|  The “up” asset in a “down” market
There is virtually no other financial asset like whole life insurance. Compare some of its features with other financial instruments—the benefits are exceptional:
• Guaranteed death benefit, typically income-tax free to beneficiaries.2
• Guaranteed cash value is not correlated to the market, and is tax-deferred.
• Access to cash available through withdrawals and income tax-free loans.1,2,3
• Policy can be transferred or pledged as collateral for a loan.
• In the long run, the cash values provide stable returns over time.
• Self-completing in the case of disability with a Waiver of Premium Rider. 4
1Depending upon the policy chosen, cash value may be available as early as the payment of the second year's premium.
2Policy benefits are reduced by outstanding loans or loan interest.
3Assumes policy is not a Modified Endowment Contract (MEC).
4Riders may incur additional costs.
Leveraging your assets—when more is more
Over and above the value provided by your whole life policy, there is also an optional feature that not everyone has, but it provides even greater benefits as a portfolio asset. The Enhanced Paid-Up Additions Rider (EPUA) allows the purchase of additional paid-up insurance1 with flexible payment options and at favorable rates to enhance the policy’s value. Extra dollars can work harder here, boosting values at an accelerated pace!
Money on the sidelines?
Where are you putting your extra cash these days?
Suppose you earned a $25,000 bonus? What can you do with a one-time cash windfall? Let’s see what happens to a policy’s values and returns if a policyholder makes a one-time EPUA payment of approximately $25,000.
This example shows results for a 40-year-old, Best Class with a hypothetical whole life policy of $500,000 in face amount.2
The policyholder has contributed $100 annually to maintain the EPUA rider option, and in year 3 has paid in $25,000—an ideal use for a cash bonus, or funds received from the sale of an asset. How do these rates look to you? 1Policyholders can purchase paid-up additional insurance on the insured’s life, within policy limits, over and above the base face amount.
2Example shown is based on a hypothetical policy not available for sale, using Guardian's Whole Life Paid-Up at Age 99 and averaging male and female values for issue age 40. A full illustration showing both guaranteed and non-guaranteed values must be provided by a Guardian representative to individuals applying for any Guardian whole life insurance policy.
Flexible features built for change
Since life insurance is a long term asset designed to fit your financial profile during your lifetime, the Enhanced Paid-Up Additions Rider1 on a whole life policy was created to dovetail with the policy to provide more control. EPUA allows you to:
• Schedule an amount that you wish to pay with your policy premium each year.
• Make unscheduled payments at any time.
• Vary payments and guaranteed cash value growth from year to year.
• Earn dividends on the additional paid-up insurance purchased.
Moreover, as values build2, the policy becomes a source of ready, liquid cash available3. Plus, the EPUA is not a contractual obligation—just an annual contribution of $100 keeps this option open. In the event of disability, a Waiver of Premium rider purchased when the policy was issued would cover scheduled EPUA payments in addition to the policy’s premium.
 Why Guardian?
The Guardian Life Insurance Company of America is one of the oldest and last remaining mutual life insurance companies in the nation. Founded in 1860, Guardian has paid a dividend to its participating life policyholders every year since it has been authorized to do so, through boon years as well as turbulent times.
In November 2008, Guardian’s Board of Directors approved a record dividend allocation of $723 million to its individual life policyholders in 2009, reflecting an increase of $60 million, or 9.0%, over the amount allocated in 2008. It also represents the greatest amount ever earmarked for Guardian policyholder dividends.
Guardian’s secure capital position and strong results in 2008 have allowed us to increase the dividend interest rate from 7.25% to 7.30% in 2009. The chart below illustrates Guardian’s steady dividend performance from 2003–2008.
*The 2008 number of $729 million mostly comprises the $723 million life policyholder liability to be paid out in 2009. This number is a close estimate, as some policies may lapse or be surrendered before they become eligible to receive their dividend.
 What the rating agencies say
Guardian received upgrades from 3 renowned rating agencies in the short span between October 2007 and December 2008 – a noteworthy accomplishment. The chart below shows how the company is evaluated by four of these independent sources:
Fitch raised Guardian’s rating in October 2007, stating in part that Guardian demonstrated “improved operating performance and higher than expected capital adequacy.”
In July, 2008, Standard & Poor’s characterized Guardian as having “a conservative investment philosophy which has limited speculative grade credit risk and no exposure to sub-prime mortgages,”and raised the rating from AA (Positive Outlook) to AA+ (Stable Outlook).
A.M. Best raised Guardian’s rating to A++ in November, 2008, citing the company’s “superior capitalization,” our ability to “sustain positive earnings trends,” the company’s “well-diversified product portfolio” as well as the focus on “building policyholder value.”
The Bottom Line: How Do You Feel About Your Money?
For the wise consumer, a vital component underlying every financial strategy should be a solid foundation of life insurance. In fact, income from other assets can easily be used as a funding vehicle for a life insurance policy and its enhancements such as EPUA. These synergies are a smart way tocreate, leverage, and retain wealth for the long term.
Generations have come to rely on Guardian and its high quality products for financial growth and protection.
1 Riders may incur additional costs.
2 Cash values include dividends. Dividends are not guaranteed. They are declared annually by Guardian’s Board of Directors.
3 Policy benefits are reduced by any outstanding loans and loan interest. In any given year, annual dividends, if any, are affected by policy loans.
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