Transcript Slide 1

Introducing the
Elite Survivor Index® II
Survivorship policy with flexibility, accumulation potential and protection
Presented by…
FOR FINANCIAL PROFESSIONAL USE ONLY-NOT FOR PUBLIC DISTRIBUTION
Disclaimer
 The information presented herein is not a comprehensive analysis of the
topic presented, and the viewer should consult tax and legal advisors to
understand all the ramifications of the topics discussed.
 This information is general in nature and may be subject to change. The
Company, its financial professionals and other representatives are not
authorized to give legal, tax or accounting advice. Applicable laws and
regulations are complex and subject to change. Any tax statements in this
material are not intended to suggest the avoidance of U.S. federal, state or
local tax penalties. For advice concerning your situation, consult your
professional attorney, tax advisor or accountant.
 To ensure compliance with requirements imposed by U.S. Treasury
Regulations, we inform you that any tax advice contained in this presentation
(including any attachments) is not intended or written to be used, and cannot
be used, for the purpose of (i) avoiding penalties under the Internal Revenue
Code or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed herein.
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Agenda
 What is Survivorship Life Insurance
 Elite Survivor Index II Product Overview
– Caps, Pars, Loans, Charges, Riders
 Estate Planning Sales Concept
 RetireStronger.com
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What is Survivorship Life Insurance?
This type of life insurance is a single policy that
covers two lives.
It pays the death benefit after both of the people
insured have passed away and is typically more
affordable than purchasing two individual
policies.
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What is Survivorship Life Insurance?
 Life insurance is usually the least expensive method for
providing cash for the payment of estate taxes.
 Since 1981, the law allows one spouse to transfer all their
property to the other spouse at death tax free.1
 This is the “unlimited marital deduction.”
 If there is an estate tax due, it is not due until the surviving
spouse dies.
1Based
on current federal tax law subject to certain restrictions.
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What is Survivorship Life Insurance?
 Life insurance companies
designed the survivorship life
insurance contract.
 Since the premium is lower, it
can be an even better solution
than a policy insuring only one
person.
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Introducing…
Elite Survivor Index II
Survivorship index
universal life insurance
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Elite Survivor Index II
 Cost-effective protection, flexibility and choice with upside potential.
 Elite Survivor Index II universal life insurance provides affordable last
survivor death benefit protection plus the opportunity to build cash
value that can be accessed in the future.
 Unique survivorship coverage can assist in a variety of needs:
– Estate Planning
– Wealth Transfer
– Charitable Gifts
– Key Person Coverage for Businesses
– Lifetime Support for Special Needs Children
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Target Market
 Clients looking for survivorship index universal life
insurance can fall into several categories:
– Related business partners
– Non-related business partners
– Couples who need tax-advantaged supplemental retirement income
– Grandparents who want to leave a legacy for a grandchild
– Couples with children from previous marriages
– Couples with special needs children
– Same-gender couples
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Key Benefits
 Competitively priced, joint and last survivor fixed index universal life
protection for estate and business needs
New
 Higher upside potential for growth
– 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 if the market performs well
 New Choice Loan option – allows the client the ability to access their
funds while they remain eligible for index interest
 Death Benefit Guarantee for 20 years or to age 80, whichever comes
first
*Rates as of 06/02/2014
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Product Highlights
20-90
20-80 Preferred Plus No Tobacco
Issue Ages
Minimum Death Benefit
Monthly Guarantee Premium
Provision (MGP)
Death Benefit Options
$250,000
A policy will not terminate up to 20
years from the issue date or age 80,
whichever comes first, based on the
age of the younger insured. Not to be
less than 5 years.
Option 1 (Level)
Option 2 (Increasing)
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Product Highlights
Percentage of Premium Load
Monthly Administration Fee
Monthly Expense Charge
Cost of Insurance
Current Charges are:
Years 1-5: 12%
Years 6-10: 7%
Years 11+: 5%
Charges are subject to change, but
cannot exceed 12% in any year.
$10.00
Five-year monthly expense charge
per $1,000 of base coverage,
including increases in base coverage
Based on the Net Amount at Risk
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Product Highlights
Four-Year Term Rider
Provides last survivor term insurance coverage
during the first four policy years.
The additional death benefit is equal to 125
percent of the policy’s initial specified amount.
This rider can only be added at issue and
terminates after four years.
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Product Highlights
Overloan Protection Rider
Available for new issues and inforce
policies.
Rider guarantees that base policy will
not lapse due to an outstanding loan
Rider must be activated in writing
once the loan balance exceeds 94%
of cash value.
A one-time charge will be deducted
from the accumulation value, and
future monthly deduction will be
waived.
Rider benefit can be activated at later
of attained age 75 or 15th policy
anniversary.
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Product Highlights
Maturity Extension Option
This allows the policy owner to elect
to extend coverage beyond the
original maturity date.
If elected, then starting on the original
maturity date:
The policy death benefit is set to
equal the death benefit in effect
immediately prior to the original
maturity date.
No monthly deduction will be made
No new premium payments will be
accepted.
Policies may be subject to tax consequences when continued beyond the maturity date.
The policy may not qualify as life insurance under the Internal Revenue Code after age 100.
Policy owners should consult a qualified tax advisor before electing this option.
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Current Rates
Elite Survivor Index II
Rate
Declared Interest Account
3.45%
Minimum Guarantee
2.00%
Cap Rate Index Account
Cap Rate
13.00%
Illustrated Rate
7.90%
Minimum Guarantee
0.25%
Participation Rate Index Account
Participation Rate
70.00%
Illustrated Rate
8.58%
Minimum Guarantee
0.25%
Rates as of 06/02/2014
Rates are subject to change at any time.
Rates do not vary by underwriting classification.
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1 Year Point-to-Point Cap Rate
This hypothetical example demonstrates how index interest is calculated and is for illustrative purposes only.
It does not reflect current interest crediting rates, cap rates or participation rates.
It does not reflect the return of any investment and is not a guarantee of future income.
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1 Year Point-to-Point Participation Rate
This hypothetical example demonstrates how index interest is calculated and is for illustrative purposes only.
It does not reflect current interest crediting rates, cap rates or participation rates.
It does not reflect the return of any investment and is not a guarantee of future income.
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Historical Perspective
Source: Elite Survivor Index II Agent Brochure
This hypothetical example
demonstrates how index interest is
calculated and is for illustrative
purposes only. It does not reflect
current interest crediting rates, cap
rates or participation rates.
It does not reflect the return of any
investment and is not a guarantee of
future income.
The table displays some Historical Values for the S&P 500. However, past Index performance does not represent future performance
of the S&P 500, nor past or future index interest-crediting rates of Elite Survivor Index II.
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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.
*When a Preferred Loan is made, loan interest to the next policy anniversary
will accrue daily at an annual effective rate of not less than 2.91% nor more
than 3.15%. (This is equivalent to an effective rate of not less than 3.0% nor
more than 3.25% respectively, paid at the end of the policy year.)
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Loan Options
Choice
 Choice Loans
– Available whenever there is an amount of cash value accumulation in the
policy
New
– Fixed rate of 6.00%*
– Policy values in these accounts continue to participate in the index account,
allowing continued access to upside potential but also increased risk if the
rate credited is less than the loan interest rate
*Rate current as of 6/10/2014. Guaranteed max rate 7.5%
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Estate Planning with
Survivorship Life Insurance
FOR FINANCIAL PROFESSIONAL USE ONLY-NOT FOR PUBLIC DISTRIBUTION
Liquidity to Pay Estate Taxes*
 Liquidity
 Some Estates are Liquid Enough to Pay Estate Taxes Owed without
Selling Assets
 Other Estates will need to Sell Assets to Raise Liquidity within 9
months . . . Regardless of the Current Market for those Assets
 Sometimes forced-sales result in Pennies on the Dollar
 Many Large Estates Prefund the Estate Tax Liability with Life
Insurance
*This information is general in nature and may be subject to change. The Company, its financial
professionals and other representatives are not authorized to give legal, tax or accounting advice.
Applicable laws and regulations are complex and subject to change. Any tax statements in this material are
not intended to suggest the avoidance of U.S. federal, state or local tax penalties. For advice concerning
your situation, consult your professional attorney, tax advisor or accountant.
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FOR FINANCIAL PROFESSIONAL USE ONLY-NOT FOR PUBLIC DISTRIBUTION
Why Life Insurance
Tax Benefits
–Income Tax Deferred Accumulation during Life
–Income Tax Free Proceeds at Death of Insured
Liquidity
–Paid in Cash
Timing
–Paid when Needed
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Life Insurance Trust
 Life Policy Proceeds Included in Estate if it is Personally
Owned
 Life Insurance Trust Typically Established to be Owner &
Beneficiary of Life Policy
 Children, Grandchildren, etc. are Beneficiaries of Life
Insurance Trust
 Life Insurance Trust Provides Liquidity that can be used
for Estate Taxes
 Does not pay tax directly but can loan funds to estate for payment
or buy assets from estate
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Benefits of an Irrevocable Life
Insurance Trust (ILIT)
Life insurance premiums (annual exclusion gifts)
reduce the estate (Crummy Notice/Present Interest Gift)
Life insurance can still be used to provide
source of estate tax liquidity
Long term control of proceeds can be protected
for your heirs
All life insurance death proceeds OUTSIDE of
your estate*
*Assuming the trust is properly structured. This is not estate planning or tax advice. Clients should contact a qualified estate planner or tax advisor.
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Policies Transferred to
Irrevocable Life Insurance Trust (ILIT)
New policies owned by ILIT are estate tax-free
from policy inception
Existing policies transferred are estate tax-free
after 3 years
 provided there are no retained incidents of ownership
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Benefits of an Irrevocable Life
Insurance Trust (ILIT)
$2,000,000 Life insurance in an ILIT
 Means – a net of $2,000,000 to family
$2,000,000 policy owned by the insured
 Means – a net of $2,000,000 MINUS the estate taxes
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Where Are We Today?
2014:
Estate, Gift and Generation
Skipping Tax
$5.34 Million Exemption
40% top Tax Bracket
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Estate Planning with
Survivorship Life Insurance
A Case Study
Case Study presented is a hypothetical representation for illustrative purposes only.
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The Situation…
 David and Katherine are in their early sixties and they own several
convenience stores.
 Their son, Paul, helps run the business and has for many years.
 Their daughter, Stacy, is a registered nurse and works in the local
hospital.
 Both Paul and Stacy have two children of their own.
 They are a close-knit family and enjoy spending lots of time together.
David & Katherine
Paul
Stacy
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The Situation…
 David and Katherine are currently healthy but want to start estate
planning so their affairs are in order for their children when they pass
on.
 The bulk of their estate consists of the business, approximately $7
million of their $12 million estate.
 The couple expects to leave the business to Paul at the second
death, and the balance of their assets would be left to Stacy.
$7M
David & Katherine
$5M
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The Situation…
 Assuming a 4% growth rate on all assets, the couple calculates the
potential future values of their assets at nearly $18 million in 10 years,
with $10.4 million of that attributed to the business value.
 At that time, assuming the Federal exemption is adjusted at a rate of
2% per year, the estate tax bill for the couple would be nearly $2.4
million.
 Currently there is no liquidity in the estate to pay this tax bill.
 They are considering life insurance as an addition to their portfolio
and are interested in a flexible policy that has upside potential for
policy growth with tax efficiency to help with wealth transfer.
$10.4M
$7.6M
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The Solution…
 David and Katherine meet with a financial advisor who explains the
benefits of Survivorship Index Universal Life insurance – costeffective protection, flexibility and choice with upside potential.
 They decide that Elite Survivor Index II is a great fit for their needs
and set up an Irrevocable Life Insurance Trust (ILIT) to purchase and
own a $5 million policy from American General.
 They allocate $2.4 million for the estate tax bill and they are planning
to leave the balance to their daughter Stacy to equalize the
inheritance.
$5M DB
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The Solution…
 They choose to allocate their funds to a Cap Rate Index Account,
which is an annual point-to-point fixed index interest account based
on the S&P 500 with an index cap of 13%.
 $41,759 premium per year and will guarantee the death benefit until
David is age 81
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Fast Forward…
Elite Index Survivor II gives David and
Katherine peace of mind that their business
will stay in the family and their grandchildren
will enjoy the benefits of their hard-earned
estate after they pass away.
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More Information…
www.retirestronger.com
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Questions
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Policies issued by: American General Life Insurance Company (AGL), Policy Form Number 14220,
ICC14-14220, Rider For Numbers Overloan Protection Rider Form Number 07620JT; Annual Pointto-Point Fixed Index Interest Account with Participation Rate Rider Form Numbers 12261, ICC1212261; Annual Point-to-Point Fixed Index Interest Account with Index Cap Rider Form Numbers
12262, ICC12-12262; Four-Year Term Rider Form Number 01904. Issuing company AGL is
responsible for financial obligations of insurance products and is a member of American
International Group, Inc. (AIG). AGL does not solicit business in the state of New York.
Guarantees are subject to the claims-paying ability of the issuing company. 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.
AIG solely the product provider our employees, agents, or producers do not provide legal, financial
or tax advise. Producer should recommend client consult their tax and legal advisors.
FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC.
AGLC107839
© 2014. All rights reserved.
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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
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 AIG. 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 AIG. The Elite Survivor Index II 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 Elite Survivor
Index II nor do they have any liability for any errors, omissions, or interruptions of the Index.