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ex3-1 auto index

The first time the automatic indexing feature is exercised will be on the policy's third anniversary date. At this time, the 4% figure is applied to the original $4,000 monthly total disability benefit ($4,000 x .04 = $160). The monthly total disability benefit is then increased to $4,160 ($4,000 + $160). On the fifth policy anniversary, the 4% figure is applied to the $4,160 amount ($4,160 x .04 = $166). The monthly total disability benefit is increased again, this time to a monthly benefit of $4,326. On the seventh policy anniversary date, $173 is added to $4,326 to generate a monthly total disability benefit of $4,499. The advantage of the cumulative effect has increased the monthly total disability benefit by nearly $500 after seven years.