Chicago | Sept. 25, 2018
The new feature allows the policyowner to submit a lump sum and creates a Premium Deposit Account (PDA) for the purpose of automatically funding future annual premium payments to a policy. This provides many potential benefits including worry-free premium payments, opportunity for growth, and helping avoid creating a Modified Endowment Contract (MEC)1.
The PDA will automatically pay the policyowner’s annual premium payments, so they don’t have to worry about making future payments (as long as there are sufficient funds in the PDA).
A competitive interest rate of 3.25% (subject to change in the future) is applied to the funds taken from the PDA before it’s used to pay the premium. Therefore, more money is put into the life insurance policy, so the policyowner may have a larger death benefit, and larger cash value potential. There are zero costs to establish and maintain the Agreement.
“The new Premium Deposit Agreement is an excellent option for a holding account for funds intended to finance future premiums,” said Jerry Blair, Midland National’s vice president and chief distribution officer. “It’s an added benefit that we can now offer our new policyowners, and use to increase our marketability of Midland National’s Indexed Universal Life products.”
Premium Deposit Agreement is now offered on all single life Indexed Universal Life products with the exception of XL Heritage. It is currently applicable in all states and territories except Alaska, British Virgin Islands, Illinois, Kansas, Marianna Islands, New Hampshire, Oregon, Pennsylvania, and Virgin Islands.
About Midland National
For more than 110 years, Midland National has been an industry leader, crediting the company’s strength to its commitment to stability, innovation and dedicated customer service. Midland National is accredited by the Better Business Bureau, and has earned an A+ (Superior) rating from A.M. Best, a large third-party independent reporting and rating company that rates an insurance company on the basis of the company's financial strength, operating performance and ability to meet its ongoing obligations to policyholders. This rating is the second highest out of 15 categories, was affirmed by A.M. Best for Midland National as part of Sammons Financial Group on August 2, 2018
Founded as Dakota Mutual Life Insurance Company in 1906, Midland National Life Insurance Company has protected families and preserved legacies for generations. Midland National is one of the leading insurance companies in America. Midland National is a member of Sammons® Financial Group, Inc. With its Annuity Division located in West Des Moines, Iowa, and its Life Operations location in Sioux Falls, South Dakota, Midland National operates in 49 states and the District of Columbia through its 12,000 licensed sales professionals. For more information, visit midlandnational.com.
1. For most policies, withdrawals are free from federal income tax to the extent of the investment in the contract, and policy loans are also tax-free so long as the policy does not terminate before the death of the insured. However, if the policy is a Modified Endowment Contract (MEC), a withdrawal or policy loan may be taxable upon receipt. Further, unpaid loan interest on a MEC may be taxable. A MEC is a contract received in exchange for a MEC or for which premiums paid during a seven-year testing period exceed prescribed premium limits (7-pay premiums).
Indexed Universal Life Insurance products are not an investment in the “market” or in the applicable index and are subject to all policy fees and charges normally associated with most universal life insurance.
XL-Heritage (policy form series L145), Premium Deposit Agreement (form series TR195) are issued by Midland National Life Insurance Company, Administrative Office, One Sammons Plaza, Sioux Falls, SD 57193. Products, features, riders, endorsements, or issue ages may not be available in all jurisdictions. Limitations or restrictions may apply. Midland National is not licensed to write in New York.