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Life Insurance in Retirement Planning Protection and Potential Income PRESENTED BY: [Joe Sample,][Designations per field stationery guidelines] [Company.

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Presentation on theme: "Life Insurance in Retirement Planning Protection and Potential Income PRESENTED BY: [Joe Sample,][Designations per field stationery guidelines] [Company."— Presentation transcript:

1 Life Insurance in Retirement Planning Protection and Potential Income PRESENTED BY: [Joe Sample,][Designations per field stationery guidelines] [Company Approved Title] [Agency Name] [The Prudential Insurance Company of America] [1234 Main Street, Suite 1, Floor 10] [Anywhere], [ST] [12345] [in required states] [ Insurance License Number ] [Phone] [ ] Fax [ ] Life Insurance Sales Presentation Ed. 10/2014 Exp. 04/30/2016 © 2014 Prudential Financial, Inc. and its related entities

2 Important Information 2 [(If Financial Planner:) Investment advisory services are offered through Prudential Financial Planning Services, a division of Pruco Securities, LLC (member SIPC), 751 Broad Street, Newark, NJ Pruco Securities is a Prudential Financial company.] For DBAs: [DBA agent’s name] offers securities as a registered representative of Pruco Securities, LLC, a Prudential Financial company. [DBA firm (if identified)] is an independent organization and is not an affiliate of Prudential Financial. [DBA agent’s name] sells life insurance products of Prudential Financial’s affiliated life insurance companies in addition to products of nonaffiliated insurance companies.] For use with an independent insurance producer who has a selling agreement with Prudential Financial*: is an independent insurance producer. sells life insurance products of Prudential Financial’s affiliated life insurance companies in addition to other life insurance companies’ products. is authorized to sell and service certain life insurance products of Prudential Financial’s companies as well as use this material. *Important Note: should represent the individual or firm with whom we have a selling agreement. [If Financial Planner: Offering investment advisory services as an investment advisor representative of Prudential Financial Planning Services, a division of Pruco Securities, LLC. Both are Prudential Financial Companies]

3 Important Information 3 For use with an independent organization who has a selling agreement with Prudential Financial*: is an independent organization and is not an affiliate of Prudential Financial. sells life insurance products of Prudential Financial’s affiliated life insurance companies in addition to other life insurance companies’ products. is authorized to sell and service certain life insurance products of Prudential Financial’s companies as well as use this material. For use with an independent insurance producer who markets through an independent organization that has a selling agreement with Prudential Financial*: is an independent organization and is not an affiliate of Prudential Financial., through its insurance producers, sells life insurance products of Prudential Financial’s affiliated life insurance companies in addition to other life insurance companies’ products. is authorized to sell and service certain life insurance products of Prudential Financial’s companies as well as use this material. *Important Note: should represent the individual or firm with whom we have a selling agreement.

4 The Many Benefits of Life Insurance 4 » Maintain their current lifestyle » Pay off a mortgage » Defray state and federal estate taxes A flexible tool to help your loved ones:

5 The Many Benefits of Life Insurance 5 While life insurance can provide for your family and/or business it can also be a source of supplemental income if your needs change.

6 High-Income Earners 6 » Maxed out contributions to a qualified retirement plan » Personal savings » Social Security Retirement income sources: Ask yourself: » Will that be enough to maintain your standard of living? » How much will be lost to income tax? Married > $181,000 income Single > $114,000 income Under age 55 and need death benefit protection Additional monthly income to allocate towards savings Desire for tax “diversification

7 Life Insurance in Retirement Planning 7 Can help in three distinct ways Death benefit proceeds are generally received federal income-tax free as provided in Internal Revenue Code 101(a). TAX-ADVANTAGED ACCESS TO CASH VALUE: You can access your cash value through loans and withdrawals. In general, loans are not currently taxable and withdrawals are taxable only when you take out more money that you’ve paid into the policy in premiums. If the policy terminated prior to death of the insured the loan is immediately taxable to the extent of gain. Different tax rules apply to Modified Endowment Contracts Loans and withdrawals may impact the ultimate death benefit payable to your beneficiaries. 1.Income-Tax Free Death Benefit 2.Tax-Deferred Cash Value 3.Income Tax Advantage Distributions

8 8 How the Strategy Works Hypothetical example, for illustrative purposes only. Actual results will vary. Life insurance policies are classified as modified endowment contracts (MECs) if premiums exceed certain limits. Distributions from MECs (such as loans, withdrawals, and collateral assignments) are taxed less favorably than distributions from policies that are not MECs to the extent there is gain in the policy. For distributions from a MEC prior to age 59½, a federal income tax penalty may apply to the extent there is gain in the policy. However, death benefits are still generally received income-tax free pursuant to IRC §101(a). The death benefit will be reduced by any withdrawals or loans (plus unpaid interest). You should consult a tax advisor. Cash Value Maximize Premium Minimum Death Benefit Cash Value

9 Life Insurance in Retirement Planning 9 With this strategy, you can: » Access accumulated cash values. 1 » Add riders for greater protection and flexibility. » Possibly delay taking Social Security benefits— potentially increasing your monthly payout. 1 Accessing a life insurance policy’s cash value will reduce the amount of death benefit available to your beneficiaries.

10 Continues over 20 years Excess over policy charges creates cash value Cover cost of policy How the Strategy Works 10 If you die before you retire Accumulated Cash Value grows tax deferred Tax-advantaged loans Withdrawals Pay Premiums When you retire, access cash value for retirement income Death benefit for your beneficiaries

11 [Example using PruLife Custom Premier II 11 Age Annual Premium for 20 Years Annual Distributions Ages Net Cash ValueNet Death Benefit 45$50,0000$23,443$1,410,980 54$50,0000$620,854$1,991,523 64$50,0000$1,967,881$3,335,573 Total$1,000, $173,859$1,924,515$3,162, $173,859$1,364,369$1,575, $173,859$142,235$284,312 Total$1,000,000$3,477,180 The above values assume non-guaranteed policy charges. You should obtain a personalized illustration, which includes the impact of a 0% investment performance and maximum guaranteed charges before purchasing a variable life insurance product. The illustration can also be generated based on a return assumption you select (subject to a 12% maximum). This is not a complete illustration for PruLife Custom Premier II. The issuing company may have the right to contest the policy for misrepresentation or apply a suicide clause. 8% hypothetical rate of return (7.32% net) Female, age 45, preferred best, minimum non-MEC face amount, option B switch to A in year 21, solve to endow at age 121 Hypothetical example, for illustrative purposes only. Actual results will vary.

12 [Example using PruLife Custom Premier II 12 Age Annual Premium for 20 Years Annual Distributions Ages Net Cash ValueNet Death Benefit 45$50,0000$16,757$1,404,294 49$50,0000$157,635$1,545,172 54$50,0000$333,400$1,704,069 59$50,0000$471,730$1,839,422 64$50,0000$583,518$1,951, $173,859$386,136$1,777, $173,859END Total$1,000,000$695,436 0% hypothetical rate of return (-1.03% net) and Maximum Charges Values above are based on the previous slide’s non-guaranteed policy assumptions. Hypothetical example, for illustrative purposes only. Actual results will vary.

13 [Example using PruLife Custom Premier II 13 Total premiums paid ages by age 65$1,000,000 Total disbursements ages 65 to 84$3,477,180 Net death benefit at age 84$284,312 Total family benefits at age 84$2,761,492 Cost-Benefit Analysis: Values above are based on the previous slide’s assumptions. Hypothetical example, for illustrative purposes only. Actual results will vary.

14 [Example using VUL Protector 14 Age Annual Premium for 20 Years Annual Distributions Ages Net Surrender ValueNet Death Benefit 45$50,0000$18,630$1,394,443 54$50,0000$614,503$1,978,180 64$50,0000$1,980,321$3,330,733 Total$1,000, $174,618$1,936,191$3,156, $174,618$1,369,498$1,563, $174,618$142,518$285,405 Total$1,000,000$3,492,360 The above values assume non-guaranteed policy charges. You should obtain a personalized illustration, which includes the impact of a 0% investment performance and maximum guaranteed charges before purchasing a variable life insurance product. The illustration can also be generated based on a return assumption you select (subject to a 12% maximum). This is not a complete illustration for VUL Protector. The issuing company may have the right to contest the policy for misrepresentation or to apply a suicide clause. 8% hypothetical rate of return (7.14% net) Female, age 45, preferred best, minimum non-MEC face amount, option B switch to A in year 21, solve to endow at age 121 Hypothetical example, for illustrative purposes only. Actual results will vary.

15 [Example using VUL Protector 15 Age Annual Premium for 20 Years Annual Distributions Ages Net Surrender ValueNet Death Benefit 45$50,0000$10,428$1,386,241 49$50,0000$152,599$1,523,050 54$50,0000$313,315$1,676,992 59$50,0000$456,847$1,807,259 64$50,0000$564,001$1,914, $174,618$364,764$1,739, $174,618END Total$1,000,000$523,854 0% hypothetical rate of return (-1.06% net) and Maximum Charges Hypothetical example, for illustrative purposes only. Actual results will vary. Values above are based on the previous slide’s assumptions.

16 [Example using VUL Protector 16 Cost-Benefit Analysis: Values above are based on the previous slide’s non-guaranteed policy assumptions. Hypothetical example, for illustrative purposes only. Actual results will vary. Total premiums paid ages by age 65$1,000,000 Total disbursements ages 65 to 84$3,492,360 Net death benefit at age 84$285,405 Total family benefits at age 84$2,777,765

17 Important Considerations 17 Before moving forward with this strategy: » You should have sufficient liquid assets to support income and expenses before implementing this strategy. » Only use assets that will not be needed for living expenses during your lifetime. » If your financial or legacy planning situation changes and you can no longer make premium payments, your desired results may not be achieved. » Your life insurance death benefit may terminate. » Consult your tax and legal advisors.

18 Any Questions Q A 18

19 Important Information 19 This material has been prepared by The Prudential Insurance Company of America. It is designed to provide general information about the subject matter covered. It should be used with the understanding that Prudential is not rendering legal, accounting or tax advice. Such services should be provided by your own advisors. Our policies contain exclusions, limitations, reductions in benefits and terms for keeping them in force. A financial professional can provide you with costs and complete details. [VUL Protector® is issued by Pruco Life Insurance Company in all states except New York, where it is issued by Pruco Life Insurance Company of New Jersey and offered through Pruco Securities, LLC (member SIPC). The contract number is VULNLG-2014 & ICC14 VULNLG-2014 and may be followed by a state code. Other insurance products are issued by The Prudential Insurance Company of America and its affiliates. All are Prudential Financial companies located in Newark, NJ. Each is solely responsible for its own financial condition and contractual obligations.] [PruLife® Custom Premier II is issued by Pruco Life Insurance Company in all states except New York, where it is issued by Pruco Life Insurance Company of New Jersey and offered through Pruco Securities, LLC (member SIPC). The contract number is VUL-2014 & ICC14 VUL-2014 and may be followed by a state code. Other insurance products are issued by The Prudential Insurance Company of America and its affiliates. All are Prudential Financial companies located in Newark, NJ. Each is solely responsible for its own financial condition and contractual obligations.] [Only use bracketed disclosure for PruLife® Custom Premier II or VUL Protector® when demonstrating this concept with one of those specific products and remove the product disclosure of the product that is not being shown.]

20 You should consider the investment objectives, risks, and charges and expenses carefully before investing in the contract, and/or underlying portfolios. The prospectus, and, if available, the summary prospectus, contains this information as well as other important information. A copy of the prospectus(es) may be obtained from Prudential.com. Please read the prospectus carefully before investing. It is possible to lose money by investing in securities. © 2014 Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities. 20 Important Information


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