1. Interest may vary by state. PDA interest is dependent on the number of annual planned premium payments paid from the PDA. The same interest rate is applied for all payments. If paying 11 premiums, one premium must be paid at issue; therefore, a maximum of 10 years of additional premiums may be deposited into the PDA.
Additional agreements may be available. Agreements may be subject to additional costs and restrictions. Agreements may not be available in all states or may exist under a different name in various states and may not be available in combination with other agreements.
The Premium Deposit Account Agreement has restrictions that may result in termination of the agreement prior to the payment of all of the planned premiums and may result in the loss of expected interest. Interest credited when used to pay policy premiums will be reported as taxable income to the policy owner.
In some states, interest may be paid upon death or PDA termination and will be calculated using the Minimum PDA Annual Interest Rate.
Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions such as surrender charges. Variable life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods. There may also be underlying fund charges and expenses, and additional charges for riders that customize a policy to fit individual needs. Charges and expenses may increase over time. The variable investment options are subject to market risk, including loss of principal.
The Policy Design chosen may impact the tax status of the policy. If too much premium is paid, the policy could become a modified endowment contract (MEC). Distributions from a MEC may be taxable and if the taxpayer is under the age of 59½ may also be subject to an additional 10% penalty tax.
This information should not be considered as tax or legal advice. Clients should consult their tax or legal advisor regarding their own tax or legal situation.
Insurance products issued by Minnesota Life Insurance Company
Policy form numbers: 14-20005 and any state variations; ICC19-20204, 19-20204 and any state variations; ICC18-20150, 18-20150 and any state variations; ICC18-20149, 18-20149 and any state variations
The information presented above is solely intended for use by financial professionals. Such information is not intended for public consumption or dissemination.