3The Road To Financial Freedom THREE ENEMIES OF YOUR MONEY “ T I P ”HOW MONEY WORKSTYPES OF MONEYINSURANCE MARKETTHREATS TO YOUR FINANCIAL SECURITYTHE REVOLUTIONARY SOLUTIONTHE SECRET OF MONEY
4THREE ENEMIES OF YOUR MONEY TAXESINCOME TAXESSALES TAXESCAPITAL GAINS TAXESESTATE TAXES
5THREE ENEMIES OF YOUR MONEY INFLATIONTHE SILENT KILLER OF YOUR MONEY
6THREE ENEMIES OF YOUR MONEY PROCASTINATIONHIGHCOSTOFWAITING
7The person with the most “doubles” wins. HOW MONEY WORKSRule of 72Divide 72 by the interest rate to estimate the number of years it takes for your money to double.Age 4%Money Doubles Every 18 Years29 $10,00047 $20,00065 $40,000Age %Money Doubles Every 9 Years$10,000$20,000$40, $80,00065 $160,000Age %Money Doubles Every 6 Years$10,000$20,000$40, $80,00053 $160,00059 $320, $640,000The person with the most “doubles” wins.* These hypothetical examples are for illustrative purposes only and do not represent any particular investment vehicle.The Rule of 72 is a mathematical concept that approximates the number of years it would take to double the principal at a constant rate of return.The performance of investments fluctuates over time, and as a result, the actual time it will take an investment to double in value cannot be predicted with any certainty.
9VARIABLE UNIVERSAL LIFE EQUITY INDEX UNIVERSAL LIFE INSURANCE MARKETTEMPORARY LIFE INSURANCE(RENTING)PERMANENT LIFE INSURANCE(BUYING)RATE OF RETURN %-3.5%WHOLE LIFERATE OF RETURN %-5%UNIVERSAL LIFETIED WITH STOCKSVARIABLE UNIVERSAL LIFERATE OF RETURN %-12%AVERAGE 7.3%-8.3%EQUITY INDEX UNIVERSAL LIFEEXPIRES AFTER CERTAIN TIMETERM LIFERETURN OF PREMIUM
10THREATS TO YOUR FINANCIAL SECURITY PREMATURE DEATHHouseholds saying they own enough life insurance to replace their income for only 2.8 years.ILLNESSEvery 40 seconds someone in the US suffers a stroke. Every minute an American will die from a coronary event1. .DISABILITYOne in 5 working Americans suffers the effects of a disability for more than six months during his/her working career2.LONG-TERM CAREThe U.S. Bureau of Census estimates that by 2060 as many as 24 million people will need long term care services.OUTLIVING YOUR MONEYPeople are living longer and longer, but they are saving less and less. Most Americans retire in poverty. 73.8% of Americans 65 and older retire on a combined income of private pension and Social Security of $10,000 less a year3.American Heart Association, American Stroke Association, Heart Disease and Stroke Statistics, 2008Commissioners Group disability table and U.S. Bureau of CensusSocial Security Administration, 1996
13Accelerated Benefits Riders ABR 1- Terminal IllnessResulting in death within two years(1 year in VT and PA)Lump-sum distribution (discounted from death benefit)Funds can be used for anythingNo additional costNo elimination periodLet’s go over the living benefits that we offer your clients. We refer to them as Accelerated Benefits – otherwise known as ABR Riders. We offer 3 state of the art ABR riders.We’ll go over what we call ABR1 – for terminal illness.Our terminal illness rider pays a benefit if the diagnosis is terminal and the Insured is expected to die within 2 years of that diagnosis. Many other carriers offer Terminal illness riders but with death resulting in 1 year from diagnosis. LSW offers a liberal benefit with its 2 year definition. We also offer a maximum benefit of $1,000,000 – many other carriers offer $500,000 of benefit or less.We offer either a full election – or a partial election – the money is paid out in a lump sum – no monthly benefits - to the owner of the policy at any point after the issue date – there is no elimination period. We do not require proof that the money is being used to pay medical expenses but we do ask for certification by a Physician who is recognized by the law of the state.
14Accelerated Benefits Riders ABR 2 - Chronically illUnable to perform 2 of 6 ADLsActivities of Daily LivingBathingContinenceDressingEatingToiletingTransferringCognitive ImpairmentShort-term or long-term memory impairmentLoss of orientation to people, places or timeDeductive or abstract reasoning impairmentMax. benefit calculated as 24% of the net death benefit (actual payment is discounted) in any calendar yearFunds can be used for anythingNo additional costPolicy must be I/F for 2 yearsABR 2 – provides for Chronic Illness. This is very much like the requirements under a true LTC policy in terms of the definition of a qualifying event. There must be the inability to perform at least 2 of the 6 ADL’s which you’ll see on the next slide.There are restrictions in terms of when benefits become available with this rider. The insurance policy must be I/F for 2 years. A duly licensed medical Physician must certify that the Insured is Chronically Ill for a period of at least 90 days before we can accelerate the death benefit. Once approved, this rider will pay a 24% lump sum benefit to the owner of the policy in any calendar year to help offset, or perhaps even cover completely, the medical costs associated with a chronic illness. This is the equivalent of 2% per month.
15Accelerated Benefits Riders ABR 3 - Critical IllnessHeart AttackStrokeCancerEnd stage renal failureMajor organ transplantALS (Lou Gehrig’s disease)BlindnessLump-sum distribution (discounted from death benefit) after 30 daysFunds can be used for anythingNo additional costThe 3rd ABR rider that we offer is for Critical Illness.Election of ABR3 can be either partial or full and are paid in a lump sum.There is a 30 day wait – which means 30 days from the date of issue of the policy…………by today’s standards in terms of elimination periods, 30 days is typically the quickest amount of time that you are likely to see for any type of policy that pays a financial benefit while living.Again – a duly licensed medical Physician must certify for the company that the Insured does in-fact suffer from a critical illness.Please keep in mind that ABR3 is not available on rated cases.Form series 8165(0703)
17According to the Federal Reserve, the richest 10% Americans own WHAT THE WEALTHY KNOW THAT MANY PEOPLE DON’TAccording to the Federal Reserve, the richest 10% Americans ownover half of the tax-free investment gains built up in life insurance1.50th to 90thpercentileOwn 38.4%Top 10%own 55.1%Has Life InsuranceHas Life InsuranceFamilies in bottom half of net-worth percentiles own just 6.5% of these tax-free assets!1. Federal Reserve, 2007
19THE EQUITY INDEX CONCEPT WHOSE TIME HAS COME UPSIDE POTENTIALWhen the stock market is up, an equity indexed product will return to you a portion of the stock market gain.DOWNSIDE PROTECTIONHowever, during the years when the stock market is down, your equity indexed account will not lose any money.09/ /2010.1on1 slide: talk about the equity indexed annuity here. Would you think American consumers are desperately looking for info like this?This is the last slide, based on what I shared with you, are you honestly interested in this? Our company is looking for sharp individuals right now.The graph is based on actual S&P 500 data and actual credited rates for the period shown on one of our indexed annuity products. These results should not be an indication that Indexed Annuities will outperform the S&P This simply demonstrates the effectiveness of Indexed Annuities in years when the S&P 500 was negative..
20Cash Value Upside growth potential Downside protection Accessibility Interest credit is tied to the S&P 500 IndexS&P 500 Index – A dynamic index that consists of the 500 largest companies in the US such as Exxon, Disney World, Walt Mart, Citigroup, Microsoft, McDonalds… etc.Downside protectionEquity Index concept guarantees you could never lose your cash value due to a decline in the indexAccessibilityTax free access after the 1st year via loans