Creating a Supplemental Future Income Stream With Life Insurance

Creating a Supplemental Future Income Stream With Life Insurance A Supplemental Illustration Prepared for Valued Client Presented by Premier Producer Premier Brokerage 1 Sales Drive Anytown, USA 98765 Life insurance is issued by Symetra Life Insurance Company, 777 108th Ave NE, Suite 1200, Bellevue, WA 98004-5135. Products are not available in all U.S. states or any U.S. territory. Symetra Life Insurance Company 777 108th Avenue NE, Suite 1200 Bellevue, WA 98004-5135 is a flexible-premium adjustable life insurance policy with index-linked interest options. Symetra is a registered service mark of Symetra Life Insurance Company. LIM-1397 Please refer to the basic illustration for guaranteed elements and other important information. 5/17

Important Information About This Supplemental Illustration A complete understanding of the Supplemental Income Plan illustration shown here requires an understanding of the variables involved and the risks associated with each. This understanding will allow you to evaluate the strategy of using life insurance to create a supplemental future income stream. Unless specifically marked as guaranteed, there is no guarantee that the owner or the designated beneficiaries will receive the amount of money illustrated. This supplemental illustration is not intended as investment, accounting, legal or tax advice and Symetra Life Insurance Company does not give investment, accounting, legal or tax advice. This illustration does not attempt to provide more than general U.S. tax information associated with life insurance policies. This information is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. This information is written to support the promotion or marketing of life insurance issued by Symetra Life Insurance Company. You should seek advice based on your particular circumstances from an independent tax advisor. The use of cash value life insurance to potentially provide a source of supplemental income assumes there is a need for death benefit protection. The use of life insurance to provide a supplemental income may reduce the death benefit available to the beneficiaries. Policy distributions in the form of loans and withdrawals will reduce the policy's cash value and death benefit and may result in a taxable event. This Supplemental Income Plan illustration demonstrates an alternative planning technique based upon the assumptions and data provided by you, the client. The accuracy of this data will enhance the value of this analysis. Please refer to the basic illustration for guaranteed elements and other important information. Page 2 of 7

Most families understand the importance of life insurance. In the event of your death, the death benefit paid to your loved ones can help them maintain their current lifestyle, pay off a mortgage, fund a college education and pay potential estate, capital gains and income taxes. Life insurance is also tax-efficient, as proceeds are generally received income-tax-free, the policy's potential policy value grows tax-deferred and may be accessed using tax-free loans and withdrawals. While its main purpose is death benefit protection, a life insurance policy can also supplement other sources of future income you may already have, such as 401(k) plans, individual retirement accounts (IRAs), Roth IRAs, annuities and Social Security. Should you die before retirement, the death benefit can provide cash for both the immediate needs of your family and to compensate for the loss of planned contributions to your retirement fund. After retirement, you can access the policy's potential policy value using tax-free loans and withdrawals to supplement your other sources of retirement income. 1 The Supplemental Income Solution With assistance from your insurance professional, you'll purchase a policy that provides both a death benefit and potential cash accumulation. As the policyowner and insured, you'll make regularly scheduled premium payments to cover the policy's associated costs, and the remaining or excess premiums will go into an account that build policy value. Anytime before or during retirement, you can access the cash surrender value through loans and withdrawals which are typically free of federal income tax for additional or supplemental income when you need it. It's important to understand that taking a loan or withdrawal from the policy will reduce the policy value and death benefit. Upon your death, any remaining death benefit will be paid to your beneficiaries. Interest payment Loan repayment Payment of premiums Death benefit proceeds 1 Life insurance can be one way to supplement existing retirement goals. As cash values have the ability to accumulate tax deferred, they subsequently have the potential to grow faster than investments in a taxable account. Loans and withdrawals are only available prior to the death of the insured and will reduce the policy death benefit and cash surrender value. This may cause the policy to lapse and may be taxable. If the policy were to terminate prior to the insured's death, the full amount borrowed would be considered distributed at that time, and if cost basis has been exhausted through withdrawals, would be fully taxable. Withdrawals or loans on modified endowment contracts (MECs) may be subject to federal income tax and a 10% IRS penalty on amounts taken prior to age 59½. Withdrawals from non MECs are sheltered from tax only to the extent of cost basis. 2 Refer to footnote 1. Please refer to the basic illustration for guaranteed elements and other important information. Page 3 of 7

Client Name: Valued Client Initial Death Benefit: $600,000 Benefits Using life insurance to fund supplemental future income has several potential advantages: Income tax free death benefit The death benefit is free from federal income taxes, which can help your beneficiaries remain financially secure and may provide estate liquidity. 3 If structured properly outside of the estate, the death benefit proceeds may also be free of estate taxes. Tax deferred growth The potential policy value accumulation grows tax deferred inside the life insurance policy. Tax advantaged income The owner of the policy may attain tax free supplemental income through a combination of policy loans and withdrawals. But remember that distributions from the policy will reduce the policy value and may reduce the death benefit payable to beneficiaries. 4 Flexibility and control s can be designed to meet your changing needs. You have the flexibility to change both the timing and amount of premiums, as long as the policy has sufficient policy value to support the policy charges. You also decide how and when money is paid into or out of the policy, and you name the beneficiary(ies). No IRS distribution requirements or penalties 5 Distributions from the policy are permitted before age 59½ with no IRS penalties, and there are no required minimum distributions (RMDs) at age 70½ or later. Key Considerations s are not deductible Life insurance premiums are funded with after tax dollars and are not tax deductible. Sufficient liquid assets Before implementing this strategy, you should have sufficient liquid assets to support your current and future standard of living. This strategy is only meant to be used with assets that will not be needed for living expenses during your expected lifetime. If you live longer than expected, additional assets may be needed to keep your policy in force. If your financial situation changes and you must use assets for any income needs or can no longer make policy premiums payments, your desired life insurance strategy may not be attained. Reduction in policy benefits Distributions in the form of policy loans and withdrawals will reduce the available cash value and death benefit, and may require additional premium. Work with your insurance professional to ensure your continuing life insurance needs are met. Modified endowment contract (MEC) Federal tax law limits the amount of premium that can be paid into a policy to retain certain tax advantages. If premiums exceed the limit, the policy will be classified as a "modified endowment contract" (MEC). Withdrawals or loans from a MEC may be subject to federal income tax and a 10% IRS penalty on amounts taken prior to age 59½. Interest rates 3 Death benefit proceeds are generally received federal income tax free. Refer to IRC Section 101(g). 4 Refer to footnote 1. 5 Only if the contract is not a MEC. Using life insurance for cash accumulation should be a supplement to your primary retirement savings vehicle. If your primary goal is retirement savings, other products may be more suitable for this purpose. Please refer to the basic illustration for guaranteed elements and other important information. Page 4 of 7

Year Age How a Supplemental Income Plan may work for you Below is a summary of values for a Supplemental Income Plan with life insurance. Based on the assumptions in the accompanying illustration. 6 Initial assumed rate of 5.79%. Net Surrender Value Net Distributions 7 Distributions Net Death Benefit 1 45 18,000 18,000 0 0 0 615,002 2 46 18,000 36,000 7,692 0 0 630,942 3 47 18,000 54,000 25,207 0 0 647,905 4 48 18,000 72,000 43,836 0 0 665,982 5 49 18,000 90,000 63,673 0 0 685,261 6 50 18,000 108,000 88,570 0 0 705,838 7 51 18,000 126,000 114,853 0 0 727,801 8 52 18,000 144,000 142,609 0 0 751,243 9 53 18,000 162,000 171,946 0 0 776,260 10 54 18,000 180,000 202,955 0 0 802,955 11 55 18,000 198,000 236,441 0 0 802,955 12 56 18,000 216,000 272,535 0 0 802,955 13 57 18,000 234,000 311,455 0 0 802,955 14 58 18,000 252,000 353,441 0 0 802,955 15 59 18,000 270,000 398,755 0 0 802,955 16 60 18,000 288,000 447,687 0 0 802,955 17 61 18,000 306,000 500,551 0 0 802,955 18 62 18,000 324,000 557,690 0 0 802,955 19 63 18,000 342,000 619,478 0 0 802,955 20 64 18,000 360,000 686,326 0 0 837,318 21 65 360,000 675,420 60,086 60,086 810,504 22 66 360,000 663,631 60,086 120,172 789,721 23 67 360,000 650,870 60,086 180,258 768,026 24 68 360,000 637,051 60,086 240,344 745,349 25 69 360,000 622,084 60,086 300,430 721,618 26 70 360,000 605,877 60,086 360,516 696,840 27 71 360,000 588,259 60,086 420,602 672,949 28 72 360,000 569,113 60,086 480,688 645,854 29 73 360,000 548,342 60,086 540,774 615,389 30 74 360,000 525,849 60,086 600,860 581,392 6 The information above is based on specific data and assumptions provided in the accompanying illustration. Policy charges will vary by issue age, gender, underwriting rate class and product selection. 7 Net Distributions from the life insurance policy are based on loans and withdrawals taken over the specified time period. Refer to footnote 1 for more details. Please refer to the basic illustration for guaranteed elements and other important information. Page 5 of 7

How a Supplemental Income Plan may work for you Below is a summary of values for a Supplemental Income Plan with life insurance. Based on the assumptions in the accompanying illustration. 8 Initial assumed rate of 5.79%. Year Age Net Surrender Value Net Distributions 9 Distributions Net Death Benefit 31 75 0 360,000 501,545 60,086 660,946 543,705 32 76 0 360,000 475,062 60,086 721,032 519,755 33 77 0 360,000 446,198 60,086 781,118 493,470 34 78 0 360,000 414,734 60,086 841,204 464,626 35 79 0 360,000 380,430 60,086 901,290 432,977 36 80 0 360,000 343,019 60,086 961,376 398,253 37 81 0 360,000 302,176 60,086 1,021,462 360,118 38 82 0 360,000 257,560 60,086 1,081,548 318,223 39 83 0 360,000 208,791 60,086 1,141,634 272,179 40 84 0 360,000 155,446 60,086 1,201,720 221,548 41 85 0 360,000 161,986 0 1,201,720 230,895 42 86 0 360,000 168,221 0 1,201,720 240,026 43 87 0 360,000 173,975 0 1,201,720 248,762 44 88 0 360,000 179,013 0 1,201,720 256,861 45 89 0 360,000 183,052 0 1,201,720 264,030 46 90 0 360,000 185,792 0 1,201,720 269,960 47 91 0 360,000 189,072 0 1,201,720 259,083 48 92 0 360,000 193,499 0 1,201,720 248,131 49 93 0 360,000 199,888 0 1,201,720 237,820 50 94 0 360,000 209,328 0 1,201,720 229,110 51 95 0 360,000 218,876 0 1,201,720 239,505 52 96 0 360,000 228,428 0 1,201,720 249,936 53 97 0 360,000 237,910 0 1,201,720 260,330 54 98 0 360,000 247,149 0 1,201,720 270,513 55 99 0 360,000 255,937 0 1,201,720 280,277 56 100 0 360,000 264,102 0 1,201,720 289,449 57 101 0 360,000 271,574 0 1,201,720 297,961 #REF! #REF! 0 #REF! 283,984 0 1,201,720 312,550 #REF! #REF! 0 #REF! 288,760 0 1,201,720 318,467 8 The information above is based on specific data and assumptions provided in the accompanying illustration. Policy charges will vary by issue age, gender underwriting rate class and product selection. 9 Net Cash Value Distributions from the life insurance policy are based on loans and withdrawals taken over the specified time period. Refer to footnote 1 for more details. Please refer to the basic illustration for guaranteed elements and other important information. Page 6 of 7

Summary Below is a summary of values for a Supplemental Income Plan using life insurance. Based on the assumptions in the accompanying illustration. Assumed Retirement Age: 65 Age to Start Distributions: 65 Years for Distributions: 20 Initial Assumed Interest Rate: 6.92% Initial : $18,000 Number of Years to Pay s: 20 Payments at 20 Years: $360,000 Cash Value Distributions Net Surrender Value Available Beginning Age 65 $686,326 Net Distributions: $60,086 Distributions for 20 Years: $1,201,720 Net Surrender Value at Age 100: $264,102 Pre-Tax Equivalent Assuming a 33.00% Federal Income Tax Rate Pre-tax Equivalent of Distributions: 10 $89,681 Pre-tax Equivalent of Distributions: 11 $1,793,612 Death Benefit Initial Death Benefit: $600,000 Net Death Benefit Beginning Age 65: $837,318 Net Death Benefit Beginning Age 85: $221,548 Net Death Benefit Beginning Age 100: $280,277 Net Benefit Analysis 12 Distributions for 20 Years: $1,201,720 Payments at 20 Years: $360,000 Net Benefit Beginning Age 85: $841,720 IRR on Death Benefit Beginning Age 85: 13 6.66% 10 The Pre tax Equivalent of Distributions is equal to the Distributions before the federal income tax rate of 33% is applied. 11 The Pre tax Equivalent of Total Distributions is equal to the Total Distributions before the federal income tax rate of 33% is applied. 12 The Net Benefit Analysis demonstrates the Net Benefit to the insured by subtracting the Payments from the Policy Value Distributions. 13 The Internal Rate of Return (IRR) on the death benefit is the effective after tax annual rate at which an amount equal to the illustrated premium and policy value distributions must be accumulated in order to generate the net death benefit at the beginning of the specified age. Please refer to the basic illustration for guaranteed elements and other important information. Page 7 of 7