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Lee Duncan Vice President & National Training Director 678.969.9000 Million Dollar Baby.

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Presentation on theme: "Lee Duncan Vice President & National Training Director 678.969.9000 Million Dollar Baby."— Presentation transcript:

1 Lee Duncan Vice President & National Training Director 678.969.9000 Million Dollar Baby

2 Agenda Why “Million Dollar Baby” using IUL is so Important Quick overview of IUL portfolio Case Study Illustrating the concept Underwriting and completing the application

3 Each premium payment they make funds their death benefit and also helps build cash value. Cash value can be used to help pay for college tuition and expenses, buying a home, retirement and everything in between. Living Benefits in case of an illness. Death benefit protection – protecting their insurability.

4 What It Costs to Go to College Can vary widely depending on institution; public vs. private College costs are rising at twice the rate of inflation Average annual tuition plus expenses at a private four-year college is about $35,000 (U.S. News, August 2010)

5 The College Debt Crisis Americans now owe more on their student loans than they do on their credit cards. College debt will surpass $1 trillion in 2012 – growing at a rate of $2,853 per second. As of 2009, 67 percent of graduates had debt, averaging $24,000 per student (this does not include loans taken out by parents) Student loan defaults have doubled since 2005 (CNBC, “Price of Admission: America’s College Debt Crisis”, 2012)

6 Cost of Buying a Home Varies widely across the U.S. Average sales price of new homes sold in U.S. was $272,900 in 2010. 20% down would translate to over $54,000 (

7 Cost of Retirement Saving $1 million will only amount to about $40,000 per year for the average retiree (assuming you limit your withdrawals to 4% of your savings during your first year in retirement). 41% of women and 32% of men believe they will have to work after retirement just to make ends – retirement has become a luxury. When the stock market was soaring people became obsessed with their nest egg number; now the focus is shifting to a more important number: how much retirement income your savings will provide.

8 Retirement saving is not just about accumulating a big pile of money!

9 The OTHER Living Benefit Tax Free Retirement Cash Value Accumulation College Education Expenses Be Your Own Banker!!!!!

10 Why Tax-Free?

11 If you were a farmer would you rather pay tax on the seed… …or the harvest?

12 LSW Indexed UL Products

13 SecurePlus ® Provider Middle market Upside potential without the risk of losses Issue ages 0-85 Minimum face amount - $25,000 4 interest crediting strategies 1.25% Annual Account Value Enhancement starting at year 10 10-year surrender charge period

14 LSW FlexLife ® 4th Generation IUL Business or affluent/emerging affluent clients Issue ages 0-85 Minimum Face: $100,000 (Base Face Amount + APB* Face Amount) 5 interest crediting strategies Price banding at $250k, $1MM, and $3MM Lifetime Income Benefit Rider *Additional Protection Benefit Rider. Riders are optional, may require an additional premium and may not be available in all states.

15 Case Study: John Smith LSW FlexLife Newborn baby (at least 15 days old); male Parents each have $500,000 of life insurance in force; are both in early 30s Face Amount: $200,000, Increasing Death Benefit for 50 years Interest Strategies Allocation: 50% strategy 1, 50% strategy 2; illustrated rate of 8.3%

16 Initial premium of $50 per month In 5 years they increase premium to $75 per month In 10 years they increase premium to $100 per month Case Study: John Smith

17 Child takes out max loan at age 23 to repay college loans – four years $10,000 per year. Total of $40,000 to repay college loans. At age 27 child takes over ownership of the policy and begins paying $100 per month. By age 33 career has taken off; increased premium to $150 per month. At age 35 takes out $40,000 to buy first house. Case Study: John Smith

18 At age 36 continues to pay $150 per month. At age 40 increases to $200 per month. Retires at age 67 and begins taking retirement income from policy at age 70 – projected $289,420 per year for 35 years! John Smith dies at age 93 and his children receive over $1.5 million of tax-free death benefit. Case Study: John Smith

19 Summary of Benefits Total paid in premium: $101,700 over lifetime Total “income” paid to child during lifetime: $6,556,660! Death Benefit Paid to family: $1,582,873! Total benefits paid from policy: $8,239,533!

20 Juvenile Applications Start saving from day one. The sooner you start, the better. Encourage loved ones to give the gift that keeps on giving. When family members and friends celebrate your child’s birth, subsequent birthdays, holidays, and religious events, tell them about your child’s college savings account. Every monetary gift they give will be part of a legacy of learning. Turn to your parents. Often, grandparents are the ones who are most aware of how difficult it is for parents to manage the financial burden alone, especially if more than one child is involved.

21 Juvenile Applications Because college is seen as the immediate expense, parents often focus on saving for education and leave retirement funding solely to their children. However, what we are experiencing RIGHT NOW is the risk of OUTLIVING your money. Think about it this way - Most children are eligible for financial aid for education in a way that they are not eligible for in saving for retirement. However, what we are experiencing RIGHT NOW is the risk of OUTLIVING YOUR MONEY Parents focus: Education… NOT RETIREMENT WILL FINANCIAL AID BE AVAILABLE FOR: ANOTHER WAY TO LOOK AT IT EDUCATION RETIREMENT YES NO

22 When all is said and done, a huge head start on their financial security could be the best gift you could possibly bestow… Juvenile Applications Will Consider face amount of coverage on a minor applicant EQUAL to that of the coverage on either parent (or legal guardian); unless state law dictates otherwise. Ownership / Premium Payers for minors can be parents/legal guardians or grandparents ONLY. Larger face amounts for a juvenile should include a detailed outline of the family / household income, net worth, premium funding sources, and any other supporting information. HIPAA form is required for each child. Signatures are required at age 15 and over, as well as an HIV form.

23 Juvenile Applications








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