1. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Leveraging Life Insurance in Qualified Plans: Bridging the Gap For Producer or Broker/Dealer Use Only. Not for Public Distribution.

2. Identify potential clients and concerns The strategy: qualified plans, life insurance and tax deductions A case study The split-funded plan approach Exit strategies Action plan Please note: This document is designed to provide introductory information on the subject matter. MetLife does not provide tax and legal advice. Clients should consult their attorney and /or tax advisor before making financial investment or planning decisions Agenda

3. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Identify Potential Clients & Concerns

4. For Producer or Broker/Dealer Use Only. Not for Public Distribution. The Client Older business owner Few employees Additional retirement savings needed Sufficient annual cash flow Insurable Possible transfer tax concerns

5. For Producer or Broker/Dealer Use Only. Not for Public Distribution. The Concern In the first few years I reinvested everything back into the business. I am now reaping the rewards of that sacrifice, but I am so far behind in saving for retirement. I worry I can’t catch up.

6. For Producer or Broker/Dealer Use Only. Not for Public Distribution. In 2012, the maximum 401(k) contribution is $17,000. A business owner with a salary of $300,000 would defer only 5.6% of his or her salary. (i.e. $17,000/$300,000=5.6%) They would experience a retirement gap of around $30,000 17% 11.3% 8.5% 6.8% 5.6% 4.9%

7. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Additional Concerns for Business Owners How can I generate larger tax deductions for the business? Can I protect my business assets from creditors? What will my business be worth when I retire? Will my business have to be sold to pay estate taxes? How do I provide equal inheritances to my children if they have different levels of interest in the business?

8. For Producer or Broker/Dealer Use Only. Not for Public Distribution. The Strategy Qualified Plans, Life Insurance and Tax Deductions

9. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Defined Benefit Plans Predetermined benefit at retirement Contributions vary based on performance Potential for very large contributions Contributions are tax-deductible to the business Investment risk is assumed by employer

10. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Consider Life Insurance in a Retirement Plan Leverage pre-tax funds to close the retirement gap Tax deductions Self-completing Estate planning Substitute business value

11. For Producer or Broker/Dealer Use Only. Not for Public Distribution. How Much Can Be Deducted? Answer: It Depends. The purpose of life insurance must remain secondary or “incidental” to the ultimate goal of the plan- retirement income. What does this mean?

12. For Producer or Broker/Dealer Use Only. Not for Public Distribution. What are the “Incidental” Limits? Defined Contribution Less Than Percentage Tests –Whole Life: Less than 50% of total employer contributions –Universal or Term: Less than 25% of total employer contributions Seasoned Money Seeded Money Defined Benefit 100 Times Rule –Insured’s death benefit may not exceed 100x expected monthly benefit amount Revenue Ruling 74-307 (may allow greater life insurance allocation) –DB plan treated as a hypothetical DC plan for purposes of incidental rules –An actuary determines hypothetical individual level premium contribution for each participant –“Less than 50% or 25%" limits are then applied against hypothetical contribution amount for each participant Please Note: In addition, a contract on a participant's life must be converted to cash or an annuity or distributed to a participant at retirement.

13. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Case Study

14. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Case Study Concerns Retirement income Wants greater income tax deductions Seeking strategy to replace lost business value at retirement Need for additional estate liquidity Profile Occupation: Dentist Age 50 (standard nonsmoker) Married with children 15 years until retirement 35% tax bracket Significant and steady annual cash flow Few employees Tom

15. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Evaluating the Proposed Strategy Three most important questions 1. What are the annual “out of pocket” costs? 2. If Tom dies before retiring, how much of the policy’s death benefit will remain tax-free? 3. What is the tax impact if the policy is distributed to Tom at retirement?

16. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Pre-Retirement Tax Costs $1 million policy $805 $1365 $1905 $3020 For Illustrative Purposes Only. MetLife Promise Whole Life 120 Age 50 Standard- $19,480 annual premium. Participant in 35% tax bracket Employee After Tax Out of Pocket Cost

17. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Income Tax Free Death Benefit By Year For Illustrative Purposes Only. MetLife Promise Whole Life 120 Age 50 Standard $19,480 annual premium-Guaranteed This example is for illustration purposes only. Please see full personalized illustration for additional details. Retirement

18. For Producer or Broker/Dealer Use Only. Not for Public Distribution. At Retirement - Age 65 $275,000 Fair market value of the policy $ 78,251 Cumulative taxable insurance costs $196,749 Actual Taxes Paid: $105,639

19. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Summation - Putting the Pieces Together Policy YearYear 1Year 5Year 10Year 15 Insured Age 50556065 Cash Value $0$60,000$164,000$275,000 Guaranteed Death Benefit $1,000,000 Tax Leverage Economic Benefit Taxation of death benefit if death occurs before retirement Taxation of policy at exit Actual Income Tax Paid $805$1,365$1,905$3,020 Income Tax Free Death Benefit $1,000,000$958,156$878,753$803,251 MetLife Whole Life Insurance Age 50 Standard- $20,100 annual premium-Guaranteed This example is for illustration purposes only. Please see full personalized illustration for additional details

20. For Producer or Broker/Dealer Use Only. Not for Public Distribution. The Split-Fund Plan Approach

21. For Producer or Broker/Dealer Use Only. Not for Public Distribution. The Split-Funded Plan Approach Benefits funded through a combination of insurance contracts and investments May provide for additional contributions to owners while meeting IRS coverage tests Often used in combination with a profit sharing plan

22. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Case Study Goal Increase overall deductions Minimize funding costs for employees Owners Richard, age 52 Jane, age 52 Both active in business Richard & Jane Business Owners Existing Profit Sharing Plan Maximizes contributions, $50,000 in 2012

23. For Producer or Broker/Dealer Use Only. Not for Public Distribution.

27. Exit Strategies To ensure the best outcome for the participant, a well designed exit strategy is essential. Why? When? Tax Impact? Planning Objective?

28. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Exit Strategy Options 1. Liquidation 2. Rollout/distribution 3. Sell the policy to the participant 4. Sell the policy to a Grantor Trust

29. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Exit Strategy #1: Liquidation of the Policy within the Plan Cash Surrender Value Considerations: 1)No tax implications to participant 2)Meets income objective of the plan 3)Participant loses life insurance coverage Qualified Plan Insurance Company Surrender Policy

30. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Exit Strategy #2: Distribution of Policy from the Plan Policy Gift of Policy Considerations: 1)Reduces retirement income from plan 2)Fair market value 3)10% premature distribution penalty prior to age 59 ½ 4)Transfer tax implications Qualified PlanParticipantILIT

31. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Exit Strategy #3: Sell the Policy to the Participant Considerations: 1)No 10% penalty 2)Meets income objective of the plan 3)Fair market value - No Cumulative Reportable Economic Benefit (CREB) 4)Transfer tax implications Qualified PlanParticipantILIT FMV Purchase Policy Gift of Policy

32. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Exit Strategy #4: Sell the Policy to a Grantor Trust Policy Gift equal to FMV Purchase policy for FMV Considerations: 1)No 10% penalty 2)Meets income objective of the plan 3)Fair market value (no CREB offset) 4)Transfer tax implications ParticipantQualified PlanGrantor Trust

33. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Action Plan

34. For Producer or Broker/Dealer Use Only. Not for Public Distribution. The Value of Working with a Third Party Administrator Benefits for the Trustee Actuarial administration and plan valuation Legal and compliance oversight ensures tax code validity Full Third Party Administration services including documentation and implementation Benefits for the Producer Enables you to enter business owner market with no financial or administrative overhead Consultant role with clients, attorneys and CPAs May help you increase case size Employee statements and communication Creating proposals and census administration

35. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Implementing Life Insurance in Qualified Plans 1.Identify and qualify clients 2.Schedule time for client meetings and discuss approach 3.Formalize goals, contribution abilities, employee census and insurability to determine appropriate plan type 4.Work with third party administrator to establish the plan 5.Apply for insurance contracts and determine other investments

36. For Producer or Broker/Dealer Use Only. Not for Public Distribution. MetLife Brand One of America’s largest financial companies with roots as far back as 1863 Serves over 90 of the top one hundred FORTUNE 500 ® companies * Recognized as the Nation’s Largest Life Insurer ** * MetLife. Quick Facts: Full Year 2009 ** Based on life insurance in-force as of December 31, 2009.

37. For Producer or Broker/Dealer Use Only. Not for Public Distribution. Important Information Insurance Products are: Not A Deposit Not FDIC-Insured Not Insured By Any Federal Government Agency Not Guaranteed By Any Bank Or Credit Union May Go Down In Value BDVL21194 L0512259013[0514] © 2012 METLIFE INC. PEANUTS © 2012 Peanuts Worldwide Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance products. Your clients should seek advice based on their particular circumstances from an independent tax advisor. MetLife, its agents and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You clients should consult with and rely on their own independent legal and tax advisers regarding their particular set of facts and circumstances. Prospectuses for Equity Advantage Variable Universal Life, and for the investment portfolios offered thereunder, are available from MetLife. The policy prospectus contains information about the policies features, risks, charges and expenses. Investors should consider the investment objectives, contract features, risks, charges and expenses of the investment company carefully before investing. The investment objectives, risks and policies of the investment options, as well as other information about the investment options, are described in their respective prospectuses. Clients should read the prospectuses and consider this information carefully before investing. Product availability and features may vary by state. MetLife life insurance policies have limitations, exclusions, charges, termination provisions and terms for keeping them in force. There is no guarantee that any of the variable investment options in this product will meet its stated goals or objectives. The cash value is subject to market fluctuations so that, when withdrawn, it may be worth more or less than its original value. Guarantees are based on the claims paying ability and financial strength of the issuing insurance company. Life insurance products are issued by MetLife Investors USA Insurance Company, Metropolitan Life Insurance Company and in New York only, by First MetLife Investors Insurance Company. All guarantees are based on the claims-paying ability and financial strength of the issuing insurance company. Variable products are distributed by MetLife Investors Distribution Company (MetLife Investors), Irvine, CA. May 2012