Tax-Free Investment Planning Engage More Advisors with VUL FOR - PowerPoint PPT Presentation

Tax-Free Investment Planning Engage More Advisors with VUL FOR BROKER USE ONLY. NOT FOR DISTRIBUTION.

The Power of Tax-Free $100,000 Invested for 20 Years $386,968 Tax Equivalent Yield (Federal) Tax Free Rate 24% Tax 32% Tax 35% Tax $400,000 5.00% 6.58% 7.35% 7.69% $320,850 $295,139 6.00% 7.89% 8.82% 9.23% $350,000 7.00% 9.21% 10.29% 10.77% $253,460 $300,000 8.00% 10.53% 11.76% 12.31% $250,000 Tax Equivalent Yield (Federal & State) $200,000 Tax Free Rate 29% Tax 37% Tax 40% Tax 5.00% 7.04% 7.94% 8.33% $150,000 6.00% 8.45% 9.52% 10.00% 7.00% 9.86% 11.11% 11.67% $100,000 8.00% 11.27% 12.70% 13.33% $50,000 Tip: Use the supplementary IRR $- report pages in the illustration Fully Taxable Tax-Deferred LTCG Taxed Tax-Free Chart: 7% annual account growth. 32% federal tax rate and 15% LTCG rate assumed. Tax-deferred account is taxed as lump sum at end of year 20. Taxable account and LTCG account are taxed on gains annually at respective rates. For illustration purposes only. Tax-eq yield chart: Using estimated average state tax of 5%. Seven US states don't have state income tax: TX, FL, AK, SD, WY, WA, NV FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 2

The Power of Tax-Free Stocks / Bonds Tax Diversification Mutual Funds / SMAs Brokerage Accts. Taxable Accounts Tax-Deferred Tax-Free Accounts Accounts 401(k) Pension Annuities Roth IRA IRA Muni Bonds VUL FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 3

The Power of Tax-Free Comparison Characteristic Variable Annuity Roth IRA VUL Investment Accumulation Tax-Deferred Tax-Free Tax-Free MA&E, Rider(s), Account Charges, Admin / Policy Charges, Fees and Charges Investment Investment COI, Rider(s), Investment Client Income Taxable Tax-Free Tax-Free Death Benefit Taxable Bene Roth / Tax-Free Tax-Free Underwriting No No Yes Account Setup / Issue Fairly Immediate Fairly Immediate 10-40 days For illustrative purposes only. Accelerated underwriting programs available from Lincoln, John Hancock, Principal Financial, AIG, Nationwide, and Pacific Life (as of 7/2018). FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 4

The Power of Tax-Free VA Comparison Jackson’s Elite Sample VUL Illustration Inputs Access VA Policy Client Age 40 40 Client Gender Male Male Account Type Non-Qualified Non-Qualified Premiums (20k per year for 5 years) $100,000 $100,000 Assumed Illustration Gross Rate 7% 7% Sub-Account Investment Costs 1.03% 1.03% Duration of Annual Income (age 65) 10 10 For illustrative purposes only. Should not be reproduced. Preferred, non-tobacco. Sources: Jackson Elite Access VA Illustration Software & John Hancock VUL Illustration Software. FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 5

The Power of Tax-Free VA Comparison Jackson’s Elite Sample VUL Illustration Outputs Access VA Policy Withdrawals (Start at age 65) $38,930 $33,096 Total Distribution over 10 Years $389,301 $330,960 Taxable Distribution Amount $289,301 $0 Net Surrender Value (Age 75) $0 $20,531 Net Death Benefit (Age 75) $0 $34,237 Total Distribution After Tax (35%) $288,046 $330,960 Total Distribution After Tax (24%) $319,869 $330,960 For illustrative purposes only. Should not be reproduced. Preferred, non-tobacco. Sources: Jackson Elite Access VA Illustration Software & John Hancock VUL Illustration Software. FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 6

The Power of Tax-Free Assume a Cost COT vs. COI Cost of Tax Cost of Insurance FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 7

The Power of Tax-Free The Design Prem CV + DB Insurance Premium Policy Cash Value Death Benefit FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 8

World Cla lass In Investments FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 9

World Cla lass In Investments Annualized Sample 80/20 Portfolio QE 3/2018 Returns 20% 30% 1 Year 14.87% 3 Year 8.30% 20% 5 Year 9.04% 20% 10% 10 Year 7.13% American Funds Growth American Funds International Delaware Emerging Markets Franklin Templeton Global Bond Data from Lincoln Financial AssetEdge VUL Sub-Account Performance Quarter Ending 3/2018. For illustrative Delaware SMID Cap Core purposes only. Past performance is no guarantee of future results. FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 10

World Cla lass In Investments Leverage Outlier Holdings American Funds International: American Funds Growth: Templeton Global Bond: 3 of the 4 Managers for American Funds 4 of the 6 Managers for American Funds Same fund managers as the Templeton International Fund also manage the Growth Fund also manage the Growth Global Bond retail fund: EuroPacific Growth retail fund: Fund of America retail fund: Sung Lee, Jesper Lyckeus Mark L. Casey, Martin Romo Michael Hasenstab Christopher Thomsen Michael T. Kerr, Alan J. Wilson Sonal Desai Retail Fund Assets: $163 Billion Retail Fund Assets: $190 Billion Retail Fund Assets: $40 Billion Taxable Male, Age 65, Standard NT Single Premium MEC VUL $528,990 Premium: $400,356 in Growth Fund of America GFOA MF Holding: $1,000,000 $1 Million Death Benefit Liquidate Amount: $471,010 Target: $38,000 Tax-Free 20 th Year CV: $849,928 $1,000,000 Guaranteed DB After Tax Amount: $400,356 Lifetime No-Lapse Guarantee + CV in American Funds Growth FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 11 Lincoln Financial VUL ONE Illustration Example 7% Net. LTCG at 15%.

Fin ind Henry ry and Louis Age 30-59 Age 60+ 125 Million 60 Million HENRY LOUIS High Earners Not Retired Yet Loved Ones with Unneeded Income Streams Roth IRA Alternative / LIRP Annuity / IRA / SS / Pension Max Variable Annuity (VA) Alternative Estate / Legacy Planning College / Children Expense Funding LTC / Chronic Illness Reserve Emergency Fund / Asset Protection Outlier / Concentrated Asset Transfer LTC / Chronic Illness Reserve Philanthropy / Special Cause Broker World Article, May 2018: The $30 Trillion Transfer: Pre and Post Mortem FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 12

Offer a P Packaged Solution 6 In Theory: Buy term and invest difference. Points of In Reality: Forget to convert the term to perm. Flexible Value Forget to invest the difference. 1 3 5 6 Return of “IF” Death Tax-Free “WHEN” Death Investment Benefit Income Benefit Concern: Family Concern: You Age 90+ Age 30 Age 55 “IF” Chronic Cash Value Illness Access 2 4 College Funding Gifts / Expenses Emergencies / Debts FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 13

To Protect Your AUM Tom, Age 65 (Owns a CVLI Policy Since Age 40) “Smooth Sailing” Strategy: Use the cash value of the life insurance policy to withdrawal the needed funds in the $100,000 Annual Income Needed year following a year with a market decline, in hopes of $20,000 from Social Security giving the investment account an opportunity to $10,000 from Pension recover. $70,000 from Retirement Account 20 Year Time Period: 1973-1993 (Age 65-85) S&P 500 Negative Years (5): Retirement Account Start Value: $1,000,000 1973, 74, 77, 81, 90 Investments Held: S&P 500 Index Retirement Account Ending Value: Without the Strategy: With the Strategy: $444,791 $3,587,396 56% Decline 358% Increase Figures from AXA Smooth Sailing Strategy Sales Flyer, GE-114931 (9/16) (Exp. 9/18) Cat. #156457, G38199 FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 14

Sale les and Positioning Artic icles Top 5 Ways to Sell VUL – Reference Guide The Single Premium Alternative to the VA The Investments – The Untold Story of VUL Prudential VUL Protector – Rise and Success Want to Make That a Combo Meal? – Nationwide’s Life and LTC Combo Nationwide’s Single Premium LTC Solution The Future is Here with LincXpress and ExpressTrack – Accelerated Underwriting Principal BOES – Q&A with Dan Harty – Business Opportunities Using CVLI for Income and Asset Protection – A Simple Example Tyranny of the OR vs. Genus of the AND – Distribution White Paper Prove it Pru – What are Yours Strengths? Platinum or Bust – An Experience with John Hancock’s Vitality FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 15

Conclusion and Questions The key to any distribution model, especially as it pertains to disseminating a mass-market message, is three critical items. 1) Keep it simple . Really, really simple with the same message. 2) It must be relatable . Use the advisor’s language. 3) It must be repeatable . You are there when the advisor can sell it to their clients without you. FOR BROKER USE ONLY. NOT FOR DISTRIBUTION. 16