Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Creating an inheritance with tax-efficient gifts Private Split Dollar

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Disclosures  The Voya™ Life Companies and their agents and representatives do not give tax or legal advice. This information is general in nature and not comprehensive, the applicable laws change frequently and the strategies suggested may not be suitable for everyone. You should seek advice from your tax and legal advisors regarding your individual situation.  These materials are not intended to and cannot be used to avoid tax penalties and they were prepared to support the promotion or marketing of the matter addressed in this document. Each taxpayer should seek advice from an independent tax advisor.  Life insurance products are issued by ReliaStar Life Insurance Company (Minneapolis, MN), ReliaStar Life Insurance Company of New York (Woodbury, NY) and Security Life of Denver Insurance Company (Denver, CO). Within the state of New York, only ReliaStar Life Insurance Company of New York is admitted and its products issued. All companies are members of the Voya™ family of companies.  All guarantees are based on the financial strength and claims paying ability of the issuing insurance company, who is solely responsible for all obligations under its policies.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN A question  Are you planning to leave an inheritance to your children or grandchildren?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN A question  Are you planning to leave an inheritance to your children or grandchildren?  For many people, the answer is: “It Depends!”

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN “It Depends!”  Many things are uncertain: –How many years you will be retired –Your level of expenses –Your investment returns –The level of inflation  Will there be anything left to pass on?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  You’ve planned for your retirement.  Between your savings, investments, pension and Social Security, you believe you will be financially secure.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  You want to pass on your extra wealth to your children.  But not at the expense of reducing your lifestyle or becoming poor.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Is there a viable way to create an inheritance for your children without putting your own financial security at risk?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Yes! Private Split Dollar could help you meet both objectives.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN  Private Split Dollar is a strategy that uses a life insurance policy to potentially increase the inheritance you may pass on to your children.  The policy is generally owned in an irrevocable life insurance trust (ILIT); you provide funds to pay the premiums but reserve the right to be repaid the greater of the premiums paid or the policy cash values. What is Private Split Dollar?

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Why use Life Insurance?  Life insurance can be an efficient way to transfer assets to younger family members for two reasons:

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Why use Life Insurance?  Life insurance can be an efficient way to transfer assets to younger family members for two important reasons:  Reason #1 — Potential For Growth –Gross policy death benefits always exceed the total premiums paid. –The difference between total premiums and policy death benefits represents additional assets that may be paid to policy beneficiaries.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Why use Life Insurance?  Life insurance can be an efficient way to transfer assets to younger family members for two important reasons:  Reason #1 — Potential For Growth –Gross policy death benefits always exceed the total premiums paid. –The difference between total premiums and policy death benefits represents additional assets that may be paid to policy beneficiaries.  Reason #2 — Tax Benefits –Life insurance death benefits are generally income tax free. –Policy death benefits may be structured to avoid estate taxes.* *Proceeds from an insurance policy are generally income tax free, and if properly structured, may also be free from estate tax.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN How does Private Split Dollar work? The Private Split Dollar has five steps: 1.Create an ILIT.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN How does Private Split Dollar work? The Private Split Dollar has five steps: 1.Create an ILIT. 2.The Trustee of your ILIT purchases a life insurance policy insuring your life.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN How does Private Split Dollar work? The Private Split Dollar has five steps: 1.Create an ILIT. 2.The Trustee of your ILIT purchases a life insurance policy insuring your life. 3.You enter into a split dollar agreement with the trustee that allows termination at any time.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN How does Private Split Dollar work? The Private Split Dollar has five steps: 1.Create an ILIT. 2.The Trustee of your ILIT purchases a life insurance policy insuring your life. 3.You enter into a split dollar agreement with the trustee. 4.You are deemed to make an annual gift to the beneficiaries of the ILIT of the value of the life insurance protection.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN How does Private Split Dollar work? The Private Split Dollar has five steps: 1.Create an ILIT. 2.The Trustee of your ILIT purchases a life insurance policy insuring your life. 3.You enter into a split dollar agreement with the trustee. 4.You are deemed to make an annual gift to the beneficiaries of ILIT of the value of the life insurance protection. 5.At your death your estate is repaid the greater of the premiums or cash value; the remaining death benefits belong to the trust.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Some possible advantages  Policy premiums death benefits are generally paid out income tax free.  You retain some control; if your circumstances or objectives change, the split dollar agreement could be terminated.  Using the value of the life insurance protection to measure the gift may be advantageous: –This value may be less than the policy premiums.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Some of the possible disadvantages  You pay the expenses of establishing both the ILIT and the split dollar agreement.  The total premiums paid or policy cash value (which ever is greater) on the date of death is taxed in your estate.  The value of your gift of life insurance protection increases each year.  If the policy is a survivorship policy, the value of the gift of life insurance protection may increase significantly after the death of the first insured.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Private Split Dollar in action: Joe & Paula Brown*  Joe and Paula Brown are both age 70 and in standard health; they have five children, and a $4 million net worth.  They aren’t sure how much money they will need for the rest of their lives.  They are willing to use some of their money to increase the inheritance they pass on to their children provided they can get some of their money back if they ever need it. * The hypothetical results are for illustrative purposes only and should not be deemed a representation of past or future results. This example does not represent any specific product, nor does it reflect sales charges or other expenses that may be required.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Joe & Paula Brown  The Browns have their attorney draft an irrevocable life insurance trust (“ILIT”).

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Joe & Paula Brown  The Browns have their attorney draft an irrevocable life insurance trust (“ILIT”).  The ILIT purchases a $3,000,000 survivorship life insurance policy insuring both Joe and Paula.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Joe & Paula Brown  The Browns have their attorney draft an irrevocable life insurance trust (“ILIT”).  The ILIT purchases a $3,000,000 survivorship life insurance policy insuring both Joe and Paula.  Paula and the trustee enter into a private split dollar agreement: –Paula will pay the $60,000 annual premiums –Paula will be able to recover the greater of the premiums paid or the policy’s cash value when the arrangement terminates.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Joe & Paula Brown  The Browns have their attorney draft an irrevocable life insurance trust (“ILIT”).  The ILIT purchases a $3,000,000 survivorship life insurance policy insuring both Joe and Paula.  Paula and the trustee enter into a private split dollar agreement: –Paula will pay the $60,000 annual premiums –Paula will be able to recover the greater of the premiums paid or the policy’s cash value when the arrangement terminates.  Each year Paula treats the value of the ILIT’s life insurance protection as a gift to trust’s beneficiaries.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Joe & Paula Brown  The Browns have their attorney draft an irrevocable life insurance trust (“ILIT”).  The ILIT purchases a $3,000,000 survivorship life insurance policy insuring both Joe and Paula.  Paula and the trustee enter into a private split dollar agreement: –Paula will pay the $60,000 annual premiums –Paula will be able to recover the greater of the premiums paid or the policy’s cash value.  Each year Paula treats the value of the ILIT’s life insurance protection as a gift to trust’s beneficiaries.  After 10 years Joe dies; the value of the life insurance protection gift increases.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Joe & Paula Brown  The Browns have their attorney draft an irrevocable life insurance trust (“ILIT”).  The ILIT purchases a $3,000,000 survivorship life insurance policy insuring both Joe and Paula.  Paula and the trustee enter into a private split dollar agreement: –Paula will pay the $60,000 annual premiums –Paula will be able to recover the greater of the premiums paid or the policy’s cash value.  Each year Paula treats the value of the ILIT’s life insurance protection as a gift to trust’s beneficiaries.  After 10 years Joe dies; the value of the life insurance protection increases.  5 years later Paula dies; her estate receives $900,000 because policy cash values are less the premiums she has paid at the time of her death; the ILIT retains the remaining $2,100,000 death benefits.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Joe & Paula Brown What Joe & Paula accomplished:  Premium payments were leveraged into $3,000,000 of life insurance death benefits.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Joe & Paula Brown What Joe & Paula accomplished:  Premium payments were leveraged into $3,000,000 of life insurance death benefits.  Paula retained the ability to recover some of the funds she advanced to the trust for premium payments.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Joe & Paula Brown What Joe & Paula accomplished:  Premium payments were leveraged into $3,000,000 of life insurance death benefits.  Paula retained the ability to recover some of the funds she advanced to the trust for premium payments.  The $3,000,000 death benefit was generally paid free of income taxes.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Joe & Paula Brown What Joe & Paula accomplished:  Premium payments were leveraged into $3,000,000 of life insurance death benefits.  Paula retained the ability to recover some of the funds she advanced to the trust for premium payments.  The $3,000,000 death benefit was generally paid free of income taxes.  Only the $900,000 in premium payments was included in Paula’s estate; the remaining $2,100,000 was estate tax free (assuming the arrangement was properly structured).

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Private Split Dollar  Private Split Dollar lets you use life insurance to potentially create or increase the amount you pass on to younger family members while retaining some control over your money.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Private Split Dollar  Private Split Dollar lets you use life insurance to potentially create or increase the amount you pass on to younger family members while retaining some control over your money.  Gross life insurance death benefits are always larger than the premiums paid and they can have valuable tax advantages: –Generally income tax free –Estate tax free (when properly structured).

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Private Split Dollar  Private Split Dollar lets you use life insurance to potentially create or increase the amount you pass on to younger family members while retaining some control over your money.  Gross life insurance death benefits are always larger than the premiums paid and they can have valuable tax advantages: –Generally income tax free –Estate tax free (when properly structured).  Private Split Dollar may give you the flexibility to change your mind and recover some of the funds used to pay premiums if your objectives or circumstances change.

Do not put content on the brand signature area ©2014 Voya Services Company. All rights reserved. CN Your Voya representative can show how this idea might work in your situation. Ask for a proposal customized to fit your situation.