WHOLE LIFE INSURANCE…

Permanent life insurance coverage is designed to last the rest of your life.

By keeping your policy in force with the required premium payments, you

can rest assured that the protection you need is guaranteed by Guardian A B O U T G UA R D I A N
for as long as you may live. Founded in 1860, The Guardian Life Insurance Company of America, New York, NY provides high

quality insurance products and services to meet a wide range of personal and business needs, including THE MONEY STAGES OF WHOLE LIFE INSURANCE
retirement and estate planning, employee benefits, wealth accumulation and insurance protection.

Lifetime protection is a special advantage of whole life insurance. As a mutual life insurance company, Guardian has no stockholders and is operated for the benefit of

its policyholders. You can be more confident about the future when you know your financial services
But it isn’t the only benefit. In fact, a whole life insurance policy can keep
company will be there for you and your heirs.

changing for the better, with more benefits built into its structure the longer

For more information about whole life insurance and other insurance products and services available
it stays in force. That’s why Guardian has developed The Money Stages
from Guardian, contact your agent or visit our website at: www.GuardianLife.com

of Whole Life Insurance.

This publication is provided for the purpose of education and information only and is not intended to constitute tax or legal advice.
For information on your specific situation, please consult your personal legal or tax advisor. Products are not available in all states.
Product provisions and features may vary from state to state.

A P E R S O NA L I L LU S T R AT I O N C A N B E WO RT H 1 , 0 0 0 WO R D S

Your Guardian financial professional will prepare and deliver a customized illustration based

on your personal needs. We urge you to evaluate all 6 Money Stages of Whole Life Insurance

within the context of your personal illustration, and with the help of your financial professional.
TH E LO N G ER YO U OW N IT, TH E B ETTER IT C A N G ET.

The Guardian Life Insurance

7 Hanover Square
Company of America

New York, NY 10004-4025

www.GuardianLife.com Pub 3957 (12/06)
 LET’S TAKE IT FROM THE TOP.
Owning life insurance means much more than paying a premium
and receiving a death benefit – it’s a very flexible financial tool
that develops significant value and usefulness over time. Because
life insurance policies aren’t static, illustrations are helpful in
explaining key features and benefits of a policy over many years.
Over time, Guardian’s policies develop both guaranteed and non-
guaranteed cash values and features, and an illustration can help
you understand the important difference between these. Guaranteed
values are stated in the contract, but because of careful expense
management, claims experience, and investment performance,
Here’s a sample of the whole life insurance illustration that your financial professional will review. It shows:
• Your sex and your age as of your nearest birthday.
• An assumed risk class for which you may qualify, based on your
health, medical history and other factors. The risk class will be
determined after you apply for the policy and may be different
than illustrated here. This class affects the cost of your life
insurance protection, and your agent may give you a new
illustration after the policy is issued.
• The benefit amount including the basic face amount of insurance,
plus any amounts covered by optional riders.
• The plan of insurance plus any optional riders.
• The annual premium, including the basic policy premium plus
outlays for any riders chosen.
• The dividend option, which is the method selected for applying
the dividends that Guardian credits. Policyholders share in the
company’s profits through annual dividends (if declared) that
can be used to enhance coverage or reduce outlay.
Some of the options are to:
- Receive dividends in cash or offset part or all of the premium;
- Reinvest dividends to automatically purchase more life
insurance coverage, called “Paid Up Additions.”
Next, let’s work our way across the columns, from left to right.
• Policy Year – The number of years the policy is in force,
starting from the first year.
• Age at Start of Year – The insured person’s age at the
beginning of each Policy Year. The insurance age is as of the
nearest birthday.
• Annual Dividend* – The Annual Dividend payable at the
beginning of each year, assuming the dividend scale currently
paid by Guardian never changes. Dividends probably will
change every year to reflect Guardian’s investment experience,
claims paid, expenses and other factors. If you pay more or
less premium in cash or take policy loans, your dividends would
be different than shown.
• Net Premium* – The cash payment for the annual premium for
the base policy and any riders at the beginning of the year.
• Cumulative Net Premium* – The sum of this year’s Net
Premium plus Net Premiums in all prior years.
* Any column marked with an asterisk is dependent upon dividends, which cannot be estimated or guaranteed. Values reflect the illustration’s assumptions and indefinite continuation of the 2007 dividend
scale. Dividends are declared annually by the Board of Directors and are not guaranteed. If the premium is paid out of pocket each year, it is guaranteed. If the premium is paid internally (premium offset),
it is not guaranteed and is dependent on the non-guaranteed dividend.
KEEP IN MIND THAT THE ACCOMPANYING SUMMARY ILLUSTRATION IS DESIGNED TO EXPLAIN BASIC CONTRACT MECHANICS AND IS NOT A COMPLETE ILLUSTRATION. A COMPLETE ILLUSTRATION
MUST BE REVIEWED BEFORE PURCHASING ANY LIFE INSURANCE CONTRACT. VALUES ARE BASED ON THE 2007 DIVIDEND SCALE. THE STAGES DESCRIBED DO NOT TAKE INTO ACCOUNT THE
TIME VALUE OF MONEY. THE CASH VALUE INCREASES ARE A RESULT OF BOTH THE PREMIUM PAYMENTS AND THE INTEREST EARNED ON THE EXISTING CASH VALUE.
Guardian has consistently been able to provide extra benefits
through dividends. Non-guaranteed values, such as dividends,
will probably change – both up and down – once the policy is in
force, to reflect actual experience in the future. No company can
accurately predict the future, so illustrations cannot be relied on
to estimate future costs or benefits.
Just the same, illustrations help to tell the story of how Guardian’s
policies can work over a lifetime, assuming a scenario in which
Guardian continues to charge and credit the way it currently does
for hundreds of thousands of actual policies.
On this sample, sex is shown as male and the age is shown as 40.
Here, the risk class is shown as “Preferred NT.”
Here the benefit is a $500,000 face amount.
Here the plan of insurance is Whole Life Paid-Up at 121, a whole
life policy with level annual premium payable through age 120.
(Life Paid-Up at 121 Form #06-WL)
Here, the premium is $6,385.00. The premium may be paid in
several ways, including a single sum at the start of the year and
quarterly installments.
Here, the dividend option is shown as “Paid Up Additions.”
• Base Guaranteed Cash Value – If the annual premium is paid
every year, this is the minimum cash value at the end of each year.
• Increase in Base Guaranteed Cash Value – The year-to-year
Base Guaranteed Cash Value increase.
• Net Cash Value* – The cash value payable if you surrendered
the insurance at the end of any policy year. It includes
guaranteed and non-guaranteed cash values.
• Increase in Net Cash Value* – The year-to-year Net Cash
Value increase.
• Net Death Benefit* – The end of the year guaranteed base
policy death benefit plus the life insurance amount provided by
dividend additions and any riders.
THE MONEY STAGES OF WHOLE LIFE INSURANCE
Six ways a whole life insurance policy can keep changing for the better, the longer you own it.
A whole life insurance policy is designed to last the rest of your life. Just like life itself, the longer you own it, the better it can get.
Every whole life insurance policy achieves important financial milestones over time. Use this guide and refer to your own personalized
illustration.
1. First Policy Dividend* – Dividends are credited at policy anniversaries. If dividends are not withdrawn in cash, they compound
along with other cash values, accelerating the growth of cash value in your policy.
Example: In this sample illustration, the first annual dividend is $100, credited at the start of Year 3.
2. Positive Net Cash Flow* – In early years, premium payments will exceed cash value growth. Stage 2 begins in the year that the
policy turns “net cash positive” – meaning that the increase in Net Cash Value (including dividends) will exceed the premium outlay.
Example: Stage 2 occurs in Year 4, when the Increase in Net Cash Value of $6,643 exceeds the Net Premium of $6,385.
Under current tax law, this annual accumulation is tax-deferred.
3. Positive Base Guaranteed Cash Flow – Even if Guardian never credits a dividend, in most policies the guaranteed cash
value increase will grow to exceed the guaranteed premium. Stage 3 represents the year in which the annual increase in
Guaranteed Cash Value exceeds the Net Premium.
Example: Stage 3 occurs in Year 4, when the increase in Base Guaranteed Cash Value of $6,530 exceeds the
Net Premium of $6,385.
4. Net Cash Value Exceeds Cumulative Premium* – Stage 4 begins when Total Cash Value (including dividends) exceeds
Cumulative Net Premium – the policy has more cash value than you paid in premiums.
Example: Stage 4 occurs in Year 12, when Net Cash Value of $79,688 exceeds Cumulative Net Premium of $76,620.
This gain is tax-deferred.
5. Guaranteed Cash Value Exceeds Cumulative Premium – Stage 5 represents the point at which Guaranteed Cash Value
exceeds Cumulative Net Premium.
Example: Stage 5 occurs in Year 15, when Base Guaranteed Cash Value of $95,960 exceeds Cumulative Net Premium
of $95,775.
6. Self-Supporting Policy* – Once you reach Stage 6, there may be enough cash value built up so that the policy can become
self-supporting. At that time, future premiums can be paid as they fall due with annual dividends and previously earned dividends.
Example: Starting in Year 18, the illustration shows no further cash payments; yet the policy continues to support itself.
Some Other Great Things about Life Insurance in General and Guardian Whole Life in Particular
• Living benefits
- Every whole life policy can be converted into an annuity.
- Under the terms of an optional rider, if the insured becomes terminally ill (less than 12 months to live), part of the death benefit can
be paid while the insured is still living.
- The same optional rider may pay part of the death benefit while the insured is still living if the insured becomes chronically ill and
needs permanent assistance with two or more “activities of daily living.” (Not available in all states.)
- Under terms of the optional Disability Waiver, if the insured becomes disabled, premiums will be waived and the policy will continue to
perform as if premiums were being paid.
• Death benefits
- Life insurance proceeds payable to a named beneficiary will not be included in the probate estate.
- The services of a lawyer are not necessary to collect or distribute life insurance proceeds.
- Interest is paid on life insurance proceeds from the date of the insured’s death until the date payment is made (subject to current
income tax).
- The entire death benefit can be paid in as little as a week following proof of the insured’s death.
- If desired, life insurance proceeds can be paid over time with interest, assuring that persons unfamiliar with large amounts of money
don't spend the money too quickly.