Trust PlansSM. Client Guide. Helping you plan for all of life s expenses. Offered by Forethought Life Insurance Company ( Forethought )

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1 Trust PlansSM Offered by Forethought Life Insurance Company ( Forethought ) Client Guide Helping you plan for all of life s expenses

2 Think of the most expensive purchases you have made or will make in your lifetime... House Car Vacation Wedding College Tuition How did you prepare for these expenses? Did you know that a funeral ranks among the most expensive purchases a consumer will ever make? We all prepare for the possible, so why not plan for the inevitable? Although end-of-life expenditures often get put off for more immediate expenses, it is one that can leave your family with the most debt. 1

3 Know the facts: A traditional funeral, including a casket and vault, costs about $6,000. But when extras like monuments, markers, flowers, obituary notices, acknowledgement cards, and service cars are added, the cost substantially increases. Many funerals in the United States cost more than $10, With final expenses on the rise each year, preparing for these costs beforehand is becoming a necessity. Average Cost for Funeral Expenses 2 Casket $2,000+ Burial Plot $1,625 Vault $1,195 Funeral Service Fee $1,817 Preparation of the Body $828 Expense of Facilities $1,245 Transportation, Memorial Printing Package, Flowers and Other Expenses $1,500 Total Over $10,000 Final expenses may also include: Monuments Cemetery costs Medical bills Outstanding loans Credit card bills 1 National Funeral Directors Association 2 Cost of adult funeral including extra items in Source: National Funeral Directors Association. 2

4 Providing for a funeral Few people have the resources to pay for a funeral on short notice. If you rely on your friends and family to pay for your final expenses, you may be leaving behind more than heartache. Without advanced planning and funding, your loved ones may need to reach into their savings accounts, use credit cards, take out a loan, or even sell personal assets in order to pay for your final expenses. Money set aside in savings accounts may be subject to early withdrawal penalties, get tied up in probate or be depleted by long-term care expenses or nursing home fees. A wise choice to protect your loved ones is to set aside funds for your final expenses with a life insurance policy/certificate ( policy ). How it works Taking these simple steps will create a safe plan to cover these expenses. First a life insurance policy is purchased to cover the anticipated costs of your funeral. The policy is then assigned to an irrevocable funeral trust. This assignment offers two advantages: 1. At the time of death, policy proceeds avoid probate and are available immediately to pay for final expenses. 2. The policy is not considered an asset if you are determining Medicaid eligibility. 3 This combination of life insurance and a funeral trust provides a secure plan to cover your final expenses. Use money from savings, CDs, money markets, annuities, investments, etc. Death benefit may grow. Protected funds earn interest tax-free until time of need. Funds avoid probate costs and delays. Expenses covered immediately. 3 For Medicaid spend-down purposes, consult an elder law attorney. Medicaid regulations and investment limitations may vary by state. 3

5 Security and protection when you need it most The funds in the policy will be first used to pay your funeral expenses with any excess returned to your estate or beneficiary depending on the plan you choose. By irrevocably assigning your policy and permanently transferring all ownership rights to a Forethought Trust Plan SM, you ll receive the following benefits: May give you the ability to exclude your policy as an asset in order to qualify for Medicaid and Supplemental Security Income (SSI). Policy proceeds are paid to the Trust, which then pays funeral costs. Funds set aside in the Trust to be used for funeral expenses are protected from creditors such as nursing homes, hospitals, lawyers, etc. Proceeds used for funeral expenses will avoid probate costs and delays. The policy benefit will increase with simple growth income tax-free. 4 4 Growth is not guaranteed. Tax-free by IRC Code Sec. 101(a). 4

6 Forethought Trust Plans SM Forethought Trusts have no trust fees and can be used in addition to any other trust you may already have. Forethought Funeral Expense Trust Benefits $15,000 maximum premium amount. 5 May protect funds from Medicaid spend-down upon effective date of transfer. Policy beneficiary is the Trust. The Trust pays funeral costs with any excess funds going to the estate of the insured. Forethought Estate Planning Trust Benefits $25,000 maximum face amount (up to $50,000 with additional underwriting). 5 Funds excluded from Medicaid spend-down after five years. Allows you to name a secondary beneficiary. The Trust pays funeral costs with any excess funds going to a named beneficiary or the estate of the insured. Final expense planning provides the peace-of-mind needed to continue living life to the fullest. Don t leave debt as your final gift to those you love. Guard your assets and protect the wealth you have worked so hard over the years to build for you and your family. Plan for the inevitable and save your family heartache and financial burden. 5 May vary by state. 5

7 Trust Forethought when it matters most With Forethought Life Insurance Company you can be confident your security comes first. We are proud to have served millions of consumers who have placed their trust in Forethought to help them protect their families financial futures. Forethought has built its reputation for more than a quarter of a century on quality service and reliability by delivering on our promises both today and in the future. For more information, please visit 6

8 Forethought Trust Plans SM and insurance coverage are provided by Forethought Life Insurance Company, Indianapolis, Indiana. A representative, who may also be an agent of Forethought Life Insurance Company, can answer any questions you may have. Forethought Life Insurance Company Corporate Office 300 N. Meridian St., Suite 1800 Indianapolis, IN Administrative Office One Forethought Center Batesville, IN M Forethought 0711