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Offered by National Western Life

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Presentation on theme: "Offered by National Western Life"— Presentation transcript:

1 Offered by National Western Life
Wealth Transfer Offered by National Western Life

2 Mechanics for Leaving a Legacy
SPIA Immediate Life Annuity Life Policy Lifetime Solutions Explain life or 10/5 spia with NWL as irrevocable beneficiary 2

3 $100 K (Qualified) Wealth Transfer 67 Y/O F N/T
LTRS Solutions 5 Solutions 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 5 33 % tax rate $3.8 K taxes per year for 10 33% tax rate Guaranteed DB $127,376 $192,046 180, 337 Tale of 3 wealth transfers Use the governments $$ to leave a larger bequest

4 Old Concept w/ Some New Features
Fits into Jack Marrion’s New FINANCIAL PYRAMID Plan Designed for Today’s Seniors seeking discounted bequeaths Growing Legacy in terms of DB and CASH VALUE Tax 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/Bequest Additional Income Essential Income Wealth Transfer is not a new idea!

5 Qualified Plans Asset or Liability?
Most folks hate the idea of an RMD Most Seniors Want to Leave a Legacy not a tax bill Savings Products yield next to nothing currently ( ) Many Investment Products could be Losing Money Taxes 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 $ Millions 1.4 T shortfall in fiscal ’09 alone 2010 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% Qualifed 35% Non-Qualified RMD’s must be taken at 70 ½ from Qualified Plans A 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 years Small tax burden addressed now versus larger burden for beneficiaries later Agents, Clients & Beneficiaries WIN If you Don’t….

9 Less Goes to Heirs; More to the IRS!


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 MORE Many 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 Underwriting Quick Decision made during 14 minute call Pivot to an annuity if declined Transition 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 & Applicant Agent & Applicant Call ESP ESP 12 Minutes to Success Lifetime Returns Select or Solutions Point of Sale Interview MIB searched Inteli-Script Fraud statement reviewed Decision is made – Approve/Decline Agent Sends Paperwork Either Way! NWL Applies Premium or Requests Transfer POLICY ISSUED! COMMISSIONS PAID!!

15 Elite Sales Processing
Identified as National Western Life Open for Calls until 9:30 PM CST, Monday thru Thursday! 5:00 PM on Fridays Will Call Prospect at Agent’s Direction No Exams, No APS: Instant Approval! Application Questions are central to the phone interview!

16 Agent Critical Pathway
Agent and Applicant complete the application Agent 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 client 4. The Interviewer asks for permission to research MIB (Medical Information Bureau) and IntelliScript (Prescription History)--the results will be back during the interview 5. Interviewer asks medical questions + additional information FROM the application 6. 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 Underwriting Guaranteed Death Benefit Cash Value Growth through Indexing Death Benefit Growth through Indexing Efficient Wealth Transfer A Rated Carrier Double 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, $194,635 Taxable gain $30, Tax Free Net 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, $199,979 Taxable gain $30, Tax Free Net 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 Face 5/10 or life SPIA (NWL Irrevocable Beneficiary) GUARANTEED DEATH BENEFIT Indexed Linked Interest grows account value and DB 10% Liquidity Guaranteed Table Shave….Table 5!

24 Make an extra $100,000 10 cases per year Less than 1 case per month
Average case size $100,000 Avg. Comp. $11,000 per case $11,000 x $10 cases = $110,000

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