Transcript Slide 1

Introducing Elite Index® II
Cost-effective life insurance with upside potential and downside protection
Presented by…
For Producer Use Only – Not For Dissemination To The Public
Life insurance provides your clients with the
security of providing for their families or
business if they should die prematurely.
But
when purchasing life insurance they are faced
with choices. Should they opt for the security of
a fixed product with today’s low interest rates, or
choose
a
variable
product
with
inherent
volatility? Now your clients have the opportunity
to benefit from both worlds.
FOR PRODUCER USE ONLY – NOT FOR DISSEMENATION TO THE PUBLIC
Today, there is a new choice
Elite Index II
For Producer Use Only – Not For Dissemination To The Public
Elite Index II Target Market
 Desire life coverage with upside cash value growth potential and
downside guaranteed protection
 Key ages 40-65
 Moderate to conservative risk tolerance
 Policyholder objectives:
– Primary: Low-cost death benefit protection
– Secondary: Income production to supplement retirement
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What’s New With Elite Index II?
Protection with simplified guarantees and now
including a chronic illness rider
New
–Now offered with the Accelerated Access SolutionSM –
gives you the option to accelerate your death benefit in
the event of a chronic illness, if all criteria are met
–Simplified death benefit with no-lapse guarantee – now
guaranteed for 20 years or age 80 (whichever comes
first)
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What’s New With Elite Index II?
 Higher upside potential for growth
New
– Increased cap rates – now at 13%, offering greater opportunity for
growth if the market performs well
– Higher participation rates – now at 70%, offering greater opportunity
for growth in the market performs well
– New Choice Loan option – allows the client to access their funds
while they remaining eligible for potential index crediting
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Key Benefits of Elite Index II
 Competitively priced, fixed index universal life protection for individual
and business needs.
 Interest crediting based in part on the one-year point-to-point growth
in the S&P 500.
 Ability to allocate premiums among Cap Rate Index Account,
Participation Rate Index Account and Declared Interest Account.
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Key Benefits of Elite Index II
 Minimum Death Benefit $50,000
 Rolling 2-Year target premiums (not available in New York)
 Maximum issue age of 90 and Preferred Plus underwriting class
available to issue age 80
 Four cost of insurance (COI) bands
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Loan Options
Standard & Preferred
 Loans
– The effective annual loan rate is 4.00 percent. It is payable in advance at
the rate of 3.85 percent.
– Annual effective rate of 3.00 percent will be credited to the portion of the
accumulation value that equals the amount of policy loans.
 Preferred Loans
– Available after 10 policy years.
– Maximum preferred loan amount is 10% of the average at the beginning
of the policy year.
– Loan rate (not guaranteed) currently equals the credited rate applied to
the policy loan.
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Loan Options
Choice
 Choice Loans
– Available whenever there is an amount of cash value accumulation in the
policy.
– Fixed rate of 6.00%
New
– Policy values in these accounts continue to participate in the index account
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Available Riders
 Accidental Death Benefit Rider
 Children’s Insurance Benefit Rider
 Spouse/Other Insured Rider
 Overloan Protection Rider
 Terminal Illness Accelerated Benefit Rider
 Accelerated Access SolutionSM (Chronic Illness Rider)
 Waiver of Monthly Deduction Rider
 Maturity Extension Option
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Accelerated Access SolutionSM
A chronic illness1 rider for Elite Index II
The funds can be used to help pay for –
Adult Daycare
Assisted Living
Family Care
Nursing Home Care
Virtually any expense,
even those unrelated to the illness
1Insured
must be certified as chronically ill by a licensed physician and meet all eligibility requirements.
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Benefits of Accelerated Access Solution

101(g)
– No LTC license necessary: only Life / A&H
– 2-out-of-6 ADLs or severe cognitive impairment
– Deemed to be permanent

Indemnity
– No receipts, spend benefits on anything

Choose your total AAS Benefit Base
– Minimum = greater of 50% of DB or $50,000
– Maximum = lesser of 100% of DB or $1,500,000

Maximum Monthly Benefit = IRS Monthly Per Diem, with choice of 3
caps:
– 2% of AAS Benefit Base;
– 4% of AAS Benefit Base; or
– AAS Benefit Base ÷ 12
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FOR PRODUCER USE ONLY – NOT FOR DISSEMENATION TO THE PUBLIC
Benefits of Accelerated Access Solution
Inflation hedge against future costs
Purchase more than today’s Per Diem limit!
– Many products won’t allow it!
– Provides inflation protection with a maximum monthly benefit cap
4% Cap – example:
– 4% of $300,000 = $12,000 per month
– Go on-claim in 2014: Collect $9,900 per month
– Go on-claim in the future when Per Diem = $15,000 per month:
Collect $12,000 per month
Per Diem – example:
– $300,000 AAS benefit
– Maximum monthly benefit: $300,000 ÷ 12 = $25,000 per
month
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Accelerated Access Solution Specifications
 Issue Ages 18 – 70
 AAS Rider must be added at policy issue
– Cannot be added to an existing policy
 Available through Table D!
 Waiver of costs for the entire policy
– If less than 100% is accelerated, 100% of policy costs
are still waived while on claim
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Supplemental Application
for Accelerated Access Solution
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Life insurance for retirement
planning with IUL
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Problem:
Supplemental Retirement Income in a Tax-Efficient Manner
 William, age 45, is an accountant living with his young daughter, his wife and
his mother-in-law Bridget who is in poor health. He has a solid retirement plan
made up primarily of his 401(k) and IRA accounts, but is concerned that what
he has saved in these accounts may not be enough to provide for all of the
financial demands he may have in retirement.
 William needs life insurance and he would like to supplement his death
benefit protection with potential cash accumulation in a tax-efficient manner to
help supplement his retirement income. This protection of additional income
could help pay for his daughter’s college tuition or additional healthcare for
Bridget if needed.
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Solution:
Index Universal Life Insurance
 William speaks with his financial advisor and decides that
with the death benefit protection plus upside potential of
cash accumulation and tax-efficient access1 makes index
Universal Life insurance a good fit for his needs.
 He purchases an Elite Index II policy from American
General. To maximize his cash accumulation potential,
decides to pay premiums of $15,000 / year, which
provides an initial death benefit of $320,0002 which is
guaranteed for 20 years and will grow with the cash
value of his policy.
1.
2.
Based on current federal income tax laws, policy owners should consult a qualified tax advisor.
Numbers rounded for illustrative purposes. Initial Level Death Benefit of $321,231
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Upside Potential with Downside Protection
William knows that results will vary with market
performance, and together he and his financial advisor look
at two different hypothetical scenarios:
Hypothetical Rate of
Return
Cash Value at Age 65
Income Stream for
Age 66 to Age 85
6%
$500,0001
$38,0002 /year
(using standard loans)
7.5%
$600,0003
$54,0004 /year
(using Choice loans)
Illustrated for Male, preferred non-tobacco, paid to 65, increasing
death benefit to level at age 65. Income for ages 65-85.
1. Numbers rounded for illustrative purposes. Cash value at 6% over 20 years is $499,290
2. Numbers rounded for illustrative purposes. Income stream at 6% over 20 years is $38,719 / year
3. Numbers rounded for illustrative purposes. Cash value at 7.5% over 20 years is $593,713
4. Numbers rounded for illustrative purposes. Income stream at 7.5% over 20 years is $54,590/ year
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Tax-Efficient Income Stream Option in Retirement
 William’s mother-in-law Bridget lives with them for 10 years and eventually
moves into a nursing home, and eventually passes away 5 years later.
William continues to provide financial assistance during this time which
reduces the amount of funds he is able to invest into his retirement
portfolio.
 William retires at age 65 at which time his daughter is in her freshman
year at college. At this point, William decides to access the cash value in
his life insurance policy to help pay her tuition expenses and maintain his
own lifestyle in retirement.
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Tax-Efficient Income Stream Option in Retirement
 He decides to exercise his Choice loans option, which means his funds
remain eligible for index or declared interest along with the remaining
funds in his accounts. Unlike his qualified retirement plans, accessing
accumulated cash value in his life insurance policy does not incur a tax
penalty 1
 The market has performed well, and at 7.5%, he is able to access
$54,0002 a year from his policy income-tax-free, according to current tax
laws.
1. Based on current federal income tax laws, policy owners should consult a qualified tax advisor.
2. Numbers rounded for illustrative purposes. Income stream at 7.5% over 20 years is $54,590/ year
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Flexibility in your life insurance
policy - upside potential and
downside protection
IUL vs GUL
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Why Index Universal Life Insurance?
 Kevin, age 45, is a computer engineer and has two young sons with his wife,
Christine.
 He needs death benefit protection for his family while he is working, but is
also interested in flexible features and potential cash value that he can use
during his lifetime.
 Kevin plans to retire at age 67 and also wants to be sure he has the
resources available to build the future he has in mind – sending both of his
sons to college, buying a vacation home and protecting for additional
healthcare costs in the event of a chronic illness.
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The Conversation
Index Universal Life vs. Guarantee
 Kevin speaks to his financial advisor asks to see the benefits of a similar
premium payment in Index Universal Life policy (IUL) vs. Guaranteed
Universal Life policy (GUL) in different scenarios.
 He asks about what his upside growth potential would be in both policies –
and with IUL, at two different rates of growth – 6%, and if the market performs
well, 7.5%.
 While the death benefit and cash values are guaranteed on GUL, the IUL can
also offer a guarantee for a number of years as well as strong cash value
potential.
 Additionally, death benefit is guaranteed on GUL, while IUL only provides for
a limited period of guarantees.
 He also is interested in the Accelerated Access Solution, which would allow
him to use a portion of his death benefit while he is living should he develop a
chronic illness (when criteria is met).
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For Producer Use Only – Not For Dissemination To The Public
IUL vs. GUL
Index Universal Life
Guaranteed Universal Life
$1M death benefit, with the option to
accelerate 50% of his death benefit for
chronic illness (capped at 4% per
month)
Guaranteed to age 66
$1M death benefit, with the option to
accelerate 50% of his death benefit for
chronic illness (capped at 4% per
month)
Guaranteed to age 100
Pay into the policy until age 67
Pay into the policy until age 67
Premium: 6% = $9,4001 /year*
7.5% = $7,6002 /year*
Premium: $9,8003 /year
Cash value at age 67: 6% = $240,0004
7.5% = $200,0005
Guaranteed cash
value at age 67 = $21,5006
*Premiums illustrated with the following assumptions - male, preferred non-tobacco class,
Age 45, $1 million death benefit with 4% monthly Accelerated Access Solution benefit, solve
to pay to age 67 and have $1,000 cash value at age 100.
1. Numbers rounded for illustrative purposes. IUL premium at 6% is $9,631/ year
2. Numbers rounded for illustrative purposes. IUL premium at 7.5% is $7,542.40/ year
3. Numbers rounded for illustrative purposes. GUL premium is $9,731 / year
4. Numbers rounded for illustrative purposes. IUL cash value at 6% over 20 years is $246,568
5. Numbers rounded for illustrative purposes. IUL cash value at 7.5% over 20 years is $200,619
6. Numbers rounded for illustrative purposes. GUL cash value at 20 years $21,517
For Producer Use Only – Not For Dissemination To The Public
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Answer: Elite Index II
 Kevin chooses the upside potential with protection of the Index Universal Life
insurance.
 He purchases an Elite Index II indexed universal life policy from American
General, and opts to include the Accelerated Access Solution allows him to
access income tax-free death benefits if diagnosed with a chronic illness.1,2
 He chooses a $1M death benefit and decides to begin paying premiums at
$7,6003/ year.
 He knows that he can also heavily fund the policy whenever he chooses, to
increase the cash value he accumulates.
1. Based on current federal income tax laws, policy owners should consult a qualified tax advisor.
2. Insured must be certified as chronically ill by a licensed healthcare provider and meet all eligibility requirements.
3. Numbers rounded for illustrative purposes. IUL premium at 7.5% is $7,542.40/ year
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A Policy with Flexibility
 Kevin enjoys fairly good growth in the market and accesses cash to help pay
for the college education for his sons.
 At age 75, Kevin has a stroke which leaves him requiring assistance and
decides to exercise his Accelerated Access Solution, through which he is able
to accelerate up to 50% of his death benefit.
 This benefit helps them pay for modifications needed to their home due to his
stroke without reducing their retirement portfolio substantially.
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For Producer Use Only – Not For Dissemination To The Public
Questions
Policies issued by: American General Life Insurance Company (AGL), 2727-A Allen Parkway, Houston, Texas 77019. Policy
Form Number 13717; Policy Form Number 13717N; Accelerated Access Solution (Chronic illness accelerated death benefit rider)
form number ICC13600. The underwriting risks, financial and contractual obligations and support functions associated with the
products issued by AGL are its responsibility. Guarantees are subject to the claims-paying ability of the issuing insurance company.
AGL does not solicit business in the state of New York. AGL is a member company of American International Group Inc., (AIG). AIG
does not underwrite any policy described herein. Policies and riders not available in all states. These product specifications are not
intended to be all-inclusive of product information. State variations may apply.
Please refer to the policy for complete details.
© 2014. All rights reserved
For Producer Use Only – Not For Dissemination To The Public
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American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries.. AIG companies serve commercial, institutional, and individual
customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the
United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.
Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig | Twitter: @AIG_LatestNews | LinkedIn: http://www.linkedin.com/company/aig
AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our
website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries, and
coverage is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines
insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.
The S&P 500 (the “Index”) is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and has been licensed for use by [Licensee]. Standard & Poor’s® and S&P® are registered trademarks of
Standard & Poor’s Financial Services LLC (“S&P”). These trademarks have been licensed to SPDJI and sublicensed for certain purposes to [Licensee]. The [Product] is not sponsored, endorsed, sold or
promoted by SPDJI, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of paying premiums for the [Product(s)] nor do they have any liability for
any errors, omissions, or interruptions of the Index.