Universal Life (UL) vs. An Equity Account

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1 Universal Life (UL) vs. An For: Bill Jasper Presented By: {{Licensed User's name appears here}}

2 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 an. 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. tax deferred growth of cash values; 3. Competitive current interest rate; 4. Tax free access to cash values via policy loans; 5. tax free death benefits; 6. Probate free death benefits; 7. Privacy of all transactions; 8. Advance of death benefits in certain adverse health circumstances -- as defined in the policy contract. 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. $10.0M 7.5M Cumulative Payments Cumulative Payments $10.0M 7.5M Cumulative $8,700, M 2.5M $1,700,000 0 Yrs M $4,323, M 0 Yrs $10.0M Values $10.0M Death Benefit Cash Value 7.5M 7.5M 5.0M 2.5M 5.0M 2.5M $4,113,326 $3,872,296 0 $0 Yrs 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 16

3 Flow Chart Indexed Universal Life Payments Payments Living Living Death Values Values Benefit Comparative Analysis Page 2 of 16

4 Comparison of Values Gains * Portfolio Interest Rate * Indexed Universal Life Year (1) Deposit to the (2) from the (3) Value (4) Premium (5) Loan Proceeds (6) Cash Value** Increase (7) Cash Value** (8) Death Benefit , ,204 85, ,599 12,599 2,532, , ,635 85, ,283 95,882 2,615, , ,417 85, , ,065 2,702, , ,743 85, , ,222 2,795, , ,852 85, , ,753 2,895, , ,019 85, , ,091 3,002, , ,546 85, , ,648 3,115, , ,761 85, , ,100 3,237, , ,017,014 85, , ,196 3,367, , ,162,678 85, ,122 1,025,318 3,510, , ,316,146 85, ,625 1,188,943 3,664, , ,477,834 85, ,948 1,363,891 3,829, , ,648,181 85, ,790 1,554,681 4,010, , ,827,651 85, ,417 1,749,098 4,204, , ,016,731 85, ,948 1,958,046 4,413, , ,215,937 85, ,568 2,182,614 4,638, , ,425,808 85, ,354 2,423,968 4,879, , ,646,917 85, ,396 2,683,364 5,139, , ,879,866 85, ,786 2,962,150 5,417, , ,125,287 85, ,625 3,261,775 5,717, ,000 2,985, ,000-65,196 3,196,579 3,896, ,000 2,837, ,000-64,839 3,131,740 3,845, ,000 2,681, ,000-64,267 3,067,473 3,792, ,000 2,515, ,000-63,461 3,004,012 3,737, ,000 2,340, ,000-62,404 2,941,608 3,681, ,000 2,156, ,000-61,059 2,880,549 3,623, ,000 1,962, ,000-58,601 2,821,948 3,511, ,000 1,757, ,000-55,458 2,766,490 3,390, ,000 1,540, ,000-51,481 2,715,009 3,261, ,000 1,312, ,000-46,496 2,668,513 3,123,406 1,700,000 2,900,000 1,700,000 2,900,000 *See the accompanying reports entitled " Details" and "Portfolio Details" for year-by-year equity calculation and turnover details. Management fees reflected in column (3): 1.00% **This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a basic illustration from the issuing life insurance company. 30 Year Summary Payments 1,700,000 1,700,000 2,900,000 2,900,000 Living Values 1,312,818 2,668,513 Death Benefit 1,312,818 3,123,406 Page 3 of 16

5 Comparison of Values Gains * Portfolio Interest Rate * Indexed Universal Life Year (1) Deposit to the (2) from the (3) Value (4) Premium (5) Loan Proceeds (6) Cash Value** Increase (7) Cash Value** (8) Death Benefit ,000 1,072, ,000-40,292 2,628,221 3,123, , , ,000-35,055 2,593,166 2,975, , , ,000-29,163 2,564,003 2,965, , , ,000-22,584 2,541,419 2,961, , ,000-15,270 2,526,149 2,966, ,000-7,213 2,518,936 3,039, ,000 1,468 2,520,404 3,086, ,000 10,883 2,531,287 3,144, ,000 21,029 2,552,316 3,216, ,000 31,907 2,584,223 3,216, ,000 43,421 2,627,644 3,302, ,000 55,763 2,683,407 3,403, ,000 68,749 2,752,156 3,520, ,000 82,123 2,834,279 3,653, ,000 95,944 2,930,223 3,803, , ,167 3,040,390 3,970, , ,970 3,181,360 3,974, , ,655 3,360,015 3,994, , ,177 3,586,192 4,037, , ,104 3,872,296 4,113,326 1,700,000 4,323,738 1,700,000 8,700,000 *See the accompanying reports entitled " Details" and "Portfolio Details" for year-by-year equity calculation and turnover details. Management fees reflected in column (3): 1.00% **This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a basic illustration from the issuing life insurance company. 50 Year Summary Payments 1,700,000 1,700,000 4,323,738 8,700,000 Living Values 0 3,872,296 Death Benefit 0 4,113,326 Page 4 of 16

6 A Look at Year 50 Indexed Universal Life 4,323,738 Cumulative 1,700,000 Payments 1,700,000 8,700,000 Cumulative 3,872,296 0 Value Cash Value 4,113,326 Death Benefit Page 5 of 16

7 Matching Values at 95 (Year 50) 46 Gains * Portfolio Interest Rate Required on an in Addition to the Illustrated to Match Indexed Universal Life Values over 50 Years. Required (Plus ) To Match Cash Value of: $3,872, % To match Death Benefit of: $4,113, % To Match Cash Value $3,872, %* Required To Match Death Benefit $4,113, %* Required *Plus dividend. *Plus dividend. Tax Considerations 1. : Capital gains tax calculations are taxed based on a ratio of asset value to remaining cost basis in any given year. 2. Indexed Universal Life: a. Death Benefit 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 7702(A)) are income tax free as a return of premium. d. Cash values shown assume most favorable combination of b and/or c. This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a basic illustration from the issuing life insurance company. Page 6 of 16

8 Gains * Portfolio Interest Rate Indexed Universal Life Values Cash Value* Death Benefit Year Net Pre-Tax Equivalent Net Pre-Tax Equivalent Net Pre-Tax Equivalent *This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a basic illustration from the issuing life insurance company. Page 7 of 16

9 Gains * Portfolio Interest Rate Indexed Universal Life Values Cash Value* Death Benefit Year Net Pre-Tax Equivalent Net Pre-Tax Equivalent Net Pre-Tax Equivalent n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a n/a n/ a *This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a basic illustration from the issuing life insurance company. Page 8 of 16

10 Comparison of Plan Gains Portfolio Interest Rate Initial Death Benefit 2,455,685 Indexed Universal Life* Year (1) Premium (2) Mgmt Fee (3) Taxes (4) Total (5) Cumulative Total (6) Cost of Insurance (7) Admin (8) Total (9) Cumulative Total , ,110 2,012 2,012 3,148 10,317 13,465 13, ,000 1,856 2,586 4,442 6,454 3,534 10,317 13,851 27, ,000 2,864 4,328 7,192 13,646 4,750 10,317 15,067 42, ,000 3,927 6,277 10,204 23,850 5,333 10,317 15,650 58, ,000 5,049 8,399 13,448 37,298 5,909 10,317 16,226 74, ,000 6,230 10,677 16,907 54,205 6,552 10,317 16,869 91, ,000 7,475 13,103 20,578 74,783 7,283 10,317 17, , ,000 8,788 15,675 24,463 99,246 7,850 10,317 18, , ,000 10,170 18,393 28, ,809 8,274 10,317 18, , ,000 11,627 21,263 32, ,699 8,621 6,917 15, , ,000 13,161 24,290 37, ,150 8,817 6,917 15, , ,000 14,778 27,482 42, ,410 8,979 6,917 15, , ,000 16,482 30,845 47, ,737 9,036 3,490 12, , ,000 18,277 34,390 52, ,404 9,036 3,490 12, , ,000 20,167 38,124 58, ,695 9,036 3,490 12, , ,000 22,159 42,059 64, ,913 9,036 3,490 12, , ,000 24,258 46,205 70, ,376 9,036 3,490 12, , ,000 26,469 50,573 77, ,418 9,036 3,490 12, , ,000 28,799 55,175 83, ,392 9,036 3,490 12, , ,000 31,253 60,023 91, ,668 9,036 3,490 12, , ,859 63,538 93, ,065 2, , , ,378 61,568 89, ,011 3, , , ,812 58,992 85,804 1,054,815 3, , , ,157 55,993 81,150 1,135,965 4, , , ,410 52,671 76,081 1,212,046 4, , , ,567 49,076 70,643 1,282,689 5, , , ,622 45,235 64,857 1,347,546 6, , , ,572 41,155 58,727 1,406,273 6, , , ,409 36,837 52,246 1,458,519 6, , , ,128 32,273 45,401 1,503,920 5, , ,993 1,700, ,605 1,008,315 1,503, , , , Year Summary *This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a basic illustration from the issuing life insurance company. Cumulative Living Death Plan Value Benefit 1,503,920 2,900,000 1,312,818 1,312, ,993 2,900,000 2,668,513 3,123,406 Page 9 of 16

11 Comparison of Plan Gains Portfolio Interest Rate Initial Death Benefit 2,455,685 Indexed Universal Life* Year (1) Premium (2) Mgmt Fee (3) Taxes (4) Total (5) Cumulative Total (6) Cost of Insurance (7) Admin (8) Total (9) Cumulative Total ,723 27,457 38,180 1,542,100 4, , , ,187 22,375 30,562 1,572,662 5, , , ,512 17,015 22,527 1,595,189 7, , , ,692 11,363 14,055 1,609,244 8, , , ,427 5,427 1,614,671 10, , , ,614,671 12, , , ,614,671 14, , , ,614,671 17, , , ,614,671 20, , , ,614,671 23, , , ,614,671 27, , , ,614,671 32, , , ,614,671 37, , , ,614,671 43, , , ,614,671 49, , , ,614,671 56, , , ,614,671 62, , , ,614,671 68, , , ,614,671 75, , , ,614,671 83, ,590 1,000,381 1,700, ,719 1,091,952 1,614, , ,224 1,000, Year Summary *This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a basic illustration from the issuing life insurance company. Cumulative Living Death Plan Value Benefit 1,614,671 4,323, ,000,381 8,700,000 3,872,296 4,113,326 Page 10 of 16

12 50 Year Analysis of Cumulative Plan $2,000,000 $1,500,000 $1,614,671 $1,000,000 $1,000,381 $500,000 $ Years At Year 50 * $1,000,381 * $1,614,671 *The Comparison of Plan graphic above compares the management fees and/or taxes of the investment alternative to the mortality charges, policy expenses and income taxes (if applicable) associated with the life insurance policy. Page 11 of 16

13 50 Year Analysis of Cumulative Plan Cumulative Payments Plan * $2,000k Cumulative Payments $2,000k 1,500k $1,700,000 1,500k $1,614,671 1,000k 1,000k $1,000, k 500k 0 Yrs Yrs Values $6.0M Death Benefit Cash Value 4.5M $4,113,326 $3,872, M 1.5M 0 $0 Yrs *The Comparison of Plan graphic above compares the management fees and/or taxes of the investment alternative to the mortality charges, policy expenses and income taxes (if applicable) associated with the life insurance policy. Page 12 of 16

14 Details Gains * Assumption Yr (1) Beginning of Year Value + (2) Deposit (3) Sale of Equities + (4) Capital (5) + Reinvested s = (6) Value of Before (7) Value of After ** (8) + (9) from Sales = (10) Combined , ,525 1,275 91,800 90, ,204 85, ,388 2, , , ,635 85, ,591 4, , , ,417 85, ,142 5, , , ,743 85, ,053 7, , , ,852 85, ,340 8, , , ,019 85, ,021 10, , , ,546 85, ,115 12, , , ,761 85, ,644 14,456 1,040,861 1,017, ,017,014 85, ,631 16,530 1,190,175 1,162, ,162,678 85, ,099 18,715 1,347,492 1,316, ,316,146 85, ,074 21,017 1,513,237 1,477, ,477,834 85, ,584 23,443 1,687,861 1,648, ,648,181 85, ,657 25,998 1,871,836 1,827, ,827,651 85, ,322 28,690 2,065,663 2,016, ,016,731 85, ,613 31,526 2,269,870 2,215, ,215,937 85, ,561 34,514 2,485,012 2,425, ,425,808 85, ,203 37,662 2,711,673 2,646, ,646,917 85, ,575 40,979 2,950,471 2,879, ,879,866 85, ,716 44,473 3,202,055 3,125, ,125, , , ,060,515 2,985,856 43, , , ,985, , , ,909,531 2,837,840 40, , , ,837, , , ,749,337 2,681,195 38, , , ,681, , , ,579,853 2,515,695 36, , , ,515, , , ,400,817 2,340,992 33, , , ,340, , , ,211,844 2,156,664 31, , , ,156, , , ,012,469 1,962,228 28, , , ,962, , , ,802,167 1,757,158 25, , , ,757, ,244 96, ,580,368 1,540,889 22, , , ,540, ,609 82, ,346,458 1,312,818 18, , ,000 1,700,000 2,633,044 3,075, , ,060 2,580,940 2,900,000 *The composite capital gains tax rate includes short-term gains subject to ordinary income tax and 60.00% long-term gains subject to capital gains tax. The individual tax rates used to create the composite tax rate are: Capital Gains Tax: Tax: **Column (7) is reduced by a 1.00% management fee. (To review turnover calculations, see the Portfolio Details report.) Capital gains tax calculations are based upon a ratio of asset value to remaining cost basis in any given year. Page 13 of 16

15 Details Gains * Assumption Yr (1) Beginning of Year Value + (2) Deposit (3) Sale of Equities + (4) Capital (5) + Reinvested s = (6) Value of Before (7) Value of After ** (8) + (9) from Sales = (10) Combined ,312, ,156 67, ,099,785 1,072,306 15, , , ,072, ,896 51, , ,676 11, , , , ,840 34, , ,213 7, , , , ,999 16, , ,165 3, , , , , , , ,700,000 4,046,100 3,245, , ,226 3,965,512 4,323,738 *The composite capital gains tax rate includes short-term gains subject to ordinary income tax and 60.00% long-term gains subject to capital gains tax. The individual tax rates used to create the composite tax rate are: Capital Gains Tax: Tax: **Column (7) is reduced by a 1.00% management fee. (To review turnover calculations, see the Portfolio Details report.) Capital gains tax calculations are based upon a ratio of asset value to remaining cost basis in any given year. Page 14 of 16

16 Details of Portfolio Gains * Assumption Yr (1) Beginning of Year Cost Basis (2) Deposit to the (3) Sale of Equities to Fund (4) Capital (5) Reinvested s (6) Value Before (7) Adjusted Cost Basis (8) Sale of Equities Caused by (9) Cost Basis Used by (10) Reinvested (11)** Value of After , ,525 1,275 91,800 86,275 36,720 34,510 36,035 90, ,800 85, ,388 2, , ,428 75,688 70,171 73, , ,235 85, ,591 4, , , , , , , ,916 85, ,142 5, , , , , , , ,325 85, ,053 7, , , , , , , ,869 85, ,340 8, , , , , , , ,918 85, ,021 10, , , , , , , ,824 85, ,115 12, , , , , , , ,935 85, ,644 14,456 1,040, , , , ,770 1,017, ,605 85, ,631 16,530 1,190,175 1,063, , , ,317 1,162, ,098,198 85, ,099 18,715 1,347,492 1,201, , , ,945 1,316, ,242,093 85, ,074 21,017 1,513,237 1,348, , , ,819 1,477, ,393,685 85, ,584 23,443 1,687,861 1,502, , , ,113 1,648, ,553,390 85, ,657 25,998 1,871,836 1,664, , , ,011 1,827, ,721,644 85, ,322 28,690 2,065,663 1,835, , , ,704 2,016, ,898,905 85, ,613 31,526 2,269,870 2,015, , , ,398 2,215, ,085,656 85, ,561 34,514 2,485,012 2,205, , , ,304 2,425, ,282,406 85, ,203 37,662 2,711,673 2,405,069 1,084, ,027 1,046,650 2,646, ,489,691 85, ,575 40,979 2,950,471 2,615,670 1,180,188 1,046,268 1,138,673 2,879, ,708,075 85, ,716 44,473 3,202,055 2,837,548 1,280,822 1,135,019 1,235,623 3,125, ,938, , , ,060,515 2,701,651 1,224,206 1,080,660 1,179,707 2,985, ,800, , , ,909,531 2,562,540 1,163,812 1,025,016 1,120,786 2,837, ,658, , , ,749,337 2,418,222 1,099, ,289 1,058,676 2,681, ,509, , , ,579,853 2,267,373 1,031, , ,194 2,515, ,353, , , ,400,817 2,109, , , ,148 2,340, ,189, , , ,211,844 1,942, , , ,342 2,156, ,016, , , ,012,469 1,767, , , ,567 1,962, ,834, , , ,802,167 1,582, , , ,607 1,757, ,643, ,244 96, ,580,368 1,387, , , ,233 1,540, ,440, ,609 82, ,346,458 1,182, , , ,204 1,312,818 1,700,000 *The composite capital gains tax rate includes short-term gains subject to ordinary income tax and 60.00% long-term gains subject to capital gains tax. The individual tax rates used to create the composite tax rate are: Capital Gains Tax: Tax: **Fees: Column (11) is reduced by a 1.00% management fee. Capital gains tax calculations are based upon a ratio of asset value to remaining cost basis in any given year. Page 15 of 16

17 Details of Portfolio Gains * Assumption Yr (1) Beginning of Year Cost Basis (2) Deposit to the (3) Sale of Equities to Fund (4) Capital (5) Reinvested s (6) Value Before (7) Adjusted Cost Basis (8) Sale of Equities Caused by (9) Cost Basis Used by (10) Reinvested (11)** Value of After ,227, ,156 67, ,099, , , , ,266 1,072, ,002, ,896 51, , , , , , , , ,840 34, , , , , , , , ,999 16, , , ,425 96, , , , , ,700,000 *The composite capital gains tax rate includes short-term gains subject to ordinary income tax and 60.00% long-term gains subject to capital gains tax. The individual tax rates used to create the composite tax rate are: Capital Gains Tax: Tax: **Fees: Column (11) is reduced by a 1.00% management fee. Capital gains tax calculations are based upon a ratio of asset value to remaining cost basis in any given year. Page 16 of 16

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