Indexed Universal Life vs. A Tax Deductible Retirement Plan (TDRP) For Joe Tanner. Presented By: [Licensed user's name appears here]

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1 Indexed Universal Life vs. A Tax Deductible Retirement Plan () For Joe Tanner Presented By: [Licensed user's name appears here]

2 Indexed Universal Life vs. A Tax Deductible Retirement Plan () Preface A decision to acquire additional life insurance can represent one of several significant phases in your overall financial planning. An important part of this decision involves the comparison of the life insurance policy to alternative investment possibilities. To help you make an informed decision about acquiring the policy, the accompanying presentation shows financial data regarding life insurance compared to a Tax Deductible Retirement Plan (). The study offers information from which you and your advisers can draw informed conclusions about the suitability of either plan. Following are major features of the life insurance policy for you to consider as part of your overall assessment: 1. Accumulating cash values; 2. Income tax deferred growth of cash values; 3. Competitive current interest rate; 4. Tax free access to cash values via policy loans; 5. Income tax free death benefits; 6. Probate free death benefits; 7. Privacy of all transactions. Favorable income tax consequences combine with significant policy values and benefits to produce a life insurance solution that has a considerable amount of financial leverage. Cumulative Payments Cumulative Loan Proceeds $4.8M 3.6M $4.8M 3.6M $3,996, M 1.2M $315, Yrs M 1.2M $1,41,764 Yrs $4.8M Values $4.8M Cash Value 3.6M 3.6M 2.4M 2.4M 1.2M $ Yrs M $736,836 $645,653 Yrs This graphic assumes the non-guaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. Page 1 of 7

3 Indexed Universal Life vs. A Tax Deductible Retirement Plan () Comparison Yield Income Tax Rate 3.% Interest Rate Payment 1,5 315, Tax Deductible Retirement Plan () Indexed Universal Life Yr Male Age (1) Tax Deductible Deposits to the (2) Equivalent of Deposit* (3) Withdrawal from the ** (4) Value of Account (5) Value of if Distributed (6) Death Benefit of (7) Policy Premium (8) Policy Loan Proceeds (9) Accum Value*** (1) Cash Value*** (11) Death Benefit , 1,5 15,964 9,578 11,175 1,5 9,42 2,47 323, , 1,5 32,953 19,772 23,67 1,5 19,533 13, , , 1,5 51,34 3,62 35,724 1,5 3,387 24, , , 1,5 7,277 42,166 49,194 1,5 42,31 37, , , 1,5 9,756 54,454 63,529 1,5 54,528 5, , , 1,5 112,551 67,531 78,786 1,5 67,989 64, , , 1,5 135,746 81,448 95,22 1,5 82,49 79, , , 1,5 16,431 96, ,32 1,5 98,113 96,29 412, , 1,5 186,72 112,21 13,691 1,5 114, , , , 1,5 214, ,797 15,263 1,5 133,19 132, , , 1,5 244, , ,93 1,5 153, , , , 1,5 276,85 165, ,26 1,5 175, , , , 1,5 39, , ,851 1,5 199,19 199,19 513, , 1,5 345,655 27, ,959 1,5 224, , , , 1,5 383,827 23, ,679 1,5 251, , , , 1,5 424, , ,116 1,5 28,663 28, , , 1,5 467,687 28, ,381 1,5 311, , , , 1,5 513,7 38,22 359,59 1,5 345,61 345,61 659, , 1,5 562, ,61 393,868 1,5 381, , , , 1,5 614, ,87 43,349 1,5 42,466 42, , , 1,5 67,248 42, ,174 1,5 462,65 462,65 776, , 1,5 729, ,566 51,493 1,5 56,71 56,71 821, , 1,5 792,96 475, ,467 1,5 554, , , , 1,5 858, ,371 61,266 1,5 66,1 66,1 92, , 1,5 93,13 558,62 651,72 1,5 661, , , , 1,5 1,5,826 74,78 74,78 1,5 72,21 72,21 1,34, , 1,5 1,86,414 76,49 76,49 1,5 783, ,552 1,97, , 1,5 1,172,18 82,526 82,526 1,5 851, ,461 1,165, , 1,5 1,263, ,42 884,42 1,5 924,26 924,26 1,238, , 1,5 1,36, , ,419 1,5 1,2,3 1,2,3 1,316,622 45, 315, 315, *Equal to Column (7) Note: Tax Deductible Retirement Plan () values do not reflect market rate adjustments, if any. Tax Deductible Retirement Plan () is assessed: Tax on withdrawals. Entries in Column (3) are after tax. ***This is an InsMark supplemental illustration for indexed universal life. In an actual presentation, this footnote refers to an accompanying basic illustration from a specific life insurance company with important details, caveats, and guarantees. ** withdrawal has been grossed up to account for the income tax required to produce the after tax number shown in Column (3). Management fees reflected in column (4): 1.% 3 Year Summary Payments 315, 315, Cash Flow Living Values 952,419 1,2,3 952,419 1,316,622 Page 2 of 7

4 Indexed Universal Life vs. A Tax Deductible Retirement Plan () Comparison Yield Income Tax Rate 3.% Interest Rate Payment 1,5 315, Tax Deductible Retirement Plan () Indexed Universal Life Yr Male Age (1) Tax Deductible Deposits to the (2) Equivalent of Deposit* (3) Withdrawal from the ** (4) Value of Account (5) Value of if Distributed (6) Death Benefit of (7) Policy Premium (8) Policy Loan Proceeds (9) Accum Value*** (1) Cash Value*** (11) Death Benefit ,32 1,321,34 924, ,938 83,32 972, ,138 1,184, ,327 1,274, , ,492 86, ,64 941,64 1,155, ,424 1,22, , ,664 89,424 91,955 91,955 1,126, ,614 1,158, ,12 811,12 92,614 88,252 88,252 1,97, ,9 1,87, ,58 761,58 95,9 849, ,713 1,68, ,284 1,6,132 74,292 74,292 99, ,96 819,96 1,4, ,77 914,529 64,17 64,17 12,77 791,55 791,55 996, ,36 811, ,17 568,17 16,36 764,75 764,75 952, ,58 696, , ,479 11,58 74,116 74,116 95, , ,24 397, , , ,59 718,59 857, , , ,85 297,85 117, , ,749 86, , , , , , ,31 682,31 799, ,994 93,175 65,223 65, , , , , ,223 13,281 66,56 66,56 798, , ,46 655,46 86, , , , , ,93 662,64 662,64 84, , , , , , ,83 693,83 94, ,844 72,532 72,532 95, , , , , , ,25 658,25 921, , ,42 631,42 914, ,116 67,265 67,265 91, , ,82 585,82 99, , , , , , , , , , , ,652 82, , ,55 591,55 761, , , , ,836 45, 315, 1,41, , 3,996,178 *Equal to Column (7) Note: Tax Deductible Retirement Plan () values do not reflect market rate adjustments, if any. Tax Deductible Retirement Plan () is assessed: Tax on withdrawals. Entries in Column (3) are after tax. ***This is an InsMark supplemental illustration for indexed universal life. In an actual presentation, this footnote refers to an accompanying basic illustration from a specific life insurance company with important details, caveats, and guarantees. ** withdrawal has been grossed up to account for the income tax required to produce the after tax number shown in Column (3). Management fees reflected in column (4): 1.% 6 Year Summary Payments 315, 315, Cash Flow 1,41,764 3,996,178 Living Values 645, ,836 Page 3 of 7

5 Indexed Universal Life vs. A Tax Deductible Retirement Plan () Matching Values Male Age 35 Yield Income Tax Rate 3.% Interest Rate Payment 1,5 315, Gross Interest Rate Required on a Tax Deductible Retirement Plan () to Match Indexed Universal Life Policy Values over 6 Years. Gross Interest Rate Required To match Accumulation Value of: $645, % To match Cash Value of: $645, % To match of: $736, % To Match Accumulation Value $645, % Required To Match Cash Value $645, % Required To Match $736, % Required Income Tax Considerations 1. Tax Deductible Retirement Plan (): Interest is tax deferred. 2. Indexed Universal Life: a. including available cash value component is income tax free. b. Loans are income tax free as long as the policy is kept in force. c. Withdrawals and other non-loan policy cash flow up to cost basis (not in violation of IRC Section 772) are income tax free as a return of premium. d. Cash values shown assume most favorable combination of b and/or c. This is an InsMark supplemental illustration for indexed universal life. In an actual presentation, this footnote refers to an accompanying basic illustration from a specific life insurance company with important details, caveats, and guarantees. Page 4 of 7

6 Indexed Universal Life vs. A Tax Deductible Retirement Plan () A Look at Year 6 Tax Deductible Retirement Plan () Indexed Universal Life 1,41,764 Cumulative 315, Payments 315, 3,996,178 Cumulative Cash Flow 645,653 Value Cash Value 736,836 Page 5 of 7

7 Indexed Universal Life vs. A Tax Deductible Retirement Plan () Cash Flow Comparison $4,, $3,996,178 $3,, $2,, $1,41,764 $1,, $ Years (31-6) At Year 6 Cumulative Cash Flow - Tax Deductible Retirement Plan () $1,41,764 Cumulative Policy Cash Flow - $3,996,178 Page 6 of 7

8 Indexed Universal Life vs. A Tax Deductible Retirement Plan () 6 Year Analysis $1,6, $1,2, $8, $736,836 $645,653 $4, $315, $ $ Years At Year 6 Cumulative Payments $315, Tax Deductible Retirement Plan () Values $ Cash Value of $645,653 of $736,836 Page 7 of 7

Cash Value Cost of Ignoring Life Insurance (Roth IRA vs. IUL)

Cash Value Cost of Ignoring Life Insurance (Roth IRA vs. IUL) Cash Cost of Ignoring Life Insurance ( vs. IUL) For: Erin Coppola Presented By: [Licensed user's name appears here] vs. Indexed Universal Life Preface A decision to acquire additional life insurance can