Bank One ( ONE - Get Report) set plans to acquire Zurich Life, the U.S. life and annuity operation of Switzerland's Zurich Financial Services Group, for about $500 million in cash.

Zurich Life, based in Schaumburg, Ill., underwrites term life insurance serving consumers through both a national network of 40,000 licensed brokers/insurance agents and direct marketing. The company also underwrites fixed and variable annuities, universal life policies and participates in the business-owned life insurance market.

The firm has regulatory and operating insurance authority in all 50 states.

"This is an attractive financial deal that provides us with substantially enhanced and highly efficient manufacturing capabilities to offer high-quality life insurance and annuity products through our strong distribution channels," Bank One said in a press release. The deal should add $50 million, or 4 cents a share, to Bank One's net income in 2004.

Analysts polled by Thomson First Call expect Bank One to earn $2.98 a share in 2003 and $3.31 a share in 2004.

Bank One's existing insurance business distributes third-party annuities through 3,000 insurance-licensed employees in 1,800 branches and offers life insurance products to its credit-card customers. Bank One sold more than $3 billion of annuities in 2002. Bank One is the nation's sixth-largest bank holding company, with assets of more than $285 billion.

Zurich Life is comprised of Federal Kemper Life Assurance Company, Kemper Investors Life Insurance Company, Zurich Life Insurance Company of America, Zurich Life Insurance Company of New York and their subsidiaries. In addition, Federal Kemper Life Assurance Company provides management services to Fidelity Life Association.

Chicago-based Bank One expects to close the transaction in the third quarter. Shares of Bank One were up 25 cents to $37.14 in recent New York Stock Exchange trading.