1. Life Insurance in Retirement Planning
Protection and Potential Income
Life Insurance Sales Presentation
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] [<ST> Insurance License Number < >]
[Phone] [ ] Fax [ ]
NOTE TO LICENSED FINANCIAL PROFESSIONAL: The following paragraphs must be provided to all attendees. They must be delivered in your oral presentation.
My name is [Your name]. Agent: I am a [approved title] with The Prudential Insurance Company of America.
This sales presentation is designed to help you understand a concept that we call, [“Life Insurance in Retirement Planning and how insurance and financial products and services, that I provide, can be used to help supplement retirement income.
[FINANCIAL PLANNER: I am a Financial Planner.  I offer investment advisory services as an investor advisor representative of Prudential Financial Planning Services, a division of Pruco Securities, LLC.]
If presenting in TX: Prudential professionals are licensed agents who are appointed by The Prudential Insurance Company of America and its subsidiaries, including Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey, to sell insurance and financial products.
The material presented in this sales presentation will be general in nature and should not be relied upon as the basis for action or inaction by you. Prudential Financial, its affiliates, and their sales professionals do not render tax or legal advice. Therefore, you should always consult with your own attorney, accountant, tax, or other adviser for advice regarding your particular situation.
© 2014 Prudential Financial, Inc. and its related entities
Ed. 10/2014 Exp. 04/30/2016

2. Important Information
[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]
[(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*:
<XYZ> is an independent insurance producer. <XYZ> sells life insurance products of Prudential Financial’s affiliated life insurance companies in addition to other life insurance companies’ products. <XYZ> is authorized to sell and service certain life insurance products of Prudential Financial’s companies as well as use this material.
*Important Note: <XYZ> should represent the individual or firm with whom we have a selling agreement.

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

4. The Many Benefits of Life Insurance
A flexible tool to help your loved ones:
Maintain their current lifestyle
Pay off a mortgage
Defray state and federal estate taxes
Life insurance is a flexible tool that can protect your family, but it can also do much more, as you’ll learn during this session.
As you’re probably aware, life insurance provides a death benefit that can help your loved ones meet their obligations after your death. This can help them
Maintain their current lifestyle
Pay off a mortgage, and/or
Help offset state and federal taxes that may be due on your estate.
Or, if you’re a small business owner, life insurance can help fund business continuation arrangements in the event you, a partner, or a key employee dies prematurely.

5. The Many Benefits of Life Insurance
While life insurance can provide for your family and/or business it can also be a source of supplemental income if your needs change.
But you may be thinking, “So how can life insurance help you in retirement?” Once you are retired, you may have less of a need for death benefit protection and a greater need for tax-advantaged retirement income.
Well, there are many benefits to owning life insurance. For example, as previously noted, life insurance can provide for your family in the event of your premature death and it can also facilitate a business continuation strategy. However, assuming your needs change in retirement, it can be source of supplemental income if properly structured.
Let’s take a look at three ways life insurance can help you.

6. High-Income Earners Retirement income sources:
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
Retirement income sources:
Maxed out contributions to a qualified retirement plan
Personal savings
Social Security
Let’s look at a scenario.
If you are like many high-income earners, you make an effort to maximize your retirement plan contributions and also save in other ways. Most likely, you will also rely on Social Security to partially supplement your retirement income.
But even if you do all of this, can you be certain you’ll have enough income to maintain your desired standard of living in retirement?
And ask yourself this: how much of your retirement income will you lose to taxes?
Ask yourself:
Will that be enough to maintain your standard of living?
How much will be lost to income tax?

7. Life Insurance in Retirement Planning
Can help in three distinct ways
Income-Tax Free Death Benefit
Tax-Deferred Cash Value
Income Tax Advantage Distributions
A life insurance policy can be an important part of your financial plan during your retirement years because it offers you the chance to put a portion of your assets in a product that features a number of tax-advantaged benefits. We call that our Life Insurance in Retirement Planning strategy.
Life insurance with tax-advantaged benefits can help you in three distinct ways:
A life insurance policy’s death benefit offers a generally income-tax free death benefit, per Internal Revenue Code 101(a).
Many life insurance policies also offer the potential to build tax-deferred cash values.
This cash value can then be taken from the policy through withdrawals and tax-advantaged loans. 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. Of course, loans and withdrawals may impact the ultimate death benefit payable to your beneficiaries.
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.

8. How the Strategy Works Minimum Death Benefit Maximize Premium
Cash Value
Cash Value
There are two ways to approach the purchase of your permanent insurance policy.
Many people want to get the maximum amount of death benefit they can for the least amount of money. They pay the minimum amount to keep the policy active and the cash value slowly accumulates.
[Refer to chart #1]
If you want your insurance policy to have greater potential cash value that you can access later in life, buy a life insurance with a lower face amount (that still meets your protection needs), and maximize the premium payments you make.
This approach—commonly called “overfunding a policy”—can help your life insurance policy accumulate larger cash values than it typically would by making only the minimum payments required to keep your policy active. To avoid the policy becoming a MEC, fund the policy with maximum premiums up to the limit
As you can see on this second chart, the death benefit increases as the cash value approaches the death benefit amount.
Life insurance policies are classified as modified endowment contracts (MECs) at issue 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.
Minimum Death Benefit
Maximize Premium
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.
Hypothetical example, for illustrative purposes only. Actual results will vary.

9. Life Insurance in Retirement Planning
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.
With our Life Insurance in Retirement Planning strategy, you can:
Access any accumulated cash value that has build up in your policy, for any reason, including retirement income.
Add riders for greater protection and flexibility.
Possibly delay taking Social Security benefits until later in life—potentially increasing your monthly payout.
Avoid tapping into your tax deferred assets until you are in a lower tax bracket.
Note that accessing a life insurance policy’s cash value either via withdrawal and/or loan will reduce the death benefit available to your beneficiaries.
1Accessing a life insurance policy’s cash value will reduce the amount of death benefit available to your beneficiaries.

10. Accumulated Cash Value grows tax deferred If you die before you retire
How the Strategy Works
Pay Premiums
Cover cost of policy
Accumulated Cash Value grows tax deferred
Continues over 20 years
Excess over policy charges creates cash value
If you die before you retire
Death benefit for your beneficiaries
When you retire, access cash value for retirement income
Here are the steps of the Life Insurance in Retirement Planning strategy.
You pay the premiums to keep the policy in force. Part of these premiums will cover the costs associated with the policy, and part will go toward an account that creates cash value.
Once you reach retirement (although you don’t have to wait until then), you can access the cash value through withdrawals and loans (typically in that order* and free from federal income tax) to provide you with supplemental income when you need it. Taking loans and withdrawals will reduce the cash value amount as well as the death benefit.
At your death, any remaining death benefit amount will be paid to your beneficiaries.
Let’s take a look at some examples.
*When leveraging a life insurance policy’s cash value, withdrawals are generally taken first. This is because distributions from a life insurance policy are first considered a return of cost basis (premium). Once all of the cost basis has been recovered gain will be the source of any continued distributions causing income taxation. Therefore at the point of gain the Life Insurance in Retirement Planning strategy calls for switch over to loans in order to avoid income taxation. Loan interest will accumulate as a result.
Withdrawals
Tax-advantaged loans

11. [Example using PruLife Custom Premier II
8% hypothetical rate of return (7.32% net)
Age
Annual Premium for 20 Years
Annual Distributions Ages 65-84
Net Cash Value
Net Death Benefit 45
$50,000
$23,443
$1,410,980 54
$620,854
$1,991,523 64
$1,967,881
$3,335,573
Total
$1,000,000 65
$173,859
$1,924,515
$3,162,123 74
$1,364,369
$1,575,983 84
$142,235
$284,312
$3,477,180
Here is a hypothetical example using PruLife Custom Premier II. Assuming that you pay $50,000 per year in premium for 20 years, then at age 65 you starting taking withdrawals and loans from the policy. You would be able to take annual distributions equal to $173,859 for 20 years income-tax free. And you would have had substantial death benefit protection prior to retirement.
Female, age 45, preferred best, minimum non-MEC face amount, option B switch to A in year 21, solve to endow at age 121
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.
Hypothetical example, for illustrative purposes only. Actual results will vary.

12. [Example using PruLife Custom Premier II
0% hypothetical rate of return (-1.03% net) and Maximum Charges
Age
Annual Premium for 20 Years
Annual Distributions Ages 65-85
Net Cash Value
Net Death Benefit 45
$50,000
$16,757
$1,404,294 49
$157,635
$1,545,172 54
$333,400
$1,704,069 59
$471,730
$1,839,422 64
$583,518
$1,951,210 65
$173,859
$386,136
$1,777,351 68
END
Total
$1,000,000
$695,436
Here is the performance based on guaranteed charges and a 0% gross rate of return.
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
Cost-Benefit Analysis:
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
On this slide is a cost-benefit summary.
(read benefits)
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
8% hypothetical rate of return (7.14% net)
Age
Annual Premium for 20 Years
Annual Distributions Ages 65-84
Net Surrender Value
Net Death Benefit 45
$50,000
$18,630
$1,394,443 54
$614,503
$1,978,180 64
$1,980,321
$3,330,733
Total
$1,000,000 65
$174,618
$1,936,191
$3,156,774 74
$1,369,498
$1,563,521 84
$142,518
$285,405
$3,492,360
Here is a hypothetical example using VUL Protector. Assuming that you pay $50,000 per year in premium for 20 years, then at age 65 you starting taking withdrawals and loans from the policy. You would be able to take annual distributions equal to $174,618 for 20 years income-tax free. And you would have had substantial death benefit protection prior to retirement.
Female, age 45, preferred best, minimum non-MEC face amount, option B switch to A in year 21, solve to endow at age 121
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.
Hypothetical example, for illustrative purposes only. Actual results will vary.

15. [Example using VUL Protector
0% hypothetical rate of return (-1.06% net) and Maximum Charges
Age
Annual Premium for 20 Years
Annual Distributions Ages 65-85
Net Surrender Value
Net Death Benefit 45
$50,000
$10,428
$1,386,241 49
$152,599
$1,523,050 54
$313,315
$1,676,992 59
$456,847
$1,807,259 64
$564,001
$1,914,413 65
$174,618
$364,764
$1,739,795 67
END
Total
$1,000,000
$523,854
Here is the performance based on guaranteed charges and a 0% gross rate of return.
Values above are based on the previous slide’s assumptions.
Hypothetical example, for illustrative purposes only. Actual results will vary.

16. [Example using VUL Protector
Cost-Benefit Analysis:
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
On this slide is a cost-benefit summary.
(read benefits)
Values above are based on the previous slide’s non-guaranteed policy assumptions.
Hypothetical example, for illustrative purposes only. Actual results will vary.

17. Important Considerations
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.
As with most financial strategies, there are a number of important considerations that may require attention before moving forward.
You should have sufficient liquid assets to support your current and future expenses before implementing this life insurance strategy. Equity in a home should not be considered a liquid asset.
This concept is only intended to be used with assets that will not be needed for living expenses for the lifetime of the insured. You will need to consider and estimate such needs as well as additional expenses. If you live longer than expected or these assets are exhausted, additional assets may be needed to pay the premiums to keep your policy in effect.
If your financial or legacy planning situation changes and you need to use assets or income for current or future income needs and can no longer make premium payments, your life insurance death benefit may terminate and your desired results may not be achieved. Loans taken will become taxable upon policy surrender or lapse.
Consult your tax and legal advisors when considering this strategy. 17

18. Any Questions Q A
&
Does anyone have any questions about how the Life Insurance in Retirement Planning concept works? 18

19. Important Information
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. Important Information
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.
Please note this important information.