Life insurance you don't have to die to use. Policies issued by American General Life Insurance Company, a member company of AIG

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1 Life insurance you don't have to die to use AG Secure Lifetime GUL II with AG Asset Protector SM Accelerated Access Solution Lifestyle Income Solution Live Longer. Retire Stronger. Presented by Levi Robinson, CFP, ChFC, CLU, RICP, FLMI Vice President Product Training AIG Global Consumer Insurance Policies issued by American General Life Insurance Company, a member company of AIG Agenda I d like to describe how American General Life is revolutionizing the way life insurance is bought and sold By showing how you can turn illiquid death benefits into a liquid pool of money your clients can use to protect their portfolio assets from the costs of severe illness and the risk of outliving their assets So they can achieve a higher sense of financial security during their retirement. 2 1

2 One of Three Things Will Likely Happen Die Too Soon Become Seriously Ill Outlive Retirement Assets 3 Financial Life Spectrum Building Protecting Extending Assets Assets Assets Die Too Soon Get Sick Along The Way Live Too Long Life Insurance Chronic Illness Longevity Protection 4 2

3 AG Secure Lifetime GUL II 100% ROP at Age 85 50% ROP at Policy Year 20 Guaranteed Cash Value Guaranteed Premiums and Death Benefits 5 50% ROP at Year 20 Returned premiums are more than 4x the guaranteed cash surrender value! Hypothetical information for illustrative purposes only. 6 3

4 Financial Life Spectrum Building Protecting Extending Assets Assets Assets Die Too Soon Get Sick Along The Way Live Too Long Life Insurance Chronic Illness Longevity Protection 7 Benefits of Accelerated Access Solution: Chronic Illness 101(g) No LTC license necessary 2-out-of-6 ADLs; or Severe Cognitive Impairment Deemed to be Permanent Indemnity Benefit No Receipts Spend benefits on anything Flexible Benefit Base Benefit = 50% up to 100% of Death Benefit $50,000 minimum up to $1,500,000 maximum Full waiver of monthly deductions 8 4

5 Benefits of Accelerated Access Solution: Chronic Illness Flexible Monthly Benefit 1.IRS Per Diem capped at 2% per month 2.IRS Per Diem capped at 4% per month 3.IRS Per Diem with No Cap! Max. Monthly Benefit = Total Benefit 12 IRS caps the maximum daily rate each year. The 2015 maximum is $330/day or $9,900/month. Subsequent years may be higher. 9 Benefits of Accelerated Access Solution Inflation hedge against future costs Purchase more than today s Per Diem limit Many products won t allow it Provides inflation protection with a maximum monthly benefit cap 4% Cap example: 4% of $300,000 = $12,000 per month Go on-claim in 2015: Collect $9,900 per month Go on-claim in the future when Per Diem = $15,000 per month: Collect $12,000 per month Per Diem example: $300,000 AAS benefit Maximum monthly benefit: $300,000 = $15,000 per month 10 5

6 Financial Life Spectrum Building Protecting Extending Assets Assets Assets Die Too Soon Get Sick Along The Way Live Too Long Life Insurance Chronic Illness Longevity Protection 11 What the Statistics Say Chances of survival to age X for one spouse of a couple Prepared by Ernst & Young Insurance and Actuarial Advisory Services practice. The analysis uses the Annuity 2000 mortality table with Scale G2 mortality improvements. 12 6

7 The Case for Lifestyle Income Solution: Longevity Insurance The positive aspects of living longer come with some financial concerns 48% of Americans age have no financial plans in place to protect themselves against outliving their assets and the rising cost of health care should they live longer than expected. 1 1 State of the Insured Retirement Industry: 2012 Recap and a 2013 Outlook, Insured Retirement Institute. 13 Think about what may contribute to the possibility of outliving your retirement income. Do any of these issues concern your clients? Debt Historically Low Interest Rates Social Security Uncertainty Health Care Expenses Stock Market Corrections Didn t Save Enough Rising Income Tax Rates Political Uncertainty 14 7

8 Lifestyle Income Solution: Longevity Insurance 1. Accelerate up to 10% of DB per year 2. Primary requirement: Live to age Tax-free up to basis; ordinary income after Choosing to exercise rights under the Lifestyle Income Solution can impact cash available under the Accelerated Access Solution. Please speak with your American General Life Insurance Company representative for more information % ROP at Age 85 Premiums Returned! Hypothetical information for illustrative purposes only. 16 8

9 American General Life is Revolutionizing the way YOU sell life insurance! Telling The Story 17 Risk Protection Spectrum Age $ $ Years Prior to Retirement Retirement Years 3 big risks get smaller over time. 3 other big risks get larger over time. 18 9

10 The Big 3 1. Life Insurance provides protection for: Income Replacement Mortgage Payoff College Funding Reduced Social Security Income when one spouse dies 2. AG Asset Protector s Lifestyle Income Solution provides protection for: The multitude of financial risks: - Market corrections and poor investment performance - Living longer than expected / didn t save enough - Reduced Social Security Income when one spouse dies - Health care costs (other than Chronic Illness) - Unexpected expenses (roof, furnace, A/C, auto repairs, etc.) - Financial i help for children and grandchildren - And so much more! 3. AG Asset Protector s Accelerated Access Solution provides protection for: Health Care Costs from Chronic Illness 19 Terminal lillness Rider requires diagnosis of a 24 months or less life expectancy. Except for the state of Connecticut where it is 12 months or less. Hypothetical information for illustrative purposes only

11 Change the way you sell life insurance: Turn your Term Life Insurance Sales Into Permanent UL Sales! 21 Sell The Value: Clients are Protected Whether They: Die Too Soon Become Seriously Ill Outlive Retirement Assets 22 11

12 Summary: 1. The level of liquidity created by the additional AG Asset Protector premium can t be created any other way. 2. If you ve made the decision to buy permanent UL, about the only reason you wouldn t buy AG Asset Protector is because you simply can t afford it. If you can afford it, what else can you do with the money to generate this kind of liquidity and value? 23 Summary: 3. When clients especially premium payers realize that they can spend their entire Death Benefit while they re still alive... They ll never want to own life insurance any other way! AG Asset Protector provides an unmatched level of financial security, especially during retirement, whether you: Die Too Soon Become Seriously Ill Outlive Retirement Assets 24 12

13 AG Asset Protector: It Really IS Worth It! American General Life is revolutionizing i i why people buy life insurance, and how it s sold. Become a part of the next generation of life insurance! 13

14 IRA Strategies for Wealth Transfer Today s Objectives Today I ll demonstrate how you can improve your client s legacy by describing what IRA investors typically do, & comparing it to two simple but powerful ideas so they can maximize their IRA legacy potential and recognize the value you bring

15 Sources of Retirement Cash Flow Pension Social Security Savings 30 Years Ago Pension Social Security Savings Today 29 IRAs and RMDs 30 15

16 % RMDs vs. Account Value % % % % % % % 36% 3.6% 6% 8% 14% 12% 10% % % RMDs as a % of Account Value $160,000 Projected IRA Values $140,000 $120, $100,000 $80,000 $60,000 $40,000 $20,000 $ $100,000 IRA; 7% hypothetical annual return 32 16

17 Typical IRA Transfer IRA Owner(s) Children Grandchildren 33 Typical IRA Transfer IRA Owner(s) $500,000 Children $300,000 Grandchildren 34 17

18 Story Selling 35 3 Circles 2 Questions 3-Point Value Proposition 36 18

19 3 Circles Your money can go to three places when you re done with it: L.O. C G Cross out the one you would least like to get your money when you re done with it. 37 Client Questions & Value Proposition 2 Questions: 1. Mr. & Mrs. Jones, if things go the way you have planned, what s going to happen to your IRA? 2. Why don t you give it to them right now? 3-Point Value Proposition: 1. We ll keep your IRA in your Care, Custody and Control; 2. Potentially double, triple or quadruple the value of your legacy; and 3. Take no additional investment risk in your portfolio 38 19

20 IRA Wealth Transfer Strategies 39 Typical IRA Transfer IRA Owner(s) Children Grandchildren 40 20

21 Typical IRA Transfer IRA Owner(s) $500,000 Children $300,000 Grandchildren 41 Life Insurance Solutions for IRA Wealth Transfer 42 21

22 1. IRA Income Tax Offset RMD s IRA Life Insurance (equal to taxes) Beneficiaries Taxes IRA Income Tax Offset RMD s IRA $500, Life Insurance $200,000 Beneficiaries $500,000 Taxes 44 22

23 2. IRA Income Tax Elimination RMD s IRA Life Insurance (equal to IRA) Charity Beneficiaries IRA Income Tax Elimination RMD s IRA $500, Life Insurance $500,000 Charity $500,000 Beneficiaries $500,000 Tax-Free Total: $1,000,

24 $1,000,000 Comparison of Strategies Total Net After-Tax Legacy $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 Current Tax Offset Tax Elimination 47 Do you remember our 3-Point Value Proposition? 1. We ll keep your IRA in your Care, Custody and Control; 2. Potentially double, triple or quadruple the value to your beneficiaries; and 3. Take no additional investment risk in your portfolio 48 24

25 The Soft Close I know you qualify for this program financially, but... I don t know if you qualify medically. You have time to think about it. 49 Policy Review Reviewing your clients policies every few years is an important part of helping your clients keep their financial strategy intact. If their needs or plans have changed, then their policy may need to be adjusted to fit their new circumstances. They may have too little or too much insurance for their present situation and future goals. Talking with your clients about their financial plans and periodically reviewing the role that their life insurance policy plays in those plans can make a marked difference in your clients ability to reach their goals. Chances are, life is quite different today than when your client purchased their policy and so are their insurance needs. A systematic policy review is the best way to ensure their coverage continues to keep pace with their needs

26 Why is a Policy Review Important? Would your client like to know if they could possibly increase their death benefit and/or get death benefit guarantees? Wouldn t your client want to be reassured that their death proceeds will be paid to the right beneficiary? Wouldn t your client want to know if their coverage were inadequate due to changes in their lives, their needs or in legislation? Do your clients have children or perhaps parents who rely on them for support? Would your client want to move from renting to buying insurance? A few reasons why a policy review is important in keeping your clients financial plan intact. 51 What Events Can Trigger the Need for a Review? Do you have client s who Have married or divorced in the last several years? Have changed jobs or been promoted? Have started a business or sold one and retired? Have become parents or grandparents? Have experienced a death in the family or is now providing financial support for a family member? Have refinanced or purchased a new or 2 nd home? 52 26

27 Understanding the Current Premium Environment As your clients lives have changed so has their life insurance need. Clients have the opportunity to get more coverage for the same or lower premium than when they initially purchased their current policy due to; Advances in product design Underwriting changes due to greater medical and heredity knowledge, and Interest rate environment changes If your clients haven t reviewed their policy in the last 5 years or since purchase, a policy review may be in their best interest. 53 Changes May be Required by Your Client Today Is their current policy type still the right one? Are guarantees preferable to price? Is their beneficiary designation still correct? Have estate tax laws altered their original plans? Is their policy performing as expected? Has market volatility exceeded comfort levels? Have interest rates or subaccount performance met expectations? 54 27

28 Bring On Tomorrow! Questions? For additional information, please contact your American General Life Companies representative or visit our producer web site at National Sales Desk can be reached at Or visit RetireStronger.com 56 28

29 Important Information Policies issued by: American General Life Insurance Company (AGL), Policy Form Number 13460, ICC , Rider Form Number 13972, 13600, ICC Issuing company AGL is responsible for financial obligations of insurance products and is a member of American International Group, Inc. (AIG). AGL does not solicit business in the state of New York. Policies and riders not available in all states. These product specifications are not intended to be allinclusive of product information. State variations may apply. Please refer to the policy for complete details. There may be a charge for each rider selected. See the rider for details regarding the benefit descriptions, limitations and exclusions. Guarantees are backed by the claims-paying ability of the issuing insurance company. AGLC All rights reserved. 57 Life insurance you don't have to die to use AG Secure Lifetime GUL II with AG Asset Protector SM Accelerated Access Solution Lifestyle Income Solution Live Longer. Retire Stronger. Presented by Levi Robinson, CFP, ChFC, CLU, RICP, FLMI Vice President Product Training AIG Global Consumer Insurance Policies issued by American General Life Insurance Company, a member company of AIG 29