From Here To Security Consumer Seminar Presentation

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Transcript From Here To Security Consumer Seminar Presentation

From Here
to Security
Speaker name, Title
While this communication may be used to promote or market a transaction or an idea
that is discussed in the presentation, it is intended to provide general information about
the subject matter covered and is provided with the understanding that The Principal® is
not rendering legal, accounting or tax advice. It is not a marketed opinion and may not be
used to avoid penalties under the Internal Revenue Code. You should consult with
appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting
obligations and requirements.
Before investing in variable life insurance, investors should carefully consider the
investment objectives, risks, charges, and expenses of the policy and the underlying
investment options. This and other information is contained in the free prospectus, which
can be obtained from your local representative. Please read the prospectus carefully
before investing.
Insurance products from the Principal Financial Group® (The Principal) are issued by
Principal National Life Insurance Company (except in New York) and Principal Life
Insurance Company. Securities offered through Princor Financial Services Corporation,
800/247-1737, member SIPC. Principal National, Principal Life and Princor® are
members of The Principal, Des Moines, IA 50392.
Do you count on employee benefits?
401(k) Plan
Defined benefit pension plan*
Disability income insurance
Workers compensation
Life insurance
Health insurance
* “The percentage of private-sector workers participating in an employment-based defined benefit plan
decreased from 38 percent in 1979 to 15 percent in 2008.”
Employee Benefits Research Institute, “The Importance of Defined Benefit Plans for Retirement Income
Adequacy,” Jack VanDerhei, EBRI Notes, Vol. 32, No. 8, August 2011
Employee benefits are great, but…
• Not everyone enjoys the same level
of benefits.
• They may not meet all your needs.
• You may not stay in your current
job forever.
• What happens to them when you retire?
• They may not keep up with inflation.
• They usually are not guaranteed
and could disappear.
• You have little or no control over them.
Many people are inadequately protected
• Life insurance ownership has hit a 50-year low. Three
in 10 households carry no life insurance on anyone in
the household, and half of households now believe they
are underinsured.
• Today, 77 percent of families with children under 18 have
life insurance coverage, compared with 90 percent in 2004.
• The loss of group life insurance coverage is leaving more
families with children under 18 without life insurance protection
than six years ago.
Household Trends in U.S. Life Insurance Ownership, 2010.
Life insurance ownership has declined
Where are you on the lifeline?
• Where are you?
• What can you do to
assure success?
• Where are you going?
• What are the obstacles?
Life expectancy is on the rise
“In recent years, the United States
has seen an increase in life
expectancy, and this trend is
expected to continue. A 65-year-old
man can expect to live to almost
age 82, and a 65-year-old woman
can expect to live to age 85.”
U.S. Department of Health and Human Services, Centers
for Disease Control & Prevention, Table 22 as of 2007,
2010 Report.
Premature death causes
economic disruptions
• Seven in 10 families with children
under age 18 would have trouble
paying their bills if their primary wage
earner died unexpectedly.
• Without the safety net that life
insurance can provide, the majority of
households have limited time before
savings run out to make financial
adjustments if the family is to survive
the death of a wage earner.
Household Trends in U.S. Life Insurance Ownership, 2010.
Then why is life insurance
the last thing we think about?
• Rising medical premiums?
• Planning for retirement?
• Saving for college funding?
Why do people buy life insurance?
Funeral expenses
Income replacement
Pay off debt
Pay off mortgage
The Principal Financial Well-Being Index, 2nd Quarter 2012.
Why do people buy life
insurance?, cont.
Single people
Young families
Middle-age couples
Retired couples
Business owners
The need is strong
Young households
• The younger the household,
the more likely it is
considering purchasing life
insurance in the next year.
• The presence of children
under 18 in the household
is the other critical indicator
that a household may
need coverage.
Middle-market households
• Many recognize they are
underinsured, and one in four
is considering purchasing life
insurance in the next year.
• Sixty-four percent would immediately
have trouble meeting daily living
expenses for only a few months
upon the premature death of a
wage earner.
Did you know? Forty-one percent of American adults (95 million) are underinsured.
Household Trends in U.S. Life Insurance Ownership, 2010.
Income tax features of life insurance
• The death benefit is generally free
from income tax.
• The cash value grows tax-deferred.
• The cost basis (premiums paid) can
be recovered on a first-in, first-out
(FIFO) basis without being subject to
income tax.*
• Loans can generally be taken against
the cash value without being subject
to income taxation.*
*If not a modified endowment contract.
Types of individual life insurance
• Term – Low-cost death benefit for a specified time period;
short- to mid-term time horizon
• Universal life – Flexible premium, accumulates cash value
based on fixed interest rate; mid- to long-term time horizon
• Universal life with secondary guarantees – Guaranteed
death benefit at a fixed price for a specified time period up
to lifetime; mid- to long-term time horizon
• Variable universal life – Flexible premium, non-guaranteed
cash value from performance of underlying investment
options; mid- to long-term time horizon
• Whole life – Level death benefit at a fixed price;
guaranteed cash accumulation; long-term time horizon
How much life insurance do you need?
Final expenses and cash needs
Long-term financial obligations
Living expenses
Current financial resources
The recommended
amount of life insurance
coverage is 10 to 15 times
annual income.
Michael, James O., “The Adequacy of Life Insurance
Coverage in U.S. Households,” Journal of Financial
Services Professionals.
Financial Strategies
For those seeking a
comprehensive analysis,
Financial Strategies
assesses where you are now,
where you want to go and
how to best get there.
Get a handle on all aspects
of your financial picture
Which path will you choose?
From Here to Security
Not everyone wants or needs a complete analysis.
Some may prefer an examination of particular needs.
For them, we offer a free From Here to Security checkup to examine their life and disability insurance needs.
Why participate in the
From Here to Security Program?
• Financial goal-setting can make
positive things happen.
• Our financial professionals work with
you to provide information about your
current situation and ideas for future
• You will work with professionals who
meet your employer’s standards.
Why participate in the
From Here to Security Program?, cont.
• Affordable options can be discussed.
• Simplicity – You may be able to
address these issues during
working hours.
• No fees are charged for this service.
Next steps
Decide what service(s) you want from us:
• From Here to Security (
• Financial Strategies
Sign up for a free meeting.
Begin the journey to financial security.
Thank you!
Speaker name | Contact information
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