Transcript Guarantees: Death, Taxes Lifetime Income

Guarantees: Death, Taxes
Lifetime Income
Wade Eldridge
Marketing Director
American Equity Investment Life Insurance
Wade Eldridge
Marketing DirectorNorthwest Region
American Equity
Investment Life
Insurance
AMERICAN EQUITY
EVOLUTION
•
•
•
•
•
•
0 to $22.1 Billion in Assets (03/31/11)
0 to 37,000 Agents (03/31/11)
0 to over 375,000 policyholders (03/31/11)
1 to 50 States
#3 All Time Indexed Annuity Sales
#1 in Service
*Advantage Compendium
EFFICIENCY
• Top 5 most efficient companies in the Life & Health
Insurance Industry as ranked by Revenue Per Employee
(RPE):
#1 American Equity $3.02M
#2 Phoenix $2.89M
#3 Presidential Life $2.75M
#4 Aflac $2.49M
#5 National Western $1.86M
Source: Comtex News Network 12.29.10
SOLVENCY: AEL vs. Top 25
COMPANIES
Solvency: Assets over Liabilities indicates financial soundness and a
company’s ability to meet all obligations as they come due.
$110
$109
$108
$107
$106
$105
$104
$103
$102
$101
$100
Assets for each $100 of
Liabilities as of Dec. 31,
2010.
Am
Av
No
Al
Am
Me
Na
Pr
lst
ud
g.
r
t
t
eri
t
i
e
r
hw
on
op
ate
ric
en
25
ca
wi
e
oli
an
ti a
To
nE
s
Ins
de
t
t
lF
e
F
a
p
qu
rn
.C
nL
am
Mu
Lif
i na
ity
M
o
ife
ily
eC
t
nc
.
u
u
Inv
al
tua
L
ial
I
o
n
i
Ins
's.
s.
fe
.L
l
I nc
L
Co
As
i fe
.C
ife
.
s
o.
Ins
Ins .
ur
a
.C
.C
nc
o.
o.
...
Source: 2011 Standard Analytical Service, 2011 Independent Comparative Report
SOLVENCY: AEL vs. PEER
COMPANIES
$108
$107
$106
Assets for each
$100 of Liabilities
as of Dec. 31,
2010.
$105
$104
$103
$102
$101
$100
.
p
o.
o.
o.
C
ou
C
Co
C
r
.
e
y
f
s
G
i
it
n
In
Ins
oo
i al
nu
dL
eI
e
e
f
f
c
C
f
n
n
i
i
i
n
.
a
L
.L
eL
dA
ina
Ins
al
ity
e
n
nv
t
F
n
e
u
I
a
o
Lif
nn
ran
ity
oln
ife
ati
a
A
z
u
c
L
N
u
n
n
q
A
a
G
Li
nd
llia
&
US
nE
viv
a
l
A
a
A
y
d
G
c
t
IN
Mi
eri
e li
d
i
m
F
A
o
sC
.
.
.A
fN
Source: Best’s Insurance Reports – Life Health, US 2011 Edition (2010 Annual Data)
CAPITAL COMMITMENT
Total Statutory Capital and Surplus*
$1.5
Billion
1600
$1.3
Billion
1400
Millions
1200
$1.0
$1.0
$1.0
Billion Billion Billion
1000
800
$636
Million
$713
Million
600
400
200
$404
Million
$247
$194
Million Million
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
*Includes AVR and IMR
GOLD EAGLE MEMBERSHIP
AEL Stock Options
YOUR PRODUCTION
OUR INVESTMENT IN YOU AND YOUR BUSINESS
2011 Paid Production*
AEL Stock Options
Beginning with $1,000,000
Base Stock
Options
Bonus Stock
Options
Total Stock
Options
$1,000,000 - $1,999,999
250 – 700
0
250 - 700
$2,000,000 - $2,999,999
750 – 1,200
100
850 – 1,300
$5,000,000 - $5,999,999
2,250 – 2,700
1,500
3,750 – 4,200
$7,500,000 - $7,999,999
3,500 – 3,700
3,200
6,700 – 6,900
$10,000,000 - $10,999,999
4,750 – 5,200
5,000
9,750 – 10,200
*Excludes Guarantee Series (SPDA-MYGA) and Internal Transfers
GOLD EAGLE MEMBERSHIP
Gold Eagle Money
YOUR
PRODUCTION
OUR INVESTMENT IN YOU AND YOUR BUSINESS
2011 Paid Production*
Beginning with $1,000,000
Basis Points
Multiplier
Available Gold Eagle Money
Earned
$1,000,000 - $1,999,999
16 BP
$1,600 - $3,200
$2,000,000 - $2,999,999
17 BP
$3,400 - $5,100
$3,000,000 - $3,999,999
18 BP
$5,400 - $7,200
$4,000,000 - $4,999,999
19 BP
$7,600 - $9,500
$5,000,000 - $5,999,999
20 BP
$10,000 - $12,000
$6,000,000 - $6,999,999
21 BP
$12,600 - $14,700
$7,000,000 - $7,999,999
22 BP
$15,400 - $17,600
$8,000,000 - $8,999,999
23 BP
$18,400 - $20,700
$9,000,000 - $9,999,999
24 BP
$21,600 - $24,000
$10,000,000 +
25 BP
$25,000 +
*Excludes Guarantee Series (SPDA-MYGA) and Internal Transfers
GOLD EAGLE
MEMBERSHIP
• Member Benefits
– Stock Options
– Gold Eagle Money
– Signature Guarantee Service
• Series 6, 7, 65 or 66
– AEL Fed Ex Rates
– Discounted Dell Computers
– Online Client Statement Access
Lifetime Income Benefit
Rider
(LIBR-2010)
Planning Today to
Supplement the Future
American Equity Investment Life Insurance Company
West Des Moines, Iowa
WE’RE LIVING LONGER
YEAR
LIFE EXPECTANCY
1850
39
1900
47
2006
77.9
In 2000, there were 50,000 people age 100+. In year 2010 it is estimated that
there will be over 131,000 people 100+
85+ year old population is projected to increase by over 43% by 2010 and 70% by
2020
Source: National Center for Health Statistics and the U.S. Bureau of Census
WE’RE LIVING LONGER
• Today’s 65 year old has the
following likelihood of attaining:
Man
Woman
Age 85
45.5%
55.8%
Age 95
7.7%
15.6%
Source: SOA-rp 2000 table
How Does the
Lifetime Income Benefit
Rider Work?
LIFETIME INCOME
BENEFIT RIDER (LIBR-2010)
MGSV
CV
IAV
IAV
Depends on
product
?
5%
No Fee
8%
0.90% Fee
CHOOSE ONE
Greater Of
When you are ready to elect income, the Company will look
back and guarantee you earned at least 5% or 8% on your
Income Account Value (IAV). If CV is larger, your IAV will step
up to the Contract Value.
LIFETIME INCOME BENEFIT RIDER
(LIBR-2010)
•
•
•
•
5% Roll Up – NO FEE – All issue ages
8% Roll Up – Fee 90 bps. Available on ages 50+
Elect 5% or 8% at point of Sale
Fee Calculated on Contract Value
• Many Competitors calculate on Income Account Value
• Fee Deducted from Contract Value
• Most Competitors deduct from Contract Value
FEES MATTER
Hypothetical Example:
Contract Value
$150,000
- $1,500
American Equity:
Contract Value
$150,000
- $1,350
Fee
75 bps
Income Account Value
$200,000
$1,500 (fee =
75bps of $200,000)
Income Account Value
Fee
90 bps
$200,000
$1,350 (fee = 90bps
of $150,000)
In the hypothetical example the fee is calculated off of the Income Account Value but applied to the Contract
Value. The fee calculated off of the IAV is the same % every year.
FEES MATTER
Hypothetical Example:
= Fee
$1,500
$150,000
100 bps*
American Equity:
$1,350
= Fee
$150,000
90 bps
*In the hypothetical example the fee is calculated off of the Income Account Value but applied to the
Contract Value. The fee calculated off of the IAV is the same % every year. When the fee is deducted
from the Contract Value the % may vary each year.
SALES IDEA – TIC TAC TOE
Higher Rate
of Return
Lower
return
CD
Safety of
Premium
INDEX
ANNUITY
Mutual
Fund
Risk of
Principal