Wealth Transfer Planning Through the Use of Section 6166 Election and Life Insurance

Transcription

1 Wealth Transfer Planning Through the Use of Section 6166 Election and Life The Advantages of Owning Life Place Image Here Prepared For: Valued Client & Mrs. Valued Client Presented By: Sample Agent John Hancock Financial Services 197 Clarendon St. Boston, MA Tel.: (617) Fax: (617) products are issued issued by: John by: Hancock Life Company of New York, Valhalla, NY and securities offered through John Hancock John Distributors Hancock LLC Life through other Company broker/dealers (U.S.A.), that Boston, have MA a selling and securities agreement offered with John through Hancock John Hancock Distributors Distributors LLC, 197 LLC Clarendon through Street, other broker/dealers Boston, MA that have a products selling agreement issued are issued by: with by: John Hancock products Life issued Distributors by: John LLC Company Hancock, 197 (U.S.A), Clarendon Life Boston Street, MA. Company Boston, of MA New York, Valhalla, NY February 02, 2010

2 Section 6166 Installment of Estate Tax Disclosure This is a planning tool designed to assist you in exploring potential estate planning options. It is not intended as your estate / gifting plan nor is it a specific recommendation for your estate / gifting plan. This presentation is for demonstration only. This analysis does not constitute a recommendation or a particular option over any other planning alternative. Other alternatives may be more appropriate or suitable for your particular situation and should be discussed with your legal, tax and accounting advisors prior to your making any gifting or purchase decisions. John Hancock and its agents do not guarantee the accuracy of the Section 6166 Installment of Estate Taxes system or the output. John Hancock will not be liable for any damages arising from the use or misuse of this software or from any errors or omissions in the same. John Hancock assumes no duty to update this software or to provide notice of any errors in this output or applicable changes in the law. Figures used in this program illustrate various benefit/ retirement planning concepts. Any actual analysis will be based upon both assumptions and data provided by you, the client. Your furnishing of accurate data will help enhance the value of this analysis. However, all assumed growth rates for assets are based upon information provided and and assumed assumed by you by and you and are not are a not guarantee guarantee of the of future the future performance of the of life the insurance life insurance policy. policy. This supplemental illustration assumes that the currently illustrated non-guaranteed elements will continue for all years shown. This is not likely to occur and actual results may be more or less favorable than those shown. The actual consequences of particular planning alternatives will depend on many variables, some of which may not be accounted for or fully described in this presentation. Unless otherwise indicated, the income tax, estate tax and generation skipping transfer (GST) tax implications of other specific transactions are not reflected in the analysis. Before you make any investment, estate or tax planning decisions (or change title to any assets or change beneficiary designations) your legal and tax advisors should be consulted to determine (1) the suitability of a particular planning alternative for you and (2) the precise legal tax investment and accounting consequences of that alternative. John Hancock and its agents, employees and registered representatives do not give legal, tax, accounting or investment advice and this presentation and any other oral or written communication should not be construed as such. As you explore your planning needs with your legal and tax advisors, we hope that you will find this analysis useful. This material does not constitute tax, legal or or accounting advice and and neither neither John John Hancock nornew any of Yrok its agents, nor anyemployees of its agents, or registered employees representatives or registered representatives is in the business is of in offering the business such advice. of offering It was suchnot advice. intended It was or written not intended for useor and written cannot forbe useused andby cannot any taxpayer be usedfor bythe anypurpose taxpayer offor avoiding the purpose any IRS of avoiding penalty. It any was IRSwritten penalty. to It support was written the marketing to supportof the the marketing transactions of theortransactions topics it addresses. or topics it Comments addresses. oncomments taxation are on taxation based on arejohn based Hancock s on John Hancock s understanding understanding of current tax of current law, which tax law, is subject whichtois change. subject to Anyone change. interested Anyone interested these transactions in these transactions or topics should or topics seek should advice seek based advice on his based or her on his particular or her circumstances particular circumstances from independent from independent professional professional advisors. advisors. Internal Compliance Number: MLI Page 2 of 16 February 02, 2010 SAMPLE BOOKLET Internal Compliance Number MLI DOLU 01/10

3 Section 6166 Installment of Estate Tax TABLE OF CONTENTS A. Section 6166 Installment of Estate Tax (Overview) B. Summary Of Alternatives C. Installment of Estate Taxes Analysis - Year 2034 D. Summary Of Options - Cost Analysis - In Year 2034 E. Hypothetical Comparison of Life and Installment F. Net To Heirs Analysis G. Assumptions H. Glossary Page 3 of 16 February 02, 2010

4 Section 6166 Installment of Estate Tax OVERVIEW THE CONCERN As the owner of a closely held business, liquidity for your estate could be a matter of particular importance to you. If your business represents a large portion of your estate, you may be concerned about your heirs being forced to sell the business or its assets to pay estate taxes. In examining the ways to minimize estate taxes, you may also be considering how best to create liquidity to help heirs meet the estate tax obligation and other cash needs. THE SOLUTION If your estate qualifies, consider the costs and benefits of using Internal Revenue Code (IRC) Section 6166 to temporarily defer estate taxes, and subsequently to pay them on an installment basis. Then consider how the liquidity available from a life insurance policy can be used in combination with or even as an alternative to the tax deferral option under IRC. HOW DOES IT WORK? The installment election under is available to the estate of a US citizen or legal resident, where the value of the interest in the closely held business 1 accounts for more than 35% 2 of the adjusted gross estate. In order to take advantage of estate tax deferral under this Section, your estate would file an election no later than the timely-filed estate tax return 3. Your estate would elect to defer payment of estate taxes due on the proportional value of the business 4. The election can push back payments of tax by up to 5 years, and then enables your estate to pay those taxes in up to ten equal installments after the deferral. Deferment applies only to estate tax due. Interest on that tax must be paid annually. See IRC (f). Your estate can therefore acquire up to 14 years 5 to pay. A portion of the estate tax 6 incurs interest throughout the installment period at 2% and is known as the 2% portion. Tax exceeding the 2% portion incurs interest at 45% of the current regular tax underpayment rate 7. Client's Total Estate Client Gifts Premiums To an ILIT Other Assets Business (Greater Than 35% of Total Estate) Estate Taxes Paid At Death Beneficiaries Beneficiaries Elect to Exercise Section 6166 for the Business portion the Estate (s of Estate Taxes over 14 Years) Death Benefit Proceeds used To Help Pay Estate Taxes IRS ILIT Purchases Life On Client(s) ILIT 8 1 (b)(1) defines this interest (in all cases in an entity carrying on a trade or business) as (1) an interest as a sole proprietor; (2) a partnership interest if either 20% or more of the total capital interest in such a partnership is included or the partnership had 45 or fewer partners; or (3) stock in a corporation if either 20% or more of the voting stock is included or the corporation had 45 or fewer shareholders. Passive ownership interests do not qualify the level of activity of the deceased owner distinguishes an active business that qualifies for the election from non-qualifying passive ownership. See Rev-Rul , and Private Letter Ruling Due to the variety of possible circumstances, special rules apply to valuation, including where the business is a sole proprietorship, or when combination of ownership in more than one business is permissible, or when the business is a farm. 3 The IRS determines on a case-by-case basis whether a surety bond from the estate or a special lien under provisions of 6324A is needed and appropriate. See Estate of Roski v. Commissioner, 128 T.C. 113 Dec 56,896, and Notice Formal regulations from the IRS are still pending. 4 The election will apply only to the tax owed on the value of the closely held business in proportion to the value of the entire adjusted gross estate. 5 Since the first installment of tax is due at the same time as the last installment of interest, the total possible payment period is 14 (not 15) years. IRC (a)(3) and (f). 6 This is the tax on the indexed value of $1 million in 1998, or the first $1.33 million for deaths in 2009, less the applicable credit amount. 7 The rate charged on balances owed to the IRS. For individuals and small corporations, it is the short-term applicable federal rate (AFR) plus three percentage points. This rate changes quarterly. 8 Trusts should be drafted by an attorney familiar with such matters in order to take into account income and estate tax laws (including the generation-skipping tax). Failure to do so could result in adverse tax treatment of trust proceeds. Page 4 of 16 February 02, 2010

5 Section 6166 Installment of Estate Tax OVERVIEW WHERE LIFE INSURANCE FITS IN There are obvious benefits to making the election, but certain aspects of the tax deferral and installment option under that Section make life insurance an extremely attractive complement or even an alternative to. While helps to temporarily relieve the tax burden that results from ownership of the business, it does not apply to other assets in your estate. This means that your estate could still face an estate tax burden that it would not be able to defer under. The IRS has also begun to emphasize the bond or lien requirements of that Section, which it could seek to exercise against not only the business itself but also against the underlying assets of the business. A surety bond can be prohibitively expensive or may be unavailable, and an IRS lien could affect the business future ability to borrow. Against this background, life insurance performs some important functions. First, it is self-completing. It can provide cash when your estate needs it, regardless of whether your estate qualifies for statutory relief under. In particular, the death benefit supplies the liquidity your estate needs to meet ALL its estate tax obligations, not only those that qualify for tax deferral and installment payments under. Second, even if your estate qualifies for relief under that Section, life insurance can help to relieve future liquidity pressures. There would be no need to identify sources of funding for future estate tax installments. Third, gifting of premiums during your lifetime will reduce the size of your taxable estate. You may consider establishing an irrevocable life insurance trust 8 (ILIT) to purchase and own the policy on your life. With a properly drafted trust and if premiums are within gift tax exclusion limits, your annual gifts of policy premiums to the ILIT may reduce your taxable estate with little or no gift tax consequences. BENEFITS Tax Deferral Under When a timely election is made under, estate taxes may be deferred temporarily up to 5 years, with the balance paid in installments, over a maximum of 14 years. Under, a low 2% interest rate applies to a portion of the outstanding tax owed for the duration of the installment period. Life Cash from the life insurance policy eliminates the need for a forced sale of the business or other assets to meet the estate tax obligation. The purchase of a life insurance policy may be a tax-efficient complement to the tax deferral election under. Life insurance provides your estate the liquidity it needs exactly when it is needed, regardless of whether your estate qualifies for tax deferral under. Life insurance may be a more cost-efficient method of paying estate taxes than the tax deferral provided for under the election. Life insurance eliminates uncertainty about how the future tax installments will be paid. Premium payments on the life insurance policy reduce the taxable estate. 8 Trusts should be drafted by an attorney familiar with such matters in order to take into account income and estate tax laws (including the generation-skipping tax). Failure to do so could result in adverse tax treatment of trust proceeds. Page 5 of 16 February 02, 2010

6 Section 6166 Installment of Estate Tax OVERVIEW CONSIDERATIONS A cost-benefit analysis should be conducted to compare the relative cost to the estate over time in terms of today s dollars ( present value ) of choosing the election and/or the purchase of a life insurance policy. Estate taxes attributable to your other estate assets do not qualify for special treatment under. Your estate must qualify to utilize the tax deferral opportunity under. One requirement is that the interest must be in an active trade or business 9. Gifts made within 3 years of death will be considered for the 35% of adjusted gross estate test 10. When considering tax deferral under, the implications for other planning options, including an Installment Sale of the Business to a Defective Trust, must be taken into account. Tax deferral under may require security or a lien against the business or its assets. Interest paid under a arrangement does not qualify as an administrative expense and is not deductible on either the estate tax return or on the fiduciary income tax returns. The right to defer payment can be lost in a number of circumstances, even after installment payments have begun. These could include default on payment of either interest or principal, as well as disposal of the qualifying business interest, or the withdrawal from the business of money or property attributable to that interest. Aspects of this module are based on existing tax laws which could change in the future. YOUR SITUATION The following pages illustrate the relative cost to the estate in terms of the present value of dollars spent. Four basic options can be considered for a projected year of death against a range of assumed factors, including a given rate of inflation and a given rate of estate tax: In the first of these, no prior planning has been done, so estate taxes are payable within 9 months of death. The second option assumes election of benefits with estate taxes paid over the maximum period. In the third case, estate planning employs a life insurance policy to pay estate taxes at the time due. The final option blends the benefits of with life insurance. 9 The IRS views the level of the interest-holder s activity as the significant factor in determining if the tax deferral benefits of are available to the estate. 10 IRC 2035(c). Page 6 of 16 February 02, 2010

7 Section 6166 Installment of Estate Tax SUMMARY OF ALTERNATIVES POLICY DETAILS Product: Protection SUL-G 10 Initial Premium: Insured(s): Valued Client & Mrs. Valued Client Initial Death Benefit: Male Age 64, Preferred NonSmoker/Female Age 61, Preferred NonSmoker COMPARISON OF BENEFITS IN YEAR 2034 $67,518 $6,000,000 Do Nothing Election Gifting to an ILIT & Purchase Life Total Estate Today Admin. Expenses Value of Business Cumulative Gifts Cumulative Gift Taxes Total Premiums Death Benefit Total Estate Growing at (3.00%) Admin. Expenses Net Taxable Estate Projected Estate Taxes Estate Tax Cost Assets in ILIT Net to Heirs 8,000,000 8,000, ,000,000 4,000,000 16,262,353 16,262, ,262,353 16,262,353 7,198,859 7,198,859 7,198,859 6,698,295¹ 9,063,494 9,564,058 8,000,000-4,000,000 1,687,958-1,687,958 6,000,000 13,800,685-13,800,685 6,091,108 6,091,108 6,000,000 13,709,577 NPV (Cost)/Gain at 5.00%³ (3,865,169) (3,596,409) ($978,504)² 1 Estate Tax Cost represents the Present Value to the year of Death of the 14 Annual s when a Election is made (see page 8). 2 Includes: The Net Present Value of Premiums Paid to Specified Year plus the Net Present Value of Excess Death Benefit (if any) over the Estate Taxes, or any additional Estate Tax Cost caused by the shortfall between the Death Benefit and Estate Taxes. 3 Present Value (Cost)/Gain at X% The overall Cost (or Gain) to the estate in the stated focus year, in terms of today s dollars ( present value ) assuming X% annual inflation between present and Focus Year. Includes the present value of premiums paid until Focus Year, plus present value of any excess of death benefit over estate taxes due, or present value cost of any excess of estate tax over death benefit The projected net amount available to Heirs ( Net to Heirs ) using the 6166 Election option NET TO HEIRS in this case will be less than the Net to Heirs 18,000 using the Life option until Year 39, 16,000 the cross over year. Thousands 14,000 12,000 10,000 8,000 6,000 4,000 2, Joint Life Expectancy is 25 Years (Based on Table 2000CM) Page 7 of 16 February 02, 2010 Table 2000CM. This table is the most recent IRS mortality table for determining the gift and estate tax values of various component interests in property. This table is an "average case" table. It takes into account the fact that it is valuing lives for people not self-selected for either longer or shorter than usual longevity. This table may be used starting May 1, 2009 to value annuities, life estates, and remainders. There is an overlapping period between this table and Table 90CM. Either table may be used from May 1, 2009 through June 30, Using information on the mortality table, it is possible to calculate the probability of survival from one age to another, of one single life or two lives jointly.

8 Section 6166 Installment of Estate Tax SUMMARY OF OPTIONS - COST ANALYSIS - IN YEAR 2034 ($1,779,066) ($1,332,424) ($7,198,859) Option 1. Current Planning (Basic Estate Taxes) ($6,698,295) Option 2. Estate Taxes With Section 6166 Election Option 3. Estate Taxes Paid by Life Only Option 4. Estate Taxes Paid By Section 6166 & Life Option 1. Current Planning (Basic Estate Taxes) Option 3. Estate Taxes Paid by Life Only Gross Estate: $16,262,353 Gross Estate in 2034 $13,800,685 Admin. Expenses: $0 Estate Tax in 2034 $6,091,108 Adjusted Gross Estate: $16,262,353 Less: Death Benefit Proceeds in 2034 $6,000,000 Value of Business: $8,131,176 Plus Premiums & Gift Taxes Paid By 2034 $1,687,958 Taxable Estate $16,262,353 Net Federal Estate Tax in Year 2034: ($7,198,859) Total Cost ($1,779,066) Present Value (Cost)/Gain Today (5.00%)* ($3,865,169) Present Value (Cost)/Gain Today (5.00%)* ($978,504) Option 2. Estate Taxes With Section 6166 Election Option 4. Estate Taxes Paid By Section 6166 & Life Estimated Estate Taxes to be Paid $7,198,859 Estimated Estate Taxes to be Paid $6,091,108 Estate Taxes that Must be Paid Now (a): $3,599,429 Estate Taxes that Must be Paid Now (1): $3,045,554 Estate Taxes that can be Deferred: $3,599,429 Estate Taxes that can be Deferred: $3,045,554 Unified Credit $1,455,800 Unified Credit $1,455,800 2 Percent Amount $1,251,000 2 Percent Amount $1,251,000 Amount of Tax at "Going Rate" $2,348,429 Amount of Tax at "Going Rate" $1,794,554 Going Rate (45% at the Underpayment Rate) 3.60% Going Rate (45% at the Underpayment Rate) 3.60% Total Interest $1,057,830 Total Interest $864,963 "2 Percent" Plus Principal $3,599,429 "2 Percent" Plus Principal $3,045,554 Total 6166 Cost (b): $4,657,259 Total 6166 Cost (2): $3,910,517 Total Estate Tax Cost ((a)+(b)): $8,256,689 Total Estate Tax Cost ((1)+(2)): $6,956,071 PV Cost of Annual s in Year 2034: ($6,698,295) PV Cost of Annual s in Year 2034: $5,644,466 Present Value (Cost)/Gain Today (5.00%)* ($3,596,409) Less: Death Benefit Proceeds in 2034 $6,000,000 Plus Premiums & Gift Taxes Paid By 2034 $1,687,958 Pre-Tax Income Rate Needed to Meet 6166 s = 16.82% Total & 6166 Cost ($1,332,424) Present Value (Cost)/Gain Today (5.00%)* ($846,609) Refer to Glossary for terms used on this page Assumes an Underpayment Rate of 8.00% and Inflation of 3.00% * Grossed up by an Estate Tax Rate = 45.00% Page 8 of 16 February 02, 2010 This is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration from the issuer. Benefits and values may not be guaranteed; the assumptions on which they are based are subject to change by the insurer. Actual results may be more or less favorable. Refer to the basic illustration for guaranteed elements and other important information.

9 Section 6166 Installment of Estate Tax Installment of Estate Taxes Analysis - Year 2034 Year of Death 2034 ESTATE QUALIFIES FOR SECTION 6166 BENEFITS Profit Margin of Business: 10.00% Estate Tax that Must be Paid Now (a): $3,599,429" Underpayment Rate: 8.00% Estate Tax that can be Deferred: $3,599,429 Inflation Rate: 3.00% Unified Credit: $1,455,800 CURRENT PLANNING (BASIC ESTATE TAXES) 2 Percent Amount: $1,251,000 Gross Estate: $16,262,353 Amount of Tax at "Going Rate" $2,348,429 Admin. Expenses: $0 Going Rate (45% at the Underpayment Rate) 3.60% Adjusted Gross Estate $16,262,353 Total Interest $1,057,830 Less Charitable Deduction $0 "2 Percent" Plus Principal $3,599,429 Less Marital Deduction $0 Total 6166 Cost (b): $4,657,259 Taxable Estate: $16,262,353 Total Estate Tax Cost ((a)+(b)): $8,256,689 Value of Business: $8,131,176 35% of Adjusted Gross Estate: $5,691,823 Net Federal Estate Tax: $7,198,859 "2 Percent" Principal "2 Percent" Interest "2 Percent" DETAIL ANALYSIS Principal of Amount of Tax at "Going Rate" Interest at 'Going Rate' (3.60%) Principal Total Interest Total Yr. 1 1,251,000 25, ,348,429 86, , , ,251,000 25, ,348,429 86, , , ,251,000 25, ,348,429 86, , , ,251,000 25, ,348,429 86, , , ,125,900 25, ,100 2,113,586 86, , , , ,000,800 22, ,100 1,878,744 77, , , , ,700 20, ,100 1,643,901 68, ,843 89, , ,600 17, ,100 1,409,058 60, ,843 77, , ,500 15, ,100 1,174,215 51, ,843 66, , ,400 12, , ,372 43, ,843 55, , ,300 10, , ,529 34, ,843 44, , ,200 7, , ,686 25, ,843 33, , ,100 5, , ,843 17, ,843 22, , , , , ,843 11, ,078 Totals 240,076 1,251, ,754 2,348,429 1,057,830 4,657,259 Present of 'Total ' in Year 2034: $3,098,866 Plus: Estate Tax of Non Business Assets (a) $3,599,429 PV of Total Estate Tax Cost in Year 2034: $6,698,295 PV (5.00%) of Total Estate Tax Cost Today $3,596,409 Average Annual 6166 $332,661 Value of Estate in year 2034 $16,262,353 Pre-Tax Income Rate Needed to Meet 6166 s 16.82% This is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration from the issuer. Benefits and values may not be guaranteed; the assumptions on which they are based are subject to change by the insurer. Actual results may be more or less favorable. Refer to the basic illustration for guaranteed elements and other important information. Page 9 of 16 February 02, 2010

10 Section 6166 Installment of Estate Tax Hypothetical Comparison of Life and Installment - Net Present Value 5.00% Death Year Year 2014 Year 2024 Year 2034 Year 2044 Year 2054 Year 2064 Estate Taxes 3,771,323 3,932,632 4,761,028 5,326,123 6,091,108 7,198,859 7,878,625 9,715,659 10,477,429 13,098,028 14,121,784 17,643,649 Death Benefit 6,000, ,000, ,000, ,000, Cash Flow GAIN COST COST COST COST COST COST COST COST COST COST COST Total PV 1,453,908 (2,932,437) (104,850) (2,438,596) (978,504) (2,023,780) (1,446,135) (1,676,914) (2,315,063) (1,388,017) (2,113,853) (1,147,895) Estate Tax Rate 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% Cal. Yr. Age Pre-Estate Tax* (5,211,203) (4,333,583) (3,596,409) (2,979,996) (2,466,600) (2,039,885) /61 (67,518) - (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /62 (67,518) - (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /63 (67,518) - (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /64 (67,518) - (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /65 2,161,159 (2,026,987) (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /66 - (60,671) (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /67 - (60,671) (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /68 - (60,671) (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /69 - (257,303) (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /70 - (251,236) (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /71 - (245,169) (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /72 - (239,101) (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /73 - (233,034) (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /74 - (226,967) (67,518) - (67,518) - (67,518) - (67,518) - (67,518) /75 - (220,900) 1,171,454 (2,745,347) (67,518) - (67,518) - (67,518) - (67,518) /76 - (214,833) - (82,286) (67,518) - (67,518) - (67,518) - (67,518) /77 - (208,766) - (82,286) (67,518) - (67,518) - (67,518) - (67,518) /78 - (202,699) - (82,286) (67,518) - (67,518) - (67,518) - (67,518) (348,592) (67,518) - (67,518) - (67,518) - (67,518) (340,363) (67,518) - (67,518) - (67,518) - (67,518) (332,135) (67,518) - (67,518) - (67,518) - (67,518) (323,906) (67,518) - (67,518) - (67,518) - (67,518) (315,678) (67,518) - (67,518) - (67,518) - (67,518) (307,449) (67,518) - (67,518) - (67,518) - (67,518) (299,220) (158,626) (3,710,780) (67,518) - (67,518) - (67,518) - Totals: 1,891,085 (4,509,009) 226,198 (5,259,547) (1,779,066) (3,710,780) (1,687,958) - (1,687,958) - (1,687,958) - Page 10 of 16 * Pre-Estate Tax refers to the amount that would be required today to fund the future estate tax liability February 02, 2010 ** Cash Flow = Annual Premiums & Gift Taxes Paid (if any), plus in the year of death the Death Benefit Less Estate Taxes This is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration from the issuer. Benefits and values may not be guaranteed; the assumptions on which they are based are subject to change by the insurer. Actual results may be more or less favorable. Refer to the basic illustration for guaranteed elements and other important information.

11 Section 6166 Installment of Estate Tax Hypothetical Comparison of Life and Installment - Net Present Value 5.00% Death Year Year 2014 Year 2024 Year 2034 Year 2044 Year 2054 Year 2064 Estate Taxes 3,771,323 3,932,632 4,761,028 5,326,123 6,091,108 7,198,859 7,878,625 9,715,659 10,477,429 13,098,028 14,121,784 17,643,649 Death Benefit 6,000, ,000, ,000, ,000, Cash Flow GAIN COST COST COST COST COST COST COST COST COST COST COST Total PV 1,453,908 (2,932,437) (104,850) (2,438,596) (978,504) (2,023,780) (1,446,135) (1,676,914) (2,315,063) (1,388,017) (2,113,853) (1,147,895) Estate Tax Rate 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% Cal. Yr. Age Pre-Estate Tax* (5,211,203) (4,333,583) (3,596,409) (2,979,996) (2,466,600) (2,039,885) (290,992) - (111,351) (67,518) - (67,518) - (67,518) (282,763) - (111,351) (67,518) - (67,518) - (67,518) (274,535) - (111,351) (67,518) - (67,518) - (67,518) (471,293) (67,518) - (67,518) - (67,518) (460,158) (67,518) - (67,518) - (67,518) (449,023) (67,518) - (67,518) - (67,518) (437,888) (67,518) - (67,518) - (67,518) (426,753) (67,518) - (67,518) - (67,518) (415,618) (67,518) - (67,518) - (67,518) (404,483) (1,946,143) (5,008,198) (67,518) - (67,518) (393,348) - (150,368) (67,518) - (67,518) (382,213) - (150,368) (67,518) - (67,518) (371,078) - (150,368) (67,518) - (67,518) (636,151) (67,518) - (67,518) (621,114) (606,077) (591,041) (576,004) (560,967) (545,930) (10,477,429) (6,751,894) (530,893) - (202,880) (515,857) - (202,880) (500,820) - (202,880) (857,781) (837,493) - - Totals: 1,891,085 (4,509,009) 226,198 (6,107,837) (1,779,066) (8,256,689) (4,241,766) (11,144,156) (13,110,644) (9,055,808) (2,633,214) - Page 11 of 16 * Pre-Estate Tax refers to the amount that would be required today to fund the future estate tax liability February 02, 2010 ** Cash Flow = Annual Premiums & Gift Taxes Paid (if any), plus in the year of death the Death Benefit Less Estate Taxes This is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration from the issuer. Benefits and values may not be guaranteed; the assumptions on which they are based are subject to change by the insurer. Actual results may be more or less favorable. Refer to the basic illustration for guaranteed elements and other important information.

12 Section 6166 Installment of Estate Tax Hypothetical Comparison of Life and Installment - Net Present Value 5.00% Death Year Year 2014 Year 2024 Year 2034 Year 2044 Year 2054 Year 2064 Estate Taxes 3,771,323 3,932,632 4,761,028 5,326,123 6,091,108 7,198,859 7,878,625 9,715,659 10,477,429 13,098,028 14,121,784 17,643,649 Death Benefit 6,000, ,000, ,000, ,000, Cash Flow GAIN COST COST COST COST COST COST COST COST COST COST COST Total PV 1,453,908 (2,932,437) (104,850) (2,438,596) (978,504) (2,023,780) (1,446,135) (1,676,914) (2,315,063) (1,388,017) (2,113,853) (1,147,895) Estate Tax Rate 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% Cal. Yr. Age Pre-Estate Tax* (5,211,203) (4,333,583) (3,596,409) (2,979,996) (2,466,600) (2,039,885) (817,205) (796,917) (776,629) (756,341) (736,053) (14,121,784) (9,095,203) (715,765) - (273,379) (695,477) - (273,379) (675,189) - (273,379) (1,155,561) (1,128,223) (1,100,885) (1,073,547) Totals: 1,891,085 (4,509,009) 226,198 (6,107,837) (1,779,066) (8,256,689) (4,241,766) (11,144,156) (13,110,644) (15,025,386) (16,754,998) (14,373,556) Page 12 of 16 * Pre-Estate Tax refers to the amount that would be required today to fund the future estate tax liability February 02, 2010 ** Cash Flow = Annual Premiums & Gift Taxes Paid (if any), plus in the year of death the Death Benefit Less Estate Taxes This is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration from the issuer. Benefits and values may not be guaranteed; the assumptions on which they are based are subject to change by the insurer. Actual results may be more or less favorable. Refer to the basic illustration for guaranteed elements and other important information.

13 Section 6166 Installment of Estate Tax NET TO HEIRS ANALYSIS ESTATE VALUE ANALYSIS LIFE INSURANCE Cal. Yr. Age Taxable Estate Growing at 3.00% Federal Estate Tax Net to Heirs Tax that Must be Paid Now Nominal Installment Cost PV Total Estate Tax Cost* Net to Heirs Taxable Estate (3.00%) Premiums Gift Taxes Death Benefit Net Federal Estate Tax Net to Heirs Probability of 1 Surviving Net Gain From /61 8,000,000 3,480,800 4,519,200 1,740,400 2,250,771 3,237,913 4,762,087 7,932,482 67,518-6,000,000 3,450,417 10,482, % 5,719, /62 8,240,000 3,588,800 4,651,200 1,794,400 2,320,058 3,337,955 4,902,045 8,102,938 67,518-6,000,000 3,527,122 10,575, % 5,673, /63 8,487,200 3,700,040 4,787,160 1,850,020 2,392,232 3,441,620 5,045,580 8,278,508 67,518-6,000,000 3,606,128 10,672, % 5,626, /64 8,741,816 3,814,617 4,927,199 1,907,309 2,466,655 3,548,460 5,193,356 8,459,345 67,518-6,000,000 3,687,505 10,771, % 5,578, /65 9,004,070 3,932,632 5,071,439 1,966,316 2,542,693 3,658,029 5,346,041 8,645,607 67,518-6,000,000 3,771,323 10,874, % 5,528, /66 9,274,193 4,054,187 5,220,006 2,027,093 2,621,820 3,771,507 5,502,686 8,837,456 67,518-6,000,000 3,857,655 10,979, % 5,477, /67 9,552,418 4,179,388 5,373,030 2,089,694 2,702,703 3,887,914 5,664,505 9,035,062 67,518-6,000,000 3,946,578 11,088, % 5,423, /68 9,838,991 4,308,346 5,530,645 2,154,173 2,786,117 4,007,894 5,831,097 9,238,595 67,518-6,000,000 4,038,168 11,200, % 5,369, /69 10,134,161 4,441,172 5,692,988 2,220,586 2,872,139 4,131,554 6,002,607 9,448,235 67,518-6,000,000 4,132,506 11,315, % 5,313, /70 10,438,185 4,577,983 5,860,202 2,288,992 2,960,848 4,259,005 6,179,180 9,664,164 67,518-6,000,000 4,229,674 11,434, % 5,255, /71 10,751,331 4,718,899 6,032,432 2,359,449 3,051,620 4,389,821 6,361,510 9,886,570 67,518-6,000,000 4,329,757 11,556, % 5,195, /72 11,073,871 4,864,042 6,209,829 2,432,021 3,145,944 4,525,198 6,548,673 10,115,649 67,518-6,000,000 4,432,842 11,682, % 5,134, /73 11,406,087 5,013,539 6,392,548 2,506,770 3,242,501 4,664,178 6,741,909 10,351,600 67,518-6,000,000 4,539,020 11,812, % 5,070, /74 11,748,270 5,167,521 6,580,748 2,583,761 3,342,081 4,807,424 6,940,846 10,594,630 67,518-6,000,000 4,648,383 11,946, % 5,005, /75 12,100,718 5,326,123 6,774,595 2,663,062 3,444,776 4,955,065 7,145,653 10,844,950 67,518-6,000,000 4,761,028 12,083, % 4,938, /76 12,463,739 5,489,483 6,974,257 2,744,741 3,550,677 5,107,232 7,356,507 11,102,781 67,518-6,000,000 4,877,051 12,225, % 4,869, /77 12,837,652 5,657,743 7,179,908 2,828,872 3,659,882 5,264,062 7,573,590 11,368,346 67,518-6,000,000 4,996,556 12,371, % 4,798, /78 13,222,781 5,831,051 7,391,730 2,915,526 3,771,787 5,425,153 7,797,628 11,641,878 67,518-6,000,000 5,119,645 12,522, % 4,724, ,619,464 6,009,559 7,609,905 3,004,780 3,887,197 5,591,191 8,028,274 11,923,616 67,518-6,000,000 5,246,427 12,677, % 4,648, ,028,048 6,193,422 7,834,627 3,096,711 4,006,216 5,762,323 8,265,725 12,213,806 67,518-6,000,000 5,377,013 12,836, % 4,571, ,448,890 6,382,800 8,066,089 3,191,400 4,128,954 5,938,703 8,510,187 12,512,702 67,518-6,000,000 5,511,516 13,001, % 4,490, ,882,357 6,577,860 8,304,496 3,288,930 4,255,521 6,120,487 8,761,869 12,820,564 67,518-6,000,000 5,650,054 13,170, % 4,408, ,328,827 6,778,772 8,550,055 3,389,386 4,385,330 6,307,299 9,021,529 13,137,663 67,518-6,000,000 5,792,748 13,344, % 4,323, ,788,692 6,985,711 8,802,981 3,492,856 4,519,202 6,499,844 9,288,848 13,464,275 67,518-6,000,000 5,939,724 13,524, % 4,235, ,262,353 7,198,859 9,063,494 3,599,429 4,657,259 6,698,295 9,564,058 13,800,685 67,518-6,000,000 6,091,108 13,709, % 4,145, ,750,223 7,418,401 9,331,823 3,709,200 4,799,627 6,902,830 9,847,394 14,147,187 67,518-6,000,000 6,247,034 13,900, % 4,052, ,252,730 7,644,529 9,608,202 3,822,264 4,945,731 7,113,090 10,139,641 14,504,084 67,518-6,000,000 6,407,638 14,096, % 3,956, ,770,312 7,877,440 9,892,872 3,938,720 5,096,408 7,329,803 10,440,509 14,871,688 67,518-6,000,000 6,573,060 14,298, % 3,858, ,303,421 8,117,340 10,186,082 4,058,670 5,251,795 7,553,164 10,750,257 15,250,321 67,518-6,000,000 6,743,444 14,506, % 3,756, ,852,524 8,364,436 10,488,088 4,182,218 5,412,034 7,783,371 11,069,153 15,640,312 67,518-6,000,000 6,918,940 14,721, % 3,652,219 * [PV Total Estate Tax Cost] = [Tax that Must be Paid Now] Plus the Net Present Value (5.00%) of [Nominal Installment Cost] to year of Death ** Probability of at Least 1 Surviving (EOY) based on 2000CM Page 13 of 16 February 02, 2010 This is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration from the issuer. Benefits and values may not be guaranteed; the assumptions on which they are based are subject to change by the insurer. Actual results may be more or less favorable. Refer to the basic illustration for guaranteed elements and other important information.

14 Section 6166 Installment of Estate Tax NET TO HEIRS ANALYSIS ESTATE VALUE ANALYSIS LIFE INSURANCE Cal. Yr. Age Taxable Estate Growing at 3.00% Federal Estate Tax Net to Heirs Tax that Must be Paid Now Nominal Installment Cost PV Total Estate Tax Cost* Net to Heirs Taxable Estate (3.00%) Premiums Gift Taxes Death Benefit Net Federal Estate Tax Net to Heirs Probability of 1 Surviving Net Gain From ,418,100 8,618,945 10,799,155 4,309,472 5,576,566 8,020,091 11,398,009 16,042,003 67,518-6,000,000 7,099,701 14,942, % 3,544, ,000,643 8,881,089 11,119,554 4,440,545 5,746,246 8,264,074 11,736,569 16,455,745 67,518-6,000,000 7,285,885 15,169, % 3,433, ,600,662 9,151,098 11,449,564 4,575,549 5,921,227 8,515,538 12,085,124 16,881,899 67,518-6,000,000 7,477,654 15,404, % 3,319, ,218,682 9,429,207 11,789,475 4,714,603 6,100,965 8,774,169 12,444,513 17,320,837 67,518-6,000,000 7,675,177 15,645, % 3,201, ,855,242 9,715,659 12,139,583 4,857,830 6,286,327 9,040,737 12,814,506 17,772,944 67,518-6,000,000 7,878,625 15,894, % 3,079, ,510,900 10,010,705 12,500,195 5,005,352 6,477,482 9,315,479 13,195,420 18,238,614 67,518-6,000,000 8,088,176 16,150, % 2,955, ,186,227 10,314,602 12,871,625 5,157,301 6,673,901 9,598,103 13,588,124 18,718,254 67,518-6,000,000 8,304,014 16,414, % 2,826, ,881,813 10,627,616 13,254,197 5,313,808 6,877,168 9,889,939 13,991,874 19,212,284 67,518-6,000,000 8,526,328 16,685, % 2,694, ,598,268 10,950,021 13,648,247 5,475,010 7,085,359 10,189,629 14,408,639 19,721,134 67,518-6,000,000 8,755,310 16,965, % 2,557, ,336,216 11,282,097 14,054,119 5,641,049 7,300,774 10,499,060 14,837,156 20,312, ,021,546 11,291, % (3,545,934) ,096,302 11,624,136 14,472,166 5,812,068 7,522,201 10,817,428 15,278,874 20,922, ,295,768 11,626, % (3,652,491) ,879,191 11,976,436 14,902,755 5,988,218 7,749,841 11,145,018 15,734,173 21,549, ,578,217 11,971, % (3,762,575) ,685,567 12,339,305 15,346,262 6,169,653 7,984,606 11,482,663 16,202,905 22,196, ,869,139 12,327, % (3,875,734) ,516,134 12,713,060 15,803,074 6,356,530 8,226,710 11,830,663 16,685,471 22,862, ,168,790 12,693, % (3,992,061) ,371,618 13,098,028 16,273,590 6,549,014 8,476,372 12,189,331 17,182,288 23,548, ,477,429 13,070, % (4,111,652) ,252,767 13,494,545 16,758,222 6,747,273 8,732,412 12,557,905 17,694,862 24,254, ,795,328 13,459, % (4,235,683) ,160,350 13,902,957 17,257,392 6,951,479 8,997,175 12,938,336 18,222,014 24,982, ,122,764 13,859, % (4,362,636) ,095,160 14,323,622 17,771,538 7,161,811 9,269,494 13,329,882 18,765,278 25,731, ,460,023 14,271, % (4,493,695) ,058,015 14,756,907 18,301,108 7,378,453 9,549,617 13,732,894 19,325,121 26,503, ,807,400 14,696, % (4,628,966) ,049,755 15,203,190 18,846,566 7,601,595 9,838,502 14,148,272 19,901,483 27,298, ,165,198 15,133, % (4,768,020) ,071,248 15,662,862 19,408,386 7,831,431 10,136,412 14,576,387 20,494,861 28,117, ,533,730 15,583, % (4,910,970) ,123,386 16,136,324 19,987,062 8,068,162 10,442,915 15,017,081 21,106,305 28,961, ,913,317 16,047, % (5,058,473) ,207,087 16,623,989 20,583,098 8,311,995 10,758,290 15,470,746 21,736,341 29,829, ,304,293 16,525, % (5,210,649) ,323,300 17,126,285 21,197,015 8,563,142 11,083,526 15,938,330 22,384,970 30,724, ,706,998 17,017, % (5,367,084) ,472,999 17,643,649 21,829,349 8,821,825 11,418,921 16,420,249 23,052,750 31,646, ,121,784 17,524, % (5,527,903) ,657,189 18,176,535 22,480,654 9,088,267 11,763,372 16,915,854 23,741,335 32,596, ,549,013 18,047, % (5,694,319) ,876,904 18,725,407 23,151,497 9,362,703 12,118,599 17,426,666 24,450,238 33,573, ,989,060 18,584, % (5,865,387) ,133,212 19,290,745 23,842,466 9,645,373 12,484,926 17,953,144 25,180,068 34,581, ,442,307 19,138, % (6,041,248) ,427,208 19,873,044 24,554,164 9,936,522 12,861,983 18,495,216 25,931,992 35,618, ,909,153 19,709, % (6,222,584) ,760,024 20,472,811 25,287,213 10,236,405 13,250,113 19,053,366 26,706,658 36,687, ,390,003 20,297, % (6,409,543) * [PV Total Estate Tax Cost] = [Tax that Must be Paid Now] Plus the Net Present Value (5.00%) of [Nominal Installment Cost] to year of Death ** Probability of at Least 1 Surviving (EOY) based on 2000CM Page 14 of 16 February 02, 2010 This is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration from the issuer. Benefits and values may not be guaranteed; the assumptions on which they are based are subject to change by the insurer. Actual results may be more or less favorable. Refer to the basic illustration for guaranteed elements and other important information.

15 Section 6166 Installment of Estate Tax ASSUMPTIONS CLIENT INFORMATION Client's Name(s) Valued Client & Mrs. Valued Client Client's Name Age Sex Valued Client 64 Male Risk Class Spouse's Name Age Sex Risk Class Income Tax Rate Preferred NonSmoker Mrs. Valued Client 61 Female Preferred NonSmoker 40.00% 6166 ELECTION INFORMATION Tax Year: Profit Margin of Business: Underpayment Rate: Valuation Inflation Rate: Gross Estate: Admin. Expenses: Charitable Deduction Charitable Deduction Growth Rate Marital Deduction Marital Deduction Growth Rate Net Taxable Estate Value of Business: Net Federal Estate Tax: Adjusted Gross Estate: 35% of Adjusted Gross Estate: % 8.00% 3.00% $8,000,000 $0 $0 0.00% $0 0.00% $8,000,000 $4,000,000 $3,480,800 $8,000,000 $2,800,000 Estate Qualifies For Section 6166 Benefits Estate Tax Method s per Year: Period Net Present Value Rate Estate Growth Rate GIFT INFORMATION Post-76 Taxable Gifts Prior Gift Taxes Paid No. of Exclusions Per Client Show Gift Taxes? Trust Opening Balance POLICY INFORMATION Type of Policy 2009 Limits Daily End of Year 5.00% 3.00% $0 $0 2 YES $0 Survivorship Survivorship or Single Life Policy Name State Initial Policy Death Benefit Protection SUL-G 10 Michigan $6,000,000 Total death benefit Policy Premium $67,518 Annual Premium Years for Premiums** 39 Number of years to pay premiums Current Crediting Rate 4.75% PRODUCER INFORMATION Presenter's Name Agency/Firm Name Address City, State & Zip Phone Fax Address Focus* Year of death Years to Print Single Life Expenctancy Year Sample Agent John Hancock Financial Services 197 Clarendon St. Boston, MA (617) (617) hansel@jhancock.com Page 15 of 16 February 02, 2010

16 Section 6166 Installment of Estate Tax GLOSSARY OF TERMS 2% Amount. Also called "2% Portion". Under the installment option, a certain portion of the deferred tax incurs interest at 2% throughout the installment period, namely the tax on the indexed value of $1 million in 1998 reduced by the applicable credit amount. Adjusted Gross Estate The gross estate generally refers to all property in which the decedent had an interest; for the purposes of it will also include gifts made within 3 years of death. The adjusted gross estate means the value of the gross estate reduced by allowable deductions. Going Rate Refers to 45% of the then current regular tax underpayment rate. The regular tax underpayment rate is the rate of interest charged by the IRS on balances owed to the agency. For individuals and small corporations, this is the short-term applicable federal rate (AFR) plus three percentage points, and changes quarterly. Under the installment option, the Going Rate is the rate that applies to taxable value exceeding the 2% Portion. Nominal Installment Cost This represents the total estimated amount that would be paid under the election, comprised of the principal amount of estate tax that is deferred and paid in installments plus the total interest paid over the entire course of the deferral and installment period. PV Total Estate Tax Cost For a given focus year, PV Total Estate Tax Cost represents the focus year value of the Total Estate Tax Cost, which incorporates estate taxes that cannot be deferred plus the Nominal Installment Cost (a component of which is payments to be made in the future over the course of the deferral and installment period). Pre-Tax Income Rate Needed to Meet s Refers to the average annual payment under the election divided by the business value divided by the Income Tax Rate plus the stated profit margin rate. Sale to a Defective Trust An effective estate planning tool that may be useful for holders of income-producing and appreciating assets, using the "grantor trust" rules to reduce the taxable estate. Irrevocable Life Trust (ILIT) A lifetime trust which, if properly drafted and administered, permits the life insurance proceeds to be received by the trust free of income tax and estate tax. In addition, the life insurance cash values will grow tax deferred during your lifetime. Page 16 of 16 February 02, 2010

17 John Hancock Life Company (U.S.A.) A LIFE INSURANCE POLICY ILLUSTRATION A Flexible Premium Adjustable Life Policy Valuable Information About Your Life Illustration Illustration Assumptions Valued Client Male Preferred NonSmoker Mrs. Valued Client Female Preferred NonSmoker Protection SUL-G Protection SUL-G is an insurance policy that covers two lives and pays a death benefit when the second person dies. You select the death benefit when we issue the policy. Any time after the first policy anniversary you can decrease the death benefit, provided you meet certain requirements. In some instances, we may be required to change the death benefit to meet the Internal Revenue Code regulations. There is no set premium with this policy. However, enough premium must be paid in order to continue coverage. Coverage will continue as long as the Net Cash Surrender Value or Net Policy Protection Value is greater than zero. You can pay premiums in any amount and at any time, subject to a minimum amount set by us and a maximum amount set by the Internal Revenue Code. When we receive your premiums, we deduct a premium charge and put the remaining amount into the policy. Each month we deduct a certain amount from the policy value for administrative and cost of insurance charges. We also add interest to your policy value each month. When the Younger insured reaches attained age 121, these deductions will stop. Provided coverage is in effect when the Younger insured reaches attained age 121, coverage will continue after age 121 and interest will be credited. No additional charges, other than those for any outstanding policy loans, will be deducted. Policy Protection Rider Your policy includes the Policy Protection Rider for a maximum benefit period up to the Younger life insured's attained age 121. As long as the Policy Protection Rider is in effect your policy cannot lapse even if the Net Cash Surrender Value falls to zero or below. The Policy Protection Rider will stay in effect during the benefit period as long as the reference value called the Net Policy Protection Value is greater than zero. The Net Policy Protection Value is a reference value and is only used to determine whether or not the Policy Protection Rider will stay in effect. The Protection SUL-G Form: 10PROSULG Presented By: Sample Agent Initial Death Benefit $6,000,000 Initial Planned Premium: $67, / Billing Mode: Annual Death Benefit Option 1; Cash Value Accumulation Test State: Michigan Based on Current Charges and an Initial Current Rate of 4.75% policyowner cannot access the reference value. The Policy Protection Rider is a flexible death benefit guarantee. Through your premium payments it can provide guaranteed coverage for any duration up to the maximum benefit period. But like your policy, the Policy Protection Rider is directly affected by the timing and amounts of premiums paid. To ensure that you have the Policy Protection Rider in effect for the period of time that you desire, it is important that premium payments are paid when they are due, otherwise your policy may lapse. As long as the Policy Protection Rider has not lapsed, you can restore the death benefit guarantee at any time by paying enough premium, as illustrated, to satisfy, or "catch up" to, the cumulative premium requirement for the guaranteed period you want. It is important to remember that the longer you wait to restore this guarantee, the more costly it becomes to "catch up". Premiums are due as of the premium due date indicated on your notice. However, in order to help maintain the desired death benefit guarantee, we provide a provision for the late receipt of premium payments. This feature provides you with greater death benefit guarantee protection in the event of late premium payments. In determining whether adequate Policy Protection Value is maintained to support the death benefit guarantee, we will apply late premiums retroactive to the beginning of the policy month in which they are received. Death benefit option changes, loans, withdrawals, rider termination or change, and/or face amount decreases will also affect the Policy Protection Rider. If a policy loan is outstanding, the Policy Protection Rider will not prevent your policy from lapsing if the Net Policy Value falls to zero. Net Death Benefit The life insurance provided in this illustration is payable upon the death of the surviving insured and reflects Initial Death Benefit of $6,000,000 (Option 1). The net death benefit reflects total loan plus any loan interest due. This is your Basic Illustration and is valid only if all illustration pages are included. Version: 6.1R[ ] - RC-12 Page 1 of 9 01/28/ :28:40 AM