for financial professional use only-not for public distribution introducing the elite survivor index...

FOR FINANCIAL PROFESSIONAL USE ONLY-NOT FOR PUBLIC DISTRIBUTION

Introducing the Elite Survivor Index® IISurvivorship policy with flexibility, accumulation potential and protection

Presented by…

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Disclaimer

The information presented herein is not a comprehensive analysis of the topic presented, and the viewer should consult tax and legal advisors to understand all the ramifications of the topics discussed.

This information is general in nature and may be subject to change. The Company, its financial professionals and other representatives are not authorized to give legal, tax or accounting advice. Applicable laws and regulations are complex and subject to change. Any tax statements in this material are not intended to suggest the avoidance of U.S. federal, state or local tax penalties. For advice concerning your situation, consult your professional attorney, tax advisor or accountant.

To ensure compliance with requirements imposed by U.S. Treasury Regulations, we inform you that any tax advice contained in this presentation (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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Agenda

What is Survivorship Life Insurance

Elite Survivor Index II Product Overview

–Caps, Pars, Loans, Charges, Riders

Estate Planning Sales Concept

RetireStronger.com

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What is Survivorship Life Insurance?

This type of life insurance is a single policy that

covers two lives.

It pays the death benefit after both of the people

insured have passed away and is typically more

affordable than purchasing two individual

policies.

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Life insurance is usually the least expensive method for providing cash for the payment of estate taxes.

Since 1981, the law allows one spouse to transfer all their property to the other spouse at death tax free.1

This is the “unlimited marital deduction.”

If there is an estate tax due, it is not due until the surviving spouse dies.


1Based on current federal tax law subject to certain restrictions.

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Life insurance companies

designed the survivorship life

insurance contract.

Since the premium is lower, it

can be an even better solution

than a policy insuring only one

person.


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Introducing…

Elite Survivor Index II

Survivorship index universal life insurance

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Elite Survivor Index II

Cost-effective protection, flexibility and choice with upside potential.

Elite Survivor Index II universal life insurance provides affordable last

survivor death benefit protection plus the opportunity to build cash

value that can be accessed in the future.

Unique survivorship coverage can assist in a variety of needs:

– Estate Planning

– Wealth Transfer

– Charitable Gifts

– Key Person Coverage for Businesses

– Lifetime Support for Special Needs Children

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Target Market

Clients looking for survivorship index universal life

insurance can fall into several categories:

–Related business partners

–Non-related business partners

–Couples who need tax-advantaged supplemental retirement income

–Grandparents who want to leave a legacy for a grandchild

–Couples with children from previous marriages

–Couples with special needs children

–Same-gender couples

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Key Benefits Competitively priced, joint and last survivor fixed index universal life

protection for estate and business needs

Higher upside potential for growth

– Increased cap rates – now at 13%*, offering greater opportunity for growth

if the market performs well

– Higher participation rates- now at 70%*, offering greater opportunity for

growth if the market performs well

New Choice Loan option – allows the client the ability to access their

funds while they remain eligible for index interest

Death Benefit Guarantee for 20 years or to age 80, whichever comes first

NewNew

*Rates as of 06/02/2014

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Product Highlights

Issue Ages20-90

20-80 Preferred Plus No Tobacco

Minimum Death Benefit $250,000

Monthly Guarantee Premium Provision (MGP)

A policy will not terminate up to 20 years from the issue date or age 80, whichever comes first, based on the

age of the younger insured. Not to be less than 5 years.

Death Benefit OptionsOption 1 (Level)

Option 2 (Increasing)

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Product Highlights

Percentage of Premium Load

Current Charges are:Years 1-5: 12%Years 6-10: 7%Years 11+: 5%

Charges are subject to change, but cannot exceed 12% in any year.

Monthly Administration Fee $10.00

Monthly Expense ChargeFive-year monthly expense charge

per $1,000 of base coverage, including increases in base coverage

Cost of Insurance Based on the Net Amount at Risk

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Product Highlights

Four-Year Term Rider

Provides last survivor term insurance coverage during the first four policy years.

The additional death benefit is equal to 125 percent of the policy’s initial specified amount.

This rider can only be added at issue and terminates after four years.

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Product Highlights

Overloan Protection Rider

Available for new issues and inforce policies.

Rider guarantees that base policy will not lapse due to an outstanding loan

Rider must be activated in writing once the loan balance exceeds 94%

of cash value.A one-time charge will be deducted from the accumulation value, and future monthly deduction will be

waived.Rider benefit can be activated at later

of attained age 75 or 15th policy anniversary.

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Product Highlights

Maturity Extension Option

This allows the policy owner to elect to extend coverage beyond the

original maturity date.If elected, then starting on the original

maturity date:The policy death benefit is set to equal the death benefit in effect immediately prior to the original

maturity date.No monthly deduction will be madeNo new premium payments will be

accepted.

Policies may be subject to tax consequences when continued beyond the maturity date.The policy may not qualify as life insurance under the Internal Revenue Code after age 100.

Policy owners should consult a qualified tax advisor before electing this option.

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Current Rates

Elite Survivor Index II Rate

Declared Interest Account 3.45%

Minimum Guarantee 2.00%

Cap Rate Index Account

Cap Rate 13.00%

Illustrated Rate 7.90%


Participation Rate Index Account

Participation Rate 70.00%

Illustrated Rate 8.58%


Rates as of 06/02/2014Rates are subject to change at any time.

Rates do not vary by underwriting classification.

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1 Year Point-to-Point Cap Rate

This hypothetical example demonstrates how index interest is calculated and is for illustrative purposes only.It does not reflect current interest crediting rates, cap rates or participation rates.

It does not reflect the return of any investment and is not a guarantee of future income.

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1 Year Point-to-Point Participation Rate

This hypothetical example demonstrates how index interest is calculated and is for illustrative purposes only.It does not reflect current interest crediting rates, cap rates or participation rates.

It does not reflect the return of any investment and is not a guarantee of future income.

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Historical Perspective

The table displays some Historical Values for the S&P 500. However, past Index performance does not represent future performance of the S&P 500, nor past or future index interest-crediting rates of Elite Survivor Index II.

Source: Elite Survivor Index II Agent Brochure

This hypothetical example demonstrates how index interest is calculated and is for illustrative purposes only. It does not reflect current interest crediting rates, cap rates or participation rates. It does not reflect the return of any investment and is not a guarantee of future income.

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Loan Options

Loans

– The effective annual loan rate is 4.00 percent. It is payable in advance at

the rate of 3.85 percent.

– Annual effective rate of 3.00 percent will be credited to the portion of the

accumulation value that equals the amount of policy loans.

Preferred Loans*

– Available after 10 policy years.

– Maximum preferred loan amount is 10% of the average at the beginning of

the policy year.

– Loan rate (not guaranteed) currently equals the credited rate applied to the

policy loan.

Standard & Preferred

*When a Preferred Loan is made, loan interest to the next policy anniversary will accrue daily at an annual effective rate of not less than 2.91% nor more than 3.15%. (This is equivalent to an effective rate of not less than 3.0% nor

more than 3.25% respectively, paid at the end of the policy year.)

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Loan Options

Choice Loans

– Available whenever there is an amount of cash value accumulation in the

policy

– Fixed rate of 6.00%*

– Policy values in these accounts continue to participate in the index account,

allowing continued access to upside potential but also increased risk if the

rate credited is less than the loan interest rate

Choice

NewNew

*Rate current as of 6/10/2014. Guaranteed max rate 7.5%


Estate Planning with Survivorship Life Insurance

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Liquidity to Pay Estate Taxes*

Liquidity

Some Estates are Liquid Enough to Pay Estate Taxes Owed without

Selling Assets

Other Estates will need to Sell Assets to Raise Liquidity within 9

months . . . Regardless of the Current Market for those Assets

Sometimes forced-sales result in Pennies on the Dollar

Many Large Estates Prefund the Estate Tax Liability with Life

Insurance

*This information is general in nature and may be subject to change. The Company, its financial professionals and other representatives are not authorized to give legal, tax or accounting advice.

Applicable laws and regulations are complex and subject to change. Any tax statements in this material are not intended to suggest the avoidance of U.S. federal, state or local tax penalties. For advice concerning

your situation, consult your professional attorney, tax advisor or accountant.

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Why Life Insurance

Tax Benefits

–Income Tax Deferred Accumulation during Life

–Income Tax Free Proceeds at Death of Insured

Liquidity

–Paid in Cash

Timing

–Paid when Needed

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Life Insurance Trust

Life Policy Proceeds Included in Estate if it is Personally Owned

Life Insurance Trust Typically Established to be Owner & Beneficiary of Life Policy

Children, Grandchildren, etc. are Beneficiaries of Life Insurance Trust

Life Insurance Trust Provides Liquidity that can be used for Estate Taxes Does not pay tax directly but can loan funds to estate for payment

or buy assets from estate

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Benefits of an Irrevocable Life Insurance Trust (ILIT)

Life insurance premiums (annual exclusion gifts) reduce the estate (Crummy Notice/Present Interest Gift)

Life insurance can still be used to provide source of estate tax liquidity

Long term control of proceeds can be protected for your heirs

All life insurance death proceeds OUTSIDE of your estate*

*Assuming the trust is properly structured. This is not estate planning or tax advice. Clients should contact a qualified estate planner or tax advisor.

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Policies Transferred toIrrevocable Life Insurance Trust (ILIT)

New policies owned by ILIT are estate tax-free from policy inception

Existing policies transferred are estate tax-free after 3 years

provided there are no retained incidents of ownership

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Benefits of an Irrevocable Life Insurance Trust (ILIT)

$2,000,000 Life insurance in an ILIT Means – a net of $2,000,000 to family

$2,000,000 policy owned by the insured Means – a net of $2,000,000 MINUS the estate taxes

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2014:

Estate, Gift and Generation

Skipping Tax

$5.34 Million Exemption

40% top Tax Bracket

Where Are We Today?


Estate Planning with Survivorship Life Insurance

A Case Study

Case Study presented is a hypothetical representation for illustrative purposes only.

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The Situation…

David and Katherine are in their early sixties and they own several convenience stores.

Their son, Paul, helps run the business and has for many years.

Their daughter, Stacy, is a registered nurse and works in the local hospital.

Both Paul and Stacy have two children of their own.

They are a close-knit family and enjoy spending lots of time together.

David & Katherine Paul Stacy

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The Situation…

David and Katherine are currently healthy but want to start estate planning so their affairs are in order for their children when they pass on.

The bulk of their estate consists of the business, approximately $7 million of their $12 million estate.

The couple expects to leave the business to Paul at the second death, and the balance of their assets would be left to Stacy.

David & Katherine

$7M

$5M

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The Situation…

Assuming a 4% growth rate on all assets, the couple calculates the potential future values of their assets at nearly $18 million in 10 years, with $10.4 million of that attributed to the business value.

At that time, assuming the Federal exemption is adjusted at a rate of 2% per year, the estate tax bill for the couple would be nearly $2.4 million.

Currently there is no liquidity in the estate to pay this tax bill.

They are considering life insurance as an addition to their portfolio and are interested in a flexible policy that has upside potential for policy growth with tax efficiency to help with wealth transfer.

$10.4M$7.6M

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The Solution…

David and Katherine meet with a financial advisor who explains the benefits of Survivorship Index Universal Life insurance – cost-effective protection, flexibility and choice with upside potential.

They decide that Elite Survivor Index II is a great fit for their needs and set up an Irrevocable Life Insurance Trust (ILIT) to purchase and own a $5 million policy from American General.

They allocate $2.4 million for the estate tax bill and they are planning to leave the balance to their daughter Stacy to equalize the inheritance.

$5M DB

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The Solution…

They choose to allocate their funds to a Cap Rate Index Account, which is an annual point-to-point fixed index interest account based on the S&P 500 with an index cap of 13%.

$41,759 premium per year and will guarantee the death benefit until David is age 81

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Fast Forward…

Elite Index Survivor II gives David and

Katherine peace of mind that their business

will stay in the family and their grandchildren

will enjoy the benefits of their hard-earned

estate after they pass away.

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More Information…

www.retirestronger.com

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Questions

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Policies issued by: American General Life Insurance Company (AGL), Policy Form Number 14220, CC14-14220; Rider Form Numbers 13600, ICC13-13600, except in New York, where issued by The United States Life Insurance Company in the City of New York (US Life), Policy Form Numbers 14220N, 14220NU; Rider Form Numbers 07620JTN, 01904N, 01904NU, 14261N, 14262N. Issuing companies AGL and US Life are responsible for financial obligations of insurance products and are members of American International Group, Inc. (AIG). Products may not be available in all states and product features may vary by state. Guarantees are backed by the claims-paying ability of the issuing insurance company.

These product specifications are not intended to be all-inclusive of product information. State variations may apply. Please refer to the policy for complete details.

AIG solely the product provider our employees, agents, or producers do not provide legal, financial or tax advise. Producer should recommend client consult their tax and legal advisors.

IMPORTANT: Do not state or imply that the purchase of the Elite Survivor Index II insurance product is like an investment or a means of participating in “securities,” markets,” stocks,” “stock market index,” or “S&P 500 index.”

FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION.

AGLC107839REV0914

© 2014. All rights reserved.

American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries.. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in theUnited States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.

Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIG_LatestNews | LinkedIn: http://www.linkedin.com/company/aig

The S&P 500 (the “Index”) is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and has been licensed for use by AIG. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”). These trademarks have been licensed to SPDJI and sublicensed for certain purposes to AIG. The Elite Survivor Index II is not sponsored, endorsed, sold or promoted by SPDJI, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of paying premiums for the Elite Survivor Index II nor do they have any liability for any errors, omissions, or interruptions of the Index.

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