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Agent Sales Guide

KANSAS CITY LIFE INSURANCE COMPANY

For Agent Use Only — Not For Use With Clients


The time is right to offer clients the affordable protection of term life. Kansas City Life Insurance Company’s term insurance portfolio is outstanding! Now is the time to begin contacting clients, prospects and influential third parties — attorneys, accountants, bankers and other professionals tied to business and affluent communities — to inform them about Kansas City Life’s outstanding term products. The Select Term Series is competitively priced to compete against major carriers in the $100,000 and greater term market. ChoiceTerm 20SM is competitively priced in the $1 million death benefit market and offers a Standard Select Nontobacco (SSNT) risk class.

Select Term Series

ChoiceTerm 20

Level 10, 15, 20 and 30

■ Level 10, 15, 20 and 30 Advantage

Product advantages

■ Significant Select Term discounts for premiums paid in

Our Term products are designed with the competitive pricing and preferred underwriting you need to get the high-volume sale! Once you do, the generous conversion privileges (and credit, if available), as well as requalification options, combine to help you convert the buyer into a lifelong client.

■ Acceleration of Term Policy Death Benefits Rider offers

ChoiceTerm 20 is designed to get you in the affluent market with a minimum death benefit of $1 million and competitive premiums.

■ Income Assured Option to maximize death benefit

advance (May not be available in all states) an “advance” of up to 50 percent of the policy face amount in the event of a terminal illness diagnosis and a life expectancy of 12 months or less ■ Waiver of premium, accidental death benefit, spouse

and children’s coverage proceeds

Our term portfolio represents the latest in product design features and industry trends, such as: ■ Rates and commissions comparable to similar products available through brokerage companies

Term vs. permanent Term insurance creates future sales opportunities through conversion to permanent coverage. Selling term insurance is an effective way to gain clients and establish long-term relationships.

■ Liberal options for converting to a variety of Kansas

City Life permanent policies ■ Generous conversion credit on Select Term for

switching to a permanent plan to build cash value

To ensure your clients do not outlive their insurance programs, use our illustration software. The Kansas City Life Illustration System has the ability to produce comparative insurance protection reports. These are particularly useful in illustrating the increasing costs of term insurance and the dangers of ignoring the need for permanent insurance.

■ Guaranteed maximum premium provision to ensure

rates remain affordable ■ Standard Select Nontobacco risk class on

ChoiceTerm 20 ■ Objective underwriting rules and requirements for

all applicants ■ Requalification options

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Select Term Series Specifications Type

of

Coverage

Level 10

Level 15

Level 20

Level 30

Select & Ultimate, 10-Year Renewable/ Convertible Term

Select & Ultimate, 15-Year Renewable/ Convertible Term

Select & Ultimate, 20-Year Renewable/ Convertible Term

Select & Ultimate, 30-Year Renewable/ Convertible Term

Issue Ages

20 - 75 nearest 20 - 70 nearest 20 - 65 nearest birthday birthday birthday 20 - 70 (WA) 20 - 65 (WA) 20 - 60 (WA)

Renewable To

Age 95

Minimum Face Amount

$100,000

Bands

None

Riders and Other Benefits

ADB, CTI, IAO, STI, TIR, WP

Risk Classes

PENT, PNT, NT, PT, T

Policy Fee – Commissionable

$100 – no

Prepaid Premium Discount

Yes – on annual premium only

(May

vary by state)

Premium Guarantee and Duration Deadline for Conversion

Conversion Credit

Yes – first 10 years

Yes – first 15 years

Yes – first 20 years

Issue ages 20-60, anniv. nearest age 65; issue ages 61-75, 5th policy anniversary

Issue ages 20-60, anniv. nearest age 65; issue ages 61-70, 5th policy anniversary

Issue ages 20-60, Issue ages 20-50, anniv. nearest age 65; anniv. nearest age 65 issue ages 61-65, 5th policy anniversary

Yes – first 30 years

100% Years 1&2; 80% Year 3; 60% Year 4; 40% Year 5; 20% Years 6-10; None Years 11+

Requalification/ Reentry Application Form

20 - 50 nearest birthday 20 - 48 Male ST (WA & OR) 20 - 47 ST (MD) 20 - 49 PT (MD)

Yes, after 10 years – subject to evidence of insurability A160 Request “Level 10”

A160 Request “Level 15”

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A160 Request “Level 20”

A160 Request “Level 30”


Select Term Series Specifications Level 10 Level 15 Advantage Advantage Select & Ultimate, 10-Year Renewable/ Convertible Term

Select & Ultimate, 15-Year Renewable/ Convertible Term

Level 20 Advantage

Level 30 Advantage

Select & Ultimate, 20-Year Renewable/ Convertible Term

Select & Ultimate, 30-Year Renewable/ Convertible Term

20 - 75 nearest 20 - 70 nearest 20 - 65 nearest birthday birthday birthday 20 - 70 (WA) 20 - 65 (WA) 20 - 60 (WA)

Age 95

$250,000

20 - 65 nearest birthday 20 - 60 (WA)

Age 95 $1,000,000 None

None

ADB, CTI, IAO, STI, TIR, WP

PENT, PNT, NT, PT, T

$100 – no

Yes – on annual premium only

ADB, CTI, IAO, STI, TIR, WP PENT, PNT, SSNT, NT, PT, T

Yes – first 15 years

Yes – first 20 years

Yes – first 30 years

Issue ages 20-60, anniv. nearest age 65; issue ages 61-70, 5th policy anniversary

Issue ages 20-60, anniv. nearest age 65; issue ages 61-65, 5th policy anniversary

Issue ages 20-50, anniv. nearest age 65

Yes – first 20 years Earlier of anniversary nearest age 65 or 10th policy anniversary No conversion credit

20% Years 1-10; None Years 11+

A160 Request “Level 15 Advantage”

$100 – no

No

Yes, after 10 years – subject to evidence of insurability A160 Request “Level 10 Advantage”

Select & Ultimate, 20-Year Renewable/ Convertible Term

Yes – first 10 years Issue ages 20-60, anniv. nearest age 65; issue ages 61-75, 5th policy anniversary

20 - 50 nearest birthday 20 - 49 Male ST (WA & OR) 20 - 48 ST (MD) 20 - 49 PT (MD)

ChoiceTerm 20 Specifications

A160 Request “Level 20 Advantage”

A160 Request “Level 30 Advantage”

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Yes, after 10 years – subject to evidence of insurability A160 Request “ChoiceTerm 20”


Term insurance the products The competition – selling policy features

While no two term insurance products are alike, virtually all share similar characteristics. If you are familiar with term coverage and are interested in a brief overview of Kansas City Life’s current products, consult the Term Product Portfolio Specifications charts provided in this guide. For more detailed information, refer to the Product Guide on the Kansas City Life Illustration System.

Kansas City Life’s Term products were designed to compete with similar products offered by major brokerage companies. However, cost is clearly not the only issue to consider when buying term insurance. As you review specifications for competing products, read the fine print. A difference in policy design may be the reason why the competition’s rates appear better.

The term marketplace Term insurance plays an important role in any comprehensive insurance program. In nearly all situations, it provides affordable, basic protection for a minimal investment. Term insurance gives buyers the more affordable coverage they need now, while protecting their insurability until the need for coverage ends or they can afford permanent insurance.

Premium discounts With the Select Term Series, a significant premium discount is available to insureds who pay more than the first year’s annual premium at the time the policy is issued. The insured may elect to prepay additional annual premiums at the time of issue. When used as a sales tool, this policy feature not only reduces your client’s premium cost but also helps you keep the business on the books.

Because most term insurance builds no cash value, term insurance often has been described as “renting” rather than “owning” protection. Put quite simply, term insurance is basic coverage. Usually, the need for such coverage, whether business or personal, is fairly clear.

To determine the discounted amount for prepaid premiums, enter the number of years you wish to prepay in the Outlays section of the Kansas City Life Illustration System input screen.

Families – to provide benefits for: ■ Replacement of insured’s income at time

of death

The illustration will then show a lump sum amount in Year 1, which is one regular annual premium plus the discounted premiums for the number of years selected. Regular annual premiums will then resume after the prepaid period has ended.

■ Mortgage and other credit obligations ■ College education funds ■ Final expenses

Business – to provide benefits for:

Product selection

■ Loan financing requirements ■ Start-up ventures with cash flow problems

Level 10, 15, 20 and 30 and Level 10, 15, 20 and 30 Advantage and ChoiceTerm 20 have great appeal because they lock in premiums for a set period of time. They also provide you the opportunity and freedom to work with clients over a longer period of time.

■ Buy/sell arrangements ■ Key employee coverage

ChoiceTerm 20 is great for clients who need substantial temporary coverage.

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For more information contact the Life Specialists, Scott Allard, ext. 8515, sallard@kclife.com, Dwane Turnage, ext. 8145, dturnage@kclife.com, Misty Wilcox, ext. 8228, mwilcox@kclife.com or Steve Zadeh, ext. 8167, szadeh@kclife.com.


Which product to use Select Term Series

ChoiceTerm 20

■ High face amounts - $1 million and up

Level 10, 15, 20 and 30 and Level 10, 15, 20 and 30 Advantage

■ SSNT risk class available ■ Requalification option after 10 years

■ Minimum face amounts • $100,000 for Level 10, 15, 20 and 30 • $250,000 for Level 10, 15, 20 and 30 Advantage ■ Low initial 10-, 15-, 20- or 30-year premium ■ 10-, 15-, 20- or 30-year rate guarantee during select period ■ Discount for paying premiums in advance ■ Requalification option after 10 years ■ Generous conversion credit is available

Which Product to Use Issue Ages (May vary by state) Risk Classes Minimum Issue Limit Term Period Policy Fee (Noncommissionable) Renewal Commission Conversion Conversion Credit

Currently convertible to Life Protector

Level 20

Level 20 Advantage

ChoiceTerm 20

20-65

20-65

20-65

PENT, PNT, NT, PT, T $100,000 20 years

PENT, PNT, NT, PT, T $250,000 20 years

PENT, PNT, SSNT, NT, PT, T $1,000,000 20 years

$100

$100

$100

Renewals 2-7 Ages 20-60: to age 65 Ages 61+: 5 Years Year 1-2: 100% Year 3: 80% Year 4: 60% Year 5: 40% Years 6-10: 20% Year 11+: 0%

No renewals Ages 20-60: to age 65 Ages 61+: 5 Years

No renewals Ages 20-55: 10 years Ages 56+: to age 65

Year 1-10: 20% Year 11+: 0%

No conversion credit

Yes

Yes

No

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Requalification/re-entry requirements To what extent is your client willing to bet on future insurability? How important is price in the sale? What is your client’s family health history? These are questions that need to be answered before determining which Kansas City Life product you should recommend for your client. All Kansas City Life Term products contain provisions that allow policyowners to requalify for new guaranteed periods. If they can requalify, they will pay lower premiums than if they had kept their original policies, as shown in the chart below.

Requalification vs. Re-entry Chart $2,500

Level 10 2,000

$250,000 Male age 35 Preferred nontobacco

1,500

1,000

500 0

Level 15, 20 and 30, Level 10, 15, 20 and 30 Advantage and ChoiceTerm 20 use this same concept.

35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54

10-year level premium (Select) Requalified — new 10-year level premium (Select) Not qualified — yearly renewable premium (Ultimate)

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The requalification option may be elected: ■ On or any time after the 10th policy anniversary ■ On or before the requalification expiration date shown in the policy

At the end of the select period, insureds who fail to requalify are faced with one of two choices: 1. Convert to any Kansas City Life permanent policy that is available at time of conversion. 2. Pay the ultimate, yearly renewable rates

Requalification is subject to: ■ Receipt of satisfactory evidence of insurability

Generally, conversion is the least expensive option if death benefits are needed for more than 20 years.

■ Payment of the required premiums

■ Return of the policy to Kansas City Life

Conversion options

The original policy terminates when the new one takes effect, which is the date to which premiums have been paid. A new period is established with rates based on the insured’s age (nearest birthday). Policies will have a new guaranteed period.

Few companies offer the liberal conversion options available with our products. Many companies strictly limit the type of policy to which the term coverage may be converted, don’t allow a conversion at all or require new evidence of insurability. This is a trap you can easily fall into if you are not aware of what the competition’s conversion options are.

When requalification occurs and a new policy is issued, the incontestability period will be measured from the effective date of the new policy. Because the original policy was in force for at least 10 years, Kansas City Life will not apply the suicide provision to the new policy.

All Kansas City Life term life products may be converted to a wide variety of individual, permanent life policies. For information on products available for conversion, contact the Life Specialists, Scott Allard, ext. 8515, sallard@kclife.com, Dwane Turnage, ext. 8145, dturnage@kclife.com, Misty Wilcox, ext. 8228, mwilcox@kclife.com or Steve Zadeh, ext. 8167, szadeh@kclife.com.

If the original policy included riders, the new policy may include these same riders if the insured meets our age and insurability requirements.

Failure to requalify — Products in the Select Term Series go to yearly renewable premium rates beginning in the 11th, 16th, 21st or 31st policy year. ChoiceTerm 20 goes to yearly renewable premium rates in the 21st policy year.

If only part of the face amount is converted, the remaining portion must meet the minimum policy size requirements for this plan. If the term life policy includes WP, ADB, STI and/or CTI riders, these may be converted to the new policy without evidence of insurability. (If converting to SuperNOVA or FlexWealth Advantage, WP will switch to DCOI.) The only plan currently not allowed for ChoiceTerm 20 conversion is the Life Protector Universal Life. Conversion credit is available on the Select Term Series. The chart on Page 8 will help you identify these differences and should aid in explaining to clients the value of Kansas City Life’s conversion options.

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Term Conversion Comparison Convertible to Any designated Kansas City Life permanent policy currently offered, with a premium higher than the current term premium, without evidence of insurability.

Face amount Not to exceed the death benefit payable at the time of conversion.

Conversion option availability Level 10 and Level 10 Advantage: For issue ages 20-60, this option is available to the policy anniversary nearest age 65. For issue ages 61-75, the conversion option is available to the fifth policy anniversary.

Level 15 and Level 15 Advantage: For issue ages 20-60, this option is available to the policy anniversary nearest age 65. For issue ages 61-70, the conversion option is available to the fifth policy anniversary.

Level 20 and Level 20 Advantage: For issue ages 20-60, this option is available to the policy anniversary nearest age 65. For issue ages 61-65, the conversion option is available to the fifth policy anniversary.

Level 30 and Level 30 Advantage: For issue ages 20-50, this option is available to the policy anniversary nearest age 65.

ChoiceTerm 20: The earlier of the policy anniversary nearest age 65 or the 10th policy anniversary.

Conversion credit Level 10, 15, 20 and 30: Equal to a reducing percentage of the current annual premium for the amount of term insurance being converted.

100% 80% 60%

Years 1-2 Year 3 Year 4

40% 20% 0%

Year 5 Years 6-10 Years 11+

Level 10, 15, 20 and 30 Advantage: Equal to a level percentage of the current annual premium for the amount of term insurance being converted.

20%

Years 1-10

0%

Years 11+

If less than one full year’s premium has been paid, the conversion credit will be reduced proportionately.

ChoiceTerm 20: None

Class-to-Class conversion The contracts guarantee conversion based on same class – nontobacco vs. tobacco. Kansas City Life’s current practice is also to preserve the risk rating – including both preferred and preferred elite – on the new coverage, if available on the new product, for the entire level term period. If a ChoiceTerm 20 was issued as SSNT, if converts to SNT on a permanent plan. This practice may be subject to change at any time.

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Term insurance riders ADB - Accidental Death Benefit Issue ages: 20 - 60

This TIR offers the insured an “advance” of up to 50 percent of the policy face amount if he or she is diagnosed as having a terminal illness and a life expectancy of 12 months or less.

This rider provides for payment of an additional amount of insurance in the event of accidental death. The benefit terminates on the policy anniversary on which the insured’s age is 70. There is a $200,000 coverage maximum on any one insured, including any accidental death benefits of other companies.

Initial diagnosis must occur after the TIR effective date. In some states, an administrative fee will apply. A $200 processing charge may also be assessed when a claim is paid under this rider. (This charge is currently being waived; however, we reserve the right to assess the charge in the future.)

CTI - Children’s Term Insurance Issue ages: 14 days – 17 years (child’s age)

There is no underwriting required. There is no additional premium required. When selecting the TIR in the Illustration System, no values will be altered and payouts under the TIR will not be illustrated.

This rider may be attached only to the primary insured’s policy. One low, annual premium provides coverage for all dependent children regardless of their ages. Children born after the policy takes effect are automatically covered at 14 days of age. For complete details, refer to the Product Guide on the Kansas City Life Illustration System.

WP - Waiver of Premium Issue ages: 20 - 55 With this rider, premiums falling due during a period of total disability will be waived. For premiums to be waived, disability must have existed for six consecutive months and must have occurred before age 60 and prior to the expiration date of the policy.

IAO - Income Assured Option Allows the owner to choose how the death benefit is paid out. At the time the endorsement is added, the owner designates a Lump Sum Benefit that is immediately paid out at proof of death. The owner also designates an Installment Benefit Amount paid for a designated number of installment benefit years after proof of death. Payments of the Installment Benefit Amount begin one modal period after the Lump Sum Benefit is paid and are paid according to the mode elected.

Preferred risk underwriting Kansas City Life’s underwriting criteria for term insurance is considered among the best in the industry. Refer to the Kansas City Life Underwriting Guide (Form 10247), and see how we’re ahead of the competition when it comes to getting your applicants qualified. You’ll find: ■ Preferred categories for tobacco users and nontobacco users alike

STI - Spouse’s Term Insurance Issue ages: 15 - 50 (spouse’s age)

■ Preferred Elite category for highly qualified applicants ■ SSNT risk class for ChoiceTerm 20

This rider provides decreasing term insurance on an insured’s spouse. The amount of insurance is expressed in units; a maximum number of five units may be purchased. The amount of insurance per unit depends on the spouse’s attained age. Refer to the Product Guide on the Kansas City Life Illustration System for more information.

■ No disqualification because of aviation, avocation or occupation ■ Weight tables that are more liberal than most

TIR - Accelerated Death Benefit Issue ages: 0 - 80 The Acceleration of Term Policy Death Benefits rider (TIR) can be attached to any of the Level Term and Level Advantage Term plans and ChoiceTerm 20. It can be added at issue or any time after issue.

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Term insurance Q & A (Answers to your important questions) What do Select and Ultimate mean? These terms refer to periods of time. For the Level 10 and Level 10 Advantage, the select period is 10 years. For Level 15 and Level 15 Advantage, the select period is 15 years. For Level 20, Level 20 Advantage and ChoiceTerm 20, the select period is 20 years. For Level 30 and Level 30 Advantage, the select period is 30 years. Premium rates during the select period are based on the issue age of the insured and policy duration. The ultimate period is after the select period and extends through the life of the policy. Premium rates for the ultimate period are based on the attained age of the insured.

What are the requalification options? Prior to the 10th policy anniversary, both you and the policyowner are notified of options available. One option is requalification. Upon receipt of satisfactory evidence of insurability, the required premium and the old policy, a new policy will be issued and a new select period will begin. For complete information, see the requalification section of this guide.

What should policyowners do if they cannot requalify but still need death benefits? The choices are to let the premiums go to the ultimate schedule or to convert. Generally, conversion is the least expensive of the options if death benefits are needed for more than 20 years.

Can the policyowner increase or decrease the amount of death benefit coverage? The only way to increase the death benefit is to take a new application and issue a new policy for the increased amount. To decrease a term policy, fill out

a change request for the decrease. The policy will be endorsed to reflect the reduced death benefit. The policy cannot be decreased below the minimum issue limit.

Can the policyowner skip any premium payments? No. Unlike permanent plans, term insurance has no cash values to use to pay the costs of insurance or to provide for an automatic premium loan. If a premium is not paid when due, the policy will be in default and will terminate if the premium in default is not paid within the grace period.

Can the policyowner prepay premiums? Yes. Prepayment of premiums is allowed on Level 10, 15, 20 and 30 and Level 10, 15, 20 and 30 Advantage plans. In fact, there is a discount if premiums are paid in advance.

How are premiums determined if the insured does not requalify? We use the ultimate premium rates. If the insured does not requalify, the premiums start increasing annually.

What is a conversion credit and how does it work? This credit is an inducement to convert to a permanent policy. Upon conversion of a Select Term policy, part of the current term premium is used to reduce the permanent policy premium. See the conversion chart on Page 8.

Security Assured.

TM

3520 Broadway Kansas City, MO 64111 816-753-7000 www.kclife.com Note: The coverage described in this guide is for the Term Life Insurance portfolio of Kansas City Life Insurance Company (Home Office: Kansas City, Mo.). Policy form J160; Rider forms R100, R102, R195, R207, R210, M652. Form numbers may differ by state. Coverage may not be available in all states. 6755

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