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Life Insurance with Living Benefits

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Presentation on theme: "Life Insurance with Living Benefits"— Presentation transcript:

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2 Life Insurance with Living Benefits
“Life insurance you don’t have to die to use”

3 Consumer Financial Concerns
DIE TO SOON, LIVE TOO LONG, OR GET SICK… Consumer Financial Concerns Disability Benefits in case you become disabled Cash Value Accumulation Money for Future Plans Accelerated Living Benefits Terminal, Chronic, or Critical illness riders Life Insurance Protection for your family Consumer face a number of financial concerns which include: Will the people who depend on them financially be protected should they “die too soon”? Do they have enough money to cover expenses if the “become Ill”? Have they saved enough for retirement – will it be enough should they “live to long”?

4 Many Consumers Don’t Want to Pay for Three Different Policies
DIE TO SOON, LIVE TOO LONG, OR GET SICK… Many Consumers Don’t Want to Pay for Three Different Policies LTC Life Normally, a client would have to buy 3 different policies to cover all of those concerns! This approach can prove to be quite costly. Is there another alternative? $$$ / Month Is there another alternative?

5 What Can Happen to You? STROKE
You may become Terminally or Critically Ill HEART ATTACK About every 34 seconds, someone in the United States has a myocardial infarction (heart attack).1 STROKE On average, a stroke occurs every 40 seconds.2 CANCER A new cancer is diagnosed every 30 seconds in the United States.3 1 in 2 men and women will be diagnosed with cancer in their lifetime.4 1. “About Heart Attacks” American Heart Association. 12 June (24 April 2012). 2.“Impact of Stoke” American Stoke Association. 18 April (24 April 2012). 3. “Cancer Facts & the War on Cancer” National Cancer Institute (24 April 2012). 4. “SEER Stat Fact Sheets: All Sites” National Cancer Institute (25 April 2012).

6 The chance of survival…
Yet, what about financial survival? Nearly half of people whose families have been affected by cancer say the costs of cancer care were a burden on their family, including one in six who say such costs were a MAJOR burden.2 One in eight people with advanced cancer turned down recommended care because of cost.3  The cost of a severe heart attack – including direct and indirect costs – is about $1 million.4 1.5 million Americans will declare bankruptcy this year and 60% are due to medical bills. Heart Attack – 60% Stroke – 70% Breast Cancer – 87% Prostate Cancer – 98%1 1. “Critical Illness Statistics” Pinney Insurance Center, (13 April 2012). 2. “National Survey of Households Affected by Cancer” The USA Today/Kaiser Family Foundation/Harvard School of Public Health, November (13 April 2012). 3 Shaw LJ, Merz CNB, Pepine CJ, et al. The Economic Burden of Angina in Women With Suspected Ischemic Heart Disease: Results From the National Institutes of Health National Heart, Lung, and Blood Institute-Sponsored Women's Ischemia Syndrome Evaluation. Circulation. August 29, ;114(9): 4. “The Real Risk That You’ll Have a Critical Illness” Facts About Critical Illness Insurance Coverage and Costs, (13 April 2012).

7 What Can Happen to You? You may become Chronically Ill Chronic Illness affects many people and can create additional expenses for a family. Some of these expenses may include: Nursing Home Cost for a Private Room For nursing home care, the national monthly average is now $6,266, which translates into $75,190 annually. 1 Assisted Living Facility For assisted living facilities the national monthly average is now $3,185, which translates into $38,220 annually.1 Home Health Aide (Certified) For Home Heath Aide, the national monthly average is now $3,623, which translates into $43,472 annually. 1 1 1. “Cost of Care Survey” Genworth (13 April 2012).

8 The Worst Can Happen. You may die too soon
The proportion of U.S. adults with life insurance protection has declined to an all-time low as 41 percent (95 million) of U.S. adults have no life insurance at all.1 And half of U.S. households now believe they are underinsured.2 Think about this…the median income in the USA is roughly $60,000.00… Given a standard retirement age of 65, what would your potential earning power be until you reach that age? Let’s assume a 3% annual growth for inflation, etc…. 1. “Facts About Life 2011” LIMRA, (13 April 2012). 2. “Household Trends in U.S. Life Insurance Ownership” LIMRA, (13 April 2012)

9 ABR: Terminal Illness Terminal illness is determined by a condition resulting from injury or illness which, as determined by a physician, has reduced life expectancy to not more than 24 months (12 months in VT & PA). This rider allows the insured to accelerate up to 100% (max of $1.5 Million) of the policy’s death benefit in the event of a terminal illness. Read the slide…perhaps speak to the fact that the advance money can be used to take care of business, tie up loose ends before you go – perhaps even use the money for additional treatment, or exploratory treatment that you otherwise could not afford / health insurance would not cover… Experimental Treatment Bucket List Mortgage Etc. Alliance Marketing Group, LC is an independent contractor representing National Life Insurance Company

10 ABR: Chronic Illness Chronically ill is being unable to perform 2 of 6 activities of daily living (bathing, continence, dressing, toileting, eating, and transferring) without assistance from another person or being cognitively impaired. Additional Info: 90 day waiting period Can accelerate up to 2% of death benefit per month, or 24% annually Max lifetime benefit is $1,500,000 The policy must be in-force for 2 years before benefits are available Bathing Dressing Toileting Eating Continence Transferring Read the slide – Underwriting mainly based on mortality – with less emphasis on morbidity… Emphasize that the policy MUST be in force for 2 years before benefits are available – at which point there is 90 day waiting period once the claim is made. *The maximum total amount of lifetime benefits for an Insured under all Critical and Chronic Illness Benefit Riders is $1,000,000 Alliance Marketing Group, LC is an independent contractor representing National Life Insurance Company

11 ABR: Critical Illness Allows the insured to accelerate his/her death benefit if they are critically ill Critical Illness includes diagnosis of cancer, heart attack, stroke, ALS, kidney failure, major organ transplant & blindness 30 day waiting period Max lifetime benefit is $1,000,000 Read the slide. BIG ONE – 30 day waiting period – on the 31st day, benefits can be available for a qualifying event. Tell a story, again – we all know someone, etc… Lead in to the next few slides – 2 things happen when someone suffers a critical or chronic illness…. *The maximum total amount of lifetime benefits for an Insured under all Critical and Chronic Illness Benefit Riders is $1,000,000 Alliance Marketing Group, LC is an independent contractor representing National Life Insurance Company

12 Male 45 $1,000,000 Face Amount

13 What normally happens when you suffer a Critical or Chronic Illness?
Expenses Income What normally happens when you suffer a Critical or Chronic Illness? This example that shows what may happen when you experience a chronic or critical illness. Everyone’s goal in life is to have their income higher than their expenses. Two things may happen when you have a chronic or critical illness. One is that your income goes down. You are going to have time off of work and you will need time to recover. The second thing that may happen is that you will have increased expenses. Even if you have the best health insurance policy available, you will have co-pays and deductibles and possibly medicine that health insurance will not cover. So what ends up happening is that you create debt or spend your savings. The beauty of the living benefits is that the insured has access to benefits to help offset the increased expenses and decreased income. This in turn in most cases allows you to keep the gap between your expenses and your income.

14 Income Vs Expenses DEBT Additional Income From Living Benefits!!!
Your Family’s Income DEBT Time off Work Recovery Time This example that shows what may happen when you experience a chronic or critical illness. Everyone’s goal in life is to have their income higher than their expenses. Two things may happen when you have a chronic or critical illness. One is that your income goes down. You are going to have time off of work and you will need time to recover. The second thing that may happen is that you will have increased expenses. Even if you have the best health insurance policy available, you will have co-pays and deductibles and possibly medicine that health insurance will not cover. So what ends up happening is that you create debt or spend your savings. The beauty of the living benefits is that the insured has access to benefits to help offset the increased expenses and decreased income. This in turn in most cases allows you to keep the gap between your expenses and your income. Deductibles Your Family’s Expenses Co-Pays

15 Income Vs Expenses This example shows what may happen when you experience a chronic or critical illness. Everyone’s goal in life is to have their income higher than their expenses. Two things may happen when you have a chronic or critical illness. One is that your income goes down. You are going to have time off of work and you will need time to recover. The second thing that may happen is that you will have increased expenses. Even if you have the best health insurance policy available, you will have co-pays and deductibles and possibly medicine that health insurance will not cover. So what ends up happening is that you create debt or spend your savings. The beauty of the living benefits is that the insured has access to benefits to help offset the increased expenses and decreased income. This in turn in most cases allows you to keep the gap between your expenses and your income.

16 48 - 48 - 60 What do these numbers mean?
48% of mortgage foreclosures are the result of financial hardship due to critical Illness (only 3% due to death).1 48% of businesses that fail, fail because of a critical illness.2 60% or more of all bankruptcies are directly tied to medical conditions such as critical illnesses, and around 80% of the individuals were already covered by health insurance.3 Read slide 1. Get Sick, Get Out: The Medical Causes of Home Foreclosures" Health Matrix, 2008. 2. Goldstein, Mark, “Critical Illness Insurance 101” (13 April 2012). 3. “More People are Surviving Critical Illnesses…” United States Critical Illness Insurance Resource Center, (13 April 2012).

17 This is why we call it life insurance for life – to cover you when you may need it most – for Terminal, Chronic and Critical Illness and in Death.

18 Check out our website to view testimonials: www.anallianceforlife.com
ALLIANCE GROUP TESTIMONIAL VIDEO: The Dudley’s Check out our website to view testimonials:

19 National Life Founded in 1848 Montpelier, VT National in Scope

20 We Are Financially Strong
A.M. Best A (Excellent) Third highest out of 16 ranking Standard & Poor’s A (Strong) Sixth highest of 21 rankings Moody’s A2 (Good) Sixth highest of 21 rankings Our values are Do Good. Be Good. Make Good. – so it makes sense that at least one of our rankings is Good. And in this case, Good is truly good – 6th out of 21. Moody’s: “Although industry regulatory capital levels are currently strong, emerging statutory cash flow testing reserve deficiencies are likely to result in reserve increases that will lower insurers’ earnings over the next 18 months.” (9/13/2012) S&P: “Strong capital and liquidity, along with sound investment portfolios with only moderate losses, support the high investment-grade financial strength ratings on the majority of life insurers we rate. However, continued low interest rates or equity market declines could lead to accelerated amortization of deferred acquisition costs (DAC) and require insurers to boost reserves, reducing earnings and capital and putting downward pressure on ratings.” (11/27/2012) A.M Best: “To counteract the impact of low interest rates on spread compression and earnings volatility, insurers are strategically de-risking their legacy product portfolios… However, other companies, instead, have de-risked their investment portfolios, which may accelerate investment yield deterioration.” (10/11/2012) Financial Strength ratings for National Life Insurance Company and Life Insurance Company of the Southwest Ratings are current as of March 31, 2012 and are subject to change.

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22 Term Insurance with Living Benefits
“Life insurance you don’t have to die to use”

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24 LIFE INSURANCE YOU DON’T HAVE TO DIE TO USE
Level Premium TERM With Living Benefits With LSW's term insurance, you can be prepared to meet your family’s major life event needs under a single, affordable life insurance policy. It’s a revolutionary solution we call… LIFE INSURANCE YOU DON’T HAVE TO DIE TO USE

25 LSW Term Middle to upper middle market
10, 15, 20, and 30 year term periods (G & NG) Minimum face amount - $50,000 Good for the conversion policy and Mortgage Protection Sales Not good for a long term solution sale but good temporary product Oral Swab up to $200k thru 50, $100k thru 60, and $50k thru 70 Term Period Issue Ages 10 Year G 18-75 15 Year G & NG 18-70 20 Year G & NG 18-65 30 Year G & NG 18-50 1st Generation IUL Introduced in 2005. Great product for Juvenile clients. Low expense product 1.25% Account Value Enhancement after 10th year. Allows for low initial face amount.

26 LSW Term 1st Generation IUL Introduced in 2005.
Great product for Juvenile clients. Low expense product 1.25% Account Value Enhancement after 10th year. Allows for low initial face amount.

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28 LSW IUL’s: WHY IUL? WHY NOW?
LSW Fixed UL Products

29 LSW Foundation UL LSW IUL’s: WHY IUL? WHY NOW?
Middle to upper middle market Current fixed rate of 5% Issue ages 0-85 Minimum face amount - $25,000 15-year surrender charge period Good for the low MMP sales and Mortgage Protection Sales Not good for a long term solution sale Oral Swab up to $200k thru 50, $100k thru 60, and $50k thru 70 1st Generation IUL Introduced in 2005. Great product for Juvenile clients. Low expense product 1.25% Account Value Enhancement after 10th year. Allows for low initial face amount.

30 LSW Income Builder UL LSW IUL’s: WHY IUL? WHY NOW?
Middle to upper middle market and high income earners Current fixed rate of 5.35% and a Guarantee of 3% Issue ages 0-85 Minimum face amount - $100,000 15-year surrender charge period Good for Endowment Sales Good for a long term solution sale .5% Int rate enhancement in year 6 and a .6% in year 21 Full Medical product 1st Generation IUL Introduced in 2005. Great product for Juvenile clients. Low expense product 1.25% Account Value Enhancement after 10th year. Allows for low initial face amount.

31 LSW Indexed UL Products
LSW IUL’s: WHY IUL? WHY NOW? LSW Indexed UL Products

32 Interest Crediting Strategies
LSW IUL’s: WHY IUL? WHY NOW? Interest Crediting Strategies Basic Fixed Point-to-Point, Cap Focus, S&P Point-to-Point, Participation Rate Focus, S&P Point-to-Point, no Cap, S&P Point-to-Average, no Cap, S&P Point-to-Point, MSCI Index Basic Strategy – Used to pay policy expenses and hold excess premium prior to sweeping into index strategies. 5 Interest Crediting Strategies: One Fixed Term Strategy 4 Indexed Strategies – Credit based on measurement of the S&P 500. 3. Can allocate across strategies such that total allocation = 100%.

33 SecurePlus® Provider LSW IUL’s: WHY IUL? WHY NOW?
Middle to upper middle market Upside potential without the risk of losses Issue ages 0-85 Minimum face amount - $25,000 4 interest crediting strategies 1.25% Annual Account Value Enhancement starting at year 10 10-year surrender charge period Lifetime Income Benefit Rider No routine medical testing up to $250k age 65 & under 1st Generation IUL Introduced in 2005. Great product for Juvenile clients. Low expense product 1.25% Account Value Enhancement after 10th year. Allows for low initial face amount.

34 Underwriting Program – No Routine Medical Testing
LSW IUL’s: WHY IUL? WHY NOW? Underwriting Program – No Routine Medical Testing Face Amount must be $250,000 or less Client must be age 65 or younger Applies to base policy insured and OIRs Faster processing 4 – 7 days Standard at best No option to be underwritten for Preferred Rate Class Available Verified Standard NT Express Standard NT Standard Tobacco All substandard risk classes are available This is not a guaranteed issue program. The company reserves the right to require additional requirements as deemed necessary.

35 SecurePlus® Provider LSW IUL’s: WHY IUL? WHY NOW? October 10, 2012
Part. Rate Cap Illus. Rate Point to Point (Cap Focus) 100% 10.50% 7% Point to Average 90% None 5.90% (Prt Rate Focus) 140% 10% 7.10% Point to Point - MSCI 9.50% 6% Basic Strategy % Variable Loan Rate – 4.50% Fixed Term Strategy – 4.50%

36 LSW FlexLife LSW IUL’s: WHY IUL? WHY NOW? 4th Generation IUL
Upside potential, no risk for loss Business or affluent/emerging affluent clients Issue ages 0-85 Minimum Face: $100,000 5 interest crediting strategies Price banding at $250k, $1MM, and $3MM Account value enhancement of .35% beginning in yr 10 10 yr surrender period Lifetime Income Benefit Rider High cash value accumulation product Higher caps on Index Crediting Strategies Price Banding at higher face amounts. Rider portfolio conducive to business owner market: Balance Sheet Benefit Rider Additional Protection Benefit Rider Lifetime Income Benefit Rider

37 LSW FlexLife LSW IUL’s: WHY IUL? WHY NOW? October 10, 2012 Part. Rate
Cap Illus. Rate Point to Point (Cap Focus) 100% 13% 8.10% (Part. Rate Focus) 140% 11.50% 8% (No Cap) 63% None Point to Average 115% 7.50% Point to Point - MSCI 7% Basic Strategy – 4.75% Variable Loan Rate – 4.50% Fixed Term – 5.25%

38 Consumer Financial Concerns
Disability Benefits in case you become disabled Cash Value Accumulation Money for Future Plans Accelerated Living Benefits Terminal, Chronic, or Critical illness riders Life Insurance Protection for your family Consumer face a number of financial concerns which include: Will the people who depend on them financially be protected should they “die too soon”? Do they have enough money to cover expenses if the “become Ill”? Have they saved enough for retirement – will it be enough should they “live to long”?

39 Lifetime Income Benefit Rider
Income For Life – Guaranteed Once conditions* are met and the rider is exercised. *The Lifetime Income Benefit Rider provides a benefit for the life of the insured if certain conditions are met, including but not limited to the insured’s attained age being between age 60 and 85, and that the policy has been inforce for at least 10 years (15 years for SecurePlus Provider). Insufficient policy values, outstanding policy loans and other considerations may also restrict exercising the rider. Receipt of income benefits will reduce the policy’s cash value and death benefit and may terminate other riders or reduce their benefits. There is a monthly charge from the accumulated value during the income payment period. Guarantees are dependent upon the claims-paying ability of the issuing company.

40 LIBR – Giving Your Clients More Flexibility
Now available on all IUL products NL and LSW Flex Life NL and LSW LifeCycle Solution LSW Advantage 79 NL Ultra Select LSW SecurePlus Provider Also available on in-force* New New New *Including LSW SecurePlus Paragon

41 Lifetime Income Benefit Rider

42 Product Introduction & Enhancements
Introducing a Whole New Way of Life Product Introduction & Enhancements National Life Group is constantly thinking of ways to help you as you sell, recruit and train. We want to provide you with the highest value and quality, and are exited to share with you our recent exiting advances. Products issued by National Life Insurance Company® | Life Insurance Company of the Southwest™ TC70222(0912)

43 What Is Whole Life? Whole life is a type of permanent life insurance.
How is it different? Guarantees!1 guaranteed death benefit guaranteed cash value accumulation guaranteed premiums …for the whole life of the insured With the introduction of two Whole Life products, it is important to address the question: what is Whole Life? Whole Life is a Permanent Insurance product that provides death benefit protection and cash value accumulation. Whole life premiums, cash values, and death benefits are set at policy issue and are guaranteed as long as premiums are paid. Premiums are level and predictable. 1 Guarantees are dependent upon the claims-paying ability of the issuing company. Products issued by National Life Insurance Company® | Life Insurance Company of the Southwest™ 43

44 Why Whole Life? “The biggest driver behind both total premium and policy count growth continues to be Whole Life. It remains very attractive to consumers looking for security of premium and cash value guarantees along with lifetime coverage” Whole Life is extremely attractive to consumers in today’s economy. This recent quote from LIMRA supports the recent consumer flight to guarantees. – Ashley Durham, Sr. Analyst, LIMRA 2012 Products issued by National Life Insurance Company® | Life Insurance Company of the Southwest™ 44

45 LSW ProtectorLife – Guarantees*
Guaranteed Death Benefit Guaranteed Level Premium Guaranteed Cash Value LSW ProtectorLife is focused on guarantees. Protection For Life – With LSW ProtectorLife, as long as required premiums are paid, coverage is guaranteed for life. Premium – premiums are level, guaranteed to age 100. Cash Value – LSW ProtectorLife offers guaranteed cash value accumulation that is accessible at any time through policy loans and withdrawals. Note, however, that policy loans and withdrawals will reduce the cash value and death benefit and may result in a taxable event. *Guarantees are dependent upon the claims-paying ability of the issuing company. Products issued by Life Insurance Company of the Southwest™ 45

46 LSW ProtectorLife – Availability
Issue Ages: Age nearest birthday Minimum Face Amount: $25,000* Maximum Face Amount: $500,000** 7 Rate Classes; No table ratings Preferred Non-Tobacco Verified Standard Non-Tobacco Express Non-Tobacco 1 Express Non-Tobacco 2 Preferred Tobacco Verified Standard Tobacco Express Tobacco Issue ages are 0-85 based on Age nearest birthday. The minimum face amount is $25,000 The maximum face amount is $500,000 except for Qualified Plan issue where the $500,000 doesn’t apply. You will note that we have replaced substandard table ratings with multiple Express classes. Express Non-Tobacco is the same criteria as for LSW SecurePlus Provider IUL and other products in this market. In addition we’ve added a second Express Non-Tobacco class and an Express Smoker class. This makes things easier and faster for the underwriting team because they’re working with wider “buckets” of risk. *The minimum base face will be lower when an Automatic Conversion Rider is on the policy. **No $500,000 face limitation for all policies sold inside Qualified Plans Products issued by Life Insurance Company of the Southwest™ 46

47 LSW ProtectorLife – Underwriting
Convenience No routine medical testing required for a face amounts of $250,000 or less and age 65 or younger. Ease of doing business is important to us, and it’s just as important to your clients. Not available on Preferred Class Ratings To increase the ease of doing business, there is no routine 3rd party examination required for a face amount of $250,000 or less and age 65 and younger. Note, if the insured fits this criteria there is no option for Preferred Underwriting. Products issued by Life Insurance Company of the Southwest™ 47

48 LSW ProtectorLife – Living Benefits
Accelerated Benefit Riders Terminal Illness Chronic Illness Critical Illness And of course to complete the puzzle, LSW ProtectorLife offers all three accelerated benefit riders, Terminal, Chronic and Critical Illness. Critical Illness is not available for Express Non-Tabacco 2. Receipt of accelerated benefits will reduce the cash value and death benefit, may be a taxable event and may effect eligibility for public assistance programs. 48

49 LSW ProtectorLife – Family Protection
Other Insured Rider Covers the insured’s spouse or civil union partner 20 year level term with increasing premiums after year 20 Convertible Issue ages for Rider: (Preferred & Standard Rate Classes) 20-60 (Express Standard Rate Classes) Minimum Face Amount for Rider: $25,000 Maximum Face Amount For Rider: Policy Face Amount (combination WL/ACR face amount) Children’s Term Rider Up to $25,000 of coverage on each Child Because LSW ProtectorLife can be an appealing product for your clients who are starting their families, we offer family protection through the optional riders such as the Other Insured Rider. This rider provides 20 year level term protection and is convertible. You will want to note that the LSW ProtectorLife Other Insured Rider is only available on the insured spouse or civil union partner. Up to $25,000 of term coverage is also available for children through the Children’s Term Rider. Products issued by Life Insurance Company of the Southwest™ 49

50 LSW Sales Desk 800.906.3310 Life (Option #1) Annuities (Option #2)

51 2014 ALLIANCE CONFERENCE

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54 Lee Duncan lduncan@anallianceforlife.com
Vice President and National Training Director or c Peter Goldfine National Marketing & Social Media Director or c Jessica Myers Distribution Relationship Manager NATIONAL LIFE GROUP or c


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