1 FOR AGENT USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES. PR-1293 4/09 Webinar Phone:...

1FOR AGENT USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES.

PR-1293 4/09

Webinar Phone: 877-922-4779

Pass code: 53973

Growing Life Insurance Sales for the Annuity Producer

Discover easy tips

to boost your results


PR-1293 4/09


Pass code: 53973

Disclosures These disclosures apply to this presentation in its entirety

• Custom GrowthCV is issued on policy form series LS166; Custom Guarantee is issued on policy form series LS163A; Custom Guarantee Rider is issued on form series LR435A; Chronic Illness Accelerated Benefit Rider (In Minnesota, Accelerated Benefit Rider for Continuous Confinement) is issued on form series LR450A, or state variation by North American Company for Life and Health Insurance, Executive Office, Chicago, IL 60607. Products, features or riders, endorsements or issues ages may not be available in all jurisdictions. Limitations or restrictions may apply.•If the policyowner terminates the No Lapse Guarantee period, significantly higher premiums may be necessary to keep the policy in force. Paying a premium that is equal to, but not greater than, the No Lapse Guarantee Premium will keep the policy in force during the No Lapse Guarantee Period but may result in a negative or zero policy fund. By paying only the premium required to satisfy the no-lapse guarantee, the policyowner may be forgoing the advantage of building significant cash value.•Chronically ill is defined as permanently unable to perform at least six Activities of Daily Living (bathing, continence, dressing, eating, toileting and transferring) without substantial assistance from another person. Severe cognitive impairment means the insured requires substantial supervision by another person to protect him or herself from threats to health and safety due to severe cognitive impairment. (In MN, chronically ill is defined as an insured having a condition that requires Continuous Confinement in an Eligible Institution and expected to remain there for the rest of the insured’s life). North American nor its agent give legal or tax advice. Please advise your clients to consult with and rely on a qualified legal or tax advisor before entering into or paying additional premiums with respect to such arrangements.•In some situations loans and withdrawals may be subject to federal taxes. North American does not give tax or legal advice. Clients should be instructed to consult with and rely on their own tax advisor or attorney for advice on their specific situation.•Snapshots from illustrations are for example purposes only and do not represent the full Illustrations. The information presented is hypothetical and is not intended to project or predict future investment results.•Please refer to the Custom GrowthCV marketing guide (PR-1130 R1), Custom Guarantee marketing guide (PR-651 R4) , and the Chronic Illness Accelerated Benefit guide (PR-1080) for complete product details. •Standard and Poor's awarded its "A+“ (Strong) rating for insurer financial strength on February 26, 2009 to North American Company for Life and Health Insurance as part of the Sammons Financial Group. The "A+“ (Strong) rating, which is the fifth highest out of 22 available ratings, reflects the financial strength of North American Company, member of the Sammons Financial Group.•A+ (Superior), the second highest rating out of 15 categories, was assigned by A.M. Best to North American Company for Life and Health Insurance as part of the Sammons Financial Group on January 4, 2008. A.M. Best is a large third party independent reporting and rating company that rates an insurance company on the basis of the company's financial strength, operating performance and ability to meet its ongoing obligations to policyholders. For the latest rating, access www.ambest.com.


PR-1293 4/09


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Discover the valueof growing life sales

• Maximizing overall sales

• Growing new sales rather than shifting sales

• Further cement the agent/client relationship

• Possibility of more compensation for a sale– Hypothetical: $50,000 single premium on age 60 male

• Annuity = $1,250 to $3,750

• Guaranteed UL = $4,370


PR-1293 4/09


Pass code: 53973

If you don’t sell life insurance to your clients, somebody else will!


PR-1293 4/09


Pass code: 53973

Two ways to grow life sales

1. Annuity sales that could be life insurance sales

2. Life sales you may be missing


PR-1293 4/09


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Annuity sales that could be life

• Annuity maximization

• Wealth transfer


PR-1293 4/09


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Annuity Maximization

Use when: • Assets not needed for current needs• Goal is to maximize benefit for children/grandchildren• Relief from income taxes and/or estate taxes is desired

Leverage assets currently in an annuity policy into a greater benefit for heirs at death using life insurance.


PR-1293 4/09


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Case StudyMr. Big Estate

• $250,000 annuity ($125,000 basis)

• Significant estate size

• High tax bracket

• No need of funds

Goal: Maximize estate size for heirs


PR-1293 4/09


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Case StudyMr. Big Estate

• Policy owned by ILIT• Funding options (net after 30% combined fed & state tax)

– Lifetime SPIA: $16,111/yr– 10-pay SPIA: $24,931/yr– Lump sum: $212,500

• Guaranteed death benefit purchased:– Lifetime SPIA = $654,151– 10-pay SPIA = $572,743– Lump Sum = $637,473

Age 65 Male, Standard rate class, Guaranteed DB to age 100


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Assumes income tax rate of 30% and estate tax rate of 45%. Annuity rate 5%

Annuity versus Custom Guarantee

$-

$100,000.00

$200,000.00

$300,000.00

$400,000.00

$500,000.00

$600,000.00

$700,000.00

$800,000.00

$900,000.00

$1,000,000.00

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35

Annuity after tax

Annuity after income and estate tax

Custom Guarantee death benefitafter estate tax

The information presented is hypothetical and not intended to project investment results. Illustration is not complete unless all pages are included.


PR-1293 4/09


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North American Provides:

Two competitive solutions for Annuity Maximization


PR-1293 4/09


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North American:More sales opportunities

• Custom Guarantee®

– For the death benefit objective Annuity Maximizer

– High death benefit coverage guaranteed up to age 120*

• Custom GrowthCVsm

– For the cash value objective Annuity Maximizer

– Waiver of Surrender Charge Option for quicker access to cash value and table shaving

* Subject to premium payment requirements.


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Wealth Transfer

• Single-premium asset transfer into a life insurance policy

• Immediately larger death benefit for heirs/charity


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Wealth Transfer – case study

• 65 female, Standard Non-Tobacco

• $50,000 asset transfer


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Life expectancy

age 85.8

Life expectancy

age 85.8



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Female, age 65, Standard Non-Tobacco

Insmark presentation program (version 14)


PR-1293 4/09


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Two ways to grow life sales

1. Annuity sales that could be life insurance sales

2. Life sales you may be missing

What are the easy life sales YOU are missing?


PR-1293 4/09


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Easy life sales you could be missing

• Final Expense

• Policy Review

• Using RMDs


PR-1293 4/09


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Final Expense

Low cost permanent coverage

• Custom Guarantee– Low cost guaranteed UL coverage– Dial-a-guarantee up to age 120*

• Custom TermGUL– Low cost non-guaranteed coverage

* Subject to premium payment requirements.


PR-1293 4/09


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Life Insurance Policy Review• Look to improve client’s situation through:

– Lower cost for same coverage– More coverage for same premium– Improved death benefit guarantees– Enhanced policy performance

Tips:• Identify policy goal• Discover new sales opportunities• Beat their expectations (WOW)


PR-1293 4/09


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Sample Case

• Client Male age 43• Low cost UL from year 2000• $250,000 death benefit• $1,356 annual premium• Was projected to age 100, now just age 68• Now projection needs $4,152/yr to run to 100• $4,287 cash value ($1,390 surrender value)

Super preferred rate class.Examples use an illustrated interest rate of 4.25%.


PR-1293 4/09


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Sample Case

CurrentCustom

Guarantee

Lower Cost$1,356/yr

(projects to run to age 68)

$4,152/yr to run to 100!

$1,492/yr

Guaranteed DB to age 100

Longer Guaranteed DB


Examples use an illustrated interest rate of 4.25%.


PR-1293 4/09


Pass code: 53973

Sample Case

CurrentCustom

Guarantee

Lower Cost$1,356/yr

(projects to run to age 68)

$4,152/yr to run to 100!

$1,492/yr

Guaranteed DB to age 100

Longer Guaranteed DB

Age 47 Age 95(at $1,356/yr)


Examples use an illustrated interest rate of 4.25%.


PR-1293 4/09


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Quick – Easy – Results

Policy Review will help you:• Get more sales without more clients• Get life sales from those who aren’t life clients• Uncover additional client needs• Get more referrals

• EARN COMPETITIVE COMMISSIONS!


PR-1293 4/09


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Using required minimum distributions (RMDs)

The truth for many clients:

Hasn’t taken distributions and doesn’t want or need to. Would rather leave money for

children or grandchildren’s benefit.


PR-1293 4/09


Pass code: 53973

RMD Sales Opportunity

Bill:

• Age 70 (turning 70½ this year)

• $200,000 in qualified funds (entirely taxable)

• Currently in 25% tax bracket

• Has to take RMD of $7,300 this year

RMD rounded up to nearest dollar. Uniform Lifetime table from Tax Facts 2005, Appendix F


PR-1293 4/09


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Another Option?

Use a SPIA to buy the life insurance

• Guaranteed payout for life

• Potentially larger payouts


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5 Options, 1 best solution!

Year Lump Sum

Lump sum and

Life Insurance

RMDs RMDs and Life

Insurance

SPIA and Life

Insurance

NOW $140,000 $328,500 $150,000 $309,450 $403,000

Year 10 $202,300 $328,500 $239,950 $334,400 $403,000

Year 20 $292,300 $328,500 $369,500 $370,100 $403,000

Insurance and annuity values hypothetical and not to be used to predict actual results.


PR-1293 4/09


Pass code: 53973

Discover the value of life sales

• Maximizing overall sales

• More compensation for a sale

• Growing new sales rather than shifting sales

• Further cement the agent/client relationship– Referrals

– Additional Sales Opportunities


PR-1293 4/09


Pass code: 53973

Time for action

1. Identify a concept you’d like to use

2. Gather client names to visit

3. Put it into practice

4. Use the resources at your disposal

5. Opportunity earn competitive compensation!


PR-1293 4/09


Pass code: 53973

Sales Support800-800-3656 ext. 10411

[email protected]

1 FOR AGENT USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES. PR-1293 4/09 Webinar Phone:...

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Transcript of 1 FOR AGENT USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES. PR-1293 4/09 Webinar Phone:...