Exhibit A5B
Rider -- Additional Insured Term Insurance Agreement
The Penn Mutual Life Insurance Company agrees, subject to the provisions of this
supplemental agreement, to provide the Additional Insured Term Insurance
Benefit. Penn Mutual also agrees to provide all of the other benefits which are
stated in this agreement.
This supplemental agreement is a part of the policy to which it is attached. It
is subject to all of the provisions of the policy unless stated otherwise in
this agreement.
Additional Insured Term Insurance Benefit--Penn Mutual will pay, upon receipt of
due proof of the death of an Additional Insured while this agreement is in
force, the Additional Insured Term Insurance Benefit. The amount of the term
insurance benefit for an Additional Insured is the Specified Amount for such
Additional Insured as shown in the Additional Policy Specifications.
The term insurance benefit payable upon the death of an Additional Insured will
be paid to the beneficiary of such benefit in one sum or, if elected, under an
income payment option. If part or all of the benefit is paid in one sum, Penn
Mutual will pay interest on this sum from the date of death to the date of
payment. The interest rate will be determined each year by Penn Mutual, but will
not be less than a rate of 3% per year compounded annually.
Suicide Exclusion--If an Additional Insured dies by suicide within two years
from the effective date of that Additional Insured's coverage under this
agreement, the term insurance benefit with respect to such death will be limited
to the cost of such benefit.
If an Additional Insured dies by suicide within two years from the effective
date of any increase in that Additional Insured's Specified Amount, the term
insurance benefit with respect to that increase will be limited to the cost for
that increase.
Beneficiary--The beneficiary of the term insurance benefit for an Additional
Insured is as stated in the application for that Additional Insured's coverage
under this agreement unless changed by a subsequent beneficiary designation. If
no other provision is made, the interest of a beneficiary of an Additional
Insured's term insurance benefit who dies before that Additional Insured will
pass to the Owner.
Right to Convert Term Insurance--The term insurance under this agreement for an
Additional Insured may be converted to a life or endowment policy without
evidence of insurability at any time while such insurance is in force. The Owner
must make a written request for the conversion. On or before the date of
conversion, the Owner must pay the first premium for the new policy.
The new policy will be:
(a) on a plan which insures only the life of the Additional Insured;
(b) in the same rate class and subject to the same limitations of risk as the
term insurance on the Additional Insured under this agreement;
(c) issued at the age of the Additional Insured on the birthday which is
nearest to the date of the conversion;
(d) on the policy form and at the premium rates in use by Penn Mutual on the
date of the conversion; and
(e) subject to the rules of Penn Mutual as to minimum amount, plan of insurance
and age at issue which are in effect on the date of conversion.
The inclusion of any supplemental agreements in the new policy will be subject
to the consent of Penn Mutual and must comply with the rules of Penn Mutual.
Death of Insured--If the death of the Insured under this policy occurs while
this agreement is in force, the term insurance on each Additional Insured
covered by this agreement will continue for a period of 90 days beginning on the
date of death of the Insured. This term insurance may be converted during the 90
day period. At the end of the 90 day period all term insurance under this
agreement will terminate.
Change in Specified Amount--The Specified Amount for an Additional Insured may
be changed subject to the following conditions:
(1) Any change in the Specified Amount for an Additional Insured must be at
least $5,000.
(2) Any increase in the Specified Amount for an Additional Insured must be
applied for on a written application. Evidence of insurability satisfactory
to Penn Mutual must be submitted on such Additional Insured.
(3) The Specified Amount for an Additional Insured may not be decreased to less
than $10,000.
(4) The Specified Amount for an Additional Insured may not be increased to more
than the Specified Amount on the Insured under
this policy.
(5) Any decrease in the Specified Amount for an Additional Insured will
successively decrease in reverse order the most recent increases, if any,
in the Specified Amount for that Additional Insured.
Additional Insured Term Insurance Agreement (continued)
Monthly Deduction--While this agreement is in force, the Monthly Deduction under
this policy will include the Monthly Deduction for this agreement. The Monthly
Deduction for this agreement is the sum of the following:
(a) the Cost of Insurance for the policy month for the term insurance benefit
under this agreement;
(b) if the term insurance benefit under this agreement for an Additional
Insured is in its first year, a monthly expense charge of $.10 for each
$1,000 of Specified Amount for that Additional Insured; and
(c) if the Specified Amount for an Additional Insured has been increased within
the past year, a monthly expense charge of $.10 for each $1,000 that the
Specified Amount has been increased.
Cost of Insurance--The Cost of Insurance for the term insurance benefit under
this agreement is determined separately on a monthly basis for each Additional
Insured. This Cost of Insurance is determined separately for each increase in
the term insurance benefit for an Additional Insured. The Cost of Insurance for
each Additional Insured for a policy month is calculated as (a) multiplied by
(b), where:
(a) is the Cost of Insurance rate for an Additional Insured; and
(b) is the Specified Amount for such Additional Insured.
The Cost of Insurance Rate for an Additional Insured is based on the attained
age, sex and rate class of that Additional Insured. Cost of Insurance Rates will
be determined by Penn Mutual based on expectations as to future experience.
However, these rates will not exceed those shown in the Additional Policy
Specifications.
If this policy includes a Disability Waiver of Monthly Deduction Benefit, the
Cost of Insurance for each policy month for such benefit is increased by (a)
multiplied by (b) for each Additional Insured, where:
(a) is the Cost of Insurance Rate for the waiver of Monthly Deduction for this
agreement; and
(b) is the Specified Amount for the Additional Insured.
For each Additional Insured the Cost of Insurance Rate for the waiver of the
Monthly Deduction for this agreement is based on the attained age, sex and rate
class of both the Insured and the Additional Insured. Cost of Insurance Rates
will be determined by Penn Mutual based on expectations of future experience.
However, these rates will not exceed those shown in the Additional Policy
Specifications.
Computation of Values--Reserves for this agreement are based on the 1980
Commissioners Standard Ordinary Smoker and Nonsmoker Mortality Tables, Age
Nearest Birthday. Interest is at a rate of 4% per year compounded annually.
All values and benefits in this agreement are equal to or greater than those
required by the law of the jurisdiction in which this policy is delivered.
Attained Age--The attained age of an Additional Insured under this agreement is
the age nearest birthday of that Additional Insured on the most recent policy
anniversary.
Misstatement of Age or Sex--If the age or sex of an Additional Insured has been
misstated, the term insurance benefit for that Additional Insured will be the
amount which would have been provided by the most recent Cost of Insurance
charge at the correct age and sex.
Incontestability--An Additional Insured's coverage under this agreement will be
incontestable after it has been in force during the life of such Additional
Insured for two years from the effective date of such coverage. Any increase in
the term insurance benefit for an Additional Insured will be incontestable after
the increase has been in force during the life of such Additional Insured for
two years from its effective date.
This agreement will be incontestable with respect to statements made in an
application for reinstatement after it has been in force during the life of an
Additional Insured for two years from the effective date of the reinstatement.
Termination of Additional Insured's Coverage--
The coverage of an Additional Insured under this agreement will terminate:
(a) on the anniversary of this policy which is nearest to the Additional
Insured's 70th birthday;
(b) on the date of the conversion of the term insurance on such Additional
Insured;
(c) 90 days after the death of the Insured; or
(d) upon the termination of this agreement.
Termination of Agreement--This agreement will terminate upon:
(a) lapse of this policy;
(b) surrender of this policy;
(c) the date of the death of the Insured, provided that such termination will
not affect any benefit provided by this agreement during the 90 days
following the death of the Insured;
(d) the date on which there is no longer any Additional Insured covered under
this agreement; or
(e) the Monthly Anniversary that coincides with or next follows (i) the receipt
at the Home Office of a written request by the Owner to terminate this
agreement, and (ii) the return of this policy for appropriate endorsement.
The date of issue of this agreement is the same as the Date of Issue of this
policy unless another date of issue is shown below.
/s/ Xxxxxx X. Xxxxxxxx
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Chairman and
Chief Executive Officer
