Solutions Using Defined Benefit Plans. Presented By Michael F. Kresl, MBA, CPA National Sales Manager

Transcription

1 Solutions Using Defined Benefit Plans Presented By Michael F. Kresl, MBA, CPA National Sales Manager

2 The American National Insurance Company (ANICO) GALVESTON, TEXAS

3 The American National Insurance Company (ANICO) 113 years old, publicly traded (ANAT) A AM Best A S &P Asset/Liability Ratio over 120% Has Paid Dividends over 100 Years No Corporate Debt Issued Buy & Hold Strategy in Bond Portfolio Never any CDOs, CMOs, CLOs, CBOs, NO TARP

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6 Why ANICO Defined Benefit Plans? Never a Better Time... Strong Economy & Small Business Owner Sentiment is High! Tax Cuts & Jobs Act will result in many high earning Business Owners paying More in Taxes! Boomer Business Owners looking to Catch-up for Retirement and have viable & Guaranteed Business Exit Strategies!

7 ANICO Defined Benefit Pension Plans

8 Who s a Prospect? Older Owners(s) of a Small Business (Typically Age 45+) High Earners with Disposable Income Consistent Income and Cash Flows Looking for LARGE TAX DEDUCTIONS Has Few or No Employees Values Guarantees for a Secure Retirement

9 The Power Of Defined Benefit Plans

10 Maximizing IRC 199A QBI 20% Deduction Using a Defined Benefit Plan Case Study: Male, Age 55, S-Corp Specified Service or Trade Business Joint Filer looking for Largest Tax Deduction Wants to Take Advantage of the QBI 20% Pass-Through Deduction

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12 Benefits to the Client Life Insurance and Living Benefits

13 Benefits to the Client Current and Recurring Tax Savings of ~ $ 87,000 per Year (over the course of 10 years nearly $1,000,000 in Tax Savings) Self-Completing in the event of Death - $2,000,000 Life Ins. Substantial Living Benefits - Chronic, Critical & Terminal Guaranteed Cash at age 65 (10 Years) of ~ $3.2 Million! Annuity Account Values : $ 2,200,000 Life Cash Value (Guaranteed): $ 1,000,000 Total Cash At 10 Years (65) : $ 3,200,000

14 Defined Benefit Plan Options At Retirement Annuity Account: Rollover or Transfer to IRA Take lifetime income option Life Insurance: Cash Surrender Policy Roll Proceeds to IRA Buy-Out the Life Insurance Replace Cash Value into the plan and Policy becomes NQ

15 Benefits to the Agent First Year Commissions of $ 67,000! $100,000 60% = $ 60,000 $180,000 Annuity 4% = $ 7,000 Renewals on life of 1% First Year Comp on Annuity All Years! Spin-off Sales - Personal Insurance & Investment Needs Referrals to other Business Owners

16 Defined Benefit Plans Largest Current Tax Deduction Substantial Self-Completing Benefit Life Insurance with Living Benefits! Guarantees for a Secure Retirement Protection from Creditors and Lawsuits

17 ANICO Pension Plans The Turnkey Pension Program One Throat to Choke Featuring... Free, no-obligation professional plan design and/or review Preparation and filing of plan documents Investment Platforms Fixed or Variable (Non-Registered VA) Complete Low Cost Administration/Record Keeping No Gray areas, No Off-Shore Schemes, No Audit Flags

18 A Multi-Strategy Annuity Issued by American National Insurance Company

19 Strategy Plus Indexed Annuity Indexed to the S&P Easy to Understand 7 & 10 Year Versions Maximum Surrender Charge is 9% (10 Yr) 7% (7 yr) Multiple crediting options inside one contract Top Tier LIRs Lowest Fees! Top Comp & New Trail Commission Option!

20 Key Competitive Advantages 7.2% Rollup Guaranteed & Compounded (10 yrs) Lowest cost LIRs -.90 (Fixed).60 Stacked LIR Fee only taken out in years where gains exceed Fee or carried over Above average Caps 5 Accumulation Buckets

21 Strategy Plus FIA Additional First Year 1% Bonus on Accumulation Strategy Part. Rate 7yr Cap 10yr Cap 1 Yr Fixed Declared Rate % 2.80% Period. 1 Yr Specified Trigger % 4.15% 1 Yr Monthly Sum % 1.55% 1 Yr Point-To-Point 100% 4.35% 4.70% 1 Yr Point-To-Point 50% 5.00% 6.00%

22 Surrender Charge Schedules ANICO Strategy Indexed Annuity 7 Plus Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7 Yr. 8+ 7% 6% 5% 4% 3% 2% 1% 0% ANICO Strategy Indexed Annuity 10 Plus Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7 Yr. 8 Yr. 9 Yr. 10 Yr % 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%

23 Strategy Plus FIA Lifetime Income Riders 7.20% (Compounded over 10 years) annual cost of.90% or 4.2% + Index Credit (Compounded over 10 Years) annual cost of.60%

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25 Income Payouts By Age

26 Current Interest Rates

27 ANICO Life Portfolio Sweet Spots Term Insurance Excellent Conversion Options, ART Convertible to 20 or 30 Year Term, Repricing end of 2 nd Quarter More competitive $500k + GUL- ROP, Ages 40 60s, Repricing 2 nd Quarter ROP will be optional Rider IUL Clean Product, CAP & Rate Integrity Whole Life Looks good on Single Pay and Short Pay Scenarios

28 New Accelerated Benefit Riders from American National Insurance Company Life When You Need Living Benefits!

29 Accelerated Benefit Riders (ABRs) Living Benefits Automatically included on all ANICO life polices above $50,000 Face Amounts - Including Term! Table 4 and better includes the ABRs! No Upfront Fees or Costs ABRs based on Death Benefit Larger Potential Benefits Partial Accelerations & no requirement to take benefits monthly A superior alternative to the settlement Market

30 Accelerated Benefit Riders Chronic, Critical & Terminal Chronic: Insured is unable to perform 2 of 6 activities of daily living (ADLs) for a period of 90 days or requires constant supervision to protect from threats to health or safety due to a severe cognitive impairment Critical: Heart Attack * Stroke * Invasive Cancer * End stage renal failure Major organ transplant * ALS * Blindness * Paralysis Arterial aneurysms * Severe central nervous system disease Central nervous system tumors * AIDS * Major burns * Loss of limbs Major Multi-system trauma * Severe disease of any organ Terminal: Less than 24 Months LE

31 ABR Offer Example As a general rule ABR offers will approximate the following Percentages of the Policy Death Benefit: Slight Impairment Moderate Impairment Severe Impairment 10% - 35% 35% - 60% 60% - 85% Terminal Illness 85% - 95% This is an estimation for illustrative purposes only, actual benefits will vary depending on age of contract at claim time, type of insurance and other factors

32 * * * Disclaimer * * * This presentation is for the educational use of Broker/Dealers, Registered Representatives and/or Insurance Agents only. The examples, illustrations, generalized references to the tax code and related rules in this presentation are not intended to serve as, or substitute in any way for professional tax, legal or investment advice in regard to any specific real life case. Although every attempt has been made to assure that the representations, references to tax code and related rules are correct, Michael F. Kresl, CPA, the American National Insurance Company and its employees assume no responsibility as to the correctness of the material in the presentation. For Broker/Dealer or Agent Use Only Not For Use with the General Public Michael F. Kresl, CPA