1. FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Foreign National Marketplace [Presenter’s Name] [Email] [Phone] Policies issued by American General Life Insurance Company

2. 2 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Why AIG?  Began in 1919 as American Asiatic Underwriters in Shanghai, China  1930-39: Operations expand in China and operations begin in Latin America  1940-49: New Markets including Japan and Germany  1950-59: UK and Australia markets opened  1960-69: American International Group formed  1990: AIG returns to its roots in China with the issuance of the first foreign license issued by the Chinese Government in 40 years  2013: AIG entered a joint venture with PICC Life to provide Chinese consumers life insurance and other financial products to enhance and protect their overall quality of life Chronicling over 95 years

3. 3 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION  Technology has made the world smaller  Large, growing population  Foreign Nationals face unique U.S. planning challenges  Significant need for information on strategies and planning Why Consider the Foreign National Market?

4. 4 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Foreign Nationals need YOU!  AIG will prepare you for a growing opportunity with the foreign national market segment that purchased $92 Billion of real estate in 2014 1  Foreign Nationals come to the U.S. for mature insurance and investment markets seeking estate planning help  Their mean home price is $396,180 versus $247,417 for U.S. Existing Home Sales  Some global jurisdictions offer negligible or no Life Insurance options. The U.S. is an attractive insurance marketplace. Source: 1) 2014 Profile of International Home Buying Activity, Realtor.org, Lawrence Yun, Senior Vice President & Chief Economist

5. 5 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Look at the numbers… Asian Americans  Buying power projected to be $1 trillion by 2017  45% currently WITHOUT Life Insurance  8 in 10 Value Life Insurance  Median Household income of $72,528 (15% higher than the overall U.S. median.  High rate of business ownership Source of Slide: Pew Research Center analysis based on Elizabeth M. Hoeffel et al., The Asian Population: 2010, Census Bureau, March 2012. The Largest U.S. Asian Groups The six largest country of origin groups each number more than a million people

6. 6 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION People are People  Concerns are the same – Pass wealth to the next generation – Protect their Family – Replace income – Protect wealth No matter your origin…people have the same needs… NCOA.ORG/IMPROVE – HEALTH/CENTER-FOR-HEALTHY- AGING/CHRONIC-DISEASE. SEPTEMBER 2014 CIRC.AHAJOURNALS.ORG/CONTEN T/ EARLY/2013/12/18/01. CIR.0000441139.02102.80 2013 Americans’ Perspectives on New Retirement Realities and the Longevity Bonus, a 2013 Merrill Lynch Retirement Study, conducted in partnership with Age Wave 72% Of retirees say serious health problems are the #1 worry about living a long life.

7. 7 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION But Foreign Nationals are treated differently…  Foreign National have additional Concerns – Tax law is different from U.S. Citizens – Substantial Tax Risk – Gifting – U.S. Insurance Market is mature

8. 8 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Foreign National Marketplace “Life Knows No Boundaries”

9. 9 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Where are Foreign Nationals? New York West Palm Beach Washington, DC Seattle Los Angeles Sacramento Las Vegas Phoenix Dallas – Fort Worth Boston Colorado Springs Denver Minneapolis Houston Detroit Sarasota Tampa Orlando Miami Atlanta Philadelphia (1) Migration Policy Institute, “Frequently Requested Statistics on Immigrants and Immigration in the United States.” Migration Policy Institute, Feb. 26, (2) Geoscape national DMA report 2013, The foreign-born population includes anyone who was not a U.S. citizen or a U.S. national at birth. This includes respondents who indicated they were a U.S. citizen by naturalization or not a U.S. citizen. (U.S. Census Bureau, American Community Survey 2007 Subject Definitions). +99% +86% +92% +85% +82%

10. 10 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Understanding Needs Foreign Nationals fall into two categories:  Resident Aliens  Non-Resident Aliens

11. 11 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Resident Aliens (RA)  Foreign National with a permanent U.S. home.  Worldwide assets subject to U.S. estate and gift tax  Denied certain tax advantages available to U.S. citizens

12. 12 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION  Foreign National with a permanent home in another country.  Only U.S. assets subject to U.S. estate and gift tax Non-Resident Aliens (NRA)

13. 13 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION  Are you and your spouse U.S. Citizens?  Where do you spend most of your time?  Where do you consider home to be?  Do you own a home in the United States? Determining Residency Status

14. 14 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION What is my status for U.S. income tax purposes? Do you possess an alien registration card (green card)? Were you physically present in the U.S. on at least 31 days during the current year? Were you physically present in the U.S. on at least 183 days during the 3-year period that includes all days in the current year, plus 1/3 rd the number of days in the prior calendar year, plus 1/6 th the number of days in the 2 nd previous calendar year? Do you still meet the 183 day test if you disregard exempt days? Exempt days are days you are: (1) commuting to work from Canada or Mexico; (2) in the U.S. for less than 24 hours; (3) in the U.S. as a crew member of a foreign vessel; (4) unable to leave the U.S. due to a medical condition; (5) an exempt individual. Do you still meet the 183 day test if you disregard exempt days? Exempt days are days you are: (1) commuting to work from Canada or Mexico; (2) in the U.S. for less than 24 hours; (3) in the U.S. as a crew member of a foreign vessel; (4) unable to leave the U.S. due to a medical condition; (5) an exempt individual. Were you physically present in the U.S. on at least 183 days during the current year? During the current year, did you maintain a tax home in a foreign country in which you had a closer connection than with the U.S.? You are a non- resident alien (NRA) for U.S. income tax purposes You are a resident alien (RA) for U.S. income tax purposes Yes No Yes No

15. 15 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Non-resident Alien (NRA) Underwriting Guidelines – Permanent Insurance Only Is the prospect a non-resident alien? (A non green card holder residing outside the U.S. or visiting the U.S. temporarily) Is the prospect a non-resident alien? (A non green card holder residing outside the U.S. or visiting the U.S. temporarily) Does the prospect have documented substantial contacts with the U.S.? Is the prospect in the U.S. for a purpose other than to buy insurance and has a U.S. bank account? Does the prospect meet one of the following requirements? (1) Own real property in the U.S.; (2) Has ongoing business activities in the U.S.; (3) Maintain investment interest in the U.S.; (4) Employed by a U.S. based company; (5) Annual travel to the U.S. to visit immediate family; (6) Annual travel to the U.S. to manage financial or real estate assets; (7) Regular travel to the U.S., at least 15 days minimum, for doctors visit. Does the prospect meet one of the following requirements? (1) Own real property in the U.S.; (2) Has ongoing business activities in the U.S.; (3) Maintain investment interest in the U.S.; (4) Employed by a U.S. based company; (5) Annual travel to the U.S. to visit immediate family; (6) Annual travel to the U.S. to manage financial or real estate assets; (7) Regular travel to the U.S., at least 15 days minimum, for doctors visit. Did all solicitation take place in the U.S.? Is prospect a visa holder intending to reside in the U.S. permanently? Prospect is not Eligible for Coverage Prospect may be Eligible for Coverage (additional requirements must be satisfied) Yes No Yes No Yes No Yes No Yes No

16. 16 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Worldwide assets subject to U.S. gift and estate tax  Estate and gift tax exclusion: $5,430,000  Annual gift tax exclusion: $14,000 ($147,000 for non- citizen spouse) Resident Aliens

17. 17 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION U.S. situs property subject to U.S. gift and estate tax  Gift tax on gifts of real or tangible personal property located in the U.S.  Estate tax on tangible and intangible property situated in the U.S.  Estate tax exclusion: $60,000  No unlimited marital deduction for non-citizen spouse Non-Resident Aliens

18. 18 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION U.S. Estate Tax Comparison *U.S. situated property include: real and tangible personal property located in the U.S. as well as certain intangible property deemed situated in the U.S. (example, stock issued by a U.S. corporation) Resident Alien (RA) Non-Resident Alien (NRA) Lifetime estate tax exemption $5,430,000$60,000 Top estate and gift tax rate40% Unlimited marital deduction Only if inherited assets are transferred to QDOT Assets subject to U.S. estate taxes All worldwide assets Property situated or deemed situated in the U.S.* Gift tax annual exclusion amounts $147,000 for RA spouse and $14,000 for non-spouse $147,000 for NRA spouse and $14,000 for non-spouse Assets subject to U.S. gift taxes All worldwide assets Real or tangible personal property situated in the U.S. Footnote: There are special rules applicable to recent expatriates.

19. 19 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION U.S. Tax Considerations for Foreign Nationals *A gift of a life insurance policy on oneself may be subject to the IRC §2035 look back rule, and therefore may be subject to estate taxes if included within the decedent’s estate.

20. FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Qualified Domestic Trust (QDOT) Additional material you may want to know

21. 21 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION QDOT (Qualifying Domestic Trust)  No immediate estate taxation  Assets “stuck” in U.S.  Distributions limited to income and hardship OR immediate estate taxation  Need U.S. trustee, may require bond  Tax liability is not solved upon death of trustee

22. FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Planning and Case Studies* * The stories are not actual cases, and are hypothetical representations for illustrative purposes only.

23. FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Case Study 1 Meet Desi and Grace Will help you understand: Non-Resident Aliens with U.S.-based assets

24. 24 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Meet DESI and GRACE  Chinese Citizens  No intent to remain permanently in the U.S.  Couple recently purchased a home in California for the benefit of their two children who do intend to permanently reside in the U.S. Meet Desi and Grace Profile: Desi – Age 58 Grace – Age 56

25. 25 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Upon further inquiry… Desi Separate Property LA Home $3.5M Investment Portfolio $2.2M Personal Property $300K Desi and Grace Joint Property Real Property $25M Cash and Investments $8M U.S. Bank Deposits $500K* * Note that the $500,000 cash deposit at a U.S. financial institution is not considered U.S. situs property for estate tax purposes.

26. 26 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Concerns After application of available estate exemption: $60,000 ($13,000 credit equivalent) 40% tax rate is applied Net U.S. assets after estate tax: $3,613,000 Total U.S. Assets - $6,000,000 Potential U.S. estate tax liability: $2,387,000 * Note that the $500,000 cash deposit at a U.S. financial institution is not considered U.S. situs property for estate tax purposes.

27. 27 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Potential Solution: Secure Lifetime GUL 3 (Guaranteed death benefit to age 121)  Annual premium to be paid by Desi is $44,067*  At Desi’s passing, $3 million is available to offset estate tax liability of $2,387,000 Desi can own the policy individually and name Grace and/or the children as beneficiary.  Life Insurance proceeds (from U.S. carrier) on the life of a nonresident decedent are not subject to estate taxes. Exclusion applies even when the policy is directly owned by the nonresident decedent Desi buys life insurance policy with guaranteed death benefit: $3,000,000 Estate Value (after tax) Before Life InsuranceAfter Life Insurance $3,613,000 $6,613,000 Premiums paid during lifetime will help reduce the value of the assets subject to estate tax at death. *Premium based on Male, 58, Preferred Non-tobacco, no-lapse guarantee premium for $3,000,000 level DB guaranteed to Age 121.

28. FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Case Study 2 Brian, Jennifer and their Three Children Will help you understand: Resident Aliens with significant U.S. and Worldwide Assets Married Couples with a Foreign National Spouse

29. 29 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION  Brian (U.S. National) and Jennifer (Taiwanese National with a green card) – Multi-National Couple  Three Children – U.S. Nationality Brian wants to keep the business in the family and the children to inherit the business following his and Jennifer’s passing. The Family $25 Million Business Brian, Jennifer and their Three Children

30. 30 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Three Options – One Potential Solution Following Brian’s death, Jennifer will continue to rely on the business to support her lifestyle.

31. 31 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Option 2: QDOT – Tax deferred until 2 nd death The potential estate tax liability is not solved but simply deferred until Jennifer’s death. Brian $5,430,000 Available Exemption Direct Transfer to Jennifer or Trust $19,570,000 Remaining Assets QDOT

32. 32 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Guarantees death benefit of $10 million $94,492* annually Brian gifts to Jennifer Option 3: Gifts & Life Insurance Secure Lifetime GUL 3 $10 Million Death Benefit  Received free of income and estate tax  Available to support Jennifer and children  Provides liquidity to meet eventual estate tax obligation *Premium based on Male, 50, Preferred Non-tobacco, no-lapse guarantee premium for $10,000,000 level DB guaranteed to Age 121.

33. FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Driving the Opportunity We are here to help…

34. 34 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Next Steps Review your book of business Reach out to contacts that match the client profile Strengthen and build your referral network

35. 35 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Immigrant clients? Clients with immigrant spouses? Develop a champion client Look at Your Existing Business

36. 36 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Look at Your Neighborhood Nearby colleges/universities? Nearby hospitals? Nearby military bases? Talk to realty firms for leads Align with immigration and/or international tax attorneys Network with ethnic business associations

37. FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Awareness = Opportunity Other things to keep in mind APPENDIX

38. 38 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Love Knows No Boundaries… Source: "Legal Hassles of Global Love Affairs” Wall Street Journal, Summer 2013

39. 39 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Real Estate International Buyers: 7% of $1.2 Trillion Market Five Countries: 54 Percent of Total International Sales Source: “2014 Profile of Intenational Home Buying Activity”, Realtor.org, Lawrence Yun, Senior VP & Chief Economist

40. 40 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Real Estate Canada Leads in Number of Transactions China Leads in Dollar Volume Source: “2014 Profile of Intenational Home Buying Activity”, Realtor.org, Lawrence Yun, Senior VP & Chief Economist

41. 41 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Real Estate Foreign Sales tend to be at Higher End of Market Source: “2014 Profile of Intenational Home Buying Activity”, Realtor.org, Lawrence Yun, Senior VP & Chief Economist

42. 42 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION For More Information, Contact: [Presenter’s Name] [Email] [Phone]

43. 43 FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION Policies issued by American General Life Insurance Company (AGL) except in New York, where issued by The United States Life Insurance Company in the City of New York (US Life). Issuing companies AGL and US Life are responsible for financial obligations of insurance products and are members of American International Group, Inc. (AIG). For Policy Forms ICC12 AGLA 12UCG and AGLA 12UCG. Products may not be available in all states and product features may vary by state. FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION