
5.68% |
|||||||||||||
Equity |
Emerging Markets Equity Fund PMAM/Vontobel Asset Management, Inc. |
1.33% |
1.67% |
(0.75% |
) |
(0.38% |
) | |||||||||||
Equity |
Real Estate Securities Fund PMAM/Cohen & Steers Capital Management, Inc. |
0.97% |
11.78% |
8.83% |
8.55% |
|||||||||||||
Asset Allocation |
Aggressive Allocation Fund PMAM |
1.15% |
15.38% |
8.86% |
6.49% |
|||||||||||||
Asset Allocation |
Moderately Aggressive Allocation Fund PMAM |
1.10% |
14.45% |
8.50% |
6.29% |
|||||||||||||
Asset Allocation |
Moderate Allocation Fund PMAM |
1.07% |
12.77% |
7.10% |
5.44% |
|||||||||||||
Asset Allocation |
Moderately Conservative Allocation Fund PMAM |
1.07% |
10.71% |
5.76% |
4.55% |
|||||||||||||
Asset Allocation |
Conservative Allocation Fund PMAM |
1.05% |
9.02% |
4.04% |
3.35% |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Total Growth Over 5 Year Segment |
|||||||||||||||||||
Index Performance | 1.00% | -10.00% | 4.00% | -10.00% | 3.00% | -12.37% | ||||||||||||||||||
Growth Cap | 10.00% | 9.50% | 9.50% | 10.00% | 10.00% | |||||||||||||||||||
Growth Floor | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||||||||
Stipulated Interest Calc. | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | |||||||||||||||||||
Annual Index Credits | 1.00% | 0.00% | 4.00% | 0.00% | 3.00% | 8.19% | ||||||||||||||||||
Cumulative Guarantee Int. | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | 10.41% |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Total Growth Over 5 Year Segment |
|||||||||||||||||||
Index Performance | 10.00 | -101.00 | 36.36 | -94.54 | 25.52 | -$ | 123.65 | |||||||||||||||||
Growth Cap | 100.00 | 95.95 | 95.95 | 105.04 | 105.04 | |||||||||||||||||||
Growth Floor | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||
Stipulated Interest Calc | 20.00 | 20.20 | 20.20 | 21.01 | 21.01 | |||||||||||||||||||
Annual Index Credits | 10.00 | 0.00 | 40.40 | 0.00 | 31.51 | $ | 81.91 | |||||||||||||||||
Cumulative Guarantee Int | 20.00 | 20.40 | 20.81 | 21.22 | 21.65 | $ | 104.08 | |||||||||||||||||
Additional Credit in dollars due to Five-Year Cumulative Guarantee | $ | 22.17 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Total Growth Over 5 Year Segment |
|||||||||||||||||||
Index Performance . | 1.00% | -10.00% | 4.00% | -10.00% | 3.00% | -12.37% | ||||||||||||||||||
Growth Cap | 10.00% | 9.50% | 9.50% | 10.00% | 10.00% | |||||||||||||||||||
Growth Floor . | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% | |||||||||||||||||||
Credited Interest Monthly . | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% | 5.10% | ||||||||||||||||||
Additional Annual Index Credits . | 0.00% | 0.00% | 3.00% | 0.00% | 2.00% | 5.06% | ||||||||||||||||||
Total Credited Interest . | 1.00% | 1.00% | 4.00% | 1.00% | 3.00% | 10.37% | ||||||||||||||||||
Cumulative Guarantee Int . | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | 10.41% |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Total Growth Over 5 Year Segment |
|||||||||||||||||||
Index Performance | 10.00 | -101.00 | 36.36 | -94.54 | 25.52 | -$ | 123.65 | |||||||||||||||||
Growth Cap . | 100.00 | 95.95 | 95.95 | 106.09 | 107.15 | |||||||||||||||||||
Growth Floor | 10.00 | 10.10 | 10.20 | 10.61 | 10.72 | |||||||||||||||||||
Credited Interest Monthly . | 10.00 | 10.10 | 10.20 | 10.61 | 10.72 | $ | 51.63 | |||||||||||||||||
Additional Annual Index Credits . | 0.00 | 0.00 | 30.60 | 0.00 | 21.43 | $ | 52.03 | |||||||||||||||||
Total Credited Interest | 10.00 | 10.10 | 40.80 | 10.61 | 32.15 | $ | 103.66 | |||||||||||||||||
Cumulative Guarantee Int. . | 20.00 | 20.40 | 20.81 | 21.22 | 21.65 | $ | 104.08 | |||||||||||||||||
Additional Credit in dollars due to Five-Year Cumulative Guarantee |
$ | 0.42 |
About The Penn Mutual Life Insurance Company Penn Mutual helps people become stronger. Our expertly crafted life insurance is vital to long-term financial health and strengthens people’s ability to enjoy every day. Working with our trusted network of financial professionals, we take the long view, building customized solutions for individuals, their families, and their businesses. Penn Mutual supports its financial professionals with retirement and investment services through its wholly owned subsidiary Hornor, Townsend & Kent, LLC, member FINRA/SIPC. Visit Penn Mutual at www.pennmutual.com. |
PM8700 |
05/ 24 |
STATEMENT OF ADDITIONAL INFORMATION
FOR
DIVERSIFIED ADVANTAGE VUL
a flexible premium adjustable variable life insurance policy with index-linked options issued by
THE PENN MUTUAL LIFE INSURANCE COMPANY
and funded through
PENN MUTUAL VARIABLE LIFE ACCOUNT I
of
The Penn Mutual Life Insurance Company
PO Box 178, Philadelphia, Pennsylvania 19105
1-800-523-0650
May 1, 2024
This Statement of Additional Information (the “SAI”) is not a prospectus. It should be read in conjunction with the Prospectus dated May 1, 2024 for the Diversified Advantage Variable Universal Life Insurance Policy (the “Policy”). The Policy is funded through the Penn Mutual Variable Life Account I (the “Separate Account”). A copy of the Prospectus is available, without charge, by writing to The Penn Mutual Life Insurance Company (“Penn Mutual” or the “Company”), Customer Service Group, PO Box 178, Philadelphia, Pennsylvania 19105 or you may call, toll free, 1-800-523-0650, or access our website at www.pennmutual.com. Terms used in this SAI have the same meaning as in the Prospectus.
The financial statements of the Company and the Separate Account are incorporated by reference to the financial statements included in the Separate Account’s most recent Form N-VPFS filed with the Securities and Exchange Commission.
Table of Contents
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4 |
THE PENN MUTUAL LIFE INSURANCE COMPANY
The Penn Mutual Life Insurance Company (“Penn Mutual” or the “Company”) is a Pennsylvania mutual life insurance company, chartered in 1847. We are licensed to sell insurance and annuities in 49 states and the District of Columbia. Our corporate headquarters are located at Eight Tower Bridge, 161 Washington Street, Conshohocken, Pennsylvania 19428, a suburb of Philadelphia. Our mailing address is The Penn Mutual Life Insurance Company, PO Box 178, Philadelphia, Pennsylvania 19105.
Penn Mutual Variable Life Account I
We established the Penn Mutual Variable Life Account I (the “Separate Account”) as a separate investment account under Pennsylvania law on January 27, 1987. The Separate Account is registered with the Securities and Exchange Commission (the “SEC”) as a unit investment trust under the Investment Company Act of 1940 and qualifies as a “separate account” within the meaning of the federal securities laws.
SERVICES
The Company holds title to the assets of the Separate Account. The Company maintains the records and accounts relating to the Separate Account.
ADDITIONAL INFORMATION
Assignment
You may assign the Policy while it is in force during the life of the insured. Your rights, and the rights of any beneficiary, will be subject to the rights of an assignee under the terms of an assignment. We will not be bound by any assignment until you provide a signed form, that we have either provided or find acceptable, and the form has been filed at our home office. Unless you specify otherwise, the assignment will take effect as of the date you signed the form, subject to any action we have taken prior to the time that the assignment is received at our home office. We are not responsible for the effect or the validity of any assignment.
Misstatement of Age or Sex
If the insured’s age or sex (if the policy is issued on a sex-distinct basis) has been misstated, we will adjust the proceeds payable under the Policy based on what the last monthly charges would have purchased at the correct age or sex (if the policy is issued on a sex-distinct basis).
Incontestability
After a Policy has been in force during the insured’s lifetime for two years from the date of issue, we may not contest the Policy, except in the case of fraud when permitted by applicable law. However, if there has been a Policy change or reinstatement for which we required evidence of insurability, we may contest that Policy change or reinstatement for two years with respect to information provided at that time, during the lifetime of the insured, from the effective date of the Policy change or reinstatement.
Suicide
If the insured, whether sane or insane, dies by suicide, within two years (duration may vary in some states) of the date of issue, our liability will be limited to an amount equal to the premiums paid for the Policy less any Policy Debt and partial withdrawals. If there has been an increase in Specified Amount for which we required evidence of insurability, and if the insured dies by suicide within two years (duration may vary in some states) from the effective date of the increase, our liability with respect to the increase will be limited to an amount equal to the portion of the monthly charges associated with that increase. If there has been a reinstatement, and if the insured dies by suicide within two years (duration may vary in some states) from the effective date of the reinstatement, our liability with respect to the reinstatement will be limited to an amount equal to the premiums paid less any Policy Debt and any partial withdrawals since the reinstatement.
2
Non-Principal Risks
In addition to the section of the Prospectus on the principal risks of investing in the Policy, risks are disclosed separately in each of the appropriate sections of the Prospectus.
SALE OF THE POLICY
Hornor, Townsend & Kent, LLC (“HTK”), a wholly owned subsidiary of Penn Mutual, serves as principal underwriter of the Policy. HTK is located at Eight Tower Bridge, 161 Washington Street, Conshohocken, Pennsylvania 19428. HTK also acts as principal underwriter for (1) Penn Mutual Variable Annuity Account III, a separate account established by Penn Mutual, (2) PIA Variable Life Account I, a separate account established by The Penn Insurance and Annuity Company, a wholly owned subsidiary of Penn Mutual (“PIA”), and (3) PIA Variable Annuity Account I, also a separate account established by PIA. HTK is a registered broker-dealer under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority.
For 2023, 2022, and 2021, the Company paid to HTK underwriting commissions of approximately $4,285,065, $3,955,219, and $7,277, respectively.
The offering of the Policy is continuous, and the Company does not anticipate discontinuing the offering of the Policy, although we reserve the right to do so.
ADDITIONAL INFORMATION ABOUT CHARGES
Underwriting Procedures
Underwriting is prescribed at the individual level, based on analysis of the individual insured. Current cost of insurance charges will vary based on the insured’s risk class.
• | For the Policies, the maximum Cost of Insurance Charges are based on the 2017 Commissioners Standard Ordinary Male/Female Smoker Composite Ultimate Mortality Table, Age Nearest Birthday. |
Increases in Specified Amount
Additional coverage acquired in accordance with an increase in Specified Amount will incur additional Cost of Insurance Charges and an expense charge per $1,000 of the increased Specified Amount. Following an increase in Specified Amount, the Cost of Insurance Charges and the expense charge are determined separately for the initial coverage segment as well as for each additional coverage segment created as the result of an increase in the Specified Amount. For the purposes of calculating the Cost of Insurance Charges, the Policy Value is allocated to the initial Specified Amount. If the Policy Value exceeds the initial Specified Amount, the excess will be allocated to the increases in Specified Amount in the order of the increases.
PERFORMANCE INFORMATION
We may provide the investment performance for the mutual funds (each, a “Fund”) that are offered as investment options under the Policy. The performance information for the Funds reflects fees and expenses of the Funds, but does not reflect the other fees and expenses that your Policy may charge. Expenses would be higher and performance would be lower if these other charges were included.
EXPERTS
The financial statements of the Company (i) as of December 31, 2023 and for each of the two years in the period ended December 31, 2023 and (ii) as of December 31, 2021 and for each of the two years in the period ended December 31, 2021; and the financial statements of the Separate Account as
3
of December 31, 2023 and for the periods indicated, included in this SAI constituting part of this Registration Statement, have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP’s principal business address is at 2001 Market Street, Suite 1800, Philadelphia, Pennsylvania 19103.
FINANCIAL STATEMENTS
The financial statements of the Company and the Separate Account are incorporated by reference to the financial statements included in the Separate Account’s most recent Form N-VPFS filed with the SEC. The financial statements of the Company should be distinguished from any financial statements of the Separate Account and should be considered only as bearing upon the Company’s ability to meet its obligations under the Policy.
4
STATEMENT OF ADDITIONAL INFORMATION
FOR
CORNERSTONE VUL IV
a flexible premium adjustable variable life insurance policy, and
DIVERSIFIED GROWTH VUL
a flexible premium adjustable variable life insurance policy with index-linked options
issued by
THE PENN MUTUAL LIFE INSURANCE COMPANY
and funded through
PENN MUTUAL VARIABLE LIFE ACCOUNT I
of
The Penn Mutual Life Insurance Company
PO Box 178, Philadelphia, Pennsylvania 19105
1-800-523-0650
May 1, 2024
This Statement of Additional Information (the “SAI”) is not a prospectus. It should be read in conjunction with the Prospectuses dated May 1, 2024 for the Cornerstone Variable Universal Life Insurance Policy and the Diversified Growth Variable Universal Life Insurance Policy (each, a “Policy”). The Policies are funded through the Penn Mutual Variable Life Account I (the “Separate Account”). A copy of the Prospectus for each Policy is available, without charge, by writing to The Penn Mutual Life Insurance Company (“Penn Mutual” or the “Company”), Customer Service Group, PO Box 178, Philadelphia, Pennsylvania 19105 or you may call, toll free, 1-800-523-0650, or access our website at www.pennmutual.com. Terms used in this SAI have the same meaning as in the Prospectuses.
The financial statements of the Company and the Separate Account are incorporated by reference to the financial statements included in the Separate Account’s most recent Form N-VPFS filed with the Securities and Exchange Commission.
Table of Contents
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2 | ||||
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4 | ||||
4 |
THE PENN MUTUAL LIFE INSURANCE COMPANY
The Penn Mutual Life Insurance Company (“Penn Mutual” or the “Company”) is a Pennsylvania mutual life insurance company, chartered in 1847. We are licensed to sell insurance and annuities in 49 states and the District of Columbia. Our corporate headquarters are located at Eight Tower Bridge, 161 Washington Street, Conshohocken, Pennsylvania 19428, a suburb of Philadelphia. Our mailing address is The Penn Mutual Life Insurance Company, PO Box 178, Philadelphia, Pennsylvania 19105.
Penn Mutual Variable Life Account I
We established the Penn Mutual Variable Life Account I (the “Separate Account”) as a separate investment account under Pennsylvania law on January 27, 1987. The Separate Account is registered with the Securities and Exchange Commission (the “SEC”) as a unit investment trust under the Investment Company Act of 1940 and qualifies as a “separate account” within the meaning of the federal securities laws.
SERVICES
The Company holds title to the assets of the Separate Account. The Company maintains the records and accounts relating to the Separate Account.
ADDITIONAL INFORMATION
Assignment
You may assign a Policy while it is in force during the life of the insured. Your rights, and the rights of any beneficiary, will be subject to the rights of an assignee under the terms of an assignment. We will not be bound by any assignment until you provide a signed form, that we have either provided or find acceptable, and the form has been filed at our home office. Unless you specify otherwise, the assignment will take effect as of the date you signed the form, subject to any action we have taken prior to the time that the assignment is received at our home office. We are not responsible for the effect or the validity of any assignment.
Misstatement of Age or Sex
If the insured’s age or sex (if the policy is issued on a sex-distinct basis) has been misstated, we will adjust the proceeds payable under the Policy based on what the last monthly charges would have purchased at the correct age or sex (if the policy is issued on a sex-distinct basis).
Incontestability
After a Policy has been in force during the insured’s lifetime for two years from the date of issue, we may not contest the Policy, except in the case of fraud when permitted by applicable law. However, if there has been a Policy change or reinstatement for which we required evidence of insurability, we may contest that Policy change or reinstatement for two years with respect to information provided at that time, during the lifetime of the insured, from the effective date of the Policy change or reinstatement.
Suicide
If the insured, whether sane or insane, dies by suicide, within two years (duration may vary in some states) of the date of issue, our liability will be limited to an amount equal to the premiums paid for a Policy less any indebtedness and partial surrenders. If there has been an increase in Specified Amount for which we required evidence of insurability, and if the insured dies by suicide within two years (duration may vary in some states) from the effective date of the increase, our liability with respect to the increase will be limited to an amount equal to the portion of the monthly charges associated with that increase. If there has been a reinstatement, and if the insured dies by suicide within two years (duration
2
may vary in some states) from the effective date of the reinstatement, our liability with respect to the reinstatement will be limited to an amount equal to the premiums paid less any policy loans and partial surrenders since the reinstatement.
Non-Principal Risks
In addition to the section of the Prospectus on the principal risks of investing in a Policy, risks are disclosed separately in each of the appropriate sections of the Prospectus.
SALE OF A POLICY
Hornor, Townsend & Kent, LLC (“HTK”), a wholly owned subsidiary of Penn Mutual, serves as a principal underwriter of the Policies. HTK is located at Eight Tower Bridge, 161 Washington Street, Conshohocken, Pennsylvania 19428. HTK also acts as principal underwriter for (1) Penn Mutual Variable Annuity Account III, a separate account established by Penn Mutual, (2) PIA Variable Life Account I, a separate account established by The Penn Insurance and Annuity Company, a wholly owned subsidiary of Penn Mutual (“PIA”), and (3) PIA Variable Annuity Account I, also a separate account established by PIA. HTK is a registered broker-dealer under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority.
With respect to the Cornerstone VUL IV Policy, Penn Mutual compensated HTK in the approximate amounts of $2,806, $1,129, and $244 for the years ending December 31, 2023, 2022, and 2021, respectively, for its services as principal underwriter.
With respect to the Diversified Growth VUL Policy, Penn Mutual compensated HTK in the approximate amounts of $3,431, $6,087, and $516 for the years ending December 31, 2023, 2022, and 2021, respectively, for its services as principal underwriter.
The offering of the Policies is continuous, and the Company does not anticipate discontinuing the offering of the Policies, although we reserve the right to do so.
ADDITIONAL INFORMATION ABOUT CHARGES
Underwriting Procedures
Underwriting is prescribed at the individual level, based on analysis of the individual insured. Current Cost of Insurance Charges will vary based on the insured’s risk class.
• | With respect to Cornerstone VUL IV Policies, the maximum Cost of Insurance Charges are based on the 1980 Commissioners’ Standard Ordinary Mortality Table, male or female (unisex rates may be required in some states), the non-smoker or smoker table, and age nearest birthday of the insured. |
• | With respect to Diversified Growth VUL Policies, the maximum Cost of Insurance Charges are based on the 2001 Commissioners’ Standard Ordinary Mortality Table, male or female (unisex rates may be required in some states), the Smoker Composite Table, and age nearest birthday of the insured. |
Increases in Specified Amount
Additional coverage acquired in accordance with an increase in Specified Amount will incur additional Cost of Insurance Charges and an expense charge per $1,000 of the increased Specified Amount. Following an increase in Specified Amount, the Cost of Insurance Charges and the expense charge are determined separately for the initial segment as well as for each additional segment created as the result of an increase in the Specified Amount. For the purposes of calculating the Cost of Insurance Charges, the Policy Value is allocated to the initial Specified Amount. If the Policy Value exceeds the initial Specified Amount, the excess will be allocated to the increases in Specified Amount in the order of the increases.
3
PERFORMANCE INFORMATION
We may provide the investment performance for the mutual funds (each, a “Fund”) that are offered as investment options under a Policy. The performance information for the Funds reflects fees and expenses of the Funds, but does not reflect the other fees and expenses that your Policy may charge. Expenses would be higher and performance would be lower if these other charges were included.
EXPERTS
The financial statements of the Company (i) as of December 31, 2023 and for each of the two years in the period ended December 31, 2023 and (ii) as of December 31, 2021 and for each of the two years in the period ended December 31, 2021; and the financial statements of the Separate Account as of December 31, 2023 and for the periods indicated, included in this SAI constituting part of this Registration Statement, have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP’s principal business address is at 2001 Market Street, Suite 1800, Philadelphia, Pennsylvania 19103.
FINANCIAL STATEMENTS
The financial statements of the Company and the Separate Account are incorporated by reference to the financial statements included in the Separate Account’s most recent Form N-VPFS filed with the SEC. The financial statements of the Company should be distinguished from any financial statements of the Separate Account and should be considered only as bearing upon the Company’s ability to meet its obligations under a Policy.
4
Part C
Other Information
Item 30: Exhibits
(a)(1) |
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(a)(2) |
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(b) |
Not applicable. | |
(c)(1) |
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(c)(2) |
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(h)(1) |
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(i) |
Not applicable. | |
(j) |
Not applicable. | |
(k)(1) |
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(k)(2) |
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(l) |
Not applicable. | |
(m) |
Not applicable. | |
(n) |
Consent of Independent Registered Public Accounting Firm, filed herewith. | |
(o) |
Not applicable. | |
(p) |
Not applicable. | |
(q) |
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(r) |
Not applicable. | |
(s) |
Item 31: Directors and Officers of the Depositor
The following table sets forth the names of the executive officers of the Depositor and the officers and trustees of the Company who are engaged directly or indirectly in activities relating to the Separate Account or the Policies offered by the Separate Account. Unless otherwise noted, the principal business address of each of the trustees and officers is The Penn Mutual Life Insurance Company, Eight Tower Bridge, 161 Washington Street, Conshohocken, Pennsylvania 19428.
Board of Trustees
Name and Principal Business Address |
Position and Offices with Depositor | |
David M. O’Malley |
Trustee, President and Chief Executive Officer, Chairman of the Board |
7
Gerard P. Cuddy |
Trustee | |
William C. Goings |
Trustee | |
James S. Hunt |
Trustee | |
Carol J. Johnson |
Trustee | |
Charisse R. Lillie |
Trustee | |
Eileen C. McDonnell |
Trustee | |
Helen P. Pudlin |
Trustee | |
Robert H. Rock |
Trustee | |
Susan D. Waring |
Trustee | |
Officers |
||
Name |
Position and Offices with Depositor | |
Ann-Marie Mason |
Chief Legal Officer and Corporate Secretary | |
David M. O’Malley |
President and Chief Executive Officer | |
Victoria M. Robinson |
Chief Ethics and Compliance Officer | |
David M. Raszeja |
Chief Financial Officer and Treasurer |
Item 32: Persons Controlled By or Under Common Control with the Depositor or Registrant
The Company established the Separate Account as a separate investment account under Pennsylvania law on January 27, 1987.
The Company’s Wholly-Owned Subsidiaries as of December 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
The Penn Insurance and Annuity Company | Life Insurance and Annuities | Delaware | ||
Penn Mutual Asset Management, LLC | Investment Adviser | Pennsylvania | ||
Penn Series Funds, Inc. | Investment Company | Maryland | ||
Penn Mutual Payroll Administration, LLC | Payroll | Pennsylvania | ||
Hornor, Townsend & Kent, LLC | Registered Broker-Dealer and Investment Adviser | Pennsylvania | ||
Vantis Life Insurance Company | Life Insurance | Connecticut | ||
The Penn Insurance and Annuity Company of New York (a NY Corporation) |
Life Insurance | New York | ||
1847 Insurance Captive, LLC | Corporate Risk Insurance | Delaware |
8
Penn Mutual Asset Management, LLC’s Wholly-Owned Subsidiary as of December 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
HLS I, LLC | Special Purpose Vehicle | Delaware |
Penn Insurance and Annuity Company’s Wholly-Owned Subsidiaries as of December 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
PIA Reinsurance Company of Delaware I | Reinsurance | Delaware | ||
Dresher Run I, LLC | Holding Company | Delaware |
Janney Montgomery Scott LLC’s Wholly-Owned Subsidiaries as of December 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
JMS Resources, Inc. | Investments | Pennsylvania | ||
Janney Capital Management, LLC | Investments | Delaware | ||
Janney Trust Company, LLC | Investments | New Hampshire | ||
TM Capital, LLC | Investments | Georgia |
JMS Resources, Inc.’s Wholly-Owned Subsidiary as of December 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
Janney Private Equity Company, Inc. | Investments | Delaware |
Hornor, Townsend & Kent, LLC’s Wholly-Owned Subsidiary as of December 31, 2023
Corporation |
Principal Business |
State of Incorporation | ||
HTK Insurance Agency, LLC | Insurance Agents or Brokers | Pennsylvania |
All subsidiaries listed above are included in the Company’s consolidated financial statements.
Item 33. Indemnification
Section 6.2 of the By-Laws of the Company provides that, in accordance with the provisions of the Section, the Company shall indemnify trustees and officers against expenses (including attorneys’ fees), judgments, fines, excise taxes and amounts paid in settlement actually and reasonably incurred in connection with actions, suits and proceedings, to the extent such indemnification is not prohibited by law, and may provide other indemnification to the extent not prohibited by law.
9
Pennsylvania law (15 Pa. C.S.A. §§ 1741-1750) authorizes Pennsylvania corporations to provide indemnification to directors, officers and other persons. The Company owns a directors and officers liability insurance policy covering liabilities that trustees and officers of the Company and its subsidiaries may incur in acting as trustees and officers.
Insofar as indemnification for liability arising under the Securities Act of 1933 (the “1933 Act”) may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the 1933Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.
Item 34: Principal Underwriters
Hornor, Townsend & Kent, LLC serves as principal underwriters of the securities of the Registrant. Hornor Townsend & Kent, LLC also serves as distributor of variable annuity and variable life policies issued through Penn Mutual Variable Annuity Account III, a separate account of the Company, and PIA Variable Annuity Account I and PIA Variable Life Account I, each a separate account established by The Penn Insurance and Annuity Company.
Hornor, Townsend & Kent, LLC — Board of Managers and Officers*
David M. O’Malley |
Manager and Chairman of the Board | |
Aaron J. Gordon |
Manager, President | |
Thomas H. Harris |
Manager | |
Karthick Dalawai |
Manager | |
Victoria M. Robinson |
Manager, Chief Compliance Officer | |
Keith G. Huckerby |
Manager | |
Cristina M. Leder |
Treasurer and Financial and Operations Principal | |
Ann-Marie Mason |
Chief Legal Officer and Corporate Secretary | |
Tiffany MacLean |
Anti-Money Laundering Officer | |
Jessica F. Swarr |
Assistant Vice President, Corporate Tax |
* | The principal business address of the managers and officers is The Penn Mutual Life Insurance Company, Eight Tower Bridge, 161 Washington Street, Conshohocken, Pennsylvania 19428. |
Commissions and Other Compensation Received by Each Principal Underwriter during the last Fiscal Year:
Name of Principal Underwriter |
Net Underwriting Discounts and Commissions |
Compensation on Redemption |
Brokerage Commissions |
Other Compensation | ||||
Hornor, Townsend & Kent, LLC |
$4,291,302 | $0 | $0 | $0 |
Item 35: Location of Accounts and Records
The name and address of the person who maintains physical possession of each account, book or other documents required by Section 31(a) of the Investment Company Act of 1940, as amended, is provided in the Registrant’s most recent report on Form N-CEN.
Item 36: Management Services
Not applicable.
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Item 37: Fee Representation
The Company represents that the fees and charges deducted under the Flexible Premium Adjustable Variable Life Insurance Policies, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the Company.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement under rule 485(b) under the Securities Act and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the city of Horsham Township, and Commonwealth of Pennsylvania, on April 25, 2024.
PENN MUTUAL VARIABLE LIFE ACCOUNT I | ||
(Registrant) | ||
By: | /s/ David M. O’Malley | |
David M. O’Malley | ||
President and Chief Executive Officer | ||
THE PENN MUTUAL LIFE INSURANCE COMPANY | ||
(Depositor) | ||
By: | /s/ David M. O’Malley | |
David M. O’Malley | ||
President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature |
Title |
Date | ||
/s/ David M. O’Malley |
President and Chief Executive Officer | April 25, 2024 | ||
David M. O’Malley | ||||
/s/ David M. Raszeja |
Chief Financial Officer and Treasurer | April 24, 2024 | ||
David M. Raszeja | ||||
*Gerard P. Cuddy |
Trustee | April 25, 2024 | ||
Gerard P. Cuddy | ||||
*James S. Hunt |
Trustee | April 25, 2024 | ||
James S. Hunt | ||||
*William C. Goings |
Trustee | April 25, 2024 | ||
William C. Goings | ||||
*Carol J. Johnson |
Trustee | April 25, 2024 | ||
Carol J. Johnson | ||||
*Charisse R. Lillie |
Trustee | April 25, 2024 | ||
Charisse R. Lillie | ||||
*Eileen C. McDonnell |
Trustee | April 25, 2024 | ||
Eileen C. McDonnell | ||||
*Helen P. Pudlin |
Trustee | April 25, 2024 | ||
Helen P. Pudlin | ||||
*Robert H. Rock |
Trustee | April 25, 2024 | ||
Robert H. Rock | ||||
*Susan D. Waring |
Trustee | April 25, 2024 | ||
Susan D. Waring |
*By: |
/s/ David M. O’Malley | |
David M. O’Malley, attorney-in-fact |
Exhibit Index
Exhibit No. |
Exhibit | |
(n) | Consent of Independent Registered Public Accounting Firm. |