Important changes to the Advanced Premium Fund terms and conditions from Nationwide®
To ensure we are abiding by laws and regulations set forth by individual state guidelines, new terms and
conditions have been developed for the Advanced Premium Fund (APF), or Premium Deposit Fund (PDF)1. Effective September 1, 2018, no new account setups or deposits will be permitted for policies issued in Illinois, Pennsylvania and Texas.
Terms and conditions are also changing for policyowners with active APF accounts in these states. Policyowners will be notified of the changes in terms and conditions and will have 60 days to comply with the new rules. If policies are not in compliance after 60 days, the existing APF account will be closed and the balance will be refunded to the policyowner. Copies of client letters will also be sent to the active primary producers of those policies.
Terms and conditions
The following terms and conditions have been added to ensure the APF is used for its intended purpose and that the administration of the APF follows applicable state guidelines.
• New account setup requests are not permitted for policies issued in Illinois, Pennsylvania and Texas. (We currently do not permit any new account setups in Indiana and Washington.)
• Policyowners are not permitted to make new deposits into an existing APF.
• Bankcard payments are not permitted to fund any portion of the policy while an APF account balance is present.
Existing terms and conditions:
• The APF account must be exclusively set up on an annual APF billing mode.
• The APF deposit is limited to the lesser of $250,000 deposit or the present value of 10 years of prepaid, planned premium.
• The policyowner cannot take any loans or have an outstanding loan balance on the policy while having an open and active APF account.
• The APF balance plus cash value cannot exceed the face value of the policy and cannot contain more than 10 years of prepaid, planned premium.
• The current interest rate is 2.5% and is subject to change.
• The life policy cannot be a Modified Endowment Contract (MEC), except for Nationwide YourLife CareMatters® and Nationwide YourLife® Whole Life.
• New account requests will no longer be permitted for policies issued in Illinois, Pennsylvania and Texas.
• Policies not in compliance with the new rules will result in the closure of the APF account and the balance refunded to the policyowner.