Financial Planning for Women The Value of Life Insurance

PLC.6355 (03.13)

PROTECTING YOUR FUTUREA Womans Guide to Life Insurance

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PROTECTING YOUR FUTUREA Womans Guide to Life Insurancewww.protective.com

- Welcome attendees for coming to the workshop. - Introduce yourself. - Provide any necessary room logistics restrooms, etc.10AgendaWhy think about life insurance?Myths about life insuranceReality checkHow much will you need?Insurance optionsGetting started

#11Today, were here to talk about life insurance. Now, with just a show of hands, be honest: How many of you find the topic boring(pause for hands)overwhelming(pause)depressing? Well, youre not alone if the topic of life insurance makes you uneasy. It is, after all, planning for what will happen after you are gone. For that reason, many of you may avoid planning for it altogether.

But does this really make sense? As women, you are born caregivers. You fill your days taking care of others your spouses, your children, your homes, your jobs, and sometimes your parents. Planning for the future, and considering life insurance, is another way you can take care of your loved ones.

In our time together today, we will discuss why life insurance is so critical, especially for women. Well cover some common myths about life insurance, and well take a quick reality check quiz to see where you are when it comes to life insurance planning. We will also talk about how you can determine how much life insurance you may need, the different options that are available, and finally, how you can get started on a plan.

During our discussion, feel free to jot notes down in the workbooks weve provided. These booklets follow the presentation, but also expand the discussion so that, later on when you sit down with your advisor youll be able to work through your specifics together, before making any decisions.

Why think about life insurance?You are valuable.

#So, lets start with the obvious question. Why do you need life insurance?

The simple answer is: you are valuable. You insure your house, your car, your jewelry, your health, right? All of these are valuable to you. But you are invaluableand irreplaceableto your family and friends. Every moment of every day, youre providing support, love, guidance, an extra hand, an encouraging nod, wiping a tear, lending an ear, opening your armsto so many that you know and love.

Aside from the emotional support you give relentlessly, you may provide income for your family, or thousands of dollars of services, or both. When I say services, I mean all of the things you do every day: cooking, cleaning, childcare, CEO of your household, you name it. So if you were to die unexpectedly, someone would have to take over all those responsibilities, or pay someone else to help out. If you arent married, or do not have children, you still need life insurance. Throughout this presentation, we will cover a variety of scenarios that show why women need insurance, and need to start planning now.

A lot of you are sitting here nodding your heads, realizing that you may be underinsuredwell, youre not alone. Lets take a look at some facts:

12Why think about life insurance?You may be underinsured*Three in ten American households are uninsuredHalf of American households say they need more life insurance.Only 1 in 3 women have life insurance.One-third of married women own no life insurance.

* Facts from LIMRA, LIMRA, September 2012. Women Need Life Insurance, Too!, Millionaire or Bust.com, March 31, 2011.#As a nation, we are largely underinsured. Do you ever wonder what would happen to your spouse or children if you were to die today? And then go back to what you were doing before that gloomy thought popped into your head? A lot of us do that, and lets face it, life insurance is just not a fun topic.

But its important, and too many of us are just pushing it out of our minds, to worry about it another day.

Thus, today, most women dont have life insurance, or dont have enough insurance. In fact, three in ten American households are uninsured, but half of American households say they need more life insurance. And, only 1 in 3 women have any life insurance at all One third of married women do not own life insurance. What is their spouse going to do if they die unexpectedly?

13Why think about insurance?How will your family:Cover the mortgageMeet basic living expensesPay for childcare and education, now and in the futurePay off car loans and credit-card debtLeave a legacy for future generationsManage final expenses#Imagine a worst case scenario in which something happened to you.

How would your family handle the expenses? Life insurance could help your family stay in their home by covering mortgage payments, car and credit card payments, and other household expenses. It can make sure your kids get the education you planned for them, or the financial head start you hoped they would have.

Each one of you has a different situation, that may call for a different type of life insurance coverage. If youre single, you may think you dont need coverage. Or, if youre kids are grown and you and your spouse are employed, you may be thinking the same thing. But, these are just some of the common myths that women largely believe when it comes to life insurance.

To paint a more clear picture, lets go over five common myths about life insurance, to show how life insurance fits in a variety of scenarios.

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Myth #1: I stay at home and dont need it. My husband has insurance.Beth, age 32#Myth #1, I stay at home and dont need life insurance. My husband has insurance, since he works and brings in the income.

Let me tell you about Beth. Shes 32 years old, and married with 2 young children. Beths husband has an executive position at a Fortune 500 company, and she decided to leave her job after their second child was born to stay home and care for the kids. Beth and her husband know the importance of life insurance, and he has adequate coverage since he is the sole breadwinner. But Beths not bringing home a paycheck, so they think that paying for life insurance for Beth just doesnt make sense for their family, or for their budget.

15Dont Undervalue Yourself!Source: www.salary.comAnnual estimated salary: $112,940.45CEO3.2 hoursHousekeeper14.8 hoursLaundry operator6.3 hoursComputer operator8.9 hoursCook13.9 hoursDay care teacher 13.7 hoursDriver7.9 hoursJanitor7.7 hoursPsychologist7.7 hoursFacilities manager10.7 hoursCan your family afford to hire all these people?#Just because Beth doesnt earn a salary doesnt mean she doesnt make a financial contribution to her family. Childcare, transportation, cleaning, cooking and other household activities are all important tasks, the replacement value of which is often largely underestimated.

Beth will want to think about what it would cost her family to hire someone to replace all of the work and caregiving that she does as a stay at home mom.

According to Salary.com, the average stay-at-home moms task load equates to a 95-hour work week. This equates to an annual salary of $112,940.45. If something happened to Beth, could her husband afford to pay someone for these services?

Can your family afford to hire all of these people?

16Dont Undervalue Yourself!Annual estimated salary: $ 112,940.45For 15 yearsx 15$1,694,106.70# Beths estimated annual salary that they need to cover is the $112,940.45. If something happened to Beth and they needed to cover 15 additional years of expenses without her, the cost would be over 1.6 million dollars!

If Beth and her husband didnt have insurance, where would he get the $1.6 million to cover expenses if Beth died unexpectedly? By choosing life insurance, Beth can rest assured that her husband would be able to hire out some of the services to keep their household running. Sure, nothing can replace her, but by planning with life insurance, Beth can help ease some of the hardships her family may experience if she died unexpectedly.

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Myth #2: We dont have children. We dont need life insurance.Tina, age 39#Myth #2: We dont have children, so we dont need life insurance coverage.

Now, lets talk about Tina. She is 39 years old, happily married, and they do not have any children. Double income, no kids! Go Tina! But while she and her husband both work, Tina is in a volatile industry, and downsizing is common. Tinas biggest concern is a consistent stream of income, so shes afraid to commit to life insurance premium payments that she may not be able to meet if she gets downsized next month. With her husband able to support himself and no children, why would Tina need life insurance?

18Can your husband affordThe mortgage/rent?Utilities?Car loans?Credit-card debt?Student loans?Final medical and funeral expenses?#When youre married, you share everything with your significant other, including your financial obligations. Many people mistakenly believe that they dont need to think about life insurance until they have children. Not true.

What it happen if Tina died, leaving their expenses for her husband to pay? Even with his income, would her husband be able to pay off debts like credit-card balances and car loans, and final medical bills and funeral expenses? What about the monthly rent and utility bills? Would he be able to stay in their current home? What was once a dual income household would be single income.

Additionally, todays life insurance policies offer much more than just a death benefit. Optional features and riders can help couples plan for expenses related to chronic illness or long term care, and can help them set up an income stream for each other or other family members upon their death. And most importantly, there is no better day than today to start coverage. You never know what tomorrow will bring, and your insurability may be fleeting. Tina would be smart to lock in the rates she can secure at a healthy age 39rather than waiting to see what the next decade brings.

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Myth #3: Our children are grown. Its time to cancel our policiesCarol, age 55#Myth #3: Our children are grown. Its time to cancel our policies.

Now, this is Carol, age 55. She and her husband Bob have two wonderful childrenwho are no longer children. They are grown, out of the house, and independentand Carol and Bob are happy empty nesters. Now that the kids are on their own, Carol and Bob are thinking about cancelling their policies. They could use some extra room in their budget to take some of the trips theyve had planned for decades!

20Can your spouse or children affordTo pay for your final medical and funeral expenses?To take time off of work to grieve?Future expenses without additional income or resources?The pressures of being in the sandwich generation?To pass on something to your grandchildren?#Carol and Bob will be wise to take a few minutes to think this through. Just because their kids are through college and dont need financial support, doesnt necessarily mean that theyre prepared for whatever lies ahead.

If Carol died today, Bob will still be faced with his daily living expenses PLUS any final medical costs and funeral expenses, which could amount to a large sum. Would he and the children be able to afford to take the time off of work that they need to grieve, or would they be forced to go back to work quickly to pay for your expenses?

What if Bob outlived Carol by 15, 20 or even 30 years, which is certainly possible today. Would her financial plan, without life insurance, enable her husband to maintain the lifestyle they both worked so hard to achieve? What if they had aging parents who need their assistance would Bob still be able to help? Would he be able to pay for their childrens weddings? Or leave a legacy for their kids or future grandchildren?

These are all considerations when youre thinking about life insurance. Furthermore, keeping their current life insurance coverage may help Bob and Carol as they plan for their retirement, or as they age and need additional funds for chronic illness care. As we discussed earlier, some life insurance policies can provide access to cash value that can help them out with retirement income, medical expenses related to chronic illness, or legacy planning.

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Myth #4: Insurance is too expensive.Karen, age 42#Myth #4: Insurance is too expensive.

This is Karens story. Although shes 42 years old now, 20 years ago she married her college sweetheart right after graduation, and they had three kids soon after. But, now they are divorced, and Karen is now a single mom of three teenagers. While she stayed home with the kids while they were young, she has gone back to work since the divorce, basically having to start over in her career. Since Karen has been out of the workforce for a while, her income is not what she thought it would be, and its hard for her to make ends meet with three active teenagers. Karen thinks that insurance is just too expensive to fit into her already tight budget.

22Can you afford not to? $500,000 of life insurance coveragefor the next 10 years $20.36 per month (or less than 65 cents a day!)Case studies and benefit values represented as part of this presentation are based on hypothetical client inputs. Actual results will vary based on a variety of factors including age, gender, health, and other underwriting factors. This example assumes a Protective Custom Choice UL initial level death benefit period of 10 years; 42 year old female, select preferred non-tobacco rate class. #Karen, like most single or divorced parents, wears many hats: caregiver, breadwinner, cook, chauffeur, and much more. With so much responsibility resting on Karens shoulders, she needs to make doubly sure that her children have a secure future. Life insurance can help her with that. If she died tomorrow, it could help her children with college expenses, paying off debt and covering basic living expenses.

The good news is, the cost of life insurance is at an all time low. Karen can purchase a $500,000 life insurance policy that will cover her for the next 10 years, until her children are through college and on their own. The cost for this at her current age would be $20.36 per month, or less than 65 cents per day. While her budget may be tight, surely she can find 65 cents a day if it means securing her childrens future. Life insurance is a budget line item that should not be deleted.

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Myth #5: I am single with no children. I dont need insurance.Emily, age 35#Myth #5: I am single with no children. I dont need insurance.

Finally, lets talk about Emily. She is 35 years-old, single, no kids. But she is a pretty busy woman. Emily owns a successful small business that gives her the flexibility to enjoy many hobbies. Emily loves to travel internationally, compete in marathons, and she is an avid art collector. Emily doesnt really have to worry about dependents, and shes not concerned with leaving a fortune behind, so she just dont see the need for life insurance.

24Plan for now, and for your futureWill you:Have enough coverage for any debts you leave behind?Leave enough for your final medical and funeral expenses?Lock in coverage now, and secure your future?#Who here is jealous of Emily? (jokingly, raising hand) It may seem like she doesnt have a need for insurance. But lets take a closer look.

Since Emily owns a business, she would definitely want to consider life insurance. Its likely she would have some debt, either personal or business; and she may want a succession plan for her business, with life insurance as part of that picture. Additionally, has she saved enough money to cover her final expenses if she died unexpectedly? Would she want to burden a family member with any of these debts and expenses?

The other thing is, Emily is young. She has plenty of time to change her mind about life. Fall in love, get married, have children. Who knows what is next for her? The sky is the limit. But the point is, today Emily is more insurable than she ever will be. Today she can lock in lower rates, and she can update that coverage to fit her needs over time. If she decides to marry or start a family, she will have death benefit coverage for her dependents, If she remains footloose and fancy-free, the flexibility of life insurance could provide options for her in retirement that she wouldnt otherwise have. No matter what track she chooses in life, life insurance will be there to protect her.

255 MythsI stay at home and dont need it. My husband has insurance.We dont have children. We dont need life insurance.Our children are grown. Its time to cancel our policiesInsurance is too expensiveI am single with no children. I dont need insurance.#Weve covered five reasons why women may not be pursuing life insurance coverage , and weve managed to bust all five of those myths.

There are probably even more myths out there, but the key takeaway is that life insurance is a good tool for financial protection for women in a variety of situations. If youre in doubt about insurance or confused about how it can work for you, just talk to your advisor about your concerns.

26 A Reality Check#Since weve taken the time to identify who can benefit from life insurance, lets answer some questions to find out if the time is right for you to consider coverage or changes to your current insurance.

This Reality Check quiz is in your workbook on page XX, so you can follow along with our discussion and take notes.

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Would your family be able to continue their standard of living without your income?#First, based on what weve talked about today, would your family be able to continue their standard of living without your income? 28

If you died tomorrow, would your family be able to continue without hiring help for services like child care, elder care or housekeeping?#Next, what resources and services do you provide for your family that they would need to outsource if something happened to you tomorrow? What about childcare? Taking care of your parents or your husbands parents?

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Does your family have the resources it needs to provide for future emergencies or higher education?#Do you have emergency savings put aside that your husband could still rely upon in case of an illness or medical emergency? Or would it be depleted and need to rebuild it?

Would he still be able to save for your childrens college education?30

Do you have a plan to pay all your debts, like mortgages, car loans, or credit cards?#What about the big debts your mortgage, your car, your credit cards, or any remaining student loans. Would your husband be able to pay these amounts, or know where to turn if he had to cover other daily living expenses?31

Do you have coverage for long-term care expenses?#What about expenses for long-term care coverage? Do you have a plan for how you will cover any expenses related to chronic illness care for you or your spouse? 32

Can you afford to leave a legacy?#Do you have plans to leave a legacy for your children, your grandchildren, or even a charity?

Your answers to these questions can help you determine what type of insurance coverage will best suit your needs. Many of you may be wondering how to figure out just how much insurance coverage you will need. While your advisor will be able to help you come up with a number, we can go over some guidelines to help you get an idea.

33How much will you need?Calculate the income you need:Annual income replacementYears income is needed#How much life insurance each of you will need is different, but how you calculate this amount is the same. Lets walk through it now. This is in your workbook on page XX so you can pencil your estimates in now, and fill it out when you get home.

Well start by understanding your Annual Income Replacement: how much income your family would need to have yearly if something happened to you. This would include the things we discussed: the mortgage, utilities, childcare, and other cost of living expenses.

Next, calculate the number of years this income will be needed. How many years will your beneficiaries need an annual income stream upon your death? This is the number to use.34How much will you need?What Else You Need to Cover:Immediate NeedsDebts and Obligations#Next, there will be cash needed immediately if something should happen to you. This amount should cover all of the final expenses upon your death, such as funeral costs, medical expenses, probate fees, etc.

Last, estimate the amount needed to pay off your debts and obligations. Include credit card balances, car loans, educational loans, and other remaining liabilities.35How much will you need?Calculate how much you need:Annual income replacement x Years income is needed + Cash for immediate needs + Debts and obligations - Total available funds Estimated life insurance needed#Now, lets put it all together and work through the calculation. Again, this is in the workbook.

Take the number you have determined that you will need for your Annual Income Replacement, and multiply this by the number of years you will need income.

Add in any cash you will need immediately, and the total you owe for debts and obligations. From this number, subtract the total amount of money that you have available.

This will give you the estimated amount of life insurance you will need for your family.

This is just a simple calculation to give you an idea. Talk to your advisor about what you have noted here to determine what amount is right for you.36Types of life insuranceUniversal LifeTerm Variable Universal LifeSurvivorshipWhole Life#Now that weve explorered why it is important to have insurance, and estimated how much you may need, lets walk through the many choices in coverage. It is important to understand the different options available to you so you can choose the policy that best suits your needs. Be sure to consult an insurance professional when weighing your options. Today well briefly discuss universal life, term, variable universal life, survivorship, and whole life.

37Universal LifeFlexible premium paymentsAdjustable death benefit coverageTax-deferred growth on policy valueAccess to policy cash values through loans and withdrawalsLapse protection guarantees the policy death benefit for the duration of the guarantee and does not cover cash or surrender value. Loans, withdrawals, and other policy and premium changes will affect the cost and length of protection. Failure to make premium payment as planned may cause the policy to lose lapse protection and premiums required to restore it could be significantly higher. Refer to the policy and endorsements for complete terms, conditions, and limitations.

#Universal Life is a form of permanent life insurance, which provides protection and flexibility that allows you to change, within limits, the death benefit and the timing and amount of your premium. You can build your policy's cash value, or pay a lower premium and focus more on guaranteed protection.

GRAPHIC IDEAS: stars (suggesting a long time span)

38TermProvides coverage for a specific period of timeGenerally less expensive than permanent insurancePrimarily for income protection, mortgage protection, or to cover education costs or other debts#Term is widely known as the most affordable type of insurance for most people and is designed to meet temporary needs. Often when you have a term policy, you may have the option to convert to permanent insurance if your needs change later in life.

This type of insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage.

39Variable Universal LifeFlexible premium payment options to fit your situationBuilds cash value on a tax deferred basisDesigned to provide life insurance protection with an element of long-term investment

Variable universal life insurance involves the risk of investing in stocks, bonds and other securities, including market, interest rate and credit risk and loss of principal. If the investment performance of underlying investments is poorer than expected (or if sufficient premiums are not paid), the policy may lapse or not accumulate sufficient value to fund the intended application. Investments in variable universal life insurance policies are subject to fees and charges from both the insurance company and the managers of underlying investments. Loans and withdrawals may negatively impact policy value, investment performance, death benefit, and any Lapse Protection.#Variable Universal Life is a form of Permanent Life Insurance offering flexible premium payment and death benefit options along with tax-deferred cash value accumulation for long-term investment planning. These features offer opportunities for creative retirement and legacy planning.

Variable Universal Life Insurance may be the right choice if you want: Protection that can last a lifetime; Flexibility to accommodate life changes; Cash value with market growth potential.

40Survivorship LifeInsures two people, usually a couple.Paid upon the death of the second person.May be more affordable for a couple than two separate insurance policies.

#Joint Survivorship insures the lives of two people, typically a couple, under one policy. The death benefit is paid upon the death of the second of the insured. This type of insurance may be more affordable than purchasing two separate policies.

A Survivorship life insurance policy can be the right choice if you want to leave an inheritance for your heirs or a charity; make it easier to control how your estate is distributed, or maintain coverage for both insureds' entire lives, even well beyond age 100.

41Whole LifeThe simplest form of permanent life insurance.Protects you for your entire life.Guaranteed premiums, death benefit and cash value.#Whole Life offers permanent life insurance with lifelong protection, premiums that will not increase, a guaranteed death benefit and a cash value. The simplest form of permanent life insurance, Whole Life features lifelong protection with guaranteed premiums, death benefit, and cash value. Whole Life Insurance protects you for your entire life unless you cancel the policy.

Whole Life Insurance can be right for you if you want: Fixed premiums that will not increase; A guaranteed death benefit payout; a cash value that is guaranteed to grow each year tax-deferred; and dividends that can be used to increase the value of the policy.

GRAPHIC IDEAS: mountain, oak tree (something that conveys permanence and stability)

42Compare Insurance TypesUniversalLifeTerm Variable Universal LifeSurvivorshipWhole LifeDeath BenefitDesigned for low costAccess to your moneyGuaranteed cash valueMarket ParticipationTax advantagesFlexible payments#In reviewing all of the types of insurance, figure out what is important to you, then talk to your financial advisor to see if that is a good solution for your situation.

43Getting StartedEstimate your life insurance needs with materials providedAfter you have reviewed your situation, your advisor can help you determine your next steps.#Where do you start?

Review the materials Ive given you today. Take some time to fill out your life insurance needs analysis worksheet, then set up time with your advisor to review your status and get an understanding of what your options are, and what would work best for you.

Weve only hit the high points, so you will want to sit down with an advisor, like , who can help you with decisions when it comes to life insurance.

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Video link provided by The Life Foundation: http://www.lifehappens.org/legacy/ -

#And if I havent convinced you today of how important life insurance is, heres a letter from one woman, that gives an interesting perspective of how life insurance has made the difference.

Video link: http://www.lifehappens.org/legacy/

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PROTECTING YOUR FUTUREA Womans Guide to Life Insurance#Its time to get started protecting your family. There is no better time to think about protecting them with life insurance them than now.

Protect your tomorrow, so you can embrace today.

46Questions and Answers#Thank you for having me, today. Now, lets open up this meeting for questions.

47Important InformationThis presentation is intended as general educational information about insurance and its importance in the lives of women. It is not intended to represent or promote any specific products or services offered by Protective Life. For information about Protective Life's products and services contact your insurance or financial representative or contact Protective Life directly at 1-800-866-9933 or www.protective.com.

Protective or Protective Life refers to Protective Life Insurance Company (PLICO) and its affiliates, including Protective Life & Annuity Insurance Company (PLAICO). Annuities are issued by PLICO in all states except New York and in New York by PLAICO; securities issued by Investment Distributors, Inc. (IDI) the principal underwriter for registered products issued by PLICO and PLAICO, its affiliates. All companies are located in Birmingham, AL.

Protective Custom Choice UL (UL-22) is a universal life insurance policy issued by Protective Life Insurance Company, Birmingham, AL. Policy form numbers, product features and availability may vary by state. Consult policies for benefits, riders, limitations and exclusions. Subject to underwriting. Up to a two-year contestable and suicide period. Benefits adjusted for misstatements of age of sex. In Montana, unisex rates apply.

The tax treatment of life insurance is subject to change. Neither Protective Life nor its representatives offer legal or tax advice. Purchasers should consult their legal or tax representative regarding their individual situation.#

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