August 2020
Table of Contents
Table of Contents Table of Contents .......................................................................................................................................... 2
Training ......................................................................................................................................................... 7
Links .............................................................................................................................................................. 8
Products ........................................................................................................................................................ 9
Fixed Annuities ........................................................................................................................................ 10
GrowthTrack ....................................................................................................................................... 11
SecurityTrack ....................................................................................................................................... 17
SelecTrack 5 ........................................................................................................................................ 23
SelecTrack 7 ........................................................................................................................................ 29
SelecTrack 10 ...................................................................................................................................... 35
Variable Annuities ................................................................................................................................... 41
Century II VA ....................................................................................................................................... 42
Century II Affinity VA ........................................................................................................................... 51
Century II Freedom VA ........................................................................................................................ 62
Other Annuities ....................................................................................................................................... 70
Single Premium Immediate Annuity ................................................................................................... 71
LIR vs. GMWB .......................................................................................................................................... 74
Fixed Annuity Comparison Chart ............................................................................................................ 75
Annuity Premium Limitation Comparison Chart ..................................................................................... 76
Variable Annuity Comparison Chart ....................................................................................................... 77
Term ........................................................................................................................................................ 78
Choice Advantage Term ...................................................................................................................... 79
Signature Term .................................................................................................................................... 88
Cashback Life 20 .................................................................................................................................. 97
Cashback Life 30 ................................................................................................................................ 106
Term Comparison Chart .................................................................................................................... 115
Universal Life ......................................................................................................................................... 116
Premier Protection ............................................................................................................................ 117
Compass Elite .................................................................................................................................... 141
EquiFlex ............................................................................................................................................. 164
Accumulator VUL .............................................................................................................................. 187
Illustration Information ..................................................................................................................... 208
Table of Contents
Conversions and Rollovers ................................................................................................................ 210
Non-Variable Single Life Comparison Chart ...................................................................................... 212
CVAT vs. Guideline Comparison ........................................................................................................ 213
Death Benefit Option Comparison .................................................................................................... 214
Whole Life ............................................................................................................................................. 215
Gift of Life .......................................................................................................................................... 216
Value Assured ................................................................................................................................... 222
Value Certain 20 ................................................................................................................................ 232
Previously Issued Annuities .................................................................................................................. 242
Accumulator SDDA (1989) ................................................................................................................ 243
Accumulator SDDA (1992) ................................................................................................................ 246
Deposit Administration Group Annuity ............................................................................................ 249
FlexTrack ........................................................................................................................................... 252
GrowthTrack (2008) .......................................................................................................................... 256
Qualified Retirement Annuity ........................................................................................................... 261
Retirement Contribution Plan ........................................................................................................... 265
SelecTrack 5 (2008) ........................................................................................................................... 270
SelecTrack 7 (2008) ........................................................................................................................... 275
SelecTrack 10 (2008) ......................................................................................................................... 280
SecurityTrack (2008) ......................................................................................................................... 285
Previously Issued Term Products .......................................................................................................... 290
5 – Year RCT ...................................................................................................................................... 291
10 – Year RCT .................................................................................................................................... 296
YRT 95 ............................................................................................................................................... 301
ChoiceTerm 20 (2012) ....................................................................................................................... 308
ChoiceTerm 20 (2016) ....................................................................................................................... 316
Juvenile Term to 22 ........................................................................................................................... 325
Level 10 (1993) .................................................................................................................................. 328
Level 10 (1997) .................................................................................................................................. 335
Level 10 (2005) .................................................................................................................................. 342
Level 15 (2005) .................................................................................................................................. 351
Level 20 (1998) .................................................................................................................................. 360
Level 20 (2012) .................................................................................................................................. 368
Table of Contents
Level 30 (2005) .................................................................................................................................. 377
Level Term (2016) ............................................................................................................................. 386
Level 10 Advantage (2005) ................................................................................................................ 395
Level 15 Advantage (2005) ................................................................................................................ 404
Level 20 Advantage (2012) ................................................................................................................ 413
Level 30 Advantage (2005) ................................................................................................................ 422
Level Advantage Term (2016) ........................................................................................................... 431
Cashback Life 20 – Age 95 ................................................................................................................. 440
Cashback Life 20 State Exception (SE) (2009) ................................................................................... 447
Cashback Term 20 (2008) .................................................................................................................. 455
Cashback Life 30 – Age 95 ................................................................................................................. 462
Cashback Life 30 (2014) .................................................................................................................... 469
Cashback Life 30 State Exception (SE) (2005) ................................................................................... 478
Cashback Life 30 State Exception (SE) (2014) ................................................................................... 485
Cashback Term 30 (2008) .................................................................................................................. 494
Previously Issued Universal Life Products ............................................................................................. 501
AGP-15 .............................................................................................................................................. 503
Better Life Plan .................................................................................................................................. 523
Chapter One ...................................................................................................................................... 543
Classic ................................................................................................................................................ 557
Competitor (1988) ............................................................................................................................ 584
Competitor (1991) ............................................................................................................................ 605
Competitor II ..................................................................................................................................... 626
Executive (1988) ................................................................................................................................ 652
Executive (1991) ................................................................................................................................ 674
Executive II ........................................................................................................................................ 696
FlexWealth Advantage ...................................................................................................................... 723
Joint UL .............................................................................................................................................. 752
LewerMax .......................................................................................................................................... 772
Life Pro 120 ....................................................................................................................................... 794
Life Pro 120 II .................................................................................................................................... 814
Life Protector (2011) ......................................................................................................................... 834
Life Protector (2015) ......................................................................................................................... 853
Table of Contents
LifeTrack (1983) ................................................................................................................................. 875
LifeTrack (1985) ................................................................................................................................. 895
LifeTrack II (1984) .............................................................................................................................. 915
Master Plan II .................................................................................................................................... 935
MGP – 15 ........................................................................................................................................... 955
Nova .................................................................................................................................................. 975
Nova II ............................................................................................................................................... 998
Pathway II ........................................................................................................................................ 1022
Performer (1988) ............................................................................................................................ 1042
Performer (1991) ............................................................................................................................ 1063
Performer II ..................................................................................................................................... 1084
PGP – 15 .......................................................................................................................................... 1110
Prime Performer ............................................................................................................................. 1129
Protector 50 .................................................................................................................................... 1153
Protector 120 .................................................................................................................................. 1171
RighTrack (1987) ............................................................................................................................. 1190
RighTrack (1989) ............................................................................................................................. 1207
Single Premium Estate Protector .................................................................................................... 1224
Single Premium Universal Life ........................................................................................................ 1238
Single Premium Universal Life II...................................................................................................... 1250
SuperNOVA ..................................................................................................................................... 1264
Survivorship UL ............................................................................................................................... 1292
Ultra 20 (1993) ................................................................................................................................ 1296
Ultra 20 (1996) ................................................................................................................................ 1315
Compass Elite (2017)....................................................................................................................... 1335
EquiFlex (2013) ................................................................................................................................ 1365
EquiFlex (IN, PA) .............................................................................................................................. 1392
Accumulator VUL (2008) ................................................................................................................. 1420
Alliance VUL .................................................................................................................................... 1442
Century II VUL ................................................................................................................................. 1473
Heritage Survivorship VUL .............................................................................................................. 1503
Survivorship VUL ............................................................................................................................. 1520
Previously Issued Whole Life Products ............................................................................................... 1537
Table of Contents
Gift of Life ........................................................................................................................................ 1538
Interest Sensitive Whole Life .......................................................................................................... 1542
Juvenile L65 ..................................................................................................................................... 1557
L95 ................................................................................................................................................... 1560
Value Assured (2014) ...................................................................................................................... 1567
Training
Training
Information on how to quote our products can be found within our training section at www.ikclife.com.
To access this information, simply set up a username and password by clicking on ‘Create User’. Once
you have successfully created a username and password and logged in, click on the Training tab.
iKCLife training provides you with multiple tools to help you through the quoting process including:
• Training Blog – with bi-weekly posts on helpful topics
• Videos – Over 40 training videos to assist you with different training topics
o Desktop Illustration System
o iKCLife
o Online Illustration System
o Online Inforce Illustration System
• Resources – Helpful documents on frequently asked questions
• Ask the Development Team – Allows you to submit your training questions to our Illustration
Development Team
• Training Sessions – Allows you to request a one-on-one training session with one of our
specialists
http://www.ikclife.com/
Links
Links
External Links
*Note, the links below will open up a new browser window.
• www.ikclife.com Kansas City Life Insurance Company’s Illustration System
website. Get support and the latest software updates here.
• State Approval Map Kansas City Life Insurance Company’s Illustration System state
approval map. Get a list of approved products and riders in your
state.
• www.kclife.com Includes information about Kansas City Life Insurance Company
and tools ranging from quarterly reports to an agency finder.
• www.kclgroupbenefits.com KCL’s Group Insurance website. Includes information on group
insurance product offerings, quoting tools, form downloads and
many other business tools.
• www.kclic.net Kansas City Life agent resources, including information on
pending and issued policies.
• www.sunsetfinancial.com Sunset Financial Services, Inc., a broker/dealer and wholly-
owned subsidiary of Kansas City Life Insurance Company.
http://www.ikclife.com/https://www.ikclife.com/StateApprovals/StateApprovalshttp://www.kclife.com/http://www.kclgroupbenefits.com/http://www.kclic.net/http://www.sunsetfinancial.com/
Products
Products
Kansas City Life Insurance Company offers a variety of products that fall under one of four product
categories: annuities, term life insurance, universal life insurance, and whole life insurance.
Annuities A contract or agreement by which one receives fixed payments on an
investment for a lifetime or for a specified number of years.
Term Life
Insurance
Life insurance for which premiums are paid over a limited time and
that covers a specific term with a face value that is payable only if
death occurs within that term.
Universal Life
Insurance
Life insurance in which the payments of the insured are placed in an
investment fund in which earnings from this fund pay the premium on
term life insurance while any remainder continues to increase the
policy’s value.
Whole Life
Insurance
Life insurance with premiums paid throughout the lifetime of the
insured.
Annuities
Fixed Annuities A fixed annuity is a contract between an individual and a life insurance company in which the individual
deposits an amount of money with the company. While on deposit, the insurance company promises to
pay interest and ultimately provide payments of a fixed amount over a specified period or throughout the
lifetime of one or more persons.
SelecTrack 5 SelecTrack 7 SelecTrack 10 GrowthTrack SecurityTrack
Annuities – GrowthTrack
GrowthTrack
Flexible Premium Deferred Fixed Annuity
Specifications
Issue Ages 0-85 Annuitant
0-85 Owner
Age Last Birthday
Guaranteed
Interest
GrowthTrack has a redeterminable guaranteed interest rate. The initial guaranteed
interest rate is set at issue for each policy and applies until the end of the surrender
charge period (10 years for GrowthTrack). The initial guaranteed interest rate is
subject to change each month for new applications received.
Beginning at the end of the surrender charge period, and then each subsequent
contract anniversary, a redetermined guaranteed interest rate will take effect. The
redetermined guaranteed interest rate is based on the 5-year Constant Treasury
Maturity monthly average rate for November of the previous calendar year published
by the Federal Reserve. The redetermined guaranteed interest rate will be calculated
as the Treasury Rate rounded to the nearest five-hundredths of one percent (0.05%)
reduced by 1.25%. We will notify your client when their guaranteed interest rate is
redetermined.
The guaranteed interest rate on GrowthTrack will be at least 1% and not more than
3%.
Tax Markets Qualified
Non-qualified
Premium
Limits
Minimum: $5,000 single premium or $50 per month ($600 per year)
Maximum: $250,000 (without approval)
Bonus A bonus of 1.0% of the accumulated value is paid at the end of the first policy year,
regardless of the policy size. The bonus is only paid at the end of the first year, and
there is no bonus in renewal years. This bonus is not guaranteed.
Administrative
Charge
A $30 administrative charge will be deducted from the accumulated value of the
policy at the end of each policy year. However, if a policy has $600 or more
deposited during a policy year, or has at least $10,000 of accumulated value at the
end of the policy year, this administrative charge will not be deducted.
Riders NHW, LIR
TSA Loans Qualified annuities in the 403(b) and 501(c) markets
Application A161
General
Annuity policies are tax-deferred investment vehicles that provide income for a specified period of time.
Flexible Premium Deferred Annuity policies begin payment at a future date. Premiums after the first may
be paid at any time while the contract is inforce prior to the maturity date. Each premium payment earns
Annuities – GrowthTrack
interest at the current interest rate from the date it is received. The initial interest rate is guaranteed for a
certain number of years. After the initial interest rate guarantee period, the interest rate is set annually at a
rate guaranteed to be greater than or equal to the minimum guaranteed interest rate.
GrowthTrack is a nonparticipating flexible premium deferred annuity with an initial interest rate that is
guaranteed until the end of the current calendar year. After the initial interest rate guarantee period, the
interest rate is set annually at a rate guaranteed to be greater than or equal to 1.0%. The policy
accumulates the premiums to the maturity date, at which time payments begin.
Accumulated Value
The total accumulated value of a policy at the end of any calendar year equals: 1. the previous year's accumulated value; plus
2. interest at the current year's interest rate compounded annually; plus
3. the sum of any annuity premiums received during the year with interest to the end of the year; less
4. an administrative charge, if applicable; less
5. deductions for any partial surrenders occurring during the year.
The accumulated value at any date within a policy year is determined with allowance for the time elapsed
in that policy year. Each premium payment earns interest from the date it is received.
Bonus
A bonus of 1.0% of the accumulated value is paid at the end of the first policy year, regardless of the
policy size. The bonus is only paid at the end of the first year, and there is no bonus in renewal years. This
bonus is not guaranteed.
Death Benefit
If the Annuitant or the Owner dies before the maturity date, the Beneficiary will receive a death benefit equal to the accumulated value at the time of death.
Payout Options
Payout options may be chosen for monthly income beginning on or before the maturity date.
Proceeds will equal the cash surrender value with the following payout options:
1. Interest Payments;
2. Installments of a Specified Certain Amount (payment period of less than 5 years); or
3. Installments for a Certain Specified Period (payment period of less than 5 years).
Proceeds will equal the accumulated value with the following payout options:
1. Installments of a Specified Certain Amount (payment period of 5 or more years);
2. Installments for a Certain Specified Period (payment period of 5 or more years);
3. Life Income; or
4. Joint and Survivor Income.
Taxation
One of the key features of an annuity is the tax treatment allowed by the IRS. The money that you put into
an annuity will earn interest if a fixed interest rate annuity, or have the value of their subaccount
appreciate or depreciate, if a variable annuity. The growth within a deferred annuity, unlike a certificate
of deposit, mutual fund or savings account, is not taxed in the year in which it is earned. Thus the
earnings may continue to grow and compound tax free until withdrawn.
Annuities – GrowthTrack
An annuity contract can be classified as either qualified or non-qualified. The deposits into a qualified
annuity are with pre-tax dollars. Since the deposits are pre-tax and the earnings are tax deferred, any
withdrawal from a qualified annuity is 100% taxable. Some examples of qualified annuity funding
retirement saving programs are IRAs, 401(k)s, TSAs, and 403(b)s. The deposits into a non-qualified
annuity are with after-tax dollars. Because taxes have already been paid on your deposits, the value of a
non-qualified annuity is comprised of taxable gain from the tax-deferred growth of the annuity plus the
after tax amount of the premium deposit. If a withdrawal is made, the gain in the contract is assumed to be
withdrawn first, and is taxable.
The IRS also has defined what it calls “Premature Distributions”. If you make a withdrawal prior to age
59 ½, not only are your earnings taxed at ordinary income tax rates, but the IRS assesses a premature
distribution penalty of an additional 10% on the taxable income. This 10% penalty is not assessed if the
withdrawal is the result of a death benefit, disability or made under a series of substantially equal
payments over the expected lifetime of the owner.
If a person purchases or transfers their non-qualified deferred annuity into a payout annuity the taxation of
the payout will be pro-rated as part gain and part after-tax principal. If the transferred annuity is qualified,
100% of the payment will be treated as income.
For more information on tax rules affecting nonqualified annuities, please refer to KCLIC.net. Click on
"Publications", then on "Reference Articles" under "Advanced Sales Digest", then on "Tax Rules of
Nonqualified Annuities."
Surrenders
At any time before the earlier of the death of the Annuitant or the maturity date, the Owner may request a
full or partial surrender.
Cash Surrender Value
The free partial surrender provision will be observed when calculating the surrender charge.
The cash surrender value is equal to:
1. the accumulated value; less
2. any applicable surrender charge; less
3. any premium taxes payable; less
4. any withholding taxes.
The minimum cash surrender value allowed is $500. Kansas City Life reserves the right to terminate any
policy which has less than $500 of cash surrender value. The remaining value will then be paid to the
Owner.
Surrender Charges
Full surrenders and partial surrenders are subject to a surrender charge if the withdrawal is taken during a
specific time period. The surrender charge decreases the longer the policy is inforce, and is calculated by
multiplying the policy value by the surrender charge percentage from the table below:
http://www.kclic.net/
Annuities – GrowthTrack
Year
1 2 3 4 5 6 7 8 9 10 11+
10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%
Free Partial Surrender Provision
Beginning in the first policy year, an amount up to 10% of the accumulated value may be surrendered
without a surrender charge or a market value adjustment. Only one such withdrawal may be made each
policy year, even if the prior partial withdrawal was less than 10%. Any amount withdrawn above this
10%, or any further partial withdrawals, will be subject to a surrender charge. The minimum for any
partial surrender is $100.
Systematic Partial Surrender Plan
The Systematic Partial Surrender Plan enables the Owner to preauthorize a periodic exercise of the partial
surrender right once each policy year, up to 10% of the policy value. Any other surrender in a year when
the systematic partial surrender plan has been utilized will be subject to the surrender charge.
Annuities – GrowthTrack Riders
Lifetime Income Rider (LIR)
Lifetime Income Rider (LIR)
Issue Ages
40-85 ALB Annuitant
Monthly Charge
0.06% of the GWB (0.72% annually)
Benefit
The Lifetime Income Rider (LIR) provides for the guarantee of the availability of an annual Lifetime
Income Amount (LIA), subject to reduction or termination of the withdrawals if additional withdrawals in
excess of the Lifetime Income Amount are taken. If no such excess withdrawals are taken, the Lifetime
Income Amount will never reduce or terminate.
The owner must request that lifetime income begin, and the date of this request is the Lifetime Income
Start Date. The LIA is calculated based on the age on the Lifetime Income Start Date and the Guaranteed
Withdrawal Balance (GWB). The GWB is roughly equal to premiums paid (or the contract value at the
time the rider is added to an existing policy, plus premiums paid after the rider is issued) plus any bonus
less an adjustment for withdrawals. If a withdrawal in excess of the LIA is taken, then the GWB and the
LIA are proportionally reduced. The LIA may increase as a result of additional premiums, step-ups,
and/or bonuses.
On the Lifetime Income Start Date, either a single or joint Lifetime Income Options is chosen. If a single
Lifetime Income Option is chosen, the lifetime income continues until the death of the annuitant and the
Lifetime Income Percentage is based on the age of the annuitant on the Lifetime Income Start Date.
If a joint Lifetime Income Option is chosen, the lifetime income continues until the death of both the
annuitant and the beneficiary and the Lifetime Income Percentage is based on the youngest age of the two
on the Lifetime Income Start Date. For the joint Lifetime Income option, the annuitant must also be the
owner and the beneficiary must be the spouse of the annuitant on the Lifetime Income Start Date. The
age used for either the single or joint is the Lifetime Income Start Age.
The GWB is increased by a bonus in years 1-20, where no withdrawal is taken that year. The bonus is
equal to 7.2% during years 1-10 and 4.0% during years 11-20. The bonus is based on the GWB prior to
the bonus calculation and compounds up to 200% of a single premium at the end of the 10th year and
almost 300% at the end of the 20th year if no withdrawals are taken during that time.
The GWB is also stepped up to the contract value, if greater than the GWB, on each rider anniversary and
on the Lifetime Income Start Date.
Lifetime Income Amount
The Lifetime Income Amount is calculated based on the age of the annuitant (youngest age of
annuitant/owner and annuitant/owner’s spouse beneficiary if joint) on the Lifetime Income Start Date and
the GWB at that time.
Lifetime Income Start Age Single Life Lifetime Income
Percentage (of GWB)
Joint Life Lifetime Income
Percentage (of GWB)
50-54 3.00% 2.50%
Annuities – GrowthTrack Riders
55-59 3.50% 3.00%
60-64 4.00% 3.50%
65-69 4.50% 4.00%
70-74 5.00% 4.50%
75-79 5.50% 5.00%
80-84 6.00% 5.50%
85-89 6.50% 6.00%
90 and above 7.00% 6.50%
Nursing Home Waiver (NHW)
Nursing Home Waiver (NHW)
Issue Ages
n/a
Benefit
If Kansas City Life receives satisfactory proof that the Owner is admitted to a licensed nursing home, up
to the full policy value, less any loan balance, may be paid out equally over at least a three year period
with no surrender charges or market value adjustment.
Amounts
n/a
Other Information
The Owner must be confined for at least 90 days in order for this benefit to apply.
Annuities – SecurityTrack
SecurityTrack
Flexible Premium Deferred Fixed Annuity
Specifications
Issue Ages 0-80 Annuitant
0-90 Owner
Age Last Birthday
Guaranteed
Interest
SecurityTrack has a redeterminable guaranteed interest rate. The initial guaranteed
interest rate is set at issue for each policy and applies until the end of the surrender
charge period (7 years for SecurityTrack). The initial guaranteed interest rate is
subject to change each month for new applications received.
Beginning at the end of the surrender charge period, and then each subsequent
contract anniversary, a redetermined guaranteed interest rate will take effect. The
redetermined guaranteed interest rate is based on the 5-year Constant Treasury
Maturity monthly average rate for November of the previous calendar year published
by the Federal Reserve. The redetermined guaranteed interest rate will be calculated
as the Treasury Rate rounded to the nearest five-hundredths of one percent (0.05%)
reduced by 1.25%. We will notify your client when their guaranteed interest rate is
redetermined.
The guaranteed interest rate on SecurityTrack will be at least 1% and not more than
3%.
Tax Markets Qualified
Non-qualified
Premium
Limits Minimum: $5000 single premium or $50 per month
Bonus The SecurityTrack pays an additional 0.25% bonus at the end of every contract year
in which the contract value is $50,000 or more. This bonus is not guaranteed.
Administrative
Charge
A $30 administrative charge will be deducted from the accumulated value of the
policy at the end of each policy year. However, if a policy has $600 or more
deposited during a policy year, or has at least $10,000 of accumulated value at the
end of the policy year, this administrative charge will not be deducted.
Riders NHW, LIR
TSA Loans Qualified annuities in the 403(b) and 501(c) markets
Application A161
General
Annuity policies are tax-deferred investment vehicles that provide income for a specified period of time.
Flexible Premium Deferred Annuity policies begin payment at a future date. Premiums after the first may
be paid at any time while the contract is inforce prior to the maturity date. Each premium payment earns
interest at the current interest rate from the date it is received. The initial interest rate is guaranteed for a
Annuities – SecurityTrack
certain number of years. After the initial interest rate guarantee period, the interest rate is set annually at a
rate guaranteed to be greater than or equal to the minimum guaranteed interest rate.
SecurityTrack is a nonparticipating flexible premium deferred annuity with an initial interest rate that is
guaranteed until the end of the current calendar year. After the initial interest rate guarantee period, the
interest rate is set annually at a rate guaranteed to be greater than or equal to 1.0%. The policy
accumulates the premiums to the maturity date, at which time payments begin.
Accumulated Value
The total accumulated value of a policy at the end of any calendar year equals: 1. the previous year's accumulated value; plus
2. interest at the current year's interest rate compounded annually; plus
3. the sum of any annuity premiums received during the year with interest to the end of the year; less
4. an administrative charge, if applicable; less
5. deductions for any partial surrenders occurring during the year.
The accumulated value at any date within a policy year is determined with allowance for the time elapsed
in that policy year. Each premium payment earns interest from the date it is received.
Bonus
The SecurityTrack pays an additional 0.25% bonus at the end of every contract year in which the contract value is $50,000 or more. This bonus is not guaranteed.
Death Benefit
If the Annuitant dies before the maturity date, the Beneficiary will receive a death benefit equal to the accumulated value at the time of death. If the Owner predeceases the Annuitant and the Owner dies
before the maturity date, the Beneficiary will receive a death benefit equal to the cash surrender value at
the time of death.
Payout Options
Payout options may be chosen for monthly income beginning on or before the maturity date.
Proceeds will equal the cash surrender value with the following payout options:
1. Interest Payments;
2. Installments of a Specified Certain Amount (payment period of less than 5 years); or
3. Installments for a Certain Specified Period (payment period of less than 5 years).
Proceeds will equal the accumulated value with the following payout options:
1. Installments of a Specified Certain Amount (payment period of 5 or more years);
2. Installments for a Certain Specified Period (payment period of 5 or more years);
3. Life Income; or
4. Joint and Survivor Income.
Taxation
One of the key features of an annuity is the tax treatment allowed by the IRS. The money that you put into
an annuity will earn interest if a fixed interest rate annuity, or have the value of their subaccount
appreciate or depreciate, if a variable annuity. The growth within a deferred annuity, unlike a certificate
of deposit, mutual fund or savings account, is not taxed in the year in which it is earned. Thus the
earnings may continue to grow and compound tax free until withdrawn.
Annuities – SecurityTrack
An annuity contract can be classified as either qualified or non-qualified. The deposits into a qualified
annuity are with pre-tax dollars. Since the deposits are pre-tax and the earnings are tax deferred, any
withdrawal from a qualified annuity is 100% taxable. Some examples of qualified annuity funding
retirement saving programs are IRAs, 401(k)s, TSAs, and 403(b)s. The deposits into a non-qualified
annuity are with after-tax dollars. Because taxes have already been paid on your deposits, the value of a
non-qualified annuity is comprised of taxable gain from the tax-deferred growth of the annuity plus the
after tax amount of the premium deposit. If a withdrawal is made, the gain in the contract is assumed to be
withdrawn first, and is taxable.
The IRS also has defined what it calls “Premature Distributions”. If you make a withdrawal prior to age
59 ½, not only are your earnings taxed at ordinary income tax rates, but the IRS assesses a premature
distribution penalty of an additional 10% on the taxable income. This 10% penalty is not assessed if the
withdrawal is the result of a death benefit, disability or made under a series of substantially equal
payments over the expected lifetime of the owner.
If a person purchases or transfers their non-qualified deferred annuity into a payout annuity the taxation of
the payout will be pro-rated as part gain and part after-tax principal. If the transferred annuity is qualified,
100% of the payment will be treated as income.
For more information on tax rules affecting nonqualified annuities, please refer to KCLIC.net. Click on
"Publications", then on "Reference Articles" under "Advanced Sales Digest", then on "Tax Rules of
Nonqualified Annuities."
Surrenders
At any time before the earlier of the death of the Annuitant or the maturity date, the Owner may request a
full or partial surrender.
Cash Surrender Value
The free partial surrender provision will be observed when calculating the surrender charge.
The cash surrender value is equal to:
1. the accumulated value; less
2. any applicable surrender charge; less
3. any premium taxes payable; less
4. any withholding taxes.
The minimum cash surrender value allowed is $500. Kansas City Life reserves the right to terminate any
policy which has less than $500 of cash surrender value. The remaining value will then be paid to the
Owner.
Surrender Charges
Full surrenders and partial surrenders are subject to a surrender charge if the withdrawal is taken during a
specific time period. The surrender charge decreases the longer the policy is inforce, and is calculated by
multiplying the policy value by the surrender charge percentage from the table below:
http://www.kclic.net/
Annuities – SecurityTrack
Year
1 2 3 4 5 6 7 8+
8% 8% 7% 6% 5% 4% 2% 0%
Free Partial Surrender Provision
Beginning in the first policy year, an amount up to 10% of the accumulated value may be surrendered
without a surrender charge or a market value adjustment. Only one such withdrawal may be made each
policy year, even if the prior partial withdrawal was less than 10%. Any amount withdrawn above this
10%, or any further partial withdrawals, will be subject to a surrender charge. The minimum for any
partial surrender is $100.
Systematic Partial Surrender Plan
The Systematic Partial Surrender Plan enables the Owner to preauthorize a periodic exercise of the partial
surrender right once each policy year, up to 10% of the policy value. Any other surrender in a year when
the systematic partial surrender plan has been utilized will be subject to the surrender charge.
Loan Provision
If this product is sold in the TSA (403(b)/501(c)(3)) market, a policy loan will be available after the
completion of the first policy year. Only one loan for every 12-month period is allowed.
Annuities – SecurityTrack Riders
Lifetime Income Rider (LIR)
Lifetime Income Rider (LIR)
Issue Ages
40-85 ALB Annuitant
Monthly Charge
0.06% of the GWB (0.72% annually)
Benefit
The Lifetime Income Rider (LIR) provides for the guarantee of the availability of an annual Lifetime
Income Amount (LIA), subject to reduction or termination of the withdrawals if additional withdrawals in
excess of the Lifetime Income Amount are taken. If no such excess withdrawals are taken, the Lifetime
Income Amount will never reduce or terminate.
The owner must request that lifetime income begin, and the date of this request is the Lifetime Income
Start Date. The LIA is calculated based on the age on the Lifetime Income Start Date and the Guaranteed
Withdrawal Balance (GWB). The GWB is roughly equal to premiums paid (or the contract value at the
time the rider is added to an existing policy, plus premiums paid after the rider is issued) plus any bonus
less an adjustment for withdrawals. If a withdrawal in excess of the LIA is taken, then the GWB and the
LIA are proportionally reduced. The LIA may increase as a result of additional premiums, step-ups,
and/or bonuses.
On the Lifetime Income Start Date, either a single or joint Lifetime Income Options is chosen. If a single
Lifetime Income Option is chosen, the lifetime income continues until the death of the annuitant and the
Lifetime Income Percentage is based on the age of the annuitant on the Lifetime Income Start Date.
If a joint Lifetime Income Option is chosen, the lifetime income continues until the death of both the
annuitant and the beneficiary and the Lifetime Income Percentage is based on the youngest age of the two
on the Lifetime Income Start Date. For the joint Lifetime Income option, the annuitant must also be the
owner and the beneficiary must be the spouse of the annuitant on the Lifetime Income Start Date. The
age used for either the single or joint is the Lifetime Income Start Age.
The GWB is increased by a bonus in years 1-20, where no withdrawal is taken that year. The bonus is
equal to 7.2% during years 1-10 and 4.0% during years 11-20. The bonus is based on the GWB prior to
the bonus calculation and compounds up to 200% of a single premium at the end of the 10th year and
almost 300% at the end of the 20th year if no withdrawals are taken during that time.
The GWB is also stepped up to the contract value, if greater than the GWB, on each rider anniversary and
on the Lifetime Income Start Date.
Lifetime Income Amount
The Lifetime Income Amount is calculated based on the age of the annuitant (youngest age of
annuitant/owner and annuitant/owner’s spouse beneficiary if joint) on the Lifetime Income Start Date and
the GWB at that time.
Lifetime Income Start Age Single Life Lifetime Income
Percentage (of GWB)
Joint Life Lifetime Income
Percentage (of GWB)
50-54 3.00% 2.50%
Annuities – SecurityTrack Riders
55-59 3.50% 3.00%
60-64 4.00% 3.50%
65-69 4.50% 4.00%
70-74 5.00% 4.50%
75-79 5.50% 5.00%
80-84 6.00% 5.50%
85-89 6.50% 6.00%
90 and above 7.00% 6.50%
Nursing Home Waiver (NHW)
Nursing Home Waiver (NHW)
Issue Ages
n/a
Benefit
If Kansas City Life receives satisfactory proof that the Owner is admitted to a licensed nursing home, up
to the full policy value, less any loan balance, may be paid out equally over at least a three year period
with no surrender charges or market value adjustment.
Amounts
n/a
Other Information
The Owner must be confined for at least 90 days in order for this benefit to apply.
Annuities – SelecTrack 5
SearchKey Mnemonic Plan
099AGG05 SELECT5Q Qualified
099AGH05 SELECT5NQ Non-qualified
SelecTrack 5
Single Premium Deferred Fixed Annuity
Specifications
Issue Ages 0-85 Annuitant
0-90 Owner
Age Last Birthday
Guaranteed
Interest
SelecTrack 5 has a redeterminable guaranteed interest rate. The initial guaranteed
interest rate is set at issue for each policy and applies until the end of the surrender
charge period (5 years for SelecTrack 5). The initial guaranteed interest rate is
subject to change each month for new applications received.
Beginning at the end of the surrender charge period, and then each subsequent
contract anniversary, a redetermined guaranteed interest rate will take effect. The
redetermined guaranteed interest rate is based on the 5-year Constant Treasury
Maturity monthly average rate for November of the previous calendar year published
by the Federal Reserve. The redetermined guaranteed interest rate will be calculated
as the Treasury Rate rounded to the nearest five-hundredths of one percent (0.05%)
reduced by 1.25%. We will notify your client when their guaranteed interest rate is
redetermined.
The guaranteed interest rate on SelecTrack 5 will be at least 1% and not more than
3%.
Tax Markets Qualified
Non-qualified
Premium
Limits
Minimum: $10,000
Maximum: $250,000 (without approval)
Bonus None
Administrative
Charge None
Riders NHW, LIR
TSA Loans Not Available
Application A161
General
Annuity policies are tax-deferred investment vehicles that provide income for a specified period of time.
Single Premium Deferred Annuity policies begin payment at a future date. The single premium begins
accumulating interest on the date of deposit at an initial interest rate that is guaranteed for a certain
number of years. After the initial interest rate guarantee period, the interest rate is set annually at a rate
guaranteed to be greater than or equal to the minimum guaranteed interest rate.
SelecTrack 5 is a nonparticipating annuity with an initial interest rate guarantee period of 5 years. After
the initial interest rate guarantee period has expired, the owner has the following options:
Annuities – SelecTrack 5
SearchKey Mnemonic Plan
099AGG05 SELECT5Q Qualified
099AGH05 SELECT5NQ Non-qualified
1. withdraw the accumulated value of the policy as a lump sum;
2. select one of the available payout options;
3. leave the value of the annuity policy on deposit at an interest rate determine annually; or
4. apply for a new SelecTrack policy with a new interest rate guarantee period and new surrender
charges.
Accumulated Value
The total accumulated value of a policy at the end of any calendar year equals:
1. the previous year’s accumulated value; plus
2. interest at the current year’s interest rate; plus
3. deductions for any partial surrenders occurring during the year.
The accumulated value at any date within a policy year is determined with allowance for the time elapsed
in that policy year. The net single premium begins earning interest from the date it is received.
Death Benefit
If the Annuitant dies before the maturity date, the Beneficiary will receive a death benefit equal to the
greater of:
1. the accumulated value at the death of the Annuitant; or
2. the total premium paid, less any partial surrenders, less any loan balances.
If the Owner is not the Annuitant and the Owner dies first, the Beneficiary will receive a death benefit
equal to the cash surrender value at the time of Owner’s death.
Payout Options
Payout options may be chosen for monthly income beginning on or before the maturity date. Proceeds
will equal the cash surrender value with the following payout options:
1. Interest Payments;
2. Installments of a Specified Certain Amount (payment period of less than 5 years); or
3. Installments for a Certain Specified Period (payment period of less than 5 years).
Proceeds will equal the accumulated value plus or minus any market value adjustment with the following
payout options:
1. Installments of a Specified Certain Amount (payment period of 5 or more years);
2. Installments for a Certain Specified Period (payment period of 5 or more years);
3. Life Income; or
4. Joint and Survivor Income.
Taxation
One of the key features of an annuity is the tax treatment allowed by the IRS. The money that you put
into an annuity will earn interest if a fixed interest rate annuity, or have the value of their subaccount
appreciate or depreciate, if a variable annuity. The growth within a deferred annuity, unlike a certificate
of deposit, mutual fund, or savings account, is not taxed in the year in which it is earned. Thus the
earnings may continue to grow and compound tax free until withdrawn.
An annuity contract can be classified as either qualified or non-qualified. The deposits into a qualified
annuity are with pre-tax dollars. Since the deposits are pre-tax and the earnings are tax deferred, any
withdrawal from a qualified annuity is 100% taxable. Some examples of qualified annuity funding
Annuities – SelecTrack 5
SearchKey Mnemonic Plan
099AGG05 SELECT5Q Qualified
099AGH05 SELECT5NQ Non-qualified
retirement saving programs are IRAs, 401(k)s, TSAs, and 403(b)s. The deposits into a non-qualified
annuity are with after-tax dollars. Because taxes have already been paid on your deposits, the value of a
non-qualified annuity is comprised of taxable gain from the tax-deferred growth of the annuity plus the
after tax amount of the premium deposit. If a withdrawal is made, the gain in the contract is assumed to
be withdrawn first, and is taxable.
The IRS also has defined what it calls “Premature Distributions.” If you make a withdrawal prior to age
59 ½, not only are your earnings taxed at ordinary income tax rates, but the IRS assesses a premature
distribution penalty of an additional 10% on the taxable income. This 10% penalty is not assessed if the
withdrawal is the result of a death benefit, disability or made under a series of substantially equal
payments over the expected lifetime of the owner.
If a person purchases or transfers their non-qualified deferred annuity into a payout annuity the taxation of
the payout will be pro-rated as part gain and part after-tax principal. If the transferred annuity is
qualified, 100% of the payment will be treated as income.
For more information on tax rules affecting nonqualified annuities, please refer to kclic.net. Click on
“Publications,” then on “Reference Articles” under “Advanced Sales Digest,” then on “Tax Rules of
Nonqualified Annuities.”
Surrenders
At any time before the earlier of the death of the Annuitant or the maturity date, the Owner may request a
full or partial surrender.
Cash Surrender Value
The free partial surrender provision will be observed when calculating the surrender charge.
The cash surrender value is equal to:
1. The accumulated value; less
2. Any applicable surrender charge; less
3. Any premium taxes payable; less
4. Any positive or negative market value adjustment.
This value is guaranteed to be greater than or equal to the minimum guaranteed policy value, which
equals:
1. The accumulated premiums paid; plus
2. Interest credited at the minimum guaranteed annual interest rate from issue of the policy until the
date of full surrender; less
3. Any prior surrenders; less
4. Any prior or current surrender charges; less
5. Any premium taxes payable.
Surrender Charges
Full surrenders and partial surrenders are subject to a surrender charge if the withdrawal is taken during a
specific time period. The surrender charge decreases the longer the policy is inforce, and is calculated by
multiplying the policy value by the surrender charge percentage from the table below:
Year
1 2 3 4 5 6+
http://www.kclic.net/
Annuities – SelecTrack 5
SearchKey Mnemonic Plan
099AGG05 SELECT5Q Qualified
099AGH05 SELECT5NQ Non-qualified
10% 9% 8% 7% 6% 0%
Market Value Adjustment
A market value adjustment will be applied to full surrenders, partial surrenders, and annuitization
amounts during the initial interest rate guarantee period. This adjustment can be either an addition or a
decrease to the accumulated value, and is based on the movement of interest rates since the annuity was
purchased.
Free Partial Surrender Provision
Beginning in the first policy year, an amount up to 10% of the accumulated value may be surrendered
without a surrender charge or a market value adjustment. Only one such withdrawal may be made each
policy year, even if the prior partial withdrawal was less than 10%. Any amount withdrawn above this
10%, or any further partial withdrawals, will be subject to a surrender charge and the applicable market
value adjustment. The minimum for any partial surrender is $100.
Systematic Partial Surrender Plan
The Systematic Partial Surrender Plan enables the Owner to preauthorize a periodic exercise of the partial
surrender right once each policy year, up to 10% of the policy value. Any other surrender in a year when
the systematic partial surrender plan has been utilized will be subject to the surrender charge and the
applicable market value adjustment.
Annuities – SelecTrack 5 Riders
SearchKey Mnemonic Plan
099AGG05 SELECT5Q Qualified
099AGH05 SELECT5NQ Non-qualified
Lifetime Income Rider (LIR)
Lifetime Income Rider (LIR)
Issue Ages
40-85 ALB Annuitant
Monthly Charge
0.06% of the GWB (0.72% annually)
Benefit
The Lifetime Income Rider (LIR) provides for the guarantee of the availability of an annual Lifetime
Income Amount (LIA), subject to reduction or termination of the withdrawals if additional withdrawals in
excess of the Lifetime Income Amount are taken. If no such excess withdrawals are taken, the Lifetime
Income Amount will never reduce or terminate.
The owner must request that lifetime income begin, and the date of this request is the Lifetime Income
Start Date. The LIA is calculated based on the age on the Lifetime Income Start Date and the Guaranteed
Withdrawal Balance (GWB). The GWB is roughly equal to premiums paid (or the contract value at the
time the rider is added to an existing policy, plus premiums paid after the rider is issued) plus any bonus
less an adjustment for withdrawals. If a withdrawal in excess of the LIA is taken, then the GWB and the
LIA are proportionally reduced. The LIA may increase as a result of additional premiums, step-ups,
and/or bonuses.
On the Lifetime Income Start Date, either a single or joint Lifetime Income Options is chosen. If a single
Lifetime Income Option is chosen, the lifetime income continues until the death of the annuitant and the
Lifetime Income Percentage is based on the age of the annuitant on the Lifetime Income Start Date.
If a joint Lifetime Income Option is chosen, the lifetime income continues until the death of both the
annuitant and the beneficiary and the Lifetime Income Percentage is based on the youngest age of the two
on the Lifetime Income Start Date. For the joint Lifetime Income option, the annuitant must also be the
owner and the beneficiary must be the spouse of the annuitant on the Lifetime Income Start Date. The
age used for either the single or joint is the Lifetime Income Start Age.
The GWB is increased by a bonus in years 1-20, where no withdrawal is taken that year. The bonus is
equal to 7.2% during years 1-10 and 4.0% during years 11-20. The bonus is based on the GWB prior to
the bonus calculation and compounds up to 200% of a single premium at the end of the 10th year and
almost 300% at the end of the 20th year if no withdrawals are taken during that time.
The GWB is also stepped up to the contract value, if greater than the GWB, on each rider anniversary and
on the Lifetime Income Start Date.
Lifetime Income Amount
The Lifetime Income Amount is calculated based on the age of the annuitant (youngest age of
annuitant/owner and annuitant/owner’s spouse beneficiary if joint) on the Lifetime Income Start Date and
the GWB at that time.
Lifetime Income Start Age Single Life Lifetime Income
Percentage (of GWB)
Joint Life Lifetime Income
Percentage (of GWB)
50-54 3.00% 2.50%
Annuities – SelecTrack 5 Riders
SearchKey Mnemonic Plan
099AGG05 SELECT5Q Qualified
099AGH05 SELECT5NQ Non-qualified
55-59 3.50% 3.00%
60-64 4.00% 3.50%
65-69 4.50% 4.00%
70-74 5.00% 4.50%
75-79 5.50% 5.00%
80-84 6.00% 5.50%
85-89 6.50% 6.00%
90 and above 7.00% 6.50%
Nursing Home Waiver (NHW)
Nursing Home Waiver (NHW)
Issue Ages
n/a
Benefit
If Kansas City Life receives satisfactory proof that the Owner is admitted to a licensed nursing home, up
to the full policy value, less any loan balance, may be paid out equally over at least a three year period
with no surrender charges or market value adjustment.
Amounts
n/a
Other Information
The Owner must be confined for at least 90 days in order for this benefit to apply.
Annuities – SelecTrack 7
SearchKey Mnemonic Plan
099AGG07 SELECT7Q Qualified
099AGH07 SELECT7NQ Non-qualified
SelecTrack 7
Single Premium Deferred Fixed Annuity
Specifications
Issue Ages 0-80 Annuitant
0-90 Owner
Age Last Birthday
Guaranteed
Interest
SelecTrack 7 has a redeterminable guaranteed interest rate. The initial guaranteed
interest rate is set at issue for each policy and applies until the end of the surrender
charge period (7 years for SelecTrack 7). The initial guaranteed interest rate is
subject to change each month for new applications received.
Beginning at the end of the surrender charge period, and then each subsequent
contract anniversary, a redetermined guaranteed interest rate will take effect. The
redetermined guaranteed interest rate is based on the 5-year Constant Treasury
Maturity monthly average rate for November of the previous calendar year published
by the Federal Reserve. The redetermined guaranteed interest rate will be calculated
as the Treasury Rate rounded to the nearest five-hundredths of one percent (0.05%)
reduced by 1.25%. We will notify your client when their guaranteed interest rate is
redetermined.
The guaranteed interest rate on SelecTrack 7 will be at least 1% and not more than
3%.
Tax Markets Qualified
Non-qualified
Premium
Limits
Minimum: $10,000
Maximum: $250,000 (without approval)
Bonus None
Administrative
Charge None
Riders NHW, LIR
TSA Loans Not Available
Application A161
General
Annuity policies are tax-deferred investment vehicles that provide income for a specified period of time.
Single Premium Deferred Annuity policies begin payment at a future date. The single premium begins
accumulating interest on the date of deposit at an initial interest rate that is guaranteed for a certain
number of years. After the initial interest rate guarantee period, the interest rate is set annually at a rate
guaranteed to be greater than or equal to the minimum guaranteed interest rate.
SelecTrack 7 is a nonparticipating annuity with an initial interest rate guarantee period of 7 years. After
Annuities – SelecTrack 7
SearchKey Mnemonic Plan
099AGG07 SELECT7Q Qualified
099AGH07 SELECT7NQ Non-qualified
the initial interest rate guarantee period has expired, the owner has the following options:
1. withdraw the accumulated value of the policy as a lump sum;
2. select one of the available payout options;
3. leave the value of the annuity policy on deposit at an interest rate determined annually; or
4. apply for a new SelecTrack policy with a new interest rate guarantee period and new surrender
charges.
Accumulated Value
The total accumulated value of a policy at the end of any calendar year equals:
1. the previous year's accumulated value; plus
2. interest at the current year's interest rate; plus
3. deductions for any partial surrenders occurring during the year.
The accumulated value at any date within a policy year is determined with allowance for the time elapsed
in that policy year. The net single premium begins earning interest from the date it is received.
Death Benefit
If the Annuitant dies before the maturity date, the Beneficiary will receive a death benefit equal to the
greater of:
1. the accumulated value at the death of the Annuitant; or
2. the total premium paid, less any partial surrenders, less any loan balances.
If the Owner is not the Annuitant and the Owner dies first, the Beneficiary will receive a death benefit
equal to the cash surrender value at the time of Owner's death.
Payout Options
Payout options may be chosen for monthly income beginning on or before the maturity date.
Proceeds will equal the cash surrender value with the following payout options:
1. Interest Payments;
2. Installments of a Specified Certain Amount (payment period of less than 5 years); or
3. Installments for a Certain Specified Period (payment period of less than 5 years).
Proceeds will equal the accumulated value plus or minus any market value adjustment with the following
payout options:
1. Installments of a Specified Certain Amount (payment period of 5 or more years);
2. Installments for a Certain Specified Period (payment period of 5 or more years);
3. Life Income; or
4. Joint and Survivor Income.
Taxation
One of the key features of an annuity is the tax treatment allowed by the IRS. The money that you put into
an annuity will earn interest if a fixed interest rate annuity, or have the value of their subaccount
appreciate or depreciate, if a variable annuity. The growth within a deferred annuity, unlike a certificate
of deposit, mutual fund or savings account, is not taxed in the year in which it is earned. Thus the
earnings may continue to grow and compound tax free until withdrawn.
Annuities – SelecTrack 7
SearchKey Mnemonic Plan
099AGG07 SELECT7Q Qualified
099AGH07 SELECT7NQ Non-qualified
An annuity contract can be classified as either qualified or non-qualified. The deposits into a qualified
annuity are with pre-tax dollars. Since the deposits are pre-tax and the earnings are tax deferred, any
withdrawal from a qualified annuity is 100% taxable. Some examples of qualified annuity funding
retirement saving programs are IRAs, 401(k)s, TSAs, and 403(b)s. The deposits into a non-qualified
annuity are with after-tax dollars. Because taxes have already been paid on your deposits, the value of a
non-qualified annuity is comprised of taxable gain from the tax-deferred growth of the annuity plus the
after tax amount of the premium deposit. If a withdrawal is made, the gain in the contract is assumed to be
withdrawn first, and is taxable.
The IRS also has defined what it calls “Premature Distributions”. If you make a withdrawal prior to age
59 ½, not only are your earnings taxed at ordinary income tax rates, but the IRS assesses a premature
distribution penalty of an additional 10% on the taxable income. This 10% penalty is not assessed if the
withdrawal is the result of a death benefit, disability or made under a series of substantially equal
payments over the expected lifetime of the owner.
If a person purchases or transfers their non-qualified deferred annuity into a payout annuity the taxation of
the payout will be pro-rated as part gain and part after-tax principal. If the transferred annuity is qualified,
100% of the payment will be treated as income.
For more information on tax rules affecting nonqualified annuities, please refer to KCLIC.net. Click on
"Publications", then on "Reference Articles" under "Advanced Sales Digest", then on "Tax Rules of
Nonqualified Annuities."
Surrenders
At any time before the earlier of the death of the Annuitant or the maturity date, the Owner may request a
full or partial surrender.
Cash Surrender Value
The free partial surrender provision will be observed when calculating the surrender charge.
The cash surrender value is equal to:
1. the accumulated value; less
2. any applicable surrender charge; less
3. any premium taxes payable; less
4. any positive or negative market value adjustment.
This value is guaranteed to be greater than or equal to the minimum guaranteed policy value, which
equals:
1. the accumulated premiums paid; plus
2. interest credited at the minimum guaranteed annual interest rate from issue of the policy until the
date of full surrender; less
3. any prior surrenders; less
4. any prior or current surrender charges; less
5. any premium taxes payable.
Surrender Charges
Full surrenders and partial surrenders are subject to a surrender charge if the withdrawal is taken during a
http://www.kclic.net/
Annuities – SelecTrack 7
SearchKey Mnemonic Plan
099AGG07 SELECT7Q Qualified
099AGH07 SELECT7NQ Non-qualified
specific time period. The surrender charge decreases the longer the policy is inforce, and is calculated by
multiplying the policy value by the surrender charge percentage from the table below:
Year
1 2 3 4 5 6 7 8+
10% 9% 8% 7% 6% 5% 4% 0%
Market Value Adjustment
A market value adjustment will be applied to full surrenders, partial surrenders, and annuitization
amounts during the initial interest rate guarantee period. This adjustment can be either an addition or a
decrease to the accumulated value, and is based on the movement of interest rates since the annuity was
purchased.
Free Partial Surrender Provision
Beginning in the first policy year, an amount up to 10% of the accumulated value may be surrendered
without a surrender charge or a market value adjustment. Only one such withdrawal may be made each
policy year, even if the prior partial withdrawal was less than 10%. Any amount withdrawn above this
10%, or any further partial withdrawals, will be subject to a surrender charge and the applicable market
value adjustment. The minimum for any partial surrender is $100.
Systematic Partial Surrender Plan
The Systematic Partial Surrender Plan enables the Owner to preauthorize a periodic exercise of the partial
surrender right once each policy year, up to 10% of the policy value. Any other surrender in a year when
the systematic partial surrender plan has been utilized will be subject to the surrender charge and the
applicable market value adjustment.
Annuities – SelecTrack 7 Riders
SearchKey Mnemonic Plan
099AGG07 SELECT7Q Qualified
099AGH07 SELECT7NQ Non-qualified
Lifetime Income Rider (LIR)
Lifetime Income Rider (LIR)
Issue Ages
40-85 ALB Annuitant
Monthly Charge
0.06% of the GWB (0.72% annually)
Benefit
The Lifetime Income Rider (LIR) provides for the guarantee of the availability of an annual Lifetime
Income Amount (LIA), subject to reduction or termination of the withdrawals if additional withdrawals in
excess of the Lifetime Income Amount are taken. If no such excess withdrawals are taken, the Lifetime
Income Amount will never reduce or terminate.
The owner must request that lifetime income begin, and the date of this request is the Lifetime Income
Start Date. The LIA is calculated based on the age on the Lifetime Income Start Date and the Guaranteed
Withdrawal Balance (GWB). The GWB is roughly equal to premiums paid (or the contract value at the
time the rider is added to an existing policy, plus premiums paid after the rider is issued) plus any bonus
less an adjustment for withdrawals. If a withdrawal in excess of the LIA is taken, then the GWB and the
LIA are proportionally reduced. The LIA may increase as a result of additional premiums, step-ups,
and/or bonuses.
On the Lifetime Income Start Date, either a single or joint Lifetime Income Options is chosen. If a single
Lifetime Income Option is chosen, the lifetime income continues until the death of the annuitant and the
Lifetime Income Percentage is based on the age of the annuitant on the Lifetime Income Start Date.
If a joint Lifetime Income Option is chosen, the lifetime income continues until the death of both the
annuitant and the beneficiary and the Lifetime Income Percentage is based on the youngest age of the two
on the Lifetime Income Start Date. For the joint Lifetime Income option, the annuitant must also be the
owner and the beneficiary must be the spouse of the annuitant on the Lifetime Income Start Date. The
age used for either the single or joint is the Lifetime Income Start Age.
The GWB is increased by a bonus in years 1-20, where no withdrawal is taken that year. The bonus is
equal to 7.2% during years 1-10 and 4.0% during years 11-20. The bonus is based on the GWB prior to
the bonus calculation and compounds up to 200% of a single premium at the end of the 10th year and
almost 300% at the end of the 20th year if no withdrawals are taken during that time.
The GWB is also stepped up to the contract value, if greater than the GWB, on each rider anniversary and
on the Lifetime Income Start Date.
Lifetime Income Amount
The Lifetime Income Amount is calculated based on the age of the annuitant (youngest age of
annuitant/owner and annuitant/owner’s spouse beneficiary if joint) on the Lifetime Income Start Date and
the GWB at that time.
Lifetime Income Start Age Single Life Lifetime Income
Percentage (of GWB)
Joint Life Lifetime Income
Percentage (of GWB)
50-54 3.00% 2.50%
Annuities – SelecTrack 7 Riders
SearchKey Mnemonic Plan
099AGG07 SELECT7Q Qualified
099AGH07 SELECT7NQ Non-qualified
55-59 3.50% 3.00%
60-64 4.00% 3.50%
65-69 4.50% 4.00%
70-74 5.00% 4.50%
75-79 5.50% 5.00%
80-84 6.00% 5.50%
85-89 6.50% 6.00%
90 and above 7.00% 6.50%
Nursing Home Waiver (NHW)
Nursing Home Waiver (NHW)
Issue Ages
n/a
Benefit
If Kansas City Life receives satisfactory proof that the Owner is admitted to a licensed nursing home, up
to the full policy value, less any loan balance, may be paid out equally over at least a three year period
with no surrender charges or market value adjustment.
Amounts
n/a
Other Information
The Owner must be confined for at least 90 days in order for this benefit to apply.
Annuities – SelecTrack 10
SearchKey Mnemonic Plan
099AGG10 SELECT10Q Qualified
099AGH10 SELECT10NQ Non-qualified
SelecTrack 10
Single Premium Deferred Fixed Annuity
Specifications
Issue Ages 0-80 Annuitant
0-90 Owner
Age Last Birthday
Guaranteed
Interest
SelecTrack 10 has a redeterminable guaranteed interest rate. The initial guaranteed
interest rate is set at issue for each policy and applies until the end of the surrender
charge period (10 years for SelecTrack 10). The initial guaranteed interest rate is
subject to change each month for new applications received.
Beginning at the end of the surrender charge period, and then each subsequent
contract anniversary, a redetermined guaranteed interest rate will take effect. The
redetermined guaranteed interest rate is based on the 5-year Constant Treasury
Maturity monthly average rate for November of the previous calendar year published
by the Federal Reserve. The redetermined guaranteed interest rate will be calculated
as the Treasury Rate rounded to the nearest five-hundredths of one percent (0.05%)
reduced by 1.25%. We will notify your client when their guaranteed interest rate is
redetermined.
The guaranteed interest rate on SelecTrack 10 will be at least 1% and not more than
3%.
Tax Markets Qualified
Non-qualified
Premium
Limits
Minimum: $10,000
Maximum: $250,000 (without approval)
Bonus None
Administrative
Charge None
Riders NHW, LIR
TSA Loans Not Available
Application A161
General
Annuity policies are tax-deferred investment vehicles that provide income for a specified period of time.
Single Premium Deferred Annuity policies begin payment at a future date. The single premium begins
accumulating interest on the date of deposit at an initial interest rate that is guaranteed for a certain
number of years. After the initial interest rate guarantee period, the interest rate is set annually at a rate
guaranteed to be greater than or equal to the minimum guaranteed interest rate.
SelecTrack 10 is a nonparticipating annuity with an initial interest rate guarantee period of 10 years. After
Annuities – SelecTrack 10
SearchKey Mnemonic Plan
099AGG10 SELECT10Q Qualified
099AGH10 SELECT10NQ Non-qualified
the initial interest rate guarantee period has expired, the owner has the following options:
1. withdraw the accumulated value of the policy as a lump sum;
2. select one of the available payout options;
3. leave the value of the annuity policy on deposit at an interest rate determined annually; or
4. apply for a new SelecTrack policy with a new interest rate guarantee period and new surrender
charges.
Accumulated Value
The total accumulated value of a policy at the end of any calendar year equals:
1. the previous year's accumulated value; plus
2. interest at the current year's interest rate; plus
3. deductions for any partial surrenders occurring during the year.
The accumulated value at any date within a policy year is determined with allowance for the time elapsed
in that policy year. The net single premium begins earning interest from the date it is received.
Death Benefit
If the Annuitant dies before the maturity date, the Beneficiary will receive a death benefit equal to the
greater of:
1. the accumulated value at the death of the Annuitant; or
2. the total premium paid, less any partial surrenders, less any loan balances.
If the Owner is not the Annuitant and the Owner dies first, the Beneficiary will receive a death benefit
equal to the cash surrender value at the time of Owner's death.
Payout Options
Payout options may be chosen for monthly income beginning on or before the maturity date.
Proceeds will equal the cash surrender value with the following payout options:
1. Interest Payments;
2. Installments of a Specified Certain Amount (payment period of less than 5 years); or
3. Installments for a Certain Specified Period (payment period of less than 5 years).
Proceeds will equal the accumulated value plus or minus any market value adjustment with the following
payout options:
1. Installments of a Specified Certain Amount (payment period of 5 or more years);
2. Installments for a Certain Specified Period (payment period of 5 or more years);
3. Life Income; or
4. Joint and Survivor Income.
Taxation
One of the key features of an annuity is the tax treatment allowed by the IRS. The money that you put into
an annuity will earn interest if a fixed interest rate annuity, or have the value of their subaccount
appreciate or depreciate, if a variable annuity. The growth within a deferred annuity, unlike a certificate
of deposit, mutual fund or savings account, is not taxed in the year in which it is earned. Thus the
earnings may continue to grow and compound tax free until withdrawn.
Annuities – SelecTrack 10
SearchKey Mnemonic Plan
099AGG10 SELECT10Q Qualified
099AGH10 SELECT10NQ Non-qualified
An annuity contract can be classified as either qualified or non-qualified. The deposits into a qualified
annuity are with pre-tax dollars. Since the deposits are pre-tax and the earnings are tax deferred, any
withdrawal from a qualified annuity is 100% taxable. Some examples of qualified annuity funding
retirement saving programs are IRAs, 401(k)s, TSAs, and 403(b)s. The deposits into a non-qualified
annuity are with after-tax dollars. Because taxes have already been paid on your deposits, the value of a
non-qualified annuity is comprised of taxable gain from the tax-deferred growth of the annuity plus the
after tax amount of the premium deposit. If a withdrawal is made, the gain in the contract is assumed to be
withdrawn first, and is taxable.
The IRS also has defined what it calls “Premature Distributions”. If you make a withdrawal prior to age
59 ½, not only are your earnings taxed at ordinary income tax rates, but the IRS assesses a premature
distribution penalty of an additional 10% on the taxable income. This 10% penalty is not assessed if the
withdrawal is the result of a death benefit, disability or made under a series of substantially equal
payments over the expected lifetime of the owner.
If a person purchases or transfers their non-qualified deferred annuity into a payout annuity the taxation of
the payout will be pro-rated as part gain and part after-tax principal. If the transferred annuity is qualified,
100% of the payment will be treated as income.
For more information on tax rules affecting nonqualified annuities, please refer to KCLIC.n