1. One policy, many purposes
An introduction to fixed index universal life insurance

2. What if the unexpected happened?
What would happen if you died prematurely?
Would your family have the assets to continue their current lifestyle?
Would there be money for college, final expenses, or estate taxes?
What would happen if you outlived your retirement assets?
Are you accumulating enough to ensure a comfortable retirement?
How will the future economy affect the value of your assets?
Life insurance can address several important concerns.
For today’s families and small-business owners, financial vulnerability may be a bigger concern than ever. Questions like these may be keeping you up at night:
-What would happen if you died prematurely? Would your family have the financial assets to continue their current lifestyle? Would they be able to keep your home? Would there be enough money for college? And what about the funeral expenses and estate taxes at the time of your death?
-What would happen if you outlive your retirement assets? Are you accumulating enough to ensure a comfortable retirement? What happens if you have a financial emergency or major financial obligation? How will tomorrow’s economy affect the value of your assets?

3. Why consider life insurance?
Life insurance can address immediate needs when the insured dies, including:
Income replacement
College funding
Mortgage and other debts
Estate taxes
Business succession
Final expenses
Life insurance provides an income-tax-free death benefit to your beneficiaries.
The death benefit can address immediate needs when the insured dies, including:
-Income replacement
-College funding
-Mortgage and other debts
-Estate taxes
-Business succession
-Final expenses

4. What type of life insurance is right for you?
Different types of life insurance can provide different combinations of protection and accumulation potential.
Term life
Death benefit protection only
Coverage is for a specific period of time
Level, predictable premium payments
No cash value accumulation potential
Whole life
Death benefit protection
Can provide coverage for your entire lifetime
Universal life
Flexible premium payments
Potential cash value accumulates via a fixed interest rate
Fixed index universal life (FIUL)
Potential cash value accumulates via indexed interest and cannot decrease due to market volatility
Different life insurance policies may provide different combinations of death benefit protection and cash value accumulation potential.
Generally, the more flexibility in premium payments that a life insurance policy provides (i.e., the more or larger premiums you’re able to pay and when), the greater your potential for tax-deferred cash value accumulation. Matching the right policy to your needs depends on finding the balance of death benefit protection, premium flexibility, and accumulation potential with which you’re most comfortable.
Term life insurance: provides life insurance coverage for a specific period of time, after which the policy terminates. Though they offer the advantage of a level, predictable premium, term policies provide a death benefit only – they have no cash value accumulation potential.
Whole life insurance also offers the predictability of level premium payments and can provide coverage for your entire life as long as the policy remains in force and premium is paid (instead of coverage for a set term). Unlike term policies, whole life policies provide the opportunity to build cash value you can access through policy loans.
Universal life insurance: can provide coverage for your entire lifetime as long as the policy remains in force and premium is paid (instead of a set term). It offers you the flexibility to pay your premiums at any time and in any amount (subject to some limits), as long as the policy expenses and cost of coverage are met. Universal life insurance polices also have a cash value that can accumulate at a declared interest rate, which you’re able to access through loans and withdrawals.
Fixed index universal life insurance: is a specific type of universal life policy in which potential cash value accumulates based on indexed interest. It can provide coverage for your entire lifetime as long as the policy remains in force and premium is paid (instead of a set term). This can enable greater accumulation potential that you can access in the future through loans and withdrawals.

5. FIUL can address several financial concerns.
It provides advantages now and in the future, such as:
An income-tax-free death benefit for your beneficiaries
Building potential cash value tax-deferred for retirement or other needs
The flexibility of larger premium payments to help meet your financial goals
Premium amounts are not restricted based solely on your income
Access to your cash value income-tax-free via policy loans1
Fixed index universal life insurance can help you better prepare today for when the unexpected happens.
Life insurance provides a death benefit to your surviving spouse, family, or other beneficiaries. That, of course, is the first and foremost reason to own a policy. But a fixed index universal life insurance policy also provides the opportunity for cash value accumulation that can help provide financial security in the years ahead.
It can address several financial concerns at once, such as:
-The need for an income-tax-free death benefit for your beneficiaries.
-The desire to build cash value on a tax-deferred basis for retirement or other use.
-The desire for flexibility. Some cash value accumulation policies provide flexibility in how much premium you pay and when you pay it. You’re not restricted based solely on your income or how much premium you can pay each year.
-The need for access to your money. All cash value accumulation policies provide access to cash value via policy loans.
1Policy loans will reduce available cash values and death benefits and may cause the policy to lapse, or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. Tax laws are subject to change and you should consult a tax professional.

6. Access your cash value for several needs.
FIUL policies can provide a systematic way to accumulate cash value on a tax-efficient basis for future needs:
Supplemental retirement income
Supplemental college funding
Emergencies
Business planning strategies
Other financial needs
You can access your policy’s cash value for a variety of needs.
Fixed index universal life insurance can provide a systematic way to accumulate cash value on a tax-efficient basis for future needs. Your cash value can be accessed income-tax-free for your needs including:
Supplemental retirement income
Supplemental college funding
Emergencies
Business planning strategies
Other financial needs

7. What makes FIUL different?
Indexed interest makes the difference.
Cash value may be credited interest based on positive changes in an external index
Positive results = indexed interest credited
Negative results = no indexed interest credited, but no cash value loss
Interest is locked in each year
You’re probably wondering what makes FIUL different. With an FIUL policy, part of the premium may be credited with interest based on changes in an external index – this is different than traditional universal life insurance that earns interest based on a fixed account. We call this “indexed interest.”
We track the performance of the indexes your clients select and then use the crediting method to calculate the indexed interest. At the end of each policy year, if the result is positive we credit the indexed interest up to the cap and subject to a participation rate. If the result is negative, no indexed interest is credited – but the policy’s cash value doesn’t decrease. This is because they are not actually participating in the market or investing in any stock or bond index. A benefit of FIUL policies is that the indexed interest is locked in each year.

8. How does it work? Life insurance cash value accumulation
Death benefit:
Income-tax-free death benefit to beneficiaries
Maximum IRS allows
Premium
Life insurance
cash value
accumulation
Minus fees, expenses and cost of insurance
Premium flexibility
Living advantages: Access to cash value income-tax-free via loans1
Minimum premium required
So here you are putting money into a Universal Life Policy. Before the money even gets to the policy, a small portion comes out for fees and expenses, just like any other financial product.
However, the rest of the money goes into the Universal Life Cash Value … represented by the light blue box.
Then systematically, the life insurance company pulls out the amount of money it needs to simply pay the death benefit cost … just like term insurance.
That bottom arrow represents the MINIMUM amount that my company says you have to put in to be able to simply purchase the policy. This amount is determined by many factors such as age, gender, death benefit amount, and risk class.
(NOTE TO PRODUCER: Minimum should usually be close to or at the target premium to make sure the policy is properly funded.)
However, the arrow on the top represents the MAXIMUM amount that the IRS says you’re allowed to put into the policy. And generally, anytime the IRS limits what you can put into something, it’s usually because it provides a benefit. Cash value accumulation life insurance, specifically fixed index universal life, allows you the flexibility to pay anywhere from the minimum premium to the maximum premium, and you can adjust the premium amount as your situation changes.
A couple of important side notes to be aware of:
One, if these limits are exceeded, the policy becomes what is called a Modified Endowment Contract, and all money taken from the cash value becomes taxable. So you need to be careful when designing the policy to avoid this. A MEC classification can occur if a life insurance policy is excessively funded in its early years, or if material changes to the policy occur. Funds withdrawn from a MEC policy through loans, partial assignments, and pledges are treated as gross income to the recipient and are therefore subject to taxation.
Two, the sizes of these boxes (the amount of money you either need to or are able to put in) are directly related to the amount of life insurance that is purchased. The more life insurance – the bigger the boxes.
So, there are really only two things that an individual needs to determine:
One: What is the proper amount of life insurance?
Two: What amount between those two boxes does an individual want to put in?
Really, that’s it.
1Policy loans will reduce available cash values and death benefits and may cause the policy to lapse, or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. Tax laws are subject to change and you should consult a tax professional.

9. Three types of tax advantages:
FIUL provides tax advantages to help your beneficiaries and accumulate cash value:
Income-tax-free death benefit
Tax-deferred accumulation
Tax-free income via policy loans1
We could be looking at a future of reduced benefits or increased taxes – or both. This means the need is greater than ever to protect your estate while building your cash value and sheltering them from excessive taxation.
Fixed index universal life insurance currently offers three kinds of tax advantages to help you protect your beneficiaries and accumulate cash values:
Income-tax-free death benefit
Tax-deferred accumulation
Tax-free income via policy loans
Policy loans and withdrawals reduce available cash values and death benefits and may cause the policy to lapse, or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax.
Policy loans are not usually subject to income tax unless the policy is classified as a modified endowment contract (MEC) under IRC Section 7702A. However, withdrawals or partial surrenders are subject to income tax to the extent that cash value in the policy immediately before the distribution exceeds the owner’s tax basis in the policy. If taken prior to age 59 1/2 , a 10% federal tax penalty may apply.
1Policy loans and withdrawals reduce available cash values and death benefits and may cause the policy to lapse, or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. Tax laws are subject to change and you should consult a tax professional.

10. Thank you! Is fixed index universal life insurance right for you?
Ask me how it can provide both death benefit protection and cash value accumulation potential for the future.
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Products are issued by Allianz Life Insurance Company of North America. Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.