CENCO STREET JOURNAL. New! Non-Medical Underwriting on QoL Max Accumulator+ Check Out The Cenco Website:

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1 A Specia Pubication for CENCO Reated Agents CENCO STREET JOURNAL Check Out The Cenco Website: You wi have access to: Quotes Forms Introduc on Kits for Our Core Carriers Archived and current issues of the Cenco Street Journa and the Cenco enews Inside this issue: Review Individua Federa Income Tax Returns to Boost Saes Do Your Cients Beieve These Common Disabiity Myths? 2 3 Voume 17, Issue 4 New! Non-Medica Underwriting on QoL Max Accumuator+ Apri 2017 For poicies that fa within guideines, AIG Partners QoL Max Accumuator+ has non-medica underwriting, resuting in a fast, convenient path from submission to approva! This process shortens the underwriting cyce time for many of your heathy cients. For those who quaify, the appication process wi be ess intrusive and the cyce time, from appication receipt to the underwriting decision, wi be reduced significanty. Faster processing times can be expected for appications submitted eectronicay using igo eappication, eading to faster commissions for the Agent. Non-Medica Underwriting Ages 0-59 Face amounts $50,000 - $249,999 No ab tests, physica exam or APS required for proposed insured Accept/reject underwriting Four rate casses avaiabe (Standard Non-Tobacco, Substandard Non-Tobacco, Standard Tobacco and Substandard Tobacco) If amount appied for on this appication pus any coverage issued within the ast 12 months is equa to or greater than $250,000, this new coverage appied for wi be subject to age and face amount requirements for fu underwriting. Tota inforce coverage consideration incudes QoL Advantage program scenarios where a combination of QoL Fex Term and QoL UL poicies are purchased. Rapid Rater Is Now Avaiabe On QoL Fex Term 3 If your case is eigibe, AIGPG wi get it out the door in 5 business days...guaranteed. And for the next three months, through June 30, 2017, if they don t meet their commitment they wi pay the writing agent $100! For more information, check out AIG Partners Introduction Kit on the Cenco website:

2 Page 2 A Specia Pubication for CENCO Reated Agents Review Individua Federa Tax Returns to Boost Saes How many of you have studied federa income tax returns? If you re not asking for copies of tax returns to anayze, then one of your competitors probaby is. But it won t do any good to start doing this if you don t know what to ook for. The first pace to start in the examination of an individua tax return is the Form W-2 (wage and tax statement). First, see if there is a difference between ine one (wages, tips, other compensation) and ine three (Socia Security wages). If so, this difference indicates that a person coud be a participant in a 401(k) pan, a 403 b) pan or a Section 125 pan. The same section of the W-2 indicates the taxabe portion of group term ife insurance in excess of $50,000. The premium attributabe to the first $50,000 of group term insurance is tax-free. This information is important because it raises severa questions: Is there a need for additiona individua owned ife insurance coverage? Is the cient s empoyer a prospect for group and individua ife insurance coverage? Coud you position yoursef to review the empoyer s existing empoyee benefit pans? In addition to the W-2, the Form 1040 must aso be assessed in order to provide cients with the highest eve of service. When engaged in any type of financia panning you must aways request that cients provide copies of tax returns from the ast 2 to 3 years so that you can estabish a thorough financia pan. When reviewing the Form 1040 begin by evauating the tax rate schedues for each fiing status, which highights the difference between margina and rea tax brackets. Remember that taxpayers do not pay taxes on their income at margina tax rates. Instead, income taxes are paid based upon average tax rates. For instance, a taxpayer is married and fiing jointy with $125,000 of taxabe income. They are schedued in a 25% margina tax bracket. However, the actua tax bracket is 19.2%, as it is his or her rea tax bracket. The 19.2% tax bracket is important because it coud be an indicator as to the type of advice you utimatey woud ask this cient to consider. Aso on the Form 1040 is a section where dependent chidren of any age are isted. Addressing this section with your cients or prospects is sure to open up some important discussions and consequenty create a natura saes opportunity. Severa questions shoud be asked at this point: Are you panning to set up a fund for your chidren s future education? What happens to your chidren if you shoud die or become disabed permanenty? Are there dependents that do not ive with you due to divorce or separation? If so, where do these dependents ive and who is responsibe for their care? If you have never reviewed their tax returns, then you probaby don t know everything about your cients from a financia standpoint. But if you wi take the time and make the effort, you can uncover many saes opportunities, create the trust necessary for ong-term reationships and become an expert at uncovering probems and needs that wi make you a the more vauabe.

3 Voume 17, Issue 4 Page 3 Do Your Cients Beieve These Common Disabiity Myths? Carify Their Need for Income Protection Surveys conducted by the Counci for Disabiity Awareness revea surprising misperceptions about disabiity among working aduts. To tak to your cients about their risks and need for income protection, start by asking them whether the myths beow are true or fase. For exampe, pivot from a discussion of financia panning by asking which is more ikey: an IRS audit or a disabiity. Then share the facts in a way that reates to each cient s persona situation. IRS Myth: The odds of being audited by the IRS are greater than the ikeihood of experiencing an iness or injury that prevents you from working. 27% of working aduts surveyed guessed an audit is more ikey. Fact: Odds of an IRS audit: 1%. Odds of disabiity: 25% Lottery Legend: Winning the big ottery jackpot is more ikey than becoming unabe to work due to iness or injury. That s what more than 20 percent of workers under 40 said when surveyed. Fact: The rea odds are one in 259 miion for winning the ottery, versus one in four for becoming disabed. Accidents Myth: Most disabiities are caused by accidents and injuries. Fact: 90% of disabiities are due to inesses; musce/bone disorder (28%), cancer (15.1%), injuries and poisoning (10.3%), cardiovascuar (8.7%), menta disorders (8.3%) and nervous system reated disorders (7.7%). Workers Comp Faacy: Socia Security Disabiity Insurance or Workers Compensation covers most disabed workers. Fact: 65% of initia SSDI caims were rejected in And ony 5% of disabiity caims are work-reated. The other 95% of caims are not, which means they are not eigibe for Workers Compensation. For more insights and cacuators to hep cients estimate their own risk quotient, go to disabiitycanhappen.org. Rapid Rater Is Now Avaiabe on QoL Fex Term! AIG Partners Rapid Rater is a fast and convenient too to speed-up the term quoting process. It makes the saes process easier for you and your customers with an instant quote. Use this ink: to run a quote. It wi show your cient the premium for a term periods and ratings.

4 CENCO INSURANCE MARKETING CORPORATION 1501 E Camino Ave., Suite 1 Sacramento, CA Get More Strategic With Guaranteed UL Detais Inside! Phone: (916) (800) 45-CENCO Fax: (916) HELPING AGENTS SUCCEED..IS OUR BUSINESS! We re on the web! In every interaction - incuding conversations about ife insurance - Generation Matters! Become an expert at connecting with each generation: Miennias Generation Xers Baby Boomers For quick and easy training visit aig.com/generationmatters The Definitive Marketing Pubication For Life & Disabiity Insurance Did You Know. 7 in 10 peope who are age 65 wi need chronic iness care ater in ife. The number of Americans who need ong-term care wi more than doube by in 10 peope who go on ong-term care caims do not recover. Ony 10% of the market wi have a non-permanent condition. How wi your cients pay for ong-term iness care? Life insurance chronic iness riders can hep reduce the unexpected financia strain due to a chronic iness by providing access to cash whie LIVING.

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7 QoL Tax Diversification of Retirement Assets Background Many peope understand the benefits of diversifying investments among asset casses to hep manage the risk and return of a retirement pan. But diversification can aso be used to hep manage the tax treatment of retirement assets resuting in the potentia for higher net income during retirement years. Tax considerations of retirement assets 1 WHEN IS ASSET GROWTH TAXED? TAXED NOW TAXED LATER TAXED NEVER CDs and Money Markets 401(k)/403(b) Accounts Roth IRAs Mutua Funds Traditiona IRAs Cash Vaue Life Insurance 2 Savings Accounts Feature comparison of various assets 1 For more information, go to Quaityofifeinsurance.com and visit with your AIG representative. For more information: Taxabe 401(k)/ Cash Assets Traditiona Roth IRAs Vaue Life IRAs Insurance 2 Tax-Deductibe Contributions IRS Does Not Limit Contributions Due to Income Tax-Deferred Growth No Penaty for Eary Withdrawas Tax-Free Distributions No Required Minimum Distributions at 70½ Wi Not Increase Socia Security Taxation or Medicare Premiums Incudes Income Tax-Free Survivor Benefit 1 The descriptions and features of the various assets in these tabes are for genera information purposes and address the most typica circumstances. There are many reguations governing the taxation and operation of a assets mentioned and you shoud seek the advice of a tax professiona before making any changes to your current or future retirement pans, accounts or assets. 2 Cash vaue ife insurance poicies are subject to Modified Endowment Contract rues that discourage overfunding based on face amount, insured s age and other factors. Cash vaue ife insurance aso contains additiona mortaity charges that wi increase the expense of this product. Aso, distributions in excess of tota premiums paid are taxabe uness taken as oans (which are subject to interest charges). Consut a poicy iustration for more information.

8 PROBLEM: 401(k) withdrawas are taxed as ordinary income 3 In addition to some renta properties and their Socia Security, John and Jane Kozow s retirement pan consists ony of their 401(k) pans. They ve maximized their contributions and have a tidy sum saved. Their financia professiona (FP) points out that withdrawas from their 401(k) accounts wi be taxed as ordinary income. Their FP aso expains that John and Jane may be in a higher tax bracket during retirement than they are now due to possibe changes in tax aw and their growing account vaues. At retirement, assuming a 25% tax rate, an annua withdrawa of $100,000 woud resut in taxes of $25,000, eaving a net income of $75,000 avaiabe for their retirement. 4 They discuss tax diversification as an option and that having some tax-free income woud increase the amount avaiabe. 401(k): $100,000 Withdrawa Income Tax (25%) $25,000 $75,000 Tota Net Income SOLUTION: Cash vaue ife insurance such as QoL Max Accumuator+ can hep provide tax diversification Working with their FP, John and Jane have aso decided that they need $1 miion of ife insurance to protect the famiy. The FP shows the coupe how QoL Max Accumuator+, a cash vaue ife insurance poicy, can hep them meet both objectives ife insurance protection for their famiy and a taxed never asset to increase their diversification. Withdrawa Taxes Due Net Income TAXED LATER 401(k): $50,000 Withdrawa Income Tax (25%) $12,500 TAXED NEVER QoL MaxAccumuator+ Life Insurance Poicy: $50,000 Withdrawa 5 $0 Tax $37,500 + $50,000 = $87,500 Tota Net Income RESULTS: At retirement, they choose to take $50,000 from their 401(k) and from their QoL Max Accumuator+ poicy. They were abe to increase their net income by $12,500 over the 401(k)-ony pan. QoL Max Accumuator+ is an index universa ife insurance poicy designed to maximize your taxadvantaged accumuation whie providing ife insurance benefits to your oved ones. 3 This is a not an actua case. It is a hypothetica representation for iustrative purposes, ony. The individua 401(k) pan and ife insurance poicy withdrawas are aggregated in the iustration for convenience. It is not a comprehensive anaysis of the subject matter and you shoud work with a tax professiona before making changes to your circumstances. 4 Withdrawas are subject to federa tax of 25% and may be subject to state income taxes. A 10% federa eary withdrawa tax penaty may appy if taken before age 59 1/2. 5 Withdrawas in excess of tota premiums paid are taxabe uness taken as oans (which are subject to interest charges). Poicies issued by: American Genera Life Insurance Company (AGL), Poicy Form Numbers 15646, ICC ; Rider Form Numbers 13600, ICC , CA WMDR Rev0914, 13601, ICC , 82001, 82012, 82410, 88390,15990, ICC , Issuing company AGL is responsibe for financia obigations of insurance products and is a member of American Internationa Group, Inc. (AIG). AGL does not soicit business in the state of New York. Products may not be avaiabe in a states and product features may vary by state. This information is genera in nature, may be subject to change, and does not constitute ega, tax or accounting advice from any company, its empoyees, financia professionas or other representatives. Appicabe aws and reguations are compex and subject to change. Any tax statements in this materia are not intended to suggest the avoidance of U.S. federa, state or oca tax penaties. For advice concerning your individua circumstances, consut a professiona attorney, tax advisor or accountant. AGLC (0416) AIG A rights reserved. NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE NO BANK OR CREDIT UNION GUARANTEE NOT FDIC/NCUA/NCUSIF INSURED

9 REPRINTED FROM ADVISOR MAGAZINE P.O. Box 2495 Providence RI The Journa for the Financia Services Industry Life Insurance Soutions Get More Strategic with Guaranteed UL by Joe Ross, CLU, ChFC, CRC Mr. Ross serves as Vice President, Saes Productivity and Business Deveopment for AIG s ife insurance business, a part of American Internationa Group, Inc. (AIG). He can be reached at Joe.Ross@aig.com. As you focus on heping cients pan now for the needs of tomorrow, turn an eye toward guaranteed universa ife (GUL) insurance. As LIMRA President and CEO Bob Kerzner has shared, quartery growth in tota premiums for GUL insurance improved recenty for the first time in severa years. Kerzner pointed to improved rates for GUL as one of the potentia reasons for the product s positive saes performance. 1 Another reason for the growth of GUL may center on the attractive structure of some of the current product offerings. For exampe, it s possibe to offer cients not ony a GUL contract with a choice of guarantee durations, but one with highy competitive guarantees to ages and a buit-in return-of-premium (ROP) rider at no additiona cost. But GUL insurance may not just perform we from a saes perspective. Financia professionas who everage GUL with an acceerated benefit rider that s designed to address the costy impacts of chronic iness may hep cients steer through retirement and its potentia pitfas more easiy. Know What Has Changed Cients who need permanent ife insurance have a variety of choices, and GUL insurance is one of the most secure and economica options. Athough GUL often is a no-fris poicy, offering few features other than a death benefit, enhanced soutions are avaiabe. Some GUL offerings are designed not ony to provide death benefit protection, but aso to provide income in retirement and offset the financia faout that chronic iness can trigger. Consider This Let s expore a hypothetica exampe, for iustrative purposes ony. Keep in mind that this is not an actua case and is intended soey to depict how the features of a GUL soution might work. The exampe does not refect the vaue of any specific poicy, and restrictions and imitations appy. George, age 50, is seeking $1 miion of coverage for his famiy. He wants to provide ife insurance for his spouse we into retirement, but anticipates that need dropping as he approaches his atter retirement years. He is aso concerned about the impact that a chronic iness might have on his retirement. Indeed, he shoud be concerned. According to the American Academy of Famiy Physicians, neary 81 miion peope are projected to have mutipe chronic diseases by Aso, a recent artice on Forbes.com by Howard Geckman, who wrote the book Caring for our Parents, reayed that whie the average out-of-pocket heath care costs for a person age 65 or beyond tota at east $100,000, peope with chronic inesses that ead to needs for ong-term care pay far more than that. 3 Regarding ong-term care costs, Kerzner pointed out during a recent industry briefing that When we think about the aging of America, we reay are ooking at a probem of epic proportions. There s going to be a rea need and demand for soutions. 4 Review the Pan What if George coud purchase permanent ife insurance, guaranteed to age 100, with a death benefit acceeration option that aows him to: pay premiums for 10 years, wait for 10 years, then get his premiums back over 10 years, and retain $420,000 of his death benefit, guaranteed to age 100, with no additiona premiums required? ADVISOR MAGAZINE M a rc h 2017 AGLC110678

10 P2 How it works George pays premiums of $24,000 per year for 10 years for his GUL soution. Then, he pays nothing for 10 years. Subsequenty, he takes $24,000 per year out of the poicy for 10 years, tax-free, using a unique income soution buit into the poicy. (Aways te cients to consut their quaified tax expert regarding their own situation.) This withdrawa of $24,000 per year from the poicy for 10 years reduces the amount of George s ife insurance coverage to $420,000, but provides him with needed income in retirement. Life insurance benefit With the approach and the soution described above, the benefit is $1 miion to age 70. It then steps down to $420,000 by age 80 and continues to age 100, guaranteed. Chronic iness benefit Whie severa payout options are avaiabe in conjunction with his GUL soution, George chooses to provide 2 percent of the ife insurance coverage as a monthy chronic iness benefit, starting at $20,000 per month during his earning years. The benefit then steps down to $8,400 per month during George s retirement, guaranteed. Endnotes 1. Bob Kerzner, Third Quarter 2016 Industry Briefing, LIMRA, Aug. 16, Invest in the Future of High Quaity Primary Care, AAFP Tes Congressiona Appropriators, American Academy of Famiy Physicians (AAFP) press reease, Apri 15, 2016, 3. Howard Geckman, Famiies Spend More To Care For Their Aging Parents Than To Raise Their Kids, Forbes.com, Jan. 18, 2017, 4. Bob Kerzner, Fourth Quarter 2016 Industry Briefing, LIMRA, Nov. 15, 2016, The Company, its financia professionas and other representatives do not and are not authorized to give ega, tax, financia, or accounting advice. Appicabe aws and reguations are compex and subject to change. Any tax statements in this materia are not intended to suggest the avoidance of U.S. federa, state or oca tax penaties. For advice concerning your situation, consut your professiona attorney, tax advisor or accountant. Guarantees are backed by the caims-paying abiity of AGL and US Life. They are not backed by the broker-deaer and/or insurance agency from which this poicy is purchased or any affiiates of those entities and none makes any representation or guarantees regarding the caims-paying abiity of AGL. Caifornia residents shoud be provided the Caifornia Resident Suppementa Information fyer on the Acceerated Access Soution (AGLC108547). Create a Mutipurpose Soution With the pan, a singe poicy is designed to hep with ife insurance, chronic iness protection and retirement income, effectivey addressing three key cient needs. An IRA, a Roth IRA or a 401(k) pan may aso be appropriate in the ong-term mission to achieve retirement readiness. That reaity notwithstanding, GUL insurance, especiay within the context of the strategy, merits thoughtfu consideration when heping cients pan for retirement income and to eave a egacy. What type of GUL insurance soution might be best, then? Foowing are some GUL attributes to be on the ookout for: guaranteed death benefit protection that aows for fexibe guarantee periods and premium funding, a buit-in ROP feature, cash vaue accumuation that s guaranteed rather than projected, highy competitive premiums, the potentia to reduce the death benefit without reducing the guarantee duration, iving benefit riders for chronic iness and ongevity that can be added separatey or together, and consumer-friendy processing designed to preserve guarantees in the event of ate premium payments. For more information, visit Seek Toos and Training When exporing GUL offerings, take the time to deve into comprehensive, onine product resources such as on-demand webinars; downoadabe presentations, brochures and fyers; succinct, but actionabe, videos; FAQ ists; and more. When you re ready to check premiums, everage carrier-provided toos that faciitate rapid rating. Such toos, aong with the other resources provided by carriers, are designed to hep you quicky gean the information you need in the mission to hep cients pan today for the needs of tomorrow.