NFP Carriers Present: Hot Sales Ideas Part 2

Transcription

1 NFP Carriers Present: Hot Sales Ideas Part 2 Moderated By: Stephanie Ahr Manager, Product Marketing NFP

2 Prudential: Seven Sales Ideas in Seven Minutes Presented By: Rich Brugger VP, Individual Life Insurance, National Accounts

3 Sales Idea #1: Estate Hedge Plan Do you have wealthy clients who are delaying estate planning due to the uncertainty around taxation? Pru s product-based solution lets your clients buy two term policies now with the chance to convert to SUL Protector at a later date.* *Prudential allows the conversion of two term policies to one survivorship policy at its own discretion. We may discontinue the practice at any time.

4 Sales Idea #2: ROP Term & Divorce Your clients going through divorce may need to purchase life insurance as part of a divorce decree. 1 PruLife ROP Term may offer the life insurance they need to comply with the court ruling, plus the chance to have their paid premiums returned! 2 1 Prior to purchase, the client should confirm with his/her attorney that ROP Term satisfies the provisions of an order or divorce agreement. 2 Return of Premium Term returns all premiums paid during the level premium period selected if the insured lives to the end of the selected period. Returned premiums do not include any outstanding loans and interest. Also, all premiums may not be returned if the policy is surrendered before the end of the level premium period.

5 Sales Idea #3: Legacy Planning Life insurance can help your clients leave a lasting legacy to their favorite charitable organization. Life insurance is a costeffective and tax-efficient way to maximize this gift.

6 Sales Idea #4: What SUL Can Offer Survivorship life insurance is not just for estate planning! SUL Protector can be the perfect solution for parents of young children who want extra protection if something happens to both of them. Plus, SUL Protector can be a key part of planning for loved ones with special needs.

7 Sales Idea #5: VUL Protector & IRR VUL Protector offers the guaranteed death benefit protection your clients and their loved ones need with the potential for cash value accumulation growth in case of emergency while living. It can also offer an attractive Internal Rate of Return (IRR) on the premiums paid into the policy.

8 Sales Idea #6: Spousal Lifetime Access Trust In a spousal lifetime access trust arrangement, one spouse established a trust for estate planning purposes. This trust then purchases life insurance on his or her life for the benefit of the other spouse. Using PruLife Index Advantage UL in this trust can provide a powerful combination of a flexible product with a flexible plan.

9 Sales Idea #7: Living Needs Benefit Pru s Living Needs Benefit SM Rider allows clients to accelerate their policy death benefit in the case of terminal illness or nursing home confinement. * This valuable rider is available at no additional premium on all of Pru s individual life insurance products.

10 Important Information PruLife Index Advantage UL, PruLife SUL Protector, and VUL Protector are issued by Pruco Life Insurance Company in all states except New York, where, if available, they are issued by Pruco Life Insurance Company of New Jersey. PruLife Return of Premium Term is issued by Pruco Life Insurance Company in all states except New Jersey and New York, where it is issued by Pruco Life Insurance Company of New Jersey. All are Prudential Financial companies located in Newark, NJ. Each is solely responsible for its own financial condition and contractual obligations. Variable life policies are offered through Pruco Securities, LLC. All guarantees are subject to the financial strength and claims-paying ability of the issuer. These products may not be available in all states. All benefits, riders, and product features may not be available in all states. Additional limitations may apply based on age and underwriting. Underwriting rules are subject to change at the issuer s discretion. When comparing products, price is not always the determining factor. Features and benefits are equally important. Securities and Insurance Products: Not Insured by FDIC or Any Federal Government Agency. May Lose Value. Not a Deposit of or Guaranteed by Any Bank or Bank Affiliate.

11 Important Information *The Living Needs Benefit is an accelerated death benefit and is not a health, nursing home, or long-term care insurance benefit and is not designed to eliminate the need for insurance of these types. There is no charge for this rider but, when a claim is paid under this rider, the death benefit is reduced for early payment, and a $150 processing fee ($100 in Florida) is deducted. If more than one policy is used for the claim, each policy will have a processing fee of up to $150 ($100 in Florida). Portions of the Living Needs Benefit payment may be taxable, and receiving an accelerated death benefit may affect your client's eligibility for public assistance programs. The federal income tax treatment of payments made under this rider depends upon whether the insured is the recipient of the benefit and is considered terminally ill or chronically ill. We suggest that your clients seek assistance from a personal tax advisor regarding the implications of receiving Living Needs Benefit payments. This rider is not available in Minnesota to new purchasers over age 65 until the policy has been in force for one year, and the nursing home option is not available in Connecticut, Florida, Massachusetts, New York or the District of Columbia. This rider is not available in Washington state. In Oregon, term policies must include the waiver of premium benefit to be eligible for this rider. This material is designed to provide general information in regard to the subject matter covered. It should be used with the understanding that we are not rendering legal, accounting, or tax advice. Such services should be provided by the client s own advisor. Accordingly, any information in this document cannot be used by any taxpayer for purposes of avoiding penalties under the Internal Revenue Code. Investors should consider the investment objectives, risks, and charges and expenses carefully before investing in the contract, and/or underlying portfolios. The prospectus, and if available, the summary prospectus, contains this information as well as other important information. A copy of the prospectus(es) may be obtained from Your clients should read the prospectus(es) carefully before investing. It is possible to lose money by investing in securities.

12 Principal Financial Presented By: Mason McKinnie Life Wholesaler

13 Pacific Life: PIP-LT & Premier Care Presented By: Harvey Strait Regional Vice President Jane Forbes LTC Specialist

14 Nationwide: Wealth Transfer & LTC Presented By: Richard R. Sanderson VP, Senior Relationship Manager

15 Wealth Transfer & LTC

16 Protective: Real Solutions for Real Clients Presented By: Aaron Seurkamp 2 nd VP, National Accounts, Life & Annuity Division

17 Tearing Down the Barriers Simple or Complex? Life Insurance Needs Analysis Debts and Obligations $235,000 Income Continuation $50,000 for 20 years Final Expenses - $15,000 Total Need $1,265,000 Total Cost - $ per month 20 Year Secure-T with Income Provide Option Lump Sum - $250,000 Income for 20 years - $50,000 Total Cost - $ per month

18 Tearing Down the Barriers - Real Solutions for Real People Asset: $150,000 CD Strategy: $150,000 lump sum to Alice $25,397 for 30 years to Sadie $8,500 per month available via ExtendCare Turn a $150,000 idle CD into $900,000 of Legacy Benefits!

19 AXA: Current Hot Sales Ideas Presented By: Mark Cherryhomes Regional Vice President, Northwest Region

20 Projected Inheritance AXA Underwriting Tool AXA Equitable now financially underwrites cases based on the projected inheritance of the Insured! Guidelines include*: G1 is age 75+ OR Life Expectancy under 5 years Estate plan that involves transfer of assets to G2 Verification G1 s net worth 3-5% appreciation factor on G2 s projected inheritance up to 10 years * See full guidelines for details on AXA underwriting of projected inheritance cases.

21 The Problem John (G1) Age 75 $10,000,000 Concerned about potential for higher income and estate taxes in coming years Wants to secure a legacy plan for heirs $4,000,000 to his daughter, Jill, upon his death Jill (G2) Age 55 $200,000 Recognizes need for life insurance on self Net worth, without projected inheritance, does not justify life insurance coverage Net income and liquid assets not enough to pay premiums

22 The Ultimate Gift G1 $10,000,000 G2 Purchase Life Insurance Policy Use AXA Underwriting Tools to have G1 assets justify life insurance coverage today on G2 Use AXA Product Tools to meet death benefit and cash value planning goals Use Transfer Tax Tools to gift funds to G2 trust to purchase life insurance on G2 s life

23 Calculating Death Benefit Justification Jill is financially justified for over 9X more death benefit, up to $4,025,000, with AXA s Projected Inheritance Guidelines Over 40% more total death benefit is able to be purchased today Net Worth Projected Net Worth Used To Justify Coverage Death Benefit Justified* John (G1) Jill (G2) Jill s (G2 s) Projected Inheritance $10,000,000 $16,500,000 $9,100,000 $200,000 $773,000 $425,000 $4,000,000 $6,500,000 $3,600,000 * Calculations and amounts are for illustration purposes. Actual coverage amount will vary based on facts and circumstances of a case.

24 The Ultimate Gift John s Estate $10,000,000 Gifts $3,000,000 Jill s Trust $3,600,000 Life Insurance Policy Gifts $2,000,000 John uses his full gift tax exemption and gifts assets to both Jill s trust and his ILIT to cover premium payments. John s ILIT $9,100,000 Life Insurance Policy

25 The Ultimate Gift Benefits John (G1) reduced the size of his taxable estate while creating an effective legacy plan John leveraged his current assets to justify coverage on Jill s life John used gifting exemptions to efficiently fund the coverage Jill (G2) secured needed life insurance today and locked in her insurability John and Jill purchased policies that met their needs while providing potentially attractive IRRs upon death

26 Why Do Planning Now? Unlimited lengths for Generation Skipping Trusts remain under scrutiny $5,000,000 Lifetime Exemption may be reduced If funds are being gifted using discounting techniques, these may also be limited in the future AXA Equitable underwriting and product advantages Anticipated Inheritances Cash value potential products offer flexibility to trustees if clients need to regain access to gifts

27 Indexed UL Case Design Policy Review Case Design Policy Review Male, Age 60, Standard n/t Owns an underperforming $ 1M VUL Needs the Insurance; options in later years Doesn t like the volatility of market, but still likes CV. Possible Strategy: Policy Review & Product Review

28 Policy Review Weighing the Options Options to Weigh Before any action is taken: Are there alternative sub accounts better suited for the client Are there alternative sub accounts with better charges Because the policy has been in place for some years has the client s health changed in a way that may trigger higher premiums? Need to weigh existing and proposed policy features and benefits If there is a Section 1035 exchange client needs to be aware that this will trigger new surrender, contestability and premium charges. Client weighs the options and wants to consider an exchange into a No-Lapse Product. Also looks at IUL. Before a client considers a 1035 exchange all aspects of the exchange should be considered, including but not limited to: the difference in cost of insurance charges, the types of insurance contract and different investment options that may be available, the surrender charges on the new contract versus the old, the different features and benefits of the two contracts, the clients current health status. A policy review must be completed before any transaction is completed by a client.

29 Life Insurance Analysis NLG Carriers Male, Age 60 Standard N/T Initial Premium: $ 218,000 Carrier # 1 Carrier # 2 Carrier # 3 Carrier # 4 Annual Net Outlay $ 2,909 $ 3,189 $ 5,179 $ 5,775 Yr. 10 Total Payment Net Cash Value $ 247,092 $ 75,428 $ 249,890 $ 199,065 $ 269,794 $ 74,175 $ 275,746 $ 229,126 Yr. 20 Total Payment Net Cash Value $ 276,184 $ 0 $ 281,780 $ 148,177 $321,589 $ 0 $ 333,492 $ 137,822 Yr. 30 Total Payment Net Cash Value $305,276 $ 0 $ 313,670 $ 0 $373,383 $ 0 $ 391,238 $ 0 Yr. 39 Total Payment Net Cash Value $331,458 $ 0 $ 342,371 $ 0 $471,088 $ 0 N/A N/A Year 40 Policy lapses Policy lapses Policy lapses Policy lapses This is a supplemental illustration and must be accompanied by the basic illustration. This Life Insurance Analysis is a summary illustration of the individual sales illustrations for each policy. The Values represented here are for the respective carrier s Universal Life policy on a 60- year-old male Standard non-smoker. The values reflect the lowest no lapse guarantee premium payable for 39 years to age 99 Please refer to the basic illustration for more information. * Life expectancy for a male age 60, using the CSO 2001 Table is 22 years.

30 Policy Review Athena IUL Age Annual Premium Outlay Cash Surrender Value Death Benefit Before Tax IRR on Death Benefit 60 $221,724 $172,526(EOY) $1,000, %(EOY) 65 $3,724 $218,265 $1,000, % 70 $3,724 $282,477 $1,000, % 75 $3,724 $360,913 $1,000, % 80 $3,724 $440,089 $1,000, % 90 $3,724 $ 502,660 $ 1,000, % 99 $3,724 $4,441 $1,000, % Lowest NLG Premium at age 60 $ 2,909 (Carrier # 1)) Carrier # 1 Target Premium $ 19,190 AXA Target Premium $ 44,190 Strong IRR on death benefit At Life expectancy of 82 = 8.90% This is a supplemental illustration and must be accompanied by the basic illustration. The Values represented here are for a $1,000,000 Athena Indexed UL SM policy on a 60-year-old male Standard non-smoker. The values reflect the $3,724 of premium payable for 39 years plus a premium of $ 218,000 illustrated using the S&P Year Option at a 7.00% current rate of return and current charges, which are not guaranteed. If the client was to receive a guaranteed rate of return and maximum charges are assessed in the policy, the policy would terminate in year 14, Please refer to the basic illustration for more information. * Life expectancy for a male age 60, using the CSO 2001 Table is 22 years.

31 Disclosure Life Insurance is Issued by AXA Equitable Life Insurance Company and is distributed by AXA Distributors, LLC. AXA Equitable and AXA Distributors do not provide legal or tax advice. Clients must rely on their own Advisors for these matters.