Readthe following sample life insurance policy:

• Whole Life

Completethe worksheets for each sample policy.

Whole Life Policy Worksheet FIN/428 Version 1 University of Phoenix Material Sample Whole Life Insurance Policy Worksheet Review the Sample Whole Life Insurance Policy and answer the following questions. Answer each question in 200 to 250 words: Question Answer What is the primary difference between a Universal Life and a Whole life Insurance policy? What is the life insurance qualification test? Explain the contestable period. Explain the payment of policy proceeds provision. Explain the primary difference between a whole life policy and a term policy. Copyright 2014 by University of Phoenix. All rights reserved. 1 The Northwestern Mutual Life Insurance Company agrees to pay the benefits provided in this policy (the " Policy" ), subject to its terms and conditions. Signed at Milwaukee, Wisconsin on the Date of Issue. WHOLE LIFE POLICY Eligible For Annual Dividends Life Insurance Benefit payable on death of Insured. Premiums payable for period shown on page 3. Right To Return Policy. Please read this Policy carefully. The Policy may be returned by the Owner for any reason within ten days after it was received. The Policy may be returned to the Northwestern Mutual agent who sold it to you or to the Company at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 ( " Home Office " ). If returned, the Policy will be considered void from the beginning. Any premium paid will be refunded. TT.WL.(0608) This Policy is a legal contract between the Owner and The Northwestern Mutual Life Insurance Co mpany. Read your Policy carefully. TABLE OF CONTENTS POLICY SCHEDULE PAGES SECTION 1. THE CONTRACT Section Section Section Section Section Section Section Section 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Life Insurance Benefit Entire Contract; Changes Incontestability Suicide Policy Date, Date of Issue and Attained Age Misstatement of Age or Sex Payments by the Company Insurability Requirements SECTION 2. OWNERSHIP Section Section Section Section 2.1 2.2 2.3 2.4 The Owner Transfer of Ownership Naming and Changing a Successor Owner Collateral Assignment SECTION 3. PREMIUMS AND REINSTATEMENT Section Section Section Section 3.1 3.2 3.3 3.4 Premium Payment Amount of Premium; Adjustments Unscheduled Additional Premium Option Reinstatement SECTION 4. DIVIDENDS Section 4.1 Annual Dividends Section 4.2 Use of Dividends Section 4.3 Dividend at Death SECTION 5. PAID-UP ADDITIONS SECTION 6. CASH VALUE, EXTENDED TERM INSURANCE AND PAID-UP INSURANCE Section Section Section Section Section 6.1 6.2 6.3 6.4 6.5 Cash Value Extended Term Insurance Paid-up Insurance Cash Surrender Table of Guaranteed Values; Basis of Values SECTION 7. LOANS Section Section Section Section Section Section 7.1 7.2 7.3 7.4 7.5 7.6 Policy and Premium Loans Loan Value Policy Debt Loan Interest Specified Rate Loan Interest Option Variable Rate Loan Interest Option Used by permission of the Northwestern Mutual Life Insurance Company, Milwaukee, Wisconsin. All rights reserved TT.WL.(0608) SECTION 8. CHANGE OF POLICY Section 8.1 Reduction of Policy Amount Section 8.2 Change of Plan SECTION 9. BENEFICIARIES Section Section Section Section Section 9.1 9.2 9.3 9.4 9.5 Definition of Beneficiaries Naming and Change of Beneficiaries Succession in Interest of Beneficiaries Trustee as Beneficiary General SECTION 10. PAYMENT OF POLICY BENEFITS Section 10.1 Payment of Proceeds Section 10.2 Payment Plans ADDITIONAL BENEFITS (if any) APPLICATION TT.WL.(0608) POLICY SCHEDULE PAGES Date of Issue - June 30, 2008 Plan and Additional Benefits Insurance Amount Annual Premiums Payable For Whole Life Paid-up at 90 $200,000 $2,940.00 55 Years A premium is payable on June 30, 2008 and every June 30 after that. The first premium is $ 2,940.00. The minimum annual premium is $2,940.00. See Section 3.2. To determine the premium when paid more often than annually, see page 6. The Owner may elect the Specified Rate or the Variable Rate loan interest option. See Sections 7.4 through 7.6 of the Policy. The Specified Rate loan interest option was elected on the Application. This Policy is issued in a Premier (Non-Tobacco) premium classification. Direct Beneficiary Jane M. Doe Owner John J. Doe Insured John J. Doe Age and Sex 35 Male Policy Date June 30, 2008 Policy Number 00 000 000 Plan Whole Life Paid-up at 90 Insurance Amount $200,000 TT.WL.(0608) 3 Policy Number 00 000 000 TABLE OF GUARANTEED VALUES For $200,000 Insurance Amount End of Policy Year June 30, 1 2 3 4 5 2009 2010 2011 2012 2013 0 1,922 3,914 5,969 8,094 0 8,766 17,233 25,382 33,237 June 30, 2009 November 6, 2017 October 1, 2023 June 18, 2028 December 9, 2031 6 7 8 9 10 2014 2015 2016 2017 2018 10,289 12,552 14,881 17,275 19,733 40,808 48,089 55,082 61,794 68,230 October 25, 2034 March 9, 2037 March 9, 2039 December 13, 2040 July 24, 2042 11 12 13 14 15 2019 2020 2021 2022 2023 22,252 24,838 27,492 30,236 33,070 74,397 80,318 86,003 91,503 96,820 January 15, 2044 May 29, 2045 August 24, 2046 October 15, 2047 November 7, 2048 16 17 18 19 20 2024 2025 2026 2027 2028 35,987 38,986 42,056 45,197 48,398 101,944 106,877 111,608 116,145 120,483 November 6, 2049 October 15, 2050 September 3, 2051 July 5, 2052 April 19, 2053 AGE 60 AGE 65 AGE 70 2033 2038 2043 65,213 83,228 101,861 139,459 154,660 166,747 September 27, 2056 September 3, 2059 April 30, 2061 Cash Value Paid-up Insurance Extended Term Insurance To* *Based on Extended Term Insurance described in Section 6.2 and amounts shown on page 3. Values are increased by Paid-up Additions and dividend accumulations and decreased by Policy Debt. Values shown at end of the Policy year do not reflect any premium due on that Policy anniversary. TT.WL.(0608) 4 Policy Number 00 000 000 TABLE OF CASH VALUES For $1.00 of Paid-up Additions End of Policy Year June 30, Cash Value End of Policy Year June 30, Cash Value 0 1 2 3 4 5 2008 2009 2010 2011 2012 2013 0.20443 0.21173 0.21928 0.22710 0.23517 0.24351 44 45 46 47 48 2052 2053 2054 2055 2056 0.74256 0.75622 0.76947 0.78223 0.79456 6 7 8 9 10 2014 2015 2016 2017 2018 0.25213 0.26102 0.27016 0.27956 0.28921 49 50 51 52 53 2057 2058 2059 2060 2061 0.80648 0.81794 0.82886 0.83919 0.84886 11 12 13 14 15 2019 2020 2021 2022 2023 0.29910 0.30925 0.31967 0.33044 0.34156 54 55 56 57 58 2062 2063 2064 2065 2066 0.85785 0.86615 0.87375 0.88093 0.88769 16 17 18 19 20 2024 2025 2026 2027 2028 0.35300 0.36477 0.37682 0.38914 0.40170 59 60 61 62 63 2067 2068 2069 2070 2071 0.89403 0.89991 0.90529 0.91046 0.91537 21 22 23 24 25 2029 2030 2031 2032 2033 0.41443 0.42737 0.44051 0.45393 0.46762 64 65 66 67 68 2072 2073 2074 2075 2076 0.91998 0.92420 0.92785 0.93142 0.93492 26 27 28 29 30 2034 2035 2036 2037 2038 0.48152 0.49558 0.50972 0.52390 0.53814 69 70 71 72 73 2077 2078 2079 2080 2081 0.93833 0.94163 0.94485 0.94799 0.95105 31 32 33 34 35 2039 2040 2041 2042 2043 0.55243 0.56682 0.58135 0.59602 0.61087 74 75 76 77 78 2082 2083 2084 2085 2086 0.95401 0.95689 0.95968 0.96237 0.96498 36 37 38 39 40 2044 2045 2046 2047 2048 0.62581 0.64081 0.65568 0.67043 0.68511 79 80 81 82 83 2087 2088 2089 2090 2091 0.96749 0.96991 0.97225 0.97450 0.97666 41 42 43 2049 2050 2051 0.69970 0.71420 0.72852 84 85 86 2092 2093 2094 0.97873 0.98064 1.00000 Values during a Policy year will reflect any portion of the year's premium paid and the time elapsed in that year. These Cash Values are not guaranteed after the first 20 Policy years for increases in scheduled additional premiums or unscheduled additional premiums paid after the first 20 Policy years. TT.WL.(0608) 5 Policy Number 00 000 000 PREMIUM PAYMENT FREQUENCIES OTHER THAN ANNUAL The total amount of premiums due per year when paid on frequencies other than annual is greater than the annual premium shown on page 3. Premiums paid on a basis other than annual are increased to reflect the time value of money and to cover the administrative costs of processing the additional premium payments. If premiums are paid more often than annually (see Section 3.1) , the premium amount will be determined as follows: Premium Frequency Multiply Annual Premium by: Every 6 months Every 3 months Monthly 0.5096 0.2573 0.0863 Depending upon the frequency premiums are paid and the premium payment method used, the Company may also charge an administrative fee to cover the additional costs associated with the payment method. TT.WL.(0608) 6 SECTION 1. THE CONTRACT 1.1 LIFE INSURANCE BENEFIT 1.2 ENTIRE CONTRACT; CHANGES The Northwestern Mutual Life Insurance Company ( " Company" ) will pay the Life Insurance Benefit on the death of the Insured while this Policy is in force. Subject to the terms and conditions of the Policy, the payment of the Life Insurance Benefit will be: This Policy, together with the attached application and any application supplements (together referred to in this policy as " Application " ), and any attached amendments, endorsements, riders and additional benefits, are the entire contract. Statements in the Application are representations and not warranties. This Policy may be changed by the Company to maintain compliance with applicable state and federal law or to assure continued qualification of the Policy under federal tax laws. A change in the terms of, or a waiver of the Company's rights under, the Policy is valid only if it is approved in writing by an officer of the Company. The Company may require that the Policy be sent to it for endorsement to show a change or waiver. No agent has the authority to change the Policy or to waive the Company's rights thereunder. made after proof of the death of the Insured is received at the Home Office; and made to the Beneficiaries under Section 9. The amount of the Life Insurance Benefit will be the sum of the following: the Insurance Amount shown on page 3; plus the amount of any Paid-up Additions in force under Section 5; plus the amount of any dividend accumulations (Section 4.2); plus 1.3 INCONTESTABILITY the amount of any premium refund (Section 3.1) and any dividend at death (Section 4.3); minus the sum of the following: The Company will not contest this Policy after the Policy has been in force, during the lifetime of the Insured, for two years from the Date of Issue or for two years from the effective date of a reinstatement (Section 3.4). A change to the terms of the Policy after the Date of Issue, which occurred upon the request of the Owner and was subject to the Company's insurability requirements, will be incontestable after the change has been in force, during the lifetime of the Insured, for two years from the effective date of the change. In issuing the insurance, the Company has relied on the Application. While the insurance is contestable, the Company, on the basis of a misstatement in the Application, may rescind the insurance or deny a claim. the amount of any Policy Debt (Section 7.3); plus the amount of any Adjustment to Life Insurance Benefit During Grace Period as described in Section 3.1; plus the amount of any unpaid additional premium used to purchase Paid-up Additions (Section 5). These amounts will be determined as of the date of the Insured's death. Even though the Owner does not have the right to take any policy loans after the date of the Insured's death, any policy loans that are taken after the date of the Insured's death will be deducted from the Life Insurance Benefit. 1.4 SUICIDE If the Insured dies by suicide within one year from the Date of Issue, the amount payable by the Company will be limited to the premiums paid, less the amount of any Policy Debt. If the Insured dies by suicide within one year from the date of a change to the terms of the Policy, which occurred upon the request of the Owner and was subject to the Company's insurability requirements, the amount payable with respect to such change will be limited to the premiums paid, less the amount of any Policy Debt. The amount of the Life Insurance Benefit when the Insured dies while the Policy is in force as Extended Term Insurance or Paid-up Insurance will be determined under Section 6.2 or 6.3. TT.WL.(0608) 7 1.5 POLICY DATE, DATE OF ISSUE AND ATTAINED AGE which the premiums paid would have purchased at the correct age and sex. Policy months, years, and anniversaries are computed from the Policy Date. The contestable and suicide periods begin with the Date of Issue. These dates are shown on page 3. The Date of Issue for any insurance issued under Additional Premiums Scheduled After Issue (Section 3.2) or Unscheduled Additional Premium Option (Section 3.3) will be shown on an amendment to the schedule of Benefits and Premiums. Attained Age is Issue Age (shown on page 3) plus the number of complete Policy years that have elapsed since the Policy Date. 1.7 PAYMENTS BY THE COMPANY All payments by the Company under this Policy are payable in United States dollars at the Home Office. 1.8 INSURABILITY REQUIREMENTS To make some changes under this Policy, the Insured must meet the Company's insurability requirements. These requirements are as follows: the Insured is alive; 1.6 MISSTATEMENT OF AGE OR SEX evidence of insurability must be given that is satisfactory to the Company; and If the age or sex of the Insured has been misstated and has not been corrected through a policy change, the amount payable will be the amount under the Company's underwriting standards, the Insured is in an underwriting classification that is the same as, or better than, the one for this Policy. SECTION 2. OWNERSHIP 2.1 THE OWNER subsequent Owner for any payment or other action taken by the Company until the above information is received at the Home Office in a form acceptable to the Company. The transfer will then take effect as of the date the transfer form was signed. The Company may require that the Policy be sent to it for endorsement to show the transfer. The Owner is named on page 3. All Policy rights may be exercised without the consent of any Beneficiaries by the Owner, the Owner's successor or the Owner's transferee. If the Policy has more than one Owner, Policy rights must be exercised only by authorization of all Owners. After the death of the Insured, Policy rights may be exercised only as provided in Sections 9 and 10. 2.3 NAMING AND CHANGING A SUCCESSOR OWNER 2.2 TRANSFER OF OWNERSHIP If the Owner is not the Insured, the Owner may name or change a successor owner who will become the new owner upon the Owner's death. Naming or changing a successor owner will be effective upon receipt at the Home Office of a written request that is acceptable to the Company, including any required information about the successor owner. The Owner may transfer the ownership of this Policy by providing the Company with written proof of the transfer and supplying the information in a form that is acceptable to the Company, including supplying any required information about the new Owner. The Company will not be responsible to a TT.WL.(0608) 8 2.4 COLLATERAL ASSIGNMENT The interest of the Beneficiaries will be subject to any collateral assignment made either before or after the Beneficiaries are named. The Owner may assign this Policy as collateral security. The Company is not responsible for the validity or effect of the collateral assignment. The Company will not be responsible to an assignee for any payment or other action taken by the Company before receipt of the assignment in writing at the Home Office. A collateral assignee is not an Owner. A collateral assignment is not a transfer of ownership. Ownership can be transferred only by complying with Section 2.2 or Section 2.3. SECTION 3. PREMIUMS AND REINSTATEMENT 3.1 PREMIUM PAYMENT provide an annual percentage rate calculation upon request. Payment. All premiums after the first are payable at the Home Office or to a payment center designated by the Company. All payments must be made in United States dollars payable through a United States financial institution. A receipt signed by an officer of the Company will be furnished on request. Each premium must be paid on or before its due date. The date when each premium is due and the number of years for which premiums are payable are described on page 3. A change in premium frequency will take effect when the Company accepts a premium on a new frequency. Grace Period. A grace period of 31 days will be allowed to pay a premium that is not paid on its due date. The Policy will be in full force during this period. If the premium is not paid within the grace period, the Policy will terminate as of the due date unless it continues as Extended Term Insurance or Paid-up Insurance under Sections 6.2 or 6.3. No premiums may be paid while the Policy is in force as Extended Term Insurance or Paid-up Insurance under Sections 6.2 or 6.3, except as provided in Reinstatement (Section 3.4). Adjustment To Life Insurance Benefit During Grace Period. If the Insured dies during the grace period, the amount of the unpaid premium will be deducted from the Life Insurance Benefit. Frequency. Premiums may be paid every 3, 6 or 12 months. The Company may permit the payment of premiums on other frequencies under the terms of payment programs (such as a payment program that uses electronic funds transfer). Pre miu m Refund At Death. If the premium paid for the Policy year in which the Insured dies exceeds: the premium paid on an annual basis; multiplied by On request, the Company will provide: the amount of the premium due on any available frequency for any Policy year; the fraction of the Policy year that has elapsed at the time of death, then the Company will refund this excess amount. The refund will not include: the annual total of premiums due (including the amount of the administrative fee, if any) if paid on frequencies other than annual; and any premium amount used to purchase a Paidup Addition under Section 5; and the amount by which that total differs from the annual premium. The total amount of premiums due per year when paid on frequencies other than annual is greater than the annual premium (see page 6). The Company also will TT.WL.(0608) any Unscheduled Additional Premium paid under Section 3.3. 9 3.2 AMOUNT OF PREMIUM; ADJUSTMENTS 3.3 UNSCHEDULED ADDITIONAL PREMIUM OPTION Scheduled And Minimu m Pre miu ms. The premium due on this Policy is the scheduled premium. The scheduled premium is the sum of the minimum premium, any scheduled additional premium under Section 3.2, and any premium that is due for any additional benefit that is a part of this Policy. The annual premium amounts are shown on page 3. Unscheduled additional premiums may be paid to the Company at any time before the earlier of either the Policy anniversary that is nearest to the Insured's 85th birthday or the end of the premium payable period shown on page 3. An unscheduled additional premium may be paid only if, at the time the premium is paid: Additional Pre miu ms Scheduled At Issue. If requested on the Application, this Policy may have been issued with premiums that are larger than the minimum premium. The amount of the additional premium is shown on page 3. the Insured meets the insurability requirements stated in Section 1.8; and Additional Pre miu ms Scheduled After Issue. The Owner may pay additional premiums by requesting that the premium payable on the Policy be increased. This request may be made at any time before the earlier of either the Policy anniversary that is nearest to the Insured's 85th birthday or the end of the premium payable period shown on page 3. Additional premiums may be scheduled only if, at the time the increases are applied for: the total amount of the unscheduled additional premiums and other premiums paid to the Company under any policy for purchases of paid-up life insurance on the life of the Insured is within the Company's limits for such premiums; however, the Company may not set a limit below $1,000. the insurance in force after appIying the unscheduled additional premium will be within the Company's issue limits; and Each unscheduled premium may not be less than $100. Each unscheduled premium will be used, as of the date the premium is paid, to purchase Paidup Additions as described in Section 5. the Insured satisfies the insurability requirements stated in Section 1.8; and the insurance in force after applying the scheduled additional premiums will be within the Company's issue limits; and 3.4 REINSTATEMENT the total amount of the scheduled additional premiums and other premiums paid to the Company under any policy for purchases of paid-up life insurance on the life of the Insured is within the Company's limits for such premiums; however, the Company may not set a limit below $1,000. The Policy may be reinstated within three years after the due date of the overdue premium. All unpaid minimum premiums and premiums for any additional benefits that are a part of this Policy (and interest as required below) must be received by the Company while the Insured is alive. The Policy may not be reinstated if the Policy was surrendered for its Cash Surrender Value. Any Policy Debt on the due date of the overdue premium, with interest from that date, must be repaid or reinstated. Owner's Right To Decrease Scheduled Additional Pre miu ms. The Owner may decrease the amount of the additional premium through a Policy change. This may be done at any time by written request sent to the Home Office. Later increases in the amount of the additional premium may be made only as provided in the preceding paragraph. In addition, for the Policy to be reinstated more than 31 days after the end of the grace period: the Insured must satisfy the insurability requirements stated in Section 1.8; and Effective Date. A premium change will take effect on the first premium due date that follows the receipt at the Home Office of the Owner's written request for change. all unpaid minimum premiums and premiums for any additional benefits that are a part of this Policy must be paid with interest from the due date of each premium. Interest is at an annual effective rate of 6%. Additional Pre miu ms Used To Purchase Paid-up Additions. Each scheduled additional premium paid will be used, as of the due date of the premium, to purchase Paid-up Additions as described in Section 5. TT.WL.(0608) 10 SECTION 4. DIVIDENDS 4.1 ANNUAL DIVIDENDS Dividend Accu mulations. Dividends will accumulate at interest. Interest is credited at an annual effective rate of not less than 0.5%. The Company may set a higher rate. Dividend accumulations increase the Policy's Cash Value. They are payable as part of the Life Insurance Benefit. Accumulations may be withdrawn unless they are used for a loan, for Extended Term Insurance, or for Paid-up Insurance. This Policy is eligible to share in the divisible surplus of the Company. This divisible surplus is determined each year. The Policy's share, if any, will be credited as a dividend on the Policy anniversary. This dividend will reflect the mortality, expense and investment experience of the Company and will be affected by any Policy Debt during the Policy year. Decisions concerning the amount and appropriate allocation of divisible surplus are within the sole discretion of the Company's Board of Trustees. There is no guaranteed method or formula for the determination or allocation of divisible surplus. The Company's approach is subject to change. There is no guarantee of a divisible surplus. Even if there is a divisible surplus, the payment of a dividend on this Policy is not guaranteed. No dividend will be paid on Extended Term Insurance (Section 6.2). Pre miu m Payment. Dividends will be applied to the payment of any premium then due. If the balance of a premium is not paid, or if this Policy is in force as Paid-up Insurance, the dividend will purchase Paid-up Additions. Other uses of dividends may be made available by the Company. 4.2 USE OF DIVIDENDS If no direction is given for the use of dividends, they will purchase Paid-up Additions. Annual dividends, if any, may be paid in cash or used for one of the following: 4.3 DIVIDEND AT DEATH Paid-up Additions. Dividends will purchase Paid-up Additions as described in Section 5. A dividend for the period from the beginning of the Policy year to the date of the Insured's death will be payable as part of the Life Insurance Benefit. SECTION 5. PAID-UP ADDITIONS Paid-up Additions are purchased at the beginning of the Policy year by additional premiums and by dividends. The amount of Paid-up Additions purchased by additional premiums is based on the annual additional premium minus a charge for expenses, even if the additional premium is paid other than annually. The charge will not be more than 9% for scheduled additional premiums that were scheduled at issue or that are applied for in the first 20 Policy years. The charge will not be more than TT.WL.(0608) 9% for unscheduled additional premiums paid during the first 20 Policy years. Paid-up Additions will increase the Life Insurance Benefit payable under Section 1.1. Paid-up Additions increase the Policy's Cash Value and are eligible to share in the divisible surplus (Section 4.1). They may be surrendered unless they are used for a loan, for Extended Term Insurance, or for Paid-up Insurance. 11 SECTION 6. CASH VALUE, EXTENDED TERM INSURANCE AND PAID-UP INSURANCE 6.1 CASH VALUE These amounts will be determined as of the due date of the unpaid premium. The Extended Term Insurance will start as of the due date of the unpaid premium. The period of the Extended Term Insurance will be determined by using the Cash Surrender Value as a net single premium at the Attained Age of the Insured. If the Extended Term Insurance would extend to or beyond age 121, Paid-up Insurance will be provided instead. Extended Term Insurance does not share in divisible surplus (Section 4.1). The Cash Value for this Policy, when all premiums due have been paid, will be the sum of: the Cash Value from the Table of Guaranteed Values; the Cash Value of any Paid-up Additions; and the amount of any dividend accumulations. If premiums are not paid on this Policy on an annual basis, the Cash Value will reflect a reduction for any premiums due later in the Policy year. If the Extended Term Insurance is surrendered within 31 days after a Policy anniversary, the Cash Value will not be less than the Cash Value on that anniversary. The Cash Value within three months after the due date of any unpaid premium will be the Cash Value on that due date reduced by any later surrender of Paid-up Additions and by any later withdrawal of dividend accumulations. After that, the Cash Value will be the Cash Value of the insurance then in force, including the Cash Value of any Paid-up Additions and any dividend accumulations. 6.3 PAID-UP INSURANCE Paid-up Insurance may be selected in place of Extended Term Insurance. A written request must be received at the Home Office no later than three months after the due date of an unpaid premium. The amount of insurance will be determined by using the Cash Value as a net single premium at the Attained Age of the Insured. Any Policy Debt will continue. Paid-up Insurance will share in divisible surplus (Section 4.1). The Cash Value of any Extended Term Insurance, Paid-up Insurance or Paid-up Additions will be the net single premium for that insurance at the Attained Age of the Insured. 6.2 EXTENDED TERM INSURANCE The amount of the Life Insurance Benefit when this Policy is in force as Paid-up Insurance will be: If any premium is unpaid at the end of the grace period, this Policy will be in force as Extended Term Insurance. The amount of the Life Insurance Benefit under this Extended Term Insurance will be: the amount of Paid-up Insurance determined above; plus the amount of any in force Paid-up Additions purchased by dividends after the Policy has become Paid-up Insurance (Section 5); plus the Insurance Amount shown on page 3; plus the amount of any Paid-up Additions in force under Section 5; plus the amount of any existing dividend accumulations (Section 4.2); plus the amount of any dividend accumulations (Section 4.1); minus the amount of any dividend at death (Section 4.3); minus the amount of any Policy Debt (Section 7.3). TT.WL.(0608) the amount of any Policy Debt (Section 7.3). 12 These amounts will be determined as of the date of death. Even though the Owner does not have the right to take any policy loans after the date of the Insured's death, any policy loans that are taken after the date of the Insured's death will be deducted from the Life Insurance Benefit. 6.5 TABLE OF GUARANTEED VALUES; BASIS OF VALUES Cash Values and Paid-up Insurance for the Insurance Amount are shown on page 4 for the end of the Policy years indicated. These values assume that all premiums due have been paid for the number of years stated. They do not reflect Paid-up Additions, dividend accumulations or Policy Debt. Cash Values for Paid-up Additions are shown on page 5. Values during a Policy year will reflect any portion of the year's premium paid and the time elapsed in that year. If Paid-up Insurance is surrendered within 31 days after a Policy anniversary, the Cash Value will not be less than the Cash Value on that anniversary reduced by any later surrender of Paid-up Additions and by any later withdrawal of dividend accumulations. 6.4 CASH SURRENDER Values for Policy years not shown are calculated on the same basis as those shown on page 4. A list of these values will be furnished on request. The Owner may surrender this Policy for its Cash Surrender Value. The Cash Surrender Value is the Cash Value less any Policy Debt. A written surrender of all claims, acceptable to the Company, will be required. The date of surrender will be the date of receipt at the Home Office of the written surrender. The Policy will terminate and the Cash Surrender Value will be determined as of the date of surrender. The Company may require that the Policy be sent to it. The Cash Value for each Policy year not shown on page 4 and the net single premiums are based on the 2001 Commissioners Standard Ordinary Mortality Table Ultimate Rates for the sex and smoking status of the Insured. Interest is based on an annual effective rate of 4%. Calculations assume the continuous payment of premiums and the immediate payment of claims. Surrender proceeds will be the Cash Surrender Value as of the date of surrender. These proceeds will be paid in cash or under a payment plan that is elected by the Owner. The Company may defer paying the surrender proceeds for up to six months from the date of surrender. If payment is deferred for 30 days or more, interest will be paid on the surrender proceeds from the date of surrender to the date of payment. Interest will be at an annual effective rate in accordance with the laws of the state in which this Policy is delivered. TT.WL.(0608) For increases in premium that occur under Section 3 after the twentieth Policy year, the Company may base Cash Values and premiums on the interest rates and mortality tables being used as the basis of values of whole life insurance then being issued by the Company. A detailed statement of the method of calculation of all values has been filed with the insurance supervisory official of the state in which this Policy is delivered. The Company will furnish this statement at the request of the Owner. All values are at least as great as those required by that state. 13 SECTION 7. LOANS 7.1 POLICY AND PREMIUM LOANS 7.3 POLICY DEBT The Owner may obtain a loan from the Company in an amount that is not more than the Loan Value (Section 7.2). Policy Debt consists of all outstanding loans and accrued loan interest. It may be paid to the Company at any time. Policy Debt affects any dividends that may be paid under Section 4.1. Any Policy Debt will be deducted from the Policy proceeds. Policy Loan. The loan may be obtained on written request. No loan will be made if the Policy is in force as Extended Term Insurance. The Company may defer making the loan for up to six months unless the loan is to be used to pay premiums due the Company. If the Policy Debt equals or exceeds the Cash Value, this Policy will terminate. Termination occurs 31 days after a notice has been mailed to the Owner and to any assignee on record at the Home Office. Pre miu m Loan. If the premium loan provision is in effect on this Policy, a loan will be made to pay an overdue scheduled premium. If the Loan Value is not large enough to pay the overdue scheduled premium, a scheduled premium will be paid for any other frequency permitted by this Policy for which the Loan Value is large enough. If the Loan Value is not large enough to pay the overdue scheduled premium on any frequency permitted by this Policy, the Policy will continue in force or terminate as provided in Section 3.1. The Owner may elect or revoke the premium loan provision by written request received at the Home Office. 7.4 LOAN INTEREST Loan interest accrues and is payable on a daily basis from the date of the loan on policy loans and from the premium due date on premium loans. Unpaid loan interest is included in Policy Debt. The Specified Rate loan interest option or the Variable Rate loan interest option is elected on the Application. Change To Variable Rate Loan Interest Option. The Owner may request a change to the Variable Rate loan interest option at any time, with the change to take effect on the January 1st following receipt of a written request at the Company's Home Office. 7.2 LOAN VALUE The Loan Value is the Cash Value on the next Policy anniversary after the date of the loan, minus the sum of: Change To Specified Rate Loan Interest Option. The Owner may request a change to the Specified Rate loan interest option if the loan interest rate set by the Company under Section 7.6 for the year beginning on the next January 1st is less than 8%. The written request to change must be received at the Home Office between November 15th and the last business day of the calendar year; the change will take effect on the January 1st following receipt of the request at the Home Office. any Policy Debt; any scheduled premium then due or billed; any remaining unpaid modal premiums for the current Policy year; and loan interest on the new loan and any outstanding loans to the next Policy anniversary. TT.WL.(0608) 14 7.5 SPECIFIED RATE LOAN INTEREST OPTION The loan interest rate set by the Company will not exceed the maximum rate permitted by the laws of the state in which this Policy is delivered. The loan interest rate may be increased only if the increase in the annual effective rate is at least 1/2%. The loan interest rate will be decreased if the decrease in the annual effective rate is at least 1/2%. Loan interest is payable at an annual effective rate of 8%. 7.6 VARIABLE RATE LOAN INTEREST OPTION Loan interest is payable at an annual effective rate that is set by the Company annually and applied to new or outstanding Policy Debt during the year beginning each January 1st. The highest loan interest rate that may be set by the Company is the greater of 5% or a rate based on the Moody's Corporate Bond Yield Averages-Monthly Average Corporates for the immediately preceding October. This Average is published by Moody's Investor's Service, Inc. If it is no longer published, the highest loan interest rate will be based on some other similar average established by the insurance supervisory official of the state in which this Policy is delivered. The Company will give notice: of the initial loan interest rate in effect at the time a Policy or premium loan is made. of an increase in loan interest rate on outstanding Policy Debt no later than 30 days before the January 1st on which the increase takes effect. This Policy will not terminate during a Policy year as the sole result of an increase in the loan interest rate during that Policy year. SECTION 8. CHANGE OF POLICY 8.1 REDUCTION OF POLICY AMOUNT 8.2 CHANGE OF PLAN The Owner may reduce the amount of this Policy, subject to the Company's minimum policy amount rules. The Owner may change this Policy to any permanent life insurance plan agreed to by the Owner and the Company by: paying the required costs; and meeting any other conditions set by the Company. SECTION 9. BENEFICIARIES 9.1 DEFINITION OF BENEFICIARIES 9.2 NAMING AND CHANGE OF BENEFICIARIES The term " Beneficiaries" means direct beneficiaries, contingent beneficiaries, and further payees of the Life Insurance Benefit. By Owner. The Owner may name and change the Beneficiaries of the Life Insurance Benefit: while the Insured is living; or during the first 60 days after the date of death of the Insured, if the Insured at the time of his or her death was not the Owner. A change made during the 60 days cannot be revoked. TT.WL.(0608) 15 Effective Date. A naming or a change of Beneficiaries will be made on receipt at the Home Office of a written request. The request will then take effect as of the date that it was signed. The Company is not responsible for any payment or other action that is taken by it before the receipt of the request. Any change of Beneficiary terminates all rights under previous Beneficiary designations. The Company may require that the Policy be sent to it to be endorsed. in equal shares, unless otherwise designated by the Owner, to the further payees who survive and receive payment; or if no further payees survive and receive payment of the Life Insurance Benefit, then to the estate of the last to die of all of the Beneficiaries. No Beneficiaries Survive And Receive Payment. If no Beneficiaries survive the Insured and receive payment of any portion of the Life Insurance Benefit, then the Life Insurance Benefit will be paid to the Owner or to the Owner's estate. 9.3 SUCCESSION IN INTEREST OF BENEFICIARIES At Least One Beneficiary Survives And Receives Payment. If at least one of the Beneficiaries survives the Insured and receives payment of his or her share of the Life Insurance Benefit, then the Life Insurance Benefit will be paid as follows: 9.4 TRUSTEE AS BENEFICIARY If a trustee is named as a Beneficiary and no qualified trustee makes claim to the Life Insurance Benefit within one year after payment becomes due to the trustee, or if acceptable evidence is furnished to the Company within that year showing that no trustee can qualify to receive payment, payment will be made as though the trustee had not been named. Direct Beneficiaries. The Life Insurance Benefit of this Policy will be paid in equal shares, unless otherwise designated by the Owner, to the direct beneficiaries who survive and receive payment. If a direct beneficiary dies before receiving all or part of the direct beneficiary's full share, then the unpaid portion will be paid in equal shares to the other direct beneficiaries who survive and receive payment. The Company will be fully discharged of liability for any action taken by the trustee and for all amounts paid to, or at the direction of, the trustee and will have no obligation as to the use of the amounts. In all dealings with the trustee, the Company will be fully protected against the claims of every other person. The Company will not be charged with notice of a change of trustee unless written evidence of the change is received at the Home Office. Contingent Beneficiaries. If the direct beneficiaries do not survive and receive payment of the entire Life Insurance Benefit, then the unpaid portion will be paid in equal shares, unless otherwise designated by the Owner, to the contingent beneficiaries who survive and receive payment. If a contingent beneficiary dies before receiving all or part of the contingent beneficiary's full share, then the unpaid portion will be paid in equal shares to the other contingent beneficiaries who survive and receive payment. 9.5 GENERAL Transfer Of Ownership. A transfer of ownership will not change the interest of the Beneficiaries. Further Payees. If the direct and contingent beneficiaries do not survive and receive payment of the entire Life Insurance Benefit, then the unpaid portion will be paid in one sum: TT.WL.(0608) Claims Of Creditors. So far as allowed by law, no amount payable under this Policy will be subject to the claims of creditors of the Beneficiaries. 16 SECTION 10. PAYMENT OF POLICY BENEFITS 10.1 PAYMENT OF PROCEEDS beneficiary's death. If no such payment plan Beneficiary is named, then the payment plan Beneficiary for the remaining value, if any, shall be the estate of the direct or contingent beneficiary to whom payment plan payments were being made. Payment plan Beneficiaries will continue under the terms of the payment plan. The Life Insurance Benefit will be paid in a lump sum cash payment or paid under a fixed payment plan as follows: in a manner designated by the Owner and accepted by the Company; or if the Owner has not designated an acceptable manner of payment, then in cash or in a manner designated by a direct or contingent beneficiary and accepted by the Company. The Owner may elect payment plans for surrender proceeds. The Owner will be the direct beneficiary. Effective Date. A payment plan that is elected by the Owner will take effect on the date of the death of the Insured if the election is received at the Home Office while the Insured is living. In all other situations, a payment plan that is elected will take effect on the date the election is received at the Home Office or on a later date, if requested. The Company will pay interest on the Life Insurance Benefit from the date of death of the Insured until the proceeds are paid in cash or into a payment plan. Interest will be paid at an annual effective rate determined by the Company, but the rate shall not be less than the rate, if any, required by applicable state law for unpaid death proceeds under a life insurance policy. Payment Date. The first payment is due as of the effective date of the plan. If applicable, proof of the date of birth and other required information, acceptable to the Company, must be furnished for each individual on whose life the payments are based. 10.2 PAYMENT PLANS Payment Plan Elections. The Owner may elect a payment plan for each Beneficiary's share of the Life Insurance Benefit: Transfer Between Payment Plans. A direct or contingent beneficiary who is receiving payment under a payment plan which includes the right to withdraw may transfer the withdrawal value to any other available plan. while the Insured is living; or during the first 60 days after the death of the Insured, if the Insured at the time of his or her death was not the Owner. An election made during the 60 days cannot be revoked. Minimu m Payment. The Company may limit the election of a payment plan to one that results in payments of at least $50. If payments under a payment plan are or become less than $50, the Company may change the frequency of payments. If the payments are being made once every 12 months and are less than $50, the Company may pay the present value or the balance of the payment plan. Subject to the Owner's rights and upon supplying any required information to the Company, a direct or contingent beneficiary may elect a payment plan for his or her share of the Life Insurance Benefit and/or name his or her own Beneficiary for the remaining value, if any, in the payment plan existing at the time of the direct or contingent TT.WL.(0608) 17 Payment Plan Offerings. Increase Of Monthly Inco me. A direct or contingent beneficiary may increase the amount of the monthly payments. This is done by the payment of an annuity premium to the Company at the time the payment plan elected takes effect. The amount that will be applied under the payment plan will be the net premium. The net premium is the annuity premium less a charge of not more than 2% and less any premium tax. The net premium will be applied under the same payment plan and at the same rates as the Policy proceeds. The Company may limit this net premium to an amount that is equal to the direct or contingent beneficiary's share of the Life Insurance Benefit payable under this Policy. The Company will make available the following Life Income Plans: Single Life Inco me. The Company will make monthly payments for the selected certain period, if any, and thereafter during the remaining lifetime of the individual upon whose life income payments are based. The choices for the certain period are: a. zero years; b. 10 years; c. 20 years; or d. a refund period which continues until the sum of the payments that have been made is equal to the amount that was applied under this Life Income Plan. Payment Plan Rates. Life Income Plan payments will be based on rates declared by the Company. These rates will provide at least as much income as would the Company's rates, on the date that the payment plan takes effect, for a single premium immediate annuity contract. Payments under these rates will not be less than the amounts that are described in Minimum Payment Rates. Joint And Survivor Life Inco me. The Company will make monthly payments for a 10-year certain period, and after that as long as one or both individuals, upon whose lives income payments are based, is alive. Minimu m Payment Rates. The minimum payment rates for the Life Income Plans are shown in the Minimum Payment Rate Tables. The Company may offer additional payment plans. The following shall apply to Life Income Plans: The Life Income Plan payment rates in those tables depend on the sex and the adjusted age of each person on whose life the payments are based. The adjusted age is: Withdrawal. The remaining value, if any, in a Life Income Plan may be withdrawn in a lump sum upon the death of all individuals upon whose lives income payments are based. The withdrawal value will be the present value of any unpaid payments for the remaining certain period. The present value will be based on the rate of interest used to determine the amount of the payments. the age on the birthday that is nearest to the date on which the payment plan takes effect; plus the age adjustment shown below for the number of Policy years that have elapsed from the Policy Date to the date that the payment plan takes effect. A part of a Policy year is counted as a full year. Limitations. A direct or contingent beneficiary who is a natural person may be paid under a Life Income Plan only if the payments depend on his or her life. A non-natural person may be paid under a Life Income Plan only if the payments depend on the life of the Insured's spouse or the Insured's dependent. POLICY YEARS ELAPSED 1 to 8 9 to 16 17 to 24 25 to 32 Payment Frequency. On request, payments will be made once every 3, 6 or 12 months instead of each month. TT.WL.(0608) 18 AGE ADJUSTMENT 0 -1 -2 -3 POLICY YEARS ELAPSED 33 to 40 41 to 48 49 or more AGE ADJUSTMENT -4 -5 -6 MINIMUM PAYMENT RATE TABLES Minimu m Monthly Inco me Payments per $1,000 of Proceeds SINGLE LIFE INCOME PLAN SINGLE LIFE MONTHLY PAYMENTS MALE ADJUSTED AGE* CHOSEN PERIOD (YEARS) ZERO 10 20 REFUND FEMALE ADJUSTED AGE* CHOSEN PERIOD (YEARS) ZERO 10 20 REFUND 55 56 57 58 59 $ 3.77 3.85 3.94 4.02 4.12 $ 3.74 3.82 3.90 3.98 4.07 $ 3.64 3.70 3.76 3.83 3.89 $ 3.59 3.65 3.71 3.78 3.85 55 56 57 58 59 $ 3.48 3.54 3.61 3.68 3.76 $ 3.46 3.52 3.59 3.66 3.74 $ 3.41 3.47 3.52 3.59 3.65 $ 3.37 3.42 3.48 3.54 3.60 60 61 62 63 64 4.22 4.33 4.44 4.57 4.70 4.16 4.26 4.36 4.47 4.59 3.96 4.03 4.10 4.18 4.25 3.93 4.01 4.09 4.18 4.27 60 61 62 63 64 3.84 3.93 4.03 4.13 4.23 3.82 3.90 3.99 4.08 4.18 3.72 3.78 3.85 3.93 4.00 3.67 3.74 3.82 3.89 3.98 65 66 67 68 69 4.84 4.99 5.15 5.32 5.50 4.71 4.84 4.97 5.11 5.26 4.32 4.39 4.47 4.54 4.61 4.37 4.47 4.58 4.69 4.81 65 66 67 68 69 4.35 4.47 4.60 4.74 4.90 4.29 4.40 4.52 4.65 4.78 4.08 4.16 4.24 4.32 4.40 4.06 4.16 4.25 4.36 4.46 70 71 72 73 74 5.70 5.90 6.12 6.36 6.61 5.41 5.57 5.73 5.90 6.07 4.68 4.74 4.80 4.86 4.91 4.93 5.06 5.20 5.34 5.50 70 71 72 73 74 5.06 5.24 5.43 5.63 5.86 4.92 5.07 5.23 5.40 5.57 4.48 4.55 4.63 4.70 4.77 4.58 4.70 4.83 4.97 5.11 75 76 77 78 79 6.88 7.17 7.48 7.81 8.16 6.25 6.43 6.62 6.80 6.99 4.96 5.01 5.05 5.09 5.12 5.65 5.82 6.00 6.19 6.39 75 76 77 78 79 6.10 6.36 6.64 6.94 7.27 5.76 5.95 6.14 6.35 6.55 4.84 4.90 4.95 5.00 5.05 5.26 5.42 5.60 5.78 5.97 80 81 82 83 84 8.54 8.95 9.38 9.85 10.35 7.18 7.36 7.54 7.72 7.89 5.15 5.17 5.20 5.21 5.23 6.59 6.81 7.04 7.28 7.54 80 81 82 83 84 7.63 8.02 8.44 8.90 9.39 6.76 6.97 7.18 7.39 7.59 5.09 5.12 5.15 5.18 5.20 6.17 6.39 6.61 6.85 7.10 85 and over 10.89 8.05 5.24 7.80 85 and over 9.93 7.78 5.22 7.37 JOINT AND SURVIVOR LIFE INCOME PLAN JOINT AND SURVIVOR MONTHLY PAYMENTS (with 10 years certain) MALE ADJUSTED AGE* 55 60 65 70 75 80 85 and over FEMALE ADJUSTED AGE* 55 $ 3.17 3.26 3.33 3.38 3.42 3.44 3.45 60 $ 3.31 3.45 3.57 3.66 3.73 3.77 3.80 65 70 $ 3.44 3.64 3.83 3.99 4.11 4.20 4.25 $ 3.55 3.81 4.08 4.34 4.56 4.72 4.83 75 80 $ 3.63 3.95 4.31 4.69 5.05 5.34 5.55 $ 3.68 4.05 4.49 4.99 5.51 5.98 6.35 85 and over $ 3.71 4.11 4.61 5.20 5.86 6.52 7.08 * See Section 10.2 Monthly payment rates are based on 2.50% interest and the Annuity 2000 Mortality Table with 125% of Projection Scale G. Mortality improvements are projected for 8 years plus the remaining life of the Annuitant. TT.WL.(0608) 19 POLICY APPLICATION SUPPLEMENT FOR WHOLE LIFE POLICY THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY 720 East Wisconsin Avenue Milwaukee, Wisconsin 53202 INSURED: John J. Doe PLAN NAME: POLICY: Whole Life Paid Up At 90 Amount $200,000 Scheduled Annual Additional Premium $ 00.00 Unscheduled Additional Premium (Lump Sum) $ Waiver APB IPB ADB (eligible APB elections and Term Conversions only) Surrender of Policy Endorsement No No No No No ANNUAL DIVIDENDS: 00.00 Purchase Paid-up Additions POLICY LOAN INTEREST RATE: 8% For Administrative Use Only 90-1 WL.Supp.(0608) Policy Number 00 000 000 It is reco mmended that you ... read your Policy. notify your Northwestern Mutual agent or the Company at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, of an address change. call your Northwestern Mutual agent for information--particularly on a suggestion to terminate or exchange this Policy for another policy or plan. Important Notice Concerning State ments in the Application for Your Insurance Please read the copy of the Application attached in this policy. Omission or misstatements in the Application could cause an otherwise valid claim to be denied. Carefully check the Application and write to the Company at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, within ten days of delivery, if any information shown on it is not correct and complete, or if any past medical history or other information has been left out of the Application. The Application is part of the policy and the policy was issued on the basis that the answers to all questions and the information shown on the Application are correct and complete. Election of Trustees The members of The Northwestern Mutual Life Insurance Company are its policyholders of insurance policies and deferred annuity contracts. The members exercise control through a Board of Trustees. Elections to the Board are held each year at the annual meeting of members. Members are entitled to vote in person or by proxy. WHOLE LIFE POLICY Eligible For Annual Dividends Life Insurance Benefit payable on death of Insured. Premiums payable for period shown on page 3. TT.WL.(0608)