2017 MDRT Annual Meeting e-handout Material. It's Not What You Say; It s How You Say it

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1 2017 MDRT Annual Meeting e-handout Material Title: Speaker: It's Not What You Say; It s How You Say it Dale W. Martin, CLU, ChFC Presentation Date: Monday, June 5, 2017 Presentation Time: Session Room: 2:00-3:00 p.m. Hilton - Orlando Ballroom III The Million Dollar Round Table (MDRT) does not guarantee the accuracy of tax and legal matters and is not liable for errors and omissions. You are urged to check with tax and legal professionals in your state, province or country. MDRT also suggests you consult local insurance and security regulations and your company s compliance department pertaining to the use of any new sales materials with your clients. The information contained in this handout is unedited; errors, omissions and misspellings may exist. Content may be altered during the delivery of this presentation Million Dollar Round Table Million Dollar Round Table 325 West Touhy Ave. Park Ridge, IL USA

2 Dale W. Martin, CLU, ChFC It s Not What You Say; It s How You Say it What do you do for a living? 2 How do you set the stage for a productive meeting? 3 1

3 I don t believe in life insurance! 4 INSIDE IRS OUTSIDE 5 Why don t I just buy term insurance for this? 6 2

4 AGE What kind of insurance should I own? 8 There are two main reasons why people buy life insurance Death benefit to protect their loved ones Cash value accumulation for themselves while they are alive 9 3

5 It works like a tug of war The more emphasis you put on growing the cash value, the less death benefit you will get. Inversely, the more emphasis you put on the death benefit, the less cash value you will get. It is all in the design 10 Overfunded life insurance contracts are like riding a wave 11 Life insurance is just too costly! 12 4

6 Life insurance is a bad investment! 13 Guaranteed cash accumulation Tax deferred growth and tax favored distributions Not directly affected by market conditions Strong dividend history Attractive internal rate of return Income distributions not treated as Net Investment income and are excluded from Medicare Surtax Access to the cash prior to 59% with no 10% penalty Guaranteed income tax free plan completion death benefit 14 Case Design Annual payments: $500,000 Base on Current Non-Guaranteed Dividend Paying period: 10 years Total payments: $5,000,000 Annual withdrawals/loans: $556,400 (Starting age 50 through age years) Total withdrawals/loans: $11,684,

7 Summary age 85 Based on Current Non-Guaranteed Dividend Cash Value: $6,711,260 (Internal Rate of Return 4.52% Net 7.47% Taxable) Total withdrawals/loans: $11,684,400 Death Benefit: $12,654,561 (Internal Rate of Return 4.97% Net 8.21% Taxable) Total Projected Benefits: $24,338,961 (Withdrawals/loans + Death Benefit age 85) 16 Morningstar Style Box Large Medium Small Value Blend Growth 17 Ultra Wealthy people think in terms of % not $ Client net worth: $150,000,000 Insurance death benefit: $90,000,000 Annual premium: $2,200,

8 You are asking me to invest 2.2% of my growth each year from my portfolio to increase my net worth by 60%. That sounds like a no-brainer to me. 19 How much life insurance should I have? 20 I am under the gift tax exemption of $10.8mm, so I don t need to by any life insurance. 21 7

9 Let me show you how you can breathe life into your estate plan using CPR C- Consume your assets during retirement P- Protect from creditors and divorces R- Replace your assets for your heirs at your death 22 Practice, Practice, Practice 23 8