indianapolis life portfolio review

Indianapolis LifeIndianapolis LifePortfolio ReviewPortfolio Review

Presented by:Presented by:Ronald W. Norvell CLU., ChFC.Ronald W. Norvell CLU., ChFC.

Vice President, Sales DevelopmentVice President, Sales Development1-888-565-69001-888-565-6900

For Appointment & Product Support:

Brian Ballard800/ 473-2850, ext.23 [email protected]

How to choose the right productHow to choose the right product

Does your client want a Fixed or Indexed Does your client want a Fixed or Indexed product? Why?product? Why?

Is your client more interested in Death Is your client more interested in Death Benefit, or Cash Accumulation?Benefit, or Cash Accumulation?

How important are the Guarantees?How important are the Guarantees?

What is your Client’s premium tolerance?What is your Client’s premium tolerance?

What are your commission requirements?What are your commission requirements?

For Those who want a Traditional For Those who want a Traditional FixedFixed ReturnReturn product product

We have the We have the CROWN SOLUTIONCROWN SOLUTION

Those wanting a more traditional Those wanting a more traditional Fixed ReturnFixed Return UL product UL product

Credit rate is announced upfront and Credit rate is announced upfront and guaranteed for one year.guaranteed for one year.Current credit rate is 5.9%Current credit rate is 5.9%The guaranteed rate for the life of the The guaranteed rate for the life of the product is 4%.product is 4%. Included Basic No-Lapse*Included Basic No-Lapse*20 Years – Up to Age 3520 Years – Up to Age 3515 Years – Ages 36-5515 Years – Ages 36-5510 Years – Ages 56-7510 Years – Ages 56-755 Years – Ages 76+5 Years – Ages 76+

Crown SolutionOur underwriting Matches up with

termAges 0-85Ages 0-85– Best Preferred non-tobacco 18-75Best Preferred non-tobacco 18-75– Preferred non-tobacco Preferred non-tobacco

and Preferred tobacco 18-85and Preferred tobacco 18-85

Minimum Face AmountMinimum Face Amount– $25,000 ages 0-17$25,000 ages 0-17– $50,000 ages 18 and over$50,000 ages 18 and over– $100,000 for Preferred and Best Preferred $100,000 for Preferred and Best Preferred

underwriting classesunderwriting classes

Special ClassesSpecial Classes

Maximum Special Class – Table 16Maximum Special Class – Table 16

Ratings Payable to the Later of 20 years Ratings Payable to the Later of 20 years or age 65or age 65

Target CommissionsTarget Commissions Paid through Paid through Table 6Table 6

Great for 1035 ExchangesGreat for 1035 Exchanges

1035 Loans Accepted1035 Loans Accepted if 50% or Less of Cash if 50% or Less of Cash ValueValueEnhanced CompensationEnhanced Compensation Payable on Excess Payable on Excess Premium Up to 4 Times TargetPremium Up to 4 Times Target 20% Free20% Free Partial Withdrawals Annually after Partial Withdrawals Annually after First Year First Year Enhanced LoansEnhanced Loans Years 1-10 Years 1-10– Loans are charged 5% loan interest and Loans are charged 5% loan interest and

receive 4.5% credited interestreceive 4.5% credited interest– 50 basis point spread 50 basis point spread – Preferred loans 11Preferred loans 11thth+ years, (+ years, (Zero Net CostZero Net Cost))

For Those who want a Traditional For Those who want a Traditional IndexedIndexed ReturnReturn product product

We have the We have the VISTA SERIESVISTA SERIES

Three Equity Indexed Universal Life Three Equity Indexed Universal Life ProductsProducts

Vista AdvantageVista Advantage – low target– low targetVista SelectVista Select

– – mid targetmid targetVista EliteVista Elite -high target-high targetNo variable licensing No variable licensing required to sellrequired to sell

Those who want a Potentially higher Those who want a Potentially higher Indexed ReturnIndexed Return UL product UL product

Instead of a bond portfolio, The S&P index rate Instead of a bond portfolio, The S&P index rate of return is used.of return is used.Credit rate is announced at the end of a one or Credit rate is announced at the end of a one or two year period depending on strategy selected.two year period depending on strategy selected.Current illustrated rate is 7.9% and 8.3%.Current illustrated rate is 7.9% and 8.3%.The guaranteed rate for the life of the product is The guaranteed rate for the life of the product is 2% over either a 5 year or 6 year period 2% over either a 5 year or 6 year period selected.selected.No-Lapse Guarantee to age 115 is available on No-Lapse Guarantee to age 115 is available on the Advantage product.the Advantage product.

Keeping it simple, know these Keeping it simple, know these Concepts!Concepts!

Index & Index Earnings Index & Index Earnings

Participation RateParticipation Rate

Cap RateCap Rate

SegmentsSegments

The Six GuaranteesThe Six Guarantees

Two Loan CapabilitiesTwo Loan Capabilities

The S&P 500The S&P 500Tracks 500 selected companies as an Tracks 500 selected companies as an indicator of the growth in our economyindicator of the growth in our economy

S&P 500 Industry weightings

How various industries were represented in the S&P 500 as

of Jan. 22:Financials 18.2%

Information technology 18.2%Health care 14.4%

Consumer discretionary 12.9%Industrials 10.9%

Consumer staples 8.4%Energy 6.1%

Telecommunications 5.3%Utilities 3.1%

Materials 2.5%

Source: Standard & Poors

Index earningsIndex earnings

Here is an example Here is an example on how to calculate on how to calculate an index earnings.an index earnings.

On Feb 6, 2004 the S&P500 closed at 1142.76

One year later, the S&P500 closes at 1284.56

1284.56-1142.76

141.80 /

1142.76 =12.41%

Participation rate 100%Participation rate 100%What you see is what you get!!What you see is what you get!!

All loads were taken out at the beginning All loads were taken out at the beginning of the portfolio period, therefore you have of the portfolio period, therefore you have 100% guaranteed participation.100% guaranteed participation.

The participation is guaranteed!The participation is guaranteed!

Cap Rates Today are 12% & Cap Rates Today are 12% & 30%30%

100% participation rate guaranteed100% participation rate guaranteedA 4% to 8% minimum annual cap guaranteed A 4% to 8% minimum annual cap guaranteed based on strategybased on strategyAnnual caps set in advance on segment Annual caps set in advance on segment anniversaryanniversaryCap managed on a portfolio basisCap managed on a portfolio basisCap rates will primarily raise and fall Cap rates will primarily raise and fall according to interest yield on bonds New according to interest yield on bonds New premium and segment renewals move premium and segment renewals move together.together.

Equity Indexed StrategyEquity Indexed StrategyIllustrated Rate BasisIllustrated Rate Basis

54 year look-back of historical S&P54 year look-back of historical S&P– January 1950 - December 2003January 1950 - December 2003

Performance resultsPerformance results: : One Year cap One Year cap 12% cap 7.90%12% cap 7.90%

Two Year cap Two Year cap 30% cap 8.30%30% cap 8.30%Less volatility in illustrated rateLess volatility in illustrated rate

1% change in cap only effects illustration .4%1% change in cap only effects illustration .4%

Note: The actual credited rate can be higher or lower, and will be based on actual S&P 500 index movement. Unlike the illustrated rate, the actual credited rates are likely to vary from year to year.

$$Basic

InterestStrategy at 5.00%

MaturedValue

MaturedValue

One Year

Five Years

0ne-YearFixed Term

Strategy at 4.5%

Five-YearEquity Indexed

Strategy at 7.9%

(NET OF SALES CHARGES and COI’S)

SIX-YearEquity Indexed

Strategy at 8.3%

MaturedValue

SIXYears

Segments for premium

The Six ValueThe Six Value-Added Guarantees-Added Guarantees

Policy values protectionPolicy values protection

Annual lock-in of index gainsAnnual lock-in of index gains

Annual ResetAnnual Reset

Guaranteed credited rateGuaranteed credited rate

Life Protector RiderLife Protector Rider

No Lapse Guarantee RiderNo Lapse Guarantee Rider– Even with a Even with a

guaranteed guaranteed conditional pay periodconditional pay period

Life Protector RiderLife Protector RiderSoon to be availableSoon to be available

On all productsOn all products

Unique in the industry.Unique in the industry.

Protects your clients and you.Protects your clients and you.

Fo

r A

ge

nt U

se O

nly

- N

ot F

or

Use

With

The

Gen

era

l Pu

blic


Optional benefitOptional benefit

Prevents policy from lapsing as a Prevents policy from lapsing as a result of loan indebtednessresult of loan indebtedness

May be added after policy issue without May be added after policy issue without underwritingunderwriting

One-time charge at time rider is exercisedOne-time charge at time rider is exercised


How It WorksHow It Works– Policy must be in force at least 15 years and Policy must be in force at least 15 years and

insured must be at least age 75 insured must be at least age 75 – Triggered when total loan balance including Triggered when total loan balance including

interest equals 95.5% of the accumulated valueinterest equals 95.5% of the accumulated value– One-time charge of 4.0% of gross policy value, One-time charge of 4.0% of gross policy value,

including any loan balance and interestincluding any loan balance and interest– Loan balance continues to grow but it keeps the Loan balance continues to grow but it keeps the

policy in force until the insured’s deathpolicy in force until the insured’s death


When the Rider Goes into EffectWhen the Rider Goes into Effect– No further premium is allowedNo further premium is allowed– No further monthly deductions are takenNo further monthly deductions are taken– All other riders are discontinued All other riders are discontinued

Prevents policy from lapsingPrevents policy from lapsingProvides beneficiary and agent additional peace Provides beneficiary and agent additional peace of mindof mind

Annual PremiumAnnual Premium $4,000$4,000 Per YearPer Year

x 25x 25 Years (Age 65)Years (Age 65)

$100,000$100,000 Total Premium PaidTotal Premium Paid

Cash Value at Age 65Cash Value at Age 65 $178,346$178,346

Policy Loans Beginning Year Policy Loans Beginning Year 2626

$18,000$18,000 Per Year Until Policy Lapses At Age 81Per Year Until Policy Lapses At Age 81

Total Policy LoansTotal Policy Loans $226,070$226,070

Total of Loans Plus InterestTotal of Loans Plus Interest $377,824$377,824

Gain at Policy LapseGain at Policy Lapse $377,824$377,824

- $100,000- $100,000 Premium PaidPremium Paid

$277,824$277,824 Reportable Gain (Phantom Reportable Gain (Phantom Income)Income)

Life Protector Rider …Life Protector Rider …What’s It Worth?What’s It Worth?

Here’s what can happen to a policy Here’s what can happen to a policy WITHOUT the Life Protector RiderWITHOUT the Life Protector Rider::Male Male || Age 40 Age 40 || PNT PNT || $250,000 Face Amount $250,000 Face Amount || Solution UL from AmerUs Life Insurance Solution UL from AmerUs Life Insurance GroupGroup

50% Term Blend. Illustrated at 5.9%.

Two Waiver ChoicesTwo Waiver ChoicesAvailable on all UL’sAvailable on all UL’s

Waiver of Monthly DeductionsWaiver of Monthly Deductions– All monthly deductions are waived if insured is All monthly deductions are waived if insured is

totally disabled for at least six monthstotally disabled for at least six months– Ages 0-59 with coverage to age 65Ages 0-59 with coverage to age 65

Waiver of Specified PremiumWaiver of Specified Premium– The monthly premium specified under the rider The monthly premium specified under the rider

is credited to the policy if the insured becomes is credited to the policy if the insured becomes totally disabled for at least six monthstotally disabled for at least six months

– Ages 0-59 with coverage to age 65Ages 0-59 with coverage to age 65

No Cost RidersNo Cost RidersWaiver of Surrender Charge Due to Waiver of Surrender Charge Due to ConfinementConfinement– Annual withdrawal of up to 25% of net account Annual withdrawal of up to 25% of net account

value allowed if primary insured is confined to value allowed if primary insured is confined to hospital or inpatient nursing facility for at least hospital or inpatient nursing facility for at least 30 consecutive days30 consecutive days

Accelerated Benefits Rider/Caring for Accelerated Benefits Rider/Caring for Today BenefitToday Benefit– If insured is diagnosed with a life expectancy of If insured is diagnosed with a life expectancy of

12 months or less they may access up to 50% 12 months or less they may access up to 50% of the base policy face amountof the base policy face amount

Target PremiumsTarget Premiumson a 45 male StdNT 500Kon a 45 male StdNT 500K

Horizon ULC 5,137.57 3,750.57Horizon ULC 5,137.57 3,750.57

Crown 100k base 4,340.10 1,582.00Crown 100k base 4,340.10 1,582.00

Crown All Comp 4,749.36 4,749.36Crown All Comp 4,749.36 4,749.36

Crown All Base 5,157.75 7,910.00Crown All Base 5,157.75 7,910.00

Advantage NLG 4,548.00 4,550.00Advantage NLG 4,548.00 4,550.00

Vista Select 4,719.58 5,930.00Vista Select 4,719.58 5,930.00

Vista Elite 5,405.00 8,240.00Vista Elite 5,405.00 8,240.00

Premium Solve to 100 Target Premium

Five Major MarketsFive Major Markets

Accumulation plans Accumulation plans 1.Provides living benefits1.Provides living benefits 2. Retirement plans 2. Retirement plans 3. College funding3. College funding

Guaranteed Death Benefit and Premium SalesGuaranteed Death Benefit and Premium SalesSingle Premium SalesSingle Premium SalesRescue salesRescue salesLow Cost Death BenefitsLow Cost Death Benefits

Eight Sales IdeasEight Sales IdeasTwo Types of Single Pay, Are They Better than Two Types of Single Pay, Are They Better than an Annuity?an Annuity?Start Cheap, Educate, Retire, leave a LegacyStart Cheap, Educate, Retire, leave a LegacyBe Your Own Banker!!Be Your Own Banker!!Missed Opportunity?Missed Opportunity?A Grandparent’s ChoiceA Grandparent’s Choice1035 Rescue of a dying policy with a loan.1035 Rescue of a dying policy with a loan.Planning for a Specific Income using Life Planning for a Specific Income using Life InsuranceInsuranceA Chicago Guarantee!A Chicago Guarantee!

Single Pay, better than an Annuity?Single Pay, better than an Annuity?

SituationSituation– 62 year old female, preferred non tobacco62 year old female, preferred non tobacco– Wants to convert a jumbo CD of $100,000 to Wants to convert a jumbo CD of $100,000 to

an annuity.an annuity.– However would consider a permanent, However would consider a permanent,

guaranteed guaranteed death benefit until age 100 to pass on death benefit until age 100 to pass on to her heirs.to her heirs.

– May want to withdraw funds in the futureMay want to withdraw funds in the future

Guaranteed Death Benefit

Automatic Death Benefit ExtensionTo 115.

Guaranteed Rate of Return

GuaranteedD.B.

Life ProtectorRider

95% of cash value taken out

A Second Type of Single PayA Second Type of Single Pay

40 yr old male40 yr old male

Single Pay of $100,000Single Pay of $100,000

Buys Patriot/Crown Solution using the Buys Patriot/Crown Solution using the CVAT.CVAT.

Start Cheap, Educate and Retire, Start Cheap, Educate and Retire, and leave a Legacyand leave a Legacy

30 yr old man with a 3 yr old son30 yr old man with a 3 yr old son

Needs $400,000 of life protectionNeeds $400,000 of life protection

Wants to have money 15 years from now Wants to have money 15 years from now for collegefor college

Want to have a retirement plan.Want to have a retirement plan.

Low cost beginning

$22,000 for 4 yearsNo tax outlay

$65,000 tax free for 20 years.

Total input

Total outtake

Death benefitIn his nineties

Be your Own BankerBe your Own Banker

There are several methods to achieve this goalThere are several methods to achieve this goal

This example shows how a 35yr. old man can This example shows how a 35yr. old man can buy two luxury cars, in his life time, pay himself buy two luxury cars, in his life time, pay himself back, and increases his retirement.back, and increases his retirement.

You can design the same, with an understanding You can design the same, with an understanding on how to create repayments, which most of on how to create repayments, which most of your competition can’t.your competition can’t.

Two car loans

$115,000 taxFree for 20 yrs.

Missed Opportunity?Missed Opportunity?

A 35 yr old opts to pay interest only on a A 35 yr old opts to pay interest only on a $250,000 mortgage.$250,000 mortgage.The cash flow savings, over a traditional The cash flow savings, over a traditional 30 year fixed mortgage is $700/month.30 year fixed mortgage is $700/month.At current projection, he will be able to pay At current projection, he will be able to pay off his mortgage and generate retirement off his mortgage and generate retirement income.income.His Death Benefit is double his obligation.His Death Benefit is double his obligation.

Using Equity as a ToolUsing Equity as a Tool

Some suggest that home equity earns a Some suggest that home equity earns a Zero rate of return.Zero rate of return.

By using a interest only loan, a 43 yr old By using a interest only loan, a 43 yr old man, borrows $250,000, and buys a SPIAman, borrows $250,000, and buys a SPIA

The SPIA generates $4,500/month for 5 The SPIA generates $4,500/month for 5 years.years.

A Grandparent’s ChoiceA Grandparent’s Choice

Grandparents are always looking to Grandparents are always looking to provide their grandchildren with unique provide their grandchildren with unique giftsgiftsWhy not insure the mother after birth with Why not insure the mother after birth with the grandparents annual gift exclusion.the grandparents annual gift exclusion.Provides protection for the child and a Provides protection for the child and a wonderful college fund.wonderful college fund.

A 1035 rescue of a dying policy A 1035 rescue of a dying policy with a loanwith a loan

• We have a 60 yr. old male who has a We have a 60 yr. old male who has a $1,000,000 policy that has $200,000 of $1,000,000 policy that has $200,000 of cash value, but also has a $100,000 loan cash value, but also has a $100,000 loan against it.against it.

• He would like to not pay any more He would like to not pay any more premium, but is worried about the policy premium, but is worried about the policy lapsing and owing tax.lapsing and owing tax.

• Could we help him with our new LPR?Could we help him with our new LPR?

A 1035 A 1035 exchange for exchange for $1,000,000 $1,000,000 of original of original coveragecoverage

The cash value in the The cash value in the exchange is $200,000 exchange is $200,000

with a loan of with a loan of $100,000$100,000

The D.B. The D.B. begins to begins to

decline under decline under the weight of the weight of the loan and the loan and

mounting mounting interestinterest

The policy will lapse The policy will lapse under the current under the current

assumptions at age assumptions at age 8585

However, by However, by using the new using the new LPR, we can LPR, we can rescue this rescue this

1035 exchange 1035 exchange and guarantee and guarantee the policy will the policy will never lapse!never lapse!

Need Specific Income?Need Specific Income?

Today, the strongest need for planning is Today, the strongest need for planning is for distribution, for retirement.for distribution, for retirement.Wouldn’t be nice if we could determine the Wouldn’t be nice if we could determine the desired monthly income, and plan for it?desired monthly income, and plan for it?Well, we almost can!!Well, we almost can!!By stating the desired monthly income as By stating the desired monthly income as an Annual, we can use a Minimum Death an Annual, we can use a Minimum Death Benefit, and determine the Premium Benefit, and determine the Premium needed.needed.

A Chicago Guarantee!A Chicago Guarantee!

I received a call from a Chicago agent wanting a I received a call from a Chicago agent wanting a guaranteed D.B. and Premium for a 43 year old guaranteed D.B. and Premium for a 43 year old man, for a Million dollars.man, for a Million dollars.After I ran the illustration, he asked me to show After I ran the illustration, he asked me to show him putting more money in.him putting more money in.He then asked, how many years his client would He then asked, how many years his client would have to pay at the new level to have the same have to pay at the new level to have the same guarantees!guarantees!That was his worst case scenario, he than could That was his worst case scenario, he than could make a future decision to put addition premiums make a future decision to put addition premiums based upon a future look at the S&P.based upon a future look at the S&P.

For Appointment & Product Support:

Brian Ballard800/ 473-2850, ext.23 [email protected]

indianapolis life portfolio review

Documents