Ameriprise 2015 Annual Report Download - page 37

Variable Universal Life Insurance
Variable universal life insurance provides life insurance coverage along with investment returns linked to underlying
investment accounts of the policyholder’s choice. Investment options may include VIT Funds discussed above, Portfolio
Navigator funds of funds, as well as variable portfolio funds of other companies. Our Portfolio Stabilizer funds of funds
offering is available for new sales of variable universal life insurance products. RiverSource variable universal life insurance
products in force offer a fixed account investment option with guaranteed minimum interest crediting rates ranging from
2% to 4.5% at December 31, 2015.
Fixed Universal Life Insurance and Traditional Whole Life Insurance
Fixed universal life and traditional whole life insurance policies do not subject the policyholder to the investment risks
associated with variable universal life insurance.
RiverSource fixed universal life insurance products provide life insurance coverage and cash value that increases by a fixed
interest rate. The rate is periodically reset at the discretion of the issuing company subject to certain policy terms relative
to minimum interest crediting rates. RiverSource fixed universal life insurance policies in force provide guaranteed minimum
interest crediting rates ranging from 2% to 5% at December 31, 2015. Certain fixed universal life policies offered by
RiverSource Life provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified
conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value
to cover the monthly deductions and charges.
RiverSource indexed universal life insurance (‘‘IUL’’) provides lifetime insurance protection and efficient asset growth
through index-linked interest crediting, without the impact of negative market returns. IUL is similar to universal life
insurance in that it provides life insurance coverage and cash value that increases as a result of credited interest as well
as a minimum guaranteed credited rate of interest. Unlike universal life insurance, the rate of credited interest above the
minimum guarantee for funds allocated to the indexed account is linked to the performance of the S&P 500 Index
(subject to a cap and floor) or a blended multi-index account option comprised of the S&P 500 Index, the MSCI EAFE
Index and MSCI EM Index.
In 2013, we introduced RiverSource TrioSourceSM universal life insurance with long term care benefits. The base feature of
the RiverSource TrioSource product is a fixed universal life insurance policy that provides a guaranteed death benefit and a
guaranteed return of premium.
In 2009, we discontinued new sales of traditional whole life insurance, however, we continue to service existing policies.
Our in-force traditional whole life insurance policies combine a death benefit with a cash value that generally increases
gradually over a period of years.
Term Life Insurance
Term life insurance provides a death benefit, but it does not build up cash value. The policyholder chooses the term of
coverage with guaranteed premiums at the time of issue. During the chosen term, we cannot raise premium rates even if
claims experience deteriorates. At the end of the chosen term, coverage may continue with higher premiums until the
maximum age is attained, or the policy expires with no value. We also offer a term life insurance product that pays the
death benefit in the form of a monthly income stream.
Disability Income Insurance
Disability income insurance provides monthly benefits to individuals who are unable to earn income either at their
occupation at time of disability (‘‘own occupation’’) or at any suitable occupation (‘‘any occupation’’) for premium
payments that are guaranteed not to change. Depending upon occupational and medical underwriting criteria, applicants
for disability income insurance can choose ‘‘own occupation’’ and ‘‘any occupation’’ coverage for varying benefit periods. In
some states, applicants may also choose various benefit provisions to help them integrate individual disability income
insurance benefits with Social Security or similar benefit plans and to help them protect their disability income insurance
benefits from the risk of inflation.
Long Term Care Insurance
As of December 31, 2002, the RiverSource Life companies discontinued underwriting stand-alone long term care
insurance. However, our advisors sell long term care insurance issued by other companies.
In 2004, the RiverSource Life companies began to file for approval to implement rate increases on most of their existing
blocks of nursing home-only indemnity long term care insurance policies. Implementation of these rate increases began in
early 2005 and continues. We have received approval for some or all requested increases in the 50 states where
increases have been requested, with an average approved cumulative rate increase of 113.3% of premium on all such
policies where an increase was requested.
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