Presentation is loading. Please wait.

Presentation is loading. Please wait.

©2008 Lincoln National Corporation For agent or broker use only. Not to be used with the general public. LCN0810-2021955 10/08. [Name] [Title] Lincoln.

Similar presentations


Presentation on theme: "©2008 Lincoln National Corporation For agent or broker use only. Not to be used with the general public. LCN0810-2021955 10/08. [Name] [Title] Lincoln."— Presentation transcript:

1 ©2008 Lincoln National Corporation For agent or broker use only. Not to be used with the general public. LCN /08. [Name] [Title] Lincoln Financial Distributors The Boomer Tax Dilemma

2 For agent or broker use only. Not to be used with the general public. LCN The Boomer Tax Dilemma 70 million Baby Boomers are Retiring Their Retirements are severely under-funded. Their Health Care costs are outpacing inflation. They will need someone to pay for them.

3 For agent or broker use only. Not to be used with the general public. LCN What ’ s the probability? That future tax bracket rates will increase?

4 For agent or broker use only. Not to be used with the general public. LCN World ’ s aging countries Country Highest Effective Tax Rate Median Age % of population over age 65 Belgium Japan Denmark Finland France United States Source: OECD (2007), CIA (2007)

5 For agent or broker use only. Not to be used with the general public. LCN US Historic Tax Brackets Years Highest Effective Tax Rate 1920s s s s s s s s s38 Source: IRS

6 For agent or broker use only. Not to be used with the general public. LCN Do you know? Is tax-deferred investing dead?

7 For agent or broker use only. Not to be used with the general public. LCN Do you know? Is tax-deferred investing dead? Do you have a plan?

8 For agent or broker use only. Not to be used with the general public. LCN We have a plan Variable Universal Life Insurance (VUL) Offers: An immediate income-tax-free death benefit Potential for market returns by investing in equity sub accounts Tax-free access to cash values via Withdrawals to basis Income tax-free loans Note: Loans and withdrawals will reduce the policy’s account value and death benefit, may effect your guarantees, may cause the policy to lapse, and may have tax consequences.

9 For agent or broker use only. Not to be used with the general public. LCN Why VUL? Let’s examine the after tax benefit of VUL compared to: Traditional taxable investments Traditional tax-deferred investments

10 For agent or broker use only. Not to be used with the general public. LCN How Much Benefit? Annual Taxable Returns: Gross Return: 8.0 % Mgmt Fees:- 1.0 % Pre Tax Return: 7.0 % Tax BracketAnnual After Tax Return 15 %6.80% 28 %5.76% 35 %5.20% 40 %*4.80% 50 %*4.00% 60 %*3.20% 70 %*2.40% This example is for illustrative purposes only. * Tax Brackets are not actual rates, but hypothetical in nature and may not be accurate in the future

11 For agent or broker use only. Not to be used with the general public. LCN How Much Benefit? Tax Deferred Returns: Gross Return: 8.0 % Mgmt Fees:- 1.0 % Pre Tax Return: 7.0 % Tax BracketAnnual After Tax Return 1 15 %7.48% 28 %6.96% 35 %6.65% 40 %*6.40% 50 %*5.87% 60 %*5.24% 70 %*4.48% 1 Assumes tax deferral for 30 years This example is for illustrative purposes only. * Tax Brackets are not actual rates, but hypothetical in nature and may not be accurate in the future

12 For agent or broker use only. Not to be used with the general public. LCN VUL Comparison $25,000 per year paid for 4 years into a Lincoln AssetEdge SM VUL 53 year old male preferred underwriting A client squarely in the baby boomer population.

13 For agent or broker use only. Not to be used with the general public. LCN VUL Internal Rate of Return # Payments 1 Preferred Best PreferredStandardPreferred Smoker Smoker Source: Lincoln Illustration System. The IRR is at a point 30 years in the future, with a gross rate of return of 8%, with current mortality assumptions. At a gross rate of 0% with guaranteed mortality the policy will lapse prior to year 30. Assumptions: $416,325 of death benefit 8% gross return 53 M Preferred level death benefit – minimized in year 12 Policy is not a MEC (Modified Endowment Contract)

14 For agent or broker use only. Not to be used with the general public. LCN Comparing the Alternatives Tax BracketTaxableTax deferredVUL 15 %5.95%6.50%6.04% 28 %5.04%6.01%6.04% 35 %4.55%5.72%6.04 % 40 %*4.20%5.49%6.04 % 50 %*3.50%4.99%6.04 % 60 %*2.80%4.41%6.04 % 70 %*2.10%3.71%6.04 % Annualized after-tax IRR 30 years in the Future 1.This example is for illustrative purposes only. 2.*Tax Brackets are not actual brackets, but hypothetical in nature and may not be accurate in the future 3.VUL Assumptions $416,325 of death benefit, level 8% gross return 53 M Preferred Policy is not a MEC

15 For agent or broker use only. Not to be used with the general public. LCN Protect a portion of your assets from future income taxes. Get there with Lincoln’s VUL Portfolio and the Elite Series What is your Protection Against Future Tax Increases?

16 For agent or broker use only. Not to be used with the general public. LCN How do we implement Prospects up to age 60 with Assets in taxable accounts. Action Steps: Transfer 25% of account into Lincoln AssetEdge SM VUL over 4 years (3 years + 1 day) To Illustrate: 7 pay TAMRA premium solve for Death Benefit DB option LEVEL Variable DB -11 years at TAMRA. Yr 12+ $100,000 Pay premiums for 4 years

17 For agent or broker use only. Not to be used with the general public. LCN Value of VUL to Client Immediate death benefit EZ Tax Free switch to income producing assets we just accelerated the timetable and created greater flexibility when the switch inevitably occurs. Transferred control of tax recognition to client

18 For agent or broker use only. Not to be used with the general public. LCN Value of VUL to Advisor Client gets insurance protection Great differentiator from other advisors VUL offers a chassis for an EZ Tax Free switch to income producing assets No more 1099s Great prospecting tool – “what is your current plan to protect against increasing tax brackets?”

19 For agent or broker use only. Not to be used with the general public. LCN What is it? THIS IS NOT SUPPLEMENTAL RETIREMENT INCOME IT IS PORTFOLIO TAX MANAGEMENT

20 For agent or broker use only. Not to be used with the general public. LCN Protect a portion of your assets from future income taxes. Get there with Lincoln’s VUL Portfolio and the Elite Series What was that again?

21 For agent or broker use only. Not to be used with the general public. LCN Disclosure Lincoln AssetEdgeSM VUL is issued on policy form LN698 and state variations by The Lincoln National Life Insurance Company, Fort Wayne, IN, distributed by Lincoln Financial Distributors, Inc., and offered through broker/dealers with an effective selling agreement. The Lincoln National Life Insurance Company is not authorized, nor does it solicit business in the state of New York. Contractual obligations are backed by the claims- paying ability of The Lincoln National Life Insurance Company. Policies sold in New York are issued on policy form LN698 by Lincoln Life & Annuity Company of New York, Syracuse, NY, and distributed by Lincoln Financial Distributors, Inc. Contractual obligations arebacked by the claims-paying ability of Lincoln Life & Annuity Company of New York. Policy values will fluctuate and are subject to market risk and to possible loss of principal. Product and features subject to state availability. Lincoln variable universal life insurance is sold by prospectus. Carefully consider the investment objectives, risks, and charges and expenses of the policy and its underlying investment options. This and other important information can be found in the prospectus for variable universal life policy and the prospectus for the underlying investment options. Prospectuses are available upon request and should be read carefully before investing or sending money. For a current prospectus, please call or go to

22 For agent or broker use only. Not to be used with the general public. LCN Thank you Questions?


Download ppt "©2008 Lincoln National Corporation For agent or broker use only. Not to be used with the general public. LCN0810-2021955 10/08. [Name] [Title] Lincoln."

Similar presentations


Ads by Google