Ans powerpoint whole-lifeversusindexeduniversallife

AUGUST 5-7, 2015 THE VENETIAN | LAS VEGAS

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Whole Life versus Indexed Universal Life

Making a wise decision


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•What is life insurance? • History • Product

– Burial – Term – Whole Life – Universal Life – Variable Universal Life – Indexed Universal Life


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Agenda • Why Indexed Universal Life

– John Geenen

• How to Use Indexed Universal Life – Kyle Winkfield

• Additional Features and Industry Update – Alexa Brennan


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Why Indexed Universal Life?


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Loss Aversion


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Loss Aversion* “losses loom larger than corresponding gains” • We prefer to avoid a loss over acquiring a gain. • Losses are twice as psychologically powerful as gains. * Introduced in 1979 by Amos Tversky (cognitive mathematical psychologist) and

Daniel Kahneman (2002 Nobel prize in economics).”


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Increasing Market Volatility • Greater frequency of losses than over the preceding 53 years • Since March 2009, despite a 179% equity market advance,

investors have shunned equities • Because of loss aversion investors respond more heavily to

the losses than to the gains. • They allocate their portfolios more conservatively *https://www.fidelity.com/static/dcle/welcome/documents/Fidelity_Investments_Is_Loss_Aversi

on_Causing_Investors_to_Shun_Equities.pdf


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By HOLMAN W. JENKINS, JR.

April 13, 2014 “Baby boomers can hope to experience practical immortality. In 15 years (2028),

medical technology will be adding a year of life expectancy every year. We will start to outrun our own deaths”.

Ray Kurzweil – Google Director of Engineering “the restless genius” by The Wall Street Journal, and “the ultimate thinking machine” by Forbes. Inc. magazine

calls him the “rightful heir to Thomas Edison,”

Since 1990, 115 of his147 predictions were correct. Another 12 "essentially correct"

(off by a year or two), giving him a stunning 86% accuracy rate. * http://online.wsj.com/news/articles/SB10001424127887324504704578412581386515510


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Fear of Loss


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Gallup Investor and Retirement Optimism Survey August 6, 2014

Asked to invest or save an extra $10,000,

56% of said they would keep it as cash or saved in a CD *https://www.wellsfargoadvisors.com/about-wells-fargo-advisors/newsroom/2014-wells-fargo-gallup-investor-

retirement-optimism-index.htm


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Is there a better way


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Indexed Universal Life Insurance • Protect your family with a generally tax-free, death

benefit • Protect cash value from negative market

performance • Accumulate retirement income tax-deferred • Distribute retirement income tax-free* * Loans and withdrawals may limit your ability to make elections to the Indexed Strategy, reduce or eliminate index credits,

generate an income tax liability, reduce available cash value and reduce the death benefit, or cause the policy to lapse.


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No Sequence of Returns Risk

0% floor Upside caps


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The Parachute


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How to Use Indexed Universal Life


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Fees & Costs


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Illustrated Rate


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Guaranteed Column


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Additional Features and Industry Update


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Additional Features • Accelerated Death Benefits • Long Term Care Riders • Loan Provisions • Guarantees • Flexibility


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Industry Update • AG 49

– Promote industry consistency – Affects all companies selling IUL – Date to remember

• September 1, 2015 • March 1, 2016


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Industry Update • September 1, 2015

– Changes to max illustated rates – Uniform approach for calculating maximum

illustrated rate • S&P 500 Annual Point-to-Point • 100% Participation Rate, 0% Floor, Current Cap • Rolling 25-year look back approach for past 65 years


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Industry Update

– Other index selections may have different maximum illustrated rates, but they may not exceed the rate calculated using the defined approach using the S&P500 index

– Additional requirements for the Illustration Actuary


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Industry Update – Illustrations with loans: Maximum loan leverage

will be 1% – Additional disclosures will be required

• “Side-by-side” illustration at lower illustrated rate • Additional tables


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QUESTIONS???

Ans powerpoint whole-lifeversusindexeduniversallife

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