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©UFS For Producer or Broker Dealer Use Only. Not for Public Distribution. Providing Clients Flexibility and Cash Value Using Trust and Product Design.

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Presentation on theme: "©UFS For Producer or Broker Dealer Use Only. Not for Public Distribution. Providing Clients Flexibility and Cash Value Using Trust and Product Design."— Presentation transcript:

1 ©UFS For Producer or Broker Dealer Use Only. Not for Public Distribution. Providing Clients Flexibility and Cash Value Using Trust and Product Design

2 Agenda Taxes Traditionally Safe Asset Classes Insurance as an Asset Flexible Trust Design Product Choice Alternative Investments 2 For Producer or Broker Dealer Use Only. Not for Public Distribution.

3 Income & Wealth Transfer Taxes

4 Cash Concerns 4 For Producer or Broker Dealer Use Only. Not for Public Distribution.

5 Fixed Income Yield and Returns 5 For Producer or Broker Dealer Use Only. Not for Public Distribution.

6 Tax-Free Death Benefit –Primary purpose of life insurance –Income and estate tax-free Tax-Deferred Growth Potential for Tax-Free Distributions –Policy loans and withdrawals Flexible Asset –No contribution limits based on income –Distributions prior to age 59 ½ Loans and withdrawals will decrease the cash value and death benefit. Distributions are generally treated first as tax-free recovery of basis and then as taxable income, assuming the policy is not a Modified Endowment Contract (MEC). However, different rules apply in the first fifteen policy years, when distributions accompanied by benefit reductions may be taxable prior to basis recovery. Non-MEC loans are generally not subject to tax but may be taxable when the policy lapses, is surrendered, exchanged or otherwise terminated. In the case of a MEC, loans and withdrawals are taxable to the extent of policy gain and a 10% penalty may apply if taken prior to age 59½. Always confirm the status of a particular loan or withdrawal with a qualified tax advisor. Cash value accumulation may not be guaranteed depending on the type of product selected. Investments in variable life insurance are subject to market risk, including loss of principal. Cash value life insurance offers the advantage of a tax-free death benefit and the potential for income tax-free withdrawals and policy loans provided the policy is properly structured and remains in force. 1 For Producer or Broker Dealer Use Only. Not for Public Distribution. Life Insurance as an Asset

7 1 Distributions from a life insurance policy through withdrawals of certain policy values (up to cost basis) and loans are generally not taxed as income provided you follow certain premium limits which prevent your policy from becoming a Modified Endowment Contract (MEC). Distributions taken during the first fifteen years may be subject to tax. Loans and withdrawals will generally reduce the cash value available and the death benefit payable. If policy loans are taken, there may be income tax consequences if you permit the policy to lapse or if the policy is surrendered or exchanged. 2 Traditional IRA contributions may be deducted if certain criteria are met. 3 Assuming the funds have been held in the account for at least five years and owner has reached age 59½ at the time withdrawals are taken. 4 Municipal bond interest is generally tax-free for regular federal income tax purposes. For Producer or Broker Dealer Use Only. Not for Public Distribution. Tax Diversification — Tax Control Triangle

8 Flexible Trust Design Spousal Lifetime Access Trust Transfer assets and allow the future appreciation and gift to be transferred free from estate taxes Provide a source for emergency assets for your client’s spouse Accumulate cash value on a tax-favored basis Insurance options to consider –Single life on donor spouse –Survivorship policies –Cash Value 8 For Producer or Broker Dealer Use Only. Not for Public Distribution.

9 Product Choice 9 Supplemental Income Strategy Using Guarantee Advantage UL Male, Age 50, Preferred, Non Smoker Annual Distribution $321,112 IRR at Age 65: 3.85 Taxable Equivalent Yield on IRR: 6.37% For Producer or Broker Dealer Use Only. Not for Public Distribution. 5 These illustrative values are based on the life insurance policy presented here and are entirely hypothetical. No adjustment is made for lost use of funds. It is assumed that all funds received from the life insurance policy are free of income taxation. All numbers in this presentation are based on the non-guaranteed values and are not projection of future policy performance. Please see the basic illustration for greater detail, guaranteed values, as to the underlying assumptions and risks associated with life insurance policy. Also see the Assumptions and Important Information pages for other information about the values and concept presented here. Any changes to any of the assumptions can have a significant impact on every other number or value shown. *Hypothetical Example Only Illustrative Gain Analysis 5 Assumed Age at Death:85 Death Benefit in Assumed Year of Death:$14,179,305 Total Cash Received from Policy:$4,816,687 Total Policy Benefits:$18,995,992 Less Cumulative Premiums:$5,250,000 Net Gain in Assumed Year of Death:$13,745,992

10 Product Choice 10 Supplemental Income Strategy Using Promise Whole Life Male, Age 50, Preferred, Non Smoker Annual Distribution: $412,445 IRR at Age 65: 3.61 Taxable Equivalent Yield on IRR: 5.98% *Hypothetical Example Only For Producer or Broker Dealer Use Only. Not for Public Distribution. 6 These illustrative values are based on the life insurance policy presented here and are entirely hypothetical. No adjustment is made for lost use of funds. It is assumed that all funds received from the life insurance policy are free of income taxation. All numbers in this presentation are based on the non-guaranteed values and are not projection of future policy performance. Please see the basic illustration for greater detail, guaranteed values, as to the underlying assumptions and risks associated with life insurance policy. Also see the Assumptions and Important Information pages for other information about the values and concept presented here. Any changes to any of the assumptions can have a significant impact on every other number or value shown. Illustrative Gain Analysis 5 Assumed Age at Death:85 Death Benefit in Assumed Year of Death:$13,240,940 Total Cash Received from Policy:$6,186,675 Total Policy Benefits:$19,427,615 Less Cumulative Premiums:$5,250,000 Net Gain in Assumed Year of Death:$14,177,615

11 Product Choice 11 Male, Age 50, Preferred, Non Smoker Annual Distribution: $420,067 IRR at Age 65: 4.21 Taxable Equivalent Yield on IRR: 6.97% *Hypothetical Example Only For Producer or Broker Dealer Use Only. Not for Public Distribution. Supplemental Income Strategy Using Equity Advantage VUL 6 These illustrative values are based on the life insurance policy presented here and are entirely hypothetical. No adjustment is made for lost use of funds. It is assumed that all funds received from the life insurance policy are free of income taxation. All numbers in this presentation are based on the non-guaranteed values and are not projection of future policy performance. Please see the basic illustration for greater detail, guaranteed values, as to the underlying assumptions and risks associated with life insurance policy. Also see the Assumptions and Important Information pages for other information about the values and concept presented here. Any changes to any of the assumptions can have a significant impact on every other number or value shown. Illustrative Gain Analysis 5 Assumed Age at Death:85 Death Benefit in Assumed Year of Death:$18,037,617 Total Cash Received from Policy:$6,301,006 Total Policy Benefits:$24,338,623 Less Cumulative Premiums:$5,250,000 Net Gain in Assumed Year of Death:$19,088,623

12 Product Choice 12 Summary Comparison Male, Age 50, Preferred Nonsmoker Guarantee Advantage UL without CCR Promise Whole Life Equity Advantage Variable Universal Life Initial Death Benefit18,995,99222,687,47520,005,415 Annual Premium for 5 Years1,050,000 Total Premium5,250,000 Withdrawals from 66 to 85321,112412,445420,067 IRR at Age %3.61%4.21% Taxable Equivalent Yield6.37%5.98%6.97% Total Loans & Withdrawals4,816,6876,186,6756,301,006 Current CV Year 106,741, ,627,615 2,3,4 6,899,122 2 Guaranteed CV Year 101,576,6827,192, Current CV Year 208,645, ,246,142 2,3,4 9,029,257 2 Guaranteed CV Year 20012,967, Current Interest Crediting Rate5.20%N/A 7.00% Hypothetical Gross Rate 6.26% Hypothetical Net Rate Dividend Interest RateN/A5.25%N/A Commissionable PremiumTarget – 203,560Base – 420,000Target – 376,984 Other Attributes General Account Flexible Premiums Overloan Protection Rider 5 General Account Dividends Will be Paid If and When Declared by the Issuing Company Guaranteed CV Guaranteed Minimum Death Benefit Protection Flexible Premiums No Investment Restrictions including Protected Growth Strategy Funds 1 Assumes Premiums are paid on time each year and no Loans or Withdrawals 2 Assumes Premiums are paid on time for 5 years and Loans and Withdrawals as specified 3 Assumes dividends are paid at current rate. 4 Dividends are not guaranteed. 5 Optional riders can be purchased for an additional charge. Age and state availability restrictions may apply.

13 Alternative Investments Protective Growth Strategies 13 For Producer or Broker Dealer Use Only. Not for Public Distribution.

14 Delivering on our Promises 14 For Producer or Broker Dealer Use Only. Not for Public Distribution.

15 Implementation 15 Review strategic relationship Practice review Schedule time for client meetings and discuss method of approaching client Set client meeting to confirm data, identify problems/ solutions, initiate underwriting Deliver presentation materials if required Implement Solutions Repeat Steps For Producer or Broker Dealer Use Only. Not for Public Distribution.

16 MetLife Brand MetLife, Inc. is a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers. Founded in 1868, MetLife continues to build upon its long history of providing unique solutions for its customers by launching new and innovative products, expanding its role as a leader, and continuing to provide high quality financial solutions that are backed by a trusted, well-recognized brand name and strong financial performance MetLife counts over 90 of the top one hundred FORTUNE 500® companies among its corporate clients and is the largest life insurer in the U.S. and Mexico. * Source: MetLife.com/Investor Relations 2013 For Producer or Broker Dealer Use Only. Not for Public Distribution.

17 Life Insurance Products are: Not A Deposit Not FDIC-Insured Not Insured By Any Federal Government Agency Not Guaranteed By Any Bank Or Credit Union May Go Down In Value L [exp0214] © 2013 METLIFE INC. PEANUTS © 2013 Peanuts Worldwide Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance products. You should seek advice based on your particular circumstances from an independent tax advisor. MetLife, its agents and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on your own independent legal and tax advisors regarding your particular set of facts and circumstances. Like most insurance policies, MetLife's policies contain charges, limitations, exclusions, termination provisions and terms for keeping them in force. Contact your financial representative for costs and complete details. Guarantee Advantage Universal Life is issued by MetLife Investors USA Insurance Company on Policy Form 5E and in New York only by Metropolitan Life Insurance Company on Policy Form 1E NY. All product guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company. Life insurance products are issued by: MetLife Investors USA Insurance Company, Irvine, CA and in NY only by: Metropolitan Life Insurance Company, First MetLife Investors Insurance Company, New York, NY Life insurance products are issued by: MetLife Investors USA Insurance Company 5 Park Plaza, Suite 1900 Irvine, CA And in NY only by: Metropolitan Life Insurance Company First MetLife Investors Insurance Company 200 Park Avenue New York, NY metlife.com For Producer or Broker Dealer Use Only. Not for Public Distribution.


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