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ColonySM Term UL October 2009

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Presentation on theme: "ColonySM Term UL October 2009"— Presentation transcript:

1 ColonySM Term UL October 2009
An affordable universal life insurance alternative to traditional term life insurance October 2009 Speak to slide For Agent/Broker Use Only. Not to be reproduced or shown to the public. /13/09 1

2 Life insurance products underwritten by:
Genworth Life and Annuity Insurance Company Genworth Life Insurance Company Richmond, VA Speak to slide ColonySM Term UL Agent/Broker Use Only

3 Agenda The Current State of the Market 1 2 3 Promotional Marketing 4
Genworth’s Commitment to the Needs of the Term Market 2 Affordability, Competitiveness, Process Simplicity, Flexibility 3 Promotional Marketing 4 Speak to slide Action Steps 5 ColonySM Term UL Agent/Broker Use Only

4 115MM Households Earn Up To $250,000
Mass Market Has Lowest Life Insurance Ownership Rates … … And Represents The Largest Life Insurance Coverage Gap % Ownership by Household Income $200K+ 90% Affluent $2.7T Investable Assets > $1MM or Income > $250,000 $100K - $200K 87% Mass Affluent $4.8T Investable Assets > $250, or Income > $100,000 Speak to slide $75K - $99K 84% Mass Market $6.0T Remaining Households With Income > $25,000 <$75K 56% Source: Federal Reserve Board, “The Survey Of Consumer Finances” 2007, U.S. Census Source: IAB “Closing the Coverage Gap” , 2007 – Conservative Case ColonySM Term UL Agent/Broker Use Only 4

5 Sell to the Biggest Market
1 Sell to the Biggest Market Term Life Insurance 95% of Sales < $1,000,000 Face 80% of New Premium Universal Life Insurance 99% of Sales < $5,000,000 Face 70% of New Premium Speak to slide Source: LIMRA 2006 Buyer’s Guide ColonySM Term UL Agent/Broker Use Only

6 Carriers’ Changes Not Matching Consumer Needs
1 Shifts in the Term Life Insurance Market 2009 Industry Term Product Changes Rate Increases (some carriers for 2nd round) 30 Year Term Life Exits Policy Fee Increases Commission Reductions Consumer Changes Term marketplace in 2008 was 23% of life premiums; rose ~ 20% in first half of 2009 1/3 of families in the U.S. own no life insurance Median coverage only 2x income – “Main Street” underinsured 6 out of 7 of our top competitors have increased rates since the beginning of the year. Q2 2009: Hancock Launched new series with rates + 4-9% PRU Raising rates by ~4% ING Rate increase in May; avg. ~7% Banner Rate change on June 3; avg. 4% increase overall Protective rate change effective June 15; avg. 4% Q3 2009: ING Bringing back low Band ($100k), reducing commissions (7/11). Select improved pricing (July) AIG increasing rates 4-6%, pulling year Term, raising policy fee, increasing min. face from $50K to $100K Source: Competitive research conducted by Genworth Financial; current as of 9/09/2009 Consumer – term life insurance has traditionally constituted around 23% of market but in 1st half of 2009 gone to 27% by premium (LIMRA, U.S. Individual Life Insurance Sales, Technical Supplement, Second Quarter, 2009) 65% of families own life insurance but coverage is only 1.7X income Source: Federal Reserve Board, Survey of Consumer Finances, 2007 Average premium has dropped in 1st half of 2009 as compared to last year (LIMRA, U.S. Individual Life Insurance Sales, Technical Supplement, Second Quarter, 2009) Number of policies sold end of 2008, 41% were term, number increased by more than 10% to 46%, more people are buying term more than other insurance type, spending more money on term relative to other forms of insurance and 1/3 of families remain with no coverage. (LIMRA, U.S. Individual Life Insurance Sales, Technical Supplement, Second Quarter, 2009) In a 2004 Ownership study conducted by LIMRA, the top reason for not buying more life insurance was affordability (78%) Carriers’ Changes Not Matching Consumer Needs Source: LIMRA, U.S. Individual Life Insurance Sales, Technical Supplement, Second Quarter, 2009 ColonySM Term UL Agent/Broker Use Only

7 The Genworth Solution to the Changing Market
2 The Genworth Solution to the Changing Market ColonySM Term UL Affordable protection for the traditional term market on a flexible-premium adjustable life insurance chassis (universal life) Serving the term market’s needs with competitive planned premiums for death-benefit guarantees for initial periods of 10, 15, 20 and 30 years Simple sales and service experience continue Flexibility of traditional universal life insurance Speak to slide ColonySM Term UL Agent/Broker Use Only

8 The Genworth Solution to the Changing Market
2 The Genworth Solution to the Changing Market ColonySM Term UL Offers A universal life insurance policy that allows the customer to choose an initial planned premium. Planned premiums for death-benefit guarantees for 10, 15, 20 and 30 years are comparable to term insurance premiums for the same periods Planned premiums that are intended to fund the guarantee for such chosen periods must be paid timely as planned to prevent loss of the guarantee Customers can also choose different planned premiums that will be sufficient to guarantee death benefit coverage for the period selected if they are paid as planned A universal life insurance policy that allows the customer to choose an initial planned premium. An initial planned premium comparable to a term life insurance premium can be chosen that can guarantee insurance for selected periods (for example, 10, 15, 20, and 30 years). Although a planned-premium pattern comparable to term life insurance premiums can be chosen to guarantee coverage for a period, many other planned premium patterns can also be selected to guarantee coverage for the period selected. ColonySM Term UL Agent/Broker Use Only

9 The Genworth Solution to the Changing Market
2 The Genworth Solution to the Changing Market ColonySM Term UL Higher premiums will be necessary to guarantee death-benefit coverage beyond the initial period selected. The amount of premium necessary depends on the length of any additional period selected and the frequency of planned-premium payments. The death-benefit guarantee can keep the policy in force, even if policy values do not. This guarantee, however, is conditional. In addition, certain policy rights, if exercised, can end this guarantee. Higher premiums will be required to guarantee coverage beyond the initial period selected. The amount of premium necessary depends on the length of the guarantee period and the frequency of planned-premium payments. The death-benefit guarantee is conditioned on the payment of enough premium so that at the beginning of a policy month the policy’s Coverage Protection Amount (defined in the Coverage Protection Benefit section of the policy) minus any policy loan balance is zero or greater. Policy loans and/or withdrawals can shorten the length of the guarantee or affect whether or not the guarantee remains in effect. ColonySM Term UL Agent/Broker Use Only

10 Colony Term UL: Affordability
3 Colony Term UL: Affordability Alternative to traditional term life insurance Planned premiums comparable to our current ColonySM and Sure Term® term life insurance products* Affordable planned premiums sufficient to guarantee death-benefit coverage for 10-, 15-, 20- or 30-year periods Now competitive up to $5MM death benefit Speak to slide *Colony and Sure Term premiums are the same; premium comparisons with Colony term insurance will also be valid for Sure Term. ColonySM Term UL Agent/Broker Use Only

11 Colony Term UL: Affordability
3 Colony Term UL: Affordability Compare Colony term and Colony Term UL Annual premium, Male, Preferred Best No Nicotine Use, $250,000 death benefit Age 30 35 40 45 50 Colony 20* $155.00 $160.00 $205.00 $345.00 $517.50 Colony Term UL 20 $154.41 $159.45 $204.48 $344.43 $516.90 * A $50.00 policy fee is included in the premium. Speak to slide Planned premiums for death-benefit guarantees are comparable to term insurance premiums for face amounts less than or equal to $1 million. ColonySM Term UL Agent/Broker Use Only

12 Colony Term UL: Affordability
3 Colony Term UL: Affordability Compare Colony term and Colony Term UL Annual premium, Male, Preferred Best No Nicotine Use, $5,000,000 death benefit Age 30 35 40 45 50 Colony 20* $2,350.00 $2,450.00 $3,450.00 $6,550.00 $10,350.00 Colony Term UL 20 $2,081.32 $2,251.71 $3,152.17 $5,881.57 $9,331.66 * A $50.00 policy fee is included in the premium. Speak to slide Planned premiums for death benefit guarantees above $1 million are less than our traditional term. ColonySM Term UL Agent/Broker Use Only

13 Colony Term UL: Competitiveness
3 Colony Term UL: Competitiveness Back in the market over $1 million face amount Competitive planned premiums that can guarantee death-benefit coverage for face amounts under $1 million, particularly No Nicotine Use Very competitive planned premiums that can guarantee death-benefit coverage for face amounts under $500,000 at all ages, durations, and underwriting classes Face Amount Target Position Existing Term Position Colony Term UL Position $150,000 Top 3 91% of Cells 93% of cells $250,000 84% of Cells 87% of cells $1 Million Top 5 39% of Cells 40% of cells $2.5 Million 0% of Cells 45% of cells $5 Million 41% of cells Speak to slide Very Strong Premium Positioning Note: Includes ages 35-65, every fifth year, Male and Female, PBNN, PNN and Standard classes, 10, 15, 20 and 30 year term life insurance products. Research conducted by the Genworth Financial companies, believed to be accurate and current as of 8/20/09, comparison includes 12 carriers. ColonySM Term UL Agent/Broker Use Only

14 Purchase and Service Experience: Simplicity
3 Purchase and Service Experience: Simplicity Existing Term Life New Colony Term UL Quoting Quoting Engines Same Illustration None Required Fulfillment LQR*; Life E-App Underwriting Holistic Product Name 3 Product Names 1 Product Name Annual Report N/A Yes If you are using aggregator sites, understand that premiums will be slightly different from the actual Colony Term UL premiums. Use WinFlex to get the exact numbers. Product name: since there is one product name with the new Colony Term UL, it will be far more important that the correct legal entity is selected (Genworth Life or Genworth Life & Annuity). Previously, the product name helped identify the legal entity. The default will be Genworth Life and Annuity Insurance Company. However, if that is incorrect, a reissue using the correct legal entity will need to occur which will delay policy issue as well as commissions. Policy Changes – if a consumer/agent requests a policy change, PHS will work with the policyowner/producer to ensure that the changes meet the expectation of the consumer. When the change is made, an inforce illustration will be sent to the policyowner. *Life Quick Request ColonySM Term UL Agent/Broker Use Only

15 Life Quick Request Fulfillment: Simplicity
3 Life Quick Request Fulfillment: Simplicity Reduce Cycle Times Average processing time is 10 days Improve Placement Ratios Case placement ratios up 8-10% Improve Profitability Focus on higher face policies while using LQR for lower face amounts Streamlined application process Continuous communication throughout process Allows you to maintain control May decrease your application processing costs due to fewer touches Genworth remains committed to the life insurance business and sees Life Quick Request as an offering that helps support sales to the American majority, <$1M in face Fewer New Business touches translates to reduced cycle time LQR is a service offering capability that delivers an ease of doing business for you and your agents making it easier to place more cases Placement rates are higher for cases submitted through Life Quick Request due to the reduced cycle time and less client touches Producers receive commission faster By using LQR for lower face term policies, agencies can reduce cost, increase revenue, and free up time to focus on securing higher face policies LQR was developed in partnership with a key agency ensuring a focus on the key areas of support for the BGAs LQR is a value add that offers reduced touches to your client for follow-up information –reducing opportunities for buyer’s remorse Genworth has hands on management of every case throughout the process even while it is being worked at ExamOne® (our 3rd party Fulfillment vendor) BGA has the ability to get status from their same New Business Touch Team or can go on-line to ExamOne® ’s website to track status LQR has been around for 1 1/2 years; we continue to request feedback and actively make improvements to our program to improve the experience for you and your producers Fewer APS orders because of scripted questioning by ExamOne® Streamlined application process for term life insurance including Replacements (except NY) Offers the choice of online or fax with short application 15 ColonySM Term UL Agent/Broker Use Only

16 Colony Term UL: Flexibility
3 Colony Term UL: Flexibility Broader range of issue ages than traditional term Colony Term UL 10 Preferred Best No Nicotine Use, Select No Nicotine Use, Preferred Nicotine Use Preferred No Nicotine Use, Standard No Nicotine Use, Standard Nicotine Use Colony Term UL 15 0 - 80 Colony Term UL 20 0 - 75 Colony Term UL 30 0 - 65 Nicotine Use ages begin at age 16. In Oregon, the minimum issue age is 18. Since this is a UL product, it offers a broader range of issue ages than traditional term insurance. That also means that it is flexible. The clients can full- pay, single- pay, or short-pay. Note: If the customer plans to pay premiums sufficient to provide a death-benefit guarantee for an initial period, these planned premiums must be paid timely to prevent loss of the death-benefit guarantee and possibly lapse of the policy. In 2010 there will also be the option to do 1035 exchanges. Flexible premium Ability to alter premium pattern Full-pay for the life of the guarantee, single-pay and short-pay scenarios Flexible premium as long as sufficient to keep the policy in force ColonySM Term UL Agent/Broker Use Only

17 Colony Term UL: Status by State
3 Colony Term UL: Status by State AK WA ME MT ND VT NH OR MN WI NY MA ID SD CT RI MI WY PA NJ IA OH NE MD DE NV UT IL IN WV DC CO VA KY CA KS MO NC HI TN SC AZ OK AR Product filing NM GA MS* AL Approved - 44 LA TX In Scope - 51 Speak to slide FL Updated 10/19/2009 Approved Waiting for Approval/ Availability * MS approved but not currently available ColonySM Term UL Agent/Broker Use Only 17 17

18 Promotional Marketing Campaign
4 Promotional Marketing Campaign Printed Leave Behinds for Producers Producer Let me show you today what promotional material we have available. These printed pieces are a single fold double-sided 11x17. Note to Speaker: These pieces are for leave behinds and are not intended to be printed by the BGAs at their offices. If desired, they can be ordered from RR Donnelley but they were not intended to be used by BGAs on a big scale. Our ask is that you help educate your producers on the advantage of our death benefit guarantee products. 49589 ColonySM Term UL Agent/Broker Use Only

19 Promotional Marketing Campaign
4 Promotional Marketing Campaign Printed Leave Behinds for Consumers Speak to slide 49598 ColonySM Term UL Agent/Broker Use Only

20 Promotional Marketing Campaign
4 Promotional Marketing Campaign Producer Single Sheet PDFs These single sheet PDFs are intended to provide key information in a succinct manner. They can be printed locally (at a producer’s office), downloaded only or requested from RR Donnelley. They were purposefully designed not to consume a lot of toner when printing thus the colors and lack of images. 49597 Product Fact Sheet 49596 Competitive Premium Comparison 49595 Simplicity of Transacting ColonySM Term UL Agent/Broker Use Only

21 5 Action Items Based upon all the information I just shared, can you identify a topic that you would like to learn more about? How will you promote the changes to our products to your producers and can we help you build the promotional plan? Additionally, is there a case that you are working on today that you would like us to take a closer look at? Educate your producers Can you identify any producers that you would like me to reach out to and discuss our products and/or services thereby serving as an extension of your sales team? ColonySM Term UL Agent/Broker Use Only

22 Important Information
All guarantees are based on the claims-paying ability of the issuing insurance company. These are partial product descriptions. To accurately present the products you must fully understand their features, benefits and limitations, which are explained in detail in the products' latest feature guides. Only the policy contains the actual terms and conditions of coverage. All products and their riders and benefits are subject to their policy forms and to state availability and issue limitations. ColonySM Term UL: Policy Form No. ICC09GA1002 or GA et al. (Genworth Life & Annuity); Policy Form No. ICC09GL1002 or GL et al. (Genworth Life). ColonySM 10/15/20/30, Sure Term® 10/15/20/30, and Term 10/15/20/30 is term life insurance with guaranteed level premiums for 10, 15, 20, or 30 years. After the level premium period, premiums increase annually thereafter. Colony: Policy Form No (96) et al. or 1421 et al. (Genworth Life & Annuity) Sure Term® : Policy Form No. GE-1420 et al. (Genworth Life) Term: Policy Form No. AM-1420 and is available only in New York. (Genworth Life of New York) Genworth, Genworth Financial and the Genworth logo are registered service marks of Genworth Financial, Inc. Speak to slide ColonySM Term UL Agent/Broker Use Only


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