Presentation is loading. Please wait.

Presentation is loading. Please wait.

Important Note The following presentation has been developed and approved for use by authorized producers and agents of the insurers of American General.

Similar presentations


Presentation on theme: "Important Note The following presentation has been developed and approved for use by authorized producers and agents of the insurers of American General."— Presentation transcript:

1 Important Note The following presentation has been developed and approved for use by authorized producers and agents of the insurers of American General Life Companies. This presentation must be used with the accompanying narrative notes which are included in the presentation. You must take the following steps to access these notes: 1.Save the presentation to your laptop or PC 2.Open the saved presentation; then click the “View” option in your menu bar in the upper left corner of your screen 3.From the “View” drop down, click “Notes Page” This will open the presentation with the narrative notes at the bottom of each slide. When making the presentation, these notes must be used without modification. Please contact your American General Life Companies representative with additional questions.

2

3 Policy ends at specified age (e.g., 80) or number of years (e.g., 20) Premiums increase every year; level annual premiums are also an option. Level Death Benefit Low Initial Premiums 20 years Term Life: Premiums increase over time or stay level for a period, then increase Simplest coverage Doesn’t last forever ‘Renting’ your insurance

4 Whole Life (WL): Coverage lasts “whole life” Internal cash value Most expensive Maximum in guarantees Insurance company performance could result in additional non-guaranteed monies that could be used to: Reduce premiums; Increase death benefit; and more. Higher Premiums typically level Guaranteed Cash Value inside the policy Age 100 Level Death Benefit

5 Not guaranteed; subject to increase, if required by insurance company. Age 100 Level or Increasing Death Benefit Death Benefit generally guaranteed, with payment of a guarantee premium. Universal Life (UL): Unbundles a WL policy See how much you are paying for coverage See how much is being credited to policy’s account. Generally fewer guarantees than WL Interest rate is a big driver Insurance Charges Interest credited to the account based on company’s investment performance. The credited rate is protected by a guaranteed floor. Premiums deposited into policy’s account Insurance charges Less expenses

6 Subaccounts invested in various equity and bond markets. Policy owner determines how premium is allocated. Similar to mutual funds, subaccounts can lose money. Fixed interest account (like UL) also available. Not guaranteed; subject to increase, if required by insurance company. Age 100 Level or Increasing Death Benefit Death Benefit generally guaranteed, with payment of a guarantee premium. Premiums deposited into policy’s account Insurance charges Cash value invested in the markets Cash value broken into several subaccounts Subaccounts have different investment objectives Increased risk that the policy values will lose money Not for the risk averse! Insurance Charges Less expenses Variable Universal Life (VUL):

7 Not guaranteed; subject to increase, if required by insurance company. Age 100 Level or Increasing Death Benefit Death Benefit generally guaranteed, with payment of a guarantee premium. Insurance Charges Interest credited based, in part, on one or more indices (e.g., S&P). Provides automatic diversification. Interest cannot fall below a “floor” (e.g., 0%), meaning the account cannot lose money. Fixed interest crediting (like UL) also available. Premiums deposited into policy’s account Insurance charges Less expenses Cash value tied to a stock index (or more than one) Allows cash value to increase (within limits) when markets increase Protects account from negative returns when the markets turn downward Indexed Universal Life (IUL):

8 Policy guaranteed to last as long as you want (e.g., 10 years, lifetime); some endow at an advanced age (e.g., 121) Level Premiums, Guaranteed Age 100 Level Death Benefit Some products contain Cash Value Guarantee your coverage for life (or specified duration) Low guaranteed premiums Most do not offer cash value; some do A “permanent” alternative to term Guaranteed Universal Life (GUL):

9

10 Cash value insurance: There are some simple rules to follow to enjoy the tax benefits. Extends coverage beyond “term” Provides income tax-free death benefit Allows cash values to build tax-deferred Allows cash withdrawals income tax-free

11 Supplement your retirement savings First, take advantage of “qualified plans” (e.g., 401(k), IRA) With cash value insurance, you don’t have to wait until retirement to access your money Grows tax-deferred Take your money out income tax-free Self-completes at death, with payment of the death benefit

12 A college savings program Anyone can contribute Builds tax-deferred Can be distributed tax-free Coverdell and 529 plans for education expenses only (or pay taxes and penalty) Taxes and penalty on unused Coverdell and 529 plan funds Cash value from insurance can be used for ANY expense – tax and penalty free

13 Saving for life’s surprises Most put money in taxable accounts With cash value insurance, accumulate funds tax-deferred Withdraw the money tax-free There is only ONE option: permanent life insurance

14 Want to stop paying premiums? Cash values can be used to pay premiums Pay into the policy for a few years, and If the policy has enough cash, it can make the premium payments

15 Do you own a business? Use tax-deferred cash value with tax-free withdrawals Fund a buy-sell Provide benefits for key employees Supplement your retirement

16 American General Life Companies insurers have been serving up insurance to their customers for over 160 years. We like to think that with such a long history, we’re pretty good at getting your order right. Whether you have simple tastes or a discriminating palette, when you open our menu, we’re confident that you’ll find just what you’re looking for. And don’t forget – when you’re placing your order, tell your friendly server, “I’ll take cash with that!” American General Life Companies, is the marketing name for a group of affiliated domestic life insurers including American General Life Insurance Company (AGL) and The United States Life Insurance Company in the City of New York (US Life). AGL and US Life are solely providers of insurance products. The companies, their employees, agents, representatives, and their affiliates do not provide tax, legal, or financial advice. ©2012. All rights reserved. AGLC106370


Download ppt "Important Note The following presentation has been developed and approved for use by authorized producers and agents of the insurers of American General."

Similar presentations


Ads by Google