Sales Ideas & Marketing Concepts . That Work !!! Robert G. Williams VP of Annuity Training Todays Agenda How To Create Interest Which Crediting Method is Best Index Annuity How Does it Really Work? The Stairway to Financial Peace of Mind $$$$ Year 1 Year 2 Year 3 Year 4 Year 5Year 6 Annual Reset locks in the gain. $100,000 Index Rises 10% 8% Cap Index Account $108,000 Index Falls 10% Index Gains Locked IN $108,000 Index Rises 10% 8% Cap Index account $116,640 Index Falls 10% What happens next year? Hypothetical Annual Reset Protection Potential $ Index Annuity Hypothetical Year $124,978 $121,338 $113,400 $108,000 Index Value Surrender Fee May Apply (3%) (7%) (5%) (8%) (6%) $132,477 Surrender Fee Will Apply Min Guar % $109,737 $107,217 $104,755 $102,350 $112,315 $114,955 (0%) $132,477 $117,656 Index Annuity YearIndex AcctMGSV Index Acct No Market Gains 1 (8%)$108,000$102,350$100,000 2 (5%)$113,400$104,755$100,000 3 (7%)$121,338$107,217$100,000 4 (0%)$121,338$109,737$100,000 5 (3%)$124,978$112,315$100,000 6 (6%)$132,477$114,955$100,000 7 (0%)$132,477$117,656$100,000 Sailing the Waters of the Stock Market Market IndexFinancial Advisor Poor Market Performance Monthly Average How It Works S&P 500 1,000 13,200 12 =1,100 -1,000 =100 1,000 =10% Point to Point How It Works S&P 500 or Dow 30 April 1, xx =1,000 March 31, xx =1,100 1,100 -1,000 =100 1,000 =10% Monthly Average How It Works S&P 500 1,000 13,200 12 =1,100 -1,000 =100 1,000 =10% Monthly Average How It Works S&P 500 (Oct. 1, 2003) , 12 = = = 9.44% Annual Point to Point How It Works S&P 500 (Oct. 1, 2003) = = 11.1% Calculating Monthly Point to Point Subtract the starting value from the current value DateS&P Value Oct Nov = Divide the sum by the starting value Record the Index Change and New Starting point for the next month = 4.0% Index Change for 1st month = 4.0% Starting point for 2nd month = Monthly Point to Point One Year Option DateS&P Closing ValuePercentage ChangeCapped Increase* October 1, % November 3, %3.00% December 1, % January 2, %3.00% February 2, % March 1, % April 1, % May 3, % June 1, % July 1, % August 2, % September 1, % October 1, % First Year Credited Rate 9.23% *3%Cap Which Was PROBABLY More Beneficial To Consumer Monthly Point to Point9.23% Monthly Average9.44% Annual Point to Point11.1% Monthly Point to Point One Year Option DateS&P Closing ValuePercentage ChangeCapped Increase* October 1, % November 3, %3.00% December 1, % January 2, %3.00% February 2, % March 1, % April 1, % May 3, %-1.29% (+1%) June 1, % July 1, % August 2, %-1.98% (+1%) September 1, % October 1, % First Year Credited Rate 9.23% (+14.5%) *3%Cap Index Crediting Assumptions Monthly Point to Point Cap3% Monthly Average Cap10% Annual Point to Point Cap9% Closing Prices on First Business Day of each Month 1991 S&P Performance DatesIndex numberMonthly ChangeAccrued January February %3.00% March %3.00% April % May % June %3.00% July % August %3.00% September % October % November % December % January %3.00% Index Crediting Assumptions Monthly Point to Point Total24.69% 3% Monthly Cap Total9.29% Credited Amount9.29% Monthly Annual Average15.54% 10% Annual Cap Credited10.00% Annual Point to Point 26.30% 9% Annual Cap Credited9.00% 1995 S&P Performance DatesIndex numberMonthly ChangeAccrued January February % March %3.00% April % May % June %3.00% July % August %3.00% September % October %3.00% November % December %3.00% January % Index Crediting Assumptions Monthly Point to Point Total29.84% 3% Monthly Cap Total26.32% Credited Amount26.32% Monthly Annual Average19.09% 10% Annual Cap Credited10.00% Annual Point to Point 34.13% 9% Annual Cap Credited9.00% 1998 S&P Performance DatesIndex numberMonthly ChangeAccrued January February % March1, %3.00% April1, %3.00% May1, % June1, % July1, %3.00% August1, % September % October1, %3.00% November1, %3.00% December1, %3.00% January1, %3.00% Index Crediting Assumptions Monthly Point to Point Total26.10% 3% Monthly Cap Total5.30% Credited Amount5.30% Monthly Annual Average12.10% 10% Annual Cap Credited10.00% Annual Point to Point 26.67% 9% Annual Cap Credited9.00% 2003 S&P Performance DatesIndex numberMonthly ChangeAccrued January February % March % April % May %3.00% June %3.00% July % August % September1, % October % November1, %3.00% December1, % January1, %3.00% Index Crediting Assumptions Monthly Point to Point Total24.22% 3% Monthly Cap Total12.45% Credited Amount12.45% Monthly Annual Average10.01% 10% Annual Cap Credited10.00% Annual Point to Point 26.38% 9% Annual Cap Credited9.00% 2004 S&P Performance DatesIndex numberMonthly ChangeAccrued January1, February1, % March1, % April1, % May1, % June1, % July1, % August1, % September1, % October1, ,51%0.51% November1, % December1, %3.00% January1, %3.00% Index Crediting Assumptions Monthly Point to Point Total9.34% 3% Monthly Cap Total8.15% Credited Amount8.15% Monthly Annual Average2.46% 10% Annual Cap Credited2.46% Annual Point to Point 9.48% 9% Annual Cap Credited9.00% Potential vs. Protection -40%0%+40%+20%-20% INVESTMENT INDEX ANNUITY $$ Why Index Annuities + 40% - 40% +2.35% Investments Savings Program Participate in all or a portion of the S&P and/or DJIA $ Index Annuity vs. Market And, of course. 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