Forgotten Asset Class

Types of Life InsuranceTermWhole LifeVariable LifeIndexed Life – Indices like the S&P 500.

Participate in gains but if index has a negative performance (like 2008) policy is credited at 0%.

Survivorship Life – Estate PlanningUniversal Life

Guaranteed No-Lapse UL (“lifetime term”)Guaranteed Premium & DB to age 121.

Life Insurance BenefitsFLEXIBILITY – Ability to adjust premiums and

DB’s.Valuable riders such as Guaranteed future

purchase options and Long term care benefits.UNLIMITED protection of cash values from

lawsuits or judgments (ARIZONA)Cash Values can be accessed TAX-FREE via

withdrawals & loansMany new Policies have “wash” or 0% net loansGains can avoid ANY taxation unless you let policy lapse.No penalty taxes for early withdrawal.Free of federal income, capital gains, AMT, state and

income doesn’t trigger taxation of Soc. Security benefits.

Reasons for a Policy ReviewMore Competitive Product PricingMany newer policies have better GuaranteesOlder policies needed interest rates to

remain much higher than current rates to stay in-force – High incidence of Lapses.

Independent review of trust – owned policies showed 86% could be improved with a policy review.

Improved Life Expectancy* – Lower Insurance (Mortality Costs)40 Yr. old Male in 1975 – 68.8 yrs. LE40 Yr. old Male in 2006 – 75.2 yrs. LE

*Source: National Cernter for Health Statistics

Consumer – Friendly Enhancements

Trends in Life InsuranceTerm Insurance

Return of Premium TermStretch DB payout to beneficiaries rather than

lump sum = helps to reduce premium cost

EXAMPLE: 50 Yr. Old Male (Preferred N/T)20 yr. level @ $500K = $1,28520 yr. level - Payout $33,333 @ 15 yrs. =

$919.72 (28% Lower Premium)

Trends in Life Insurance (pg. 2)Cash Value Insurance Enhancements

New popular policies are issued WITHOUT surrender charges. Available on UL/VUL/IUL (Index Life) chassis.

Index Life offers upside participation while providing downside protection using popular stock indices like the S&P 500, Hang Seng, Euro Stoxx 50 & World Index.

Participate in Index Gains with a CAP but NOT Losses. 100% Participation in the S&P 500 index up to a 16% Cap 140% Participation in the S&P 500 index up to a 14% Cap Advantage of a Lookback – 75% into best performing index, 25% in next best

performing index & 0% in the worst performing index.

MUCH higher early cash values and in some cases, the 1st yr. surrender values => premium.

Example*: 35 Yr. Old Male Excellent Health $1M DB ($27,500 Prem. @ 8 yrs.)

** Old Style – Yr. 1 SURRENDER Value = $3,833 -- Yr. 10 Projected Surrender Value = $323,850

** New-Style – Yr. 1 SURRENDER Value = $27,500-- Yr. 10 Projected Surrender Value = $320,210* MN Life Eclipse IUL with @ without SVEA Rider

Trends in Life Insurance (pg. 3)LONG TERM CARE riders

Popular for insured who doesn’t like to pay premiums and not receive any benefits.

Tax-Free Death Benefits & Long Term Care Benefits90% Mortality Underwriting – possibly a little easier to

qualify for some Life + LTC plans.Tax-Free 1035 exchange from existing life policy.

Example: 60 Yr. Old Female Good Health ($50K Single Prem.)- Guaranteed Death Benefit of $101,481- Guaranteed Return of Premium after 3 yrs.- Guaranteed Cash Value - $65,497 @ age 80.- Guaranteed LTC pool of $$ = $304,443 ($4,228 mo.

benefit payable @ 72 months)► LTC $$ available for Home Health, Assisted

Living and Nursing Home.

LTC – Facts concerning WomenWomen have a 10X chance of reaching age

85 than a man. (1) Women need care longer than a man

3.7 yrs. versus 2.2 yrs. (2)

Women who live past age 65 50% greater chance of entering a nursing

home than a man & (3)

Are TWICE as likely to live alone. (1)

(1) American Association for Long Term Care Insurance (AALTCI) 2009(2) National Clearing House for LTC Information, US Dept of Health & Human

Services, 11/14/2007(3) AHIP (America’s Health Insurance Plans Aug. 2007)