Presentation on theme: "Offered by National Western Life"— Presentation transcript:
1 Offered by National Western Life Wealth TransferOffered by National Western Life
2 Mechanics for Leaving a Legacy SPIAImmediate Life AnnuityLife PolicyLifetime SolutionsExplain life or 10/5 spia with NWL as irrevocable beneficiary2
3 $100 K (Qualified) Wealth Transfer 67 Y/O F N/T LTRSSolutions 5Solutions 10$67 K buys policy$100 K into 5 yr SPIA$100 K into 10 yr SPIA$33 K paid to the IRS@33% tax rate$6.9 K taxes per year for 533 % tax rate$3.8 K taxes per year for 1033% tax rateGuaranteed DB$127,376$192,046180, 337Tale of 3 wealth transfersUse the governments $$ to leave a larger bequest
4 Old Concept w/ Some New Features Fits into Jack Marrion’s New FINANCIAL PYRAMIDPlan Designed for Today’s Seniors seeking discounted bequeathsGrowing Legacy in terms of DB and CASH VALUETax payments spread--using the governments $$ to buy a bigger DB!ROTH Conversion offers 3 years to spread tax payments Wealth Transfer offers up to 10!Estate/BequestAdditional IncomeEssential IncomeWealth Transfer is not a new idea!
5 Qualified Plans Asset or Liability? Most folks hate the idea of an RMDMost Seniors Want to Leave a Legacy not a tax billSavings Products yield next to nothing currently ( )Many Investment Products could be Losing MoneyTaxes going up or down in the future?
6 October (Fiscal 2009) $164,827 $320,360 ($155,533) November $144,769 $269,970($125,201)December$237,785$289,540($51,755)January$226,090$289,547($63,457)February$87,312$281,171($193,859)March$128,924$320,513($191,589)April$266,205$287,112($20,907)May$117,217$306,868($189,651)June$215,339$309,671($94,332)July$151,480$332,160($180,680)August$145,529$249,083($103,554)September$218,880$264,087($45,207)Total 2009$2,104,357$3,520,082($1,415,725)October (Fiscal 2010)$135,294$311,657($176,363)$133,564$253,851($120,287)$218,918$310,328($91,410)$205,239$247,873($42,634)$107,520$328,429($220,909)$153,358$218,745($65,387)$245,260$327,950($82,690)$146,794$282,721($135,927)$251,048$319,470($68,422)Source: Department of the Treasury Financial Management Service Summary of Federal Government Receipts versus Outlays Fiscal 2009& 2010 in $ Millions1.4 T shortfall in fiscal ’09 alone2010 will be worse
7 Market Potential 65% Qualifed 35% Non-Qualified $2 Trillion Dollars of in force annuities: (IRI)Questions:How much goes to beneficiaries?How much will pass tax free?65% Qualifed35% Non-QualifiedRMD’s must be taken at 70 ½ from Qualified PlansA significant tax burden can be redirected if life insurance is used to transfer Qualified Wealth
8 Why Wealth Transfer Now? There is little in the way of guaranteed growth with treasuries at 2.9% for 10 yearsSmall tax burden addressed now versus larger burden for beneficiaries laterAgents, Clients & Beneficiaries WINIf you Don’t….
9 Less Goes to Heirs; More to the IRS! IRS WASHINGTON
11 Two things are certain: Death & Taxes ? Good Agents help Beneficiaries avoid excess taxes!
12 Overcoming the Underwriting Obstacle. APS/ Dr Overcoming the Underwriting Obstacle! APS/ Dr.’s Exam/ Blood Test/ EKG’s—NO MOREMany annuity producers are terrified by their perception of life insurance U/W so what are the obstacles?
13 Wealth Transfer Made Easy Point Of Sale UnderwritingQuick Decision made during 14 minute callPivot to an annuity if declinedTransition of qualified funds to life insurance if client is comfortable with a tax bill spread out over 5-10 years
14 14 Minutes to Success! Lifetime Returns Select or Solutions Agent & ApplicantAgent & ApplicantCall ESPESP12 Minutes to SuccessLifetime Returns Select or SolutionsPoint of Sale InterviewMIB searchedInteli-ScriptFraud statement reviewedDecision is made – Approve/DeclineAgent Sends Paperwork Either Way!NWL Applies Premium or Requests TransferPOLICY ISSUED!COMMISSIONS PAID!!
15 Elite Sales Processing Identified as National Western LifeOpen for Calls until 9:30 PM CST, Monday thru Thursday! 5:00 PM on FridaysWill Call Prospect at Agent’s DirectionNo Exams, No APS: Instant Approval!Application Questions are central to the phone interview!
16 Agent Critical Pathway Agent and Applicant complete the applicationAgent calls Elite Sales Processing, Inc. (ESP)3. The ESP interviewer talks with the NWL® agent then asks for permission to record the interview w/ the client4. The Interviewer asks for permission to research MIB (Medical Information Bureau) and IntelliScript (Prescription History)--the results will be back during the interview5. Interviewer asks medical questions + additional information FROM the application6. If all questions are “No” in the medical history section, and MIB, IntelliScript are within NWL® guidelines, the application is accepted!7. Agent sends application to NWL (accepted or declined) process complete!8. ESP notifies Home Office on decision, forwards interview for processing
17 Lifetime Returns Solutions Instant Approval UnderwritingGuaranteed Death BenefitCash Value Growth through IndexingDeath Benefit Growth through IndexingEfficient Wealth TransferA Rated CarrierDouble Digit Street Commission to age 80
18 Looking for Prospects? Look at book of ANNUITY CLIENTS! Cash value life policy holders might want to to LTRS not solutions?(if non guaranteed DB set to implode)Whole life policy owners with cash above or = DB
19 Case Study 1:Mrs. Smith is 65 years old and has $100,000 in a Tax-deferred Annuity with ABC Ins. Company. She is concerned that if she passes away her two sons have to pay taxes on the $30,000 of gain she has in her annuity contract. Mrs. Smith is healthy with a few minor health issues. Does not need money to live on.Using NWL’s Lifetime Solution's she could transfer the Annuity’s tax liable DB into a Tax-Free DB of $194,635.The $30,000 gain would be spread out over 10 years. If she should pass away prior to the 10 year period the proceeds of the contract would be paid out to her two sons tax-free.Note: Mrs. Smith would receive a 1099 each year that the SPIA funds the life insurance.
20 An Upgrade? Annuity Lifetime Returns Solutions Death Benefit Death Benefit$100, $194,635Taxable gain $30, Tax FreeNet to Heirs after taxes Net to Heirs$91, $194,635(Assuming 28% tax bracket)
21 Case Study 2:Mr. Johnson is 75 y/o. He has $150,000 in a Tax-qualified IRA. He is concerned that if he passes away his daughter will have to pay ordinary income tax on the $150,000. Mr. Johnson has a pension and Social Security to live on.He could transfer the IRA into Lifetime Solutions giving him a Tax- Free Death Benefit of $199,979.Income tax on the IRA is spread out over 10 years. And his doaughter could gift him the funds to pay these taxes.If he should pass away during the SPIA’s payout phase he is no longer on the hook for any taxation as NWL is the irrevocable beneficiary of those payments.His daughter Immediately becomes the beneficiary of nearly $200 K tax free at the death of Mr Johnson!Note: Mr. Johnson would receive a 1099 each year for the amount funding the life insurance.
22 An Upgrade? IRA Lifetime Returns Solutions Death Benefit Death Benefit $150, $199,979Taxable gain $30, Tax FreeNet to Heirs after taxes Net to Heirs$108, $199,979(Assuming 28% tax bracket)
23 Lifetime Returns Select Solutions Issue Ages 45-85$25,000 Minimum Face5/10 or life SPIA (NWL Irrevocable Beneficiary)GUARANTEED DEATH BENEFITIndexed Linked Interest grows account value and DB10% LiquidityGuaranteed Table Shave….Table 5!
24 Make an extra $100,000 10 cases per year Less than 1 case per month Average case size $100,000Avg. Comp. $11,000 per case$11,000 x $10 cases = $110,000