A NEW VIEW OF VARIABLE ANNUITIES:

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1 A NEW VIEW OF VARIABLE ANNUITIES: TAX ADVANTAGED INVESTING FOR CLIENTS WITH JEFFERSON NATIONAL, HORTER & TCA JNL20XXXX-AXXX FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR PUBLIC USE.

2 Agenda Jefferson National Monument Advisor Annuity Rescue Power of Tax Deferral Tax-Efficient Tactical Management Wealth Transfer Availability through Horter TCA Integration JEFFERSON NATIONAL PAGE 2

3 Who is Jefferson National? Based in Louisville, KY Innovator of the first flat-fee Investment-Only VA (IOVA) since 2005 Serves nearly 3,500 advisors nationwide - helping their clients save over $135 million in insurance fees. JEFFERSON NATIONAL PAGE 3

4 A New View of Variable Annuities Traditional VA Characteristics: Illiquid Commission-based Insurance Guarantees/Riders Limited Investment Options IOVA Characteristics: Simple Fees Liquid Fee-based Few or no Insurance Guarantees/Riders Broad Asset Class Investment Options JEFFERSON NATIONAL PAGE 4

5 Jefferson National s Monument Advisor What differentiates Monument Advisor from conventional VAs? $20-per-month regardless of the size of the account. This fee is locked in for the life of the contract 1 No commissions No surrender charges 2 No M&E expenses Best-in-class account management Average client fee savings: $2,985 per year over conventional VAs 3 Reducing fees helps unlock greater accumulation potential by compounding the power of tax deferral Totally transparent. Easy to use. Easy to understand 1. Jefferson National s Monument Advisor has a $20 monthly flat insurance fee. Additional low-cost fund platform fees ranging from.10% -.35% will be assessed for investors wishing to purchase shares of low-cost funds. See the prospectus for details. Certain low-cost funds may only be available to you if you retain certain investment advisors. 2. The IRS may charge a 10% tax penalty on any withdrawal made before age 59 ½. 3. Annual savings are based on an industry average M&E charge of 1.35%. Monument Advisor's flat annual insurance fee of $240, and a Monument Advisor average contract value of $238,000 (as of 12/15). JEFFERSON NATIONAL PAGE 5

6 When to use Monument Advisor Annuity Rescue Unlimited Tax Deferral Tax-Efficient Tactical Management Wealth Transfer JEFFERSON NATIONAL PAGE 6

7 #1. Annuity Rescue A tax-free 1035 exchange rescues clients from restrictive and expensive legacy VAs. In the past 10 years, Monument Advisor has saved clients a total of $135mm in fees. 1 Exchanging VAs to Monument Advisor: >Bring old commission annuities to your fee-based AUM >Add Horter strategies to your client s VA assets. >Rescue your clients from legacy VAs, their locked-in rates, lack of fund options and other restrictions without creating a taxable event >Save clients an average of $2,985 in fees annually 2 Let Jefferson National do the work >Contact your JeffNat sales team to run analysis on Monument Advisor vs. any VA on the market 1. Total client savings derived from annual average Monument Advisor contract size multiplied by Morningstar average M&E of 1.35%, minus the $240 flat-insurance fee of Monument Advisor, and then multiplied by the number of policies in force. Data spans May, 2005 through December 31, Annual savings are based on an industry average M&E charge of 1.35%. Monument Advisor's flat annual insurance fee of $240, and a Monument Advisor average contract value of $238,000 (as of 12/15). JEFFERSON NATIONAL PAGE 7

8 1035 Case Study Client: Jane Current Age: 47 Situation: >Wants to retire at age 65 >Invests $250,000 in Traditional VA >Not wanting to have a significant portion of her retirement savings completely eroded by hidden fees, Jane exchanges her old VA for Jefferson National s MA with no hidden charges. Outcome: Jane has the potential to accumulate $173,617 in additional wealth from 1035 exchange JEFFERSON NATIONAL PAGE 8

9 Annuity Comparison Calculator Additional Client Accumulation with Monument Advisor vs. Traditional VA Monument Advisor can potentially generate $173,617 more than the Average VA >Accumulated Value Over 20-Year Investment Horizon >Projection based on an assumed annual growth rate (6%) JEFFERSON NATIONAL PAGE 9

10 #2. Unlimited Tax Deferral Deferring taxes in a practical, tax-advantaged account like Monument Advisor allows client assets to accumulate and compound. The Monument Advisor IOVA offers virtually unlimited tax deferral for clients who have: 1. Maxed out 401(k)s and IRAs 2. Received a sizable inheritance or significant payouts such as a bonus 3. Larger life events, such as profits from a recent business sale. 4. Clients that are heavily invested in tax inefficient strategies and assets. Large cash flow events like these can create significant tax obligations. While it s impossible for investors to avoid taxes on most investments, it s often possible to defer them until retirement when taxes are owed. JEFFERSON NATIONAL PAGE 10

11 The Power of Tax Deferral Case Study Client: Ellen Situation: >Wants to maximize tax deferral beyond the limits of her IRA and 401K. >Does not want to invest in traditional annuity because of cost, complexity and lack of liquidity. >Using a JeffNat calculator, her Horter advisor runs an analysis to see the value that tax deferral could potentially add. Outcome: >The calculator shows that the low-cost Monument Advisor Investment Only VA generates $1,374,970 more than a taxable account on a $250,000 initial investment. JEFFERSON NATIONAL PAGE 11

12 Tax Deferral Comparison Calculator Tax smart investing with Monument Advisor Jefferson National s Tax Deferral Comparison Calculator compares investments in a taxable account versus Monument Advisor. You and your clients can see how our flat-fee IOVA reduces tax drag and provides greater accumulation for your clients. JEFFERSON NATIONAL PAGE 12

13 Tax-Efficient Tactical Management Client: Ellen Situation: >In order to minimize risk, Ellen seeks a Horter advisor to help with tactical management >Her advisor uses the JeffNat calculator to see the potential impact of tax deferral Outcome: >The calculator shows that Jefferson National s Monument Advisor can help improve performance of tactical strategies and other taxinefficient investments without increasing risk. JEFFERSON NATIONAL PAGE 13

14 The Power of Tax Deferral & Tactical Management Tactically managed portfolios have high turnover, which can produce short-term capital gains, and the subsequent tax burden can erode performance. Monument Advisor lets advisors manage portfolios tactically without the expensive consequence of short-term capital gains. JEFFERSON NATIONAL PAGE 14

15 #3. Wealth Transfer HNW clients looking to transfer wealth without gift taxes and state taxes compromising their family legacy have a solution with Monument Advisor s Non-Qualified Stretch Provision. The Non-Qualified Stretch can ease the burden of legacy planning without the high cost and complexities of trust structures. Typical VA Wealth Transfer Options: 1. Lump Sum 2. Five Year Payout 3. Annuitization 4. Nonqualified Stretch* 5. Restricted Stretch * Stretching is suitable for beneficiaries who do not have immediate need of the assets. As with all securities, there are risks associated with stretching, such as changes to tax laws and the impact of inflation. JEFFERSON NATIONAL PAGE 15

16 Restricted Stretch Case Study Client: Dan Current Age: 50 Story: >Wants to leave legacy for Grandson, Neil >Advisor recommends MA >Invests $240,000 JEFFERSON NATIONAL PAGE 16

17 Restricted Stretch Dan Assumptions: 6% growth Planning Horizon Age: 85 Accumulation at Death: $1,276,427 $1,400, $1,276, $1,200, $1,000, $800, $600, $400, $200, $240, $ Hypothetical example for illustrative purposes only. This illustration shows accumulation over a 35-year time period with no additional contributions or withdrawals. Projection is based on an assumed annual growth rate of 6%. The illustration includes Monument Advisor's $240 annual fee, and takes into account a 1% advisory fee. It does not factor in underlying fund expenses. JEFFERSON NATIONAL PAGE 17

18 Restricted Stretch Neil Client: Neil Age: 45 years old Story: >Receives $1.3M inheritance from Grandfather. JEFFERSON NATIONAL PAGE 18

19 Net RMD Distributions Account Value A NEW VIEW OF VAS Restricted Stretch Neil Average Post-Tax Annual Income: $76,000* Total New Distributions: $2,945,000 $350, $2,000, $300, $250, $1,800, $1,600, $1,400, $200, $150, $100, $50, $1,200, $1,000, $800, $600, $400, $200, $ $- Hypothetical example for illustrative purposes only. This illustration shows accumulation over a 40-year time period with no additional contributions or withdrawals. Projection is based on an assumed annual growth rate of 6%. The illustration includes Monument Advisor's $240 annual fee, and takes into account a 1% advisory fee. It does not factor in underlying fund expenses. *Hypothetical post tax income represents one year only. Corresponding years could be different depending on market performance. JEFFERSON NATIONAL PAGE 19 Net RMD Distributions Account Value

20 Restricted Stretch Case Study Summary Monument Advisor Restricted Stretch $3,500,000 Restricted Stretch Case Summary $3,000,000 $2,945,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $1,276,427 $500,000 $- $240,000 Dan Initial Investment, Neil Starting Inheritance Ending Account Value Hypothetical example for illustrative purposes only. This illustration shows accumulation over a 75-year time period with no additional contributions. RMDs are included from year 36 to 70. Projection is based on an assumed annual growth rate of 6%. The illustration includes Monument Advisor's $240 annual fee, and takes into account a 1% advisory fee. It does not factor in underlying fund expenses. JEFFERSON NATIONAL PAGE 20

21 Combining Horter with The Power of Tax Deferral JEFFERSON NATIONAL PAGE 21

22 Availability through Horter Tactical Wealth Solutions Potomac Advisors Preston Wealth Advisors Preston Wealth Advisors WST Capital Management Alpha Investment Management Alpha Investment Management Anchor Capital Anchor Capital Ocean Park Asset Management Redwood Investment Management LLC Tactical Government Bond Potomac EVO PWA Income Portfolio PWA OTC Hedge Strategy WST Asset Manager U.S. Bond Alpha Bonds Strategy Alpha Mid-Cap Power Index Alternative Equity Hedged Fixed Income Ocean Park High Yield Corporate Bond Redwood Managed Risk Strategy JEFFERSON NATIONAL PAGE 22

23 Efficiently Manage Monument Advisor Accounts with TCA JeffNat s recent partnership with Trust Company of America allows you access to combine Horter-approved strategies & managers within a single Monument Advisor account creating a more balanced, risk adjusted portfolio. Invest multiple VA strategies in a single account View TCA and Jefferson National client portfolios all in one place Account opened & funded Contract held and serviced Cash activity processed Acts as custodian Real-time integration Model constructed and managed Trading Fees (optional) JEFFERSON NATIONAL PAGE 23

24 NEXT STEPS 1. Survey existing clients with annuity 1035 options and send statement copy to JeffNat sales team 2. Explore client portfolios for greater tax efficiency 3. Educate clients on annuity death benefit options and the restricted stretch 4. Contact Horter or your JeffNat sales team for next steps and further questions JEFFERSON NATIONAL PAGE 24

25 Disclosure Variable annuities are subject to market fluctuation and risk. Principal value and investment returns will fluctuate and you may have a gain or loss when money is withdrawn. Variable annuities are long-term investments to help you meet retirement and other long-range goals. Withdrawals of tax-deferred accumulations are subject to ordinary income tax. Withdrawals made prior to age 59½ may incur a 10% IRS tax penalty. Monument Advisor is issued by Jefferson National Life Insurance Company (Dallas, TX) and distributed by Jefferson National Securities Corporation, FINRA member. Policy series JNL , JNL , JNL JEFFERSON NATIONAL PAGE 25

26 Contact Info: option 1 JEFFERSON NATIONAL PAGE 26