Forgotten Asset Class

Types of Life Insurance Term Whole Life Variable Life Indexed Life – Indices like the S&P 500. Participate in gains but if index has a negative performance (like 2008) policy is credited at 0%. Survivorship Life – Estate Planning Universal Life Guaranteed No-Lapse UL (“lifetime term”) Guaranteed Premium & DB to age 121.

Life Insurance Benefits FLEXIBILITY – Ability to adjust premiums and DB’s. Valuable riders such as Guaranteed future purchase options and Long term care benefits. UNLIMITED protection of cash values from lawsuits or judgments (ARIZONA) Cash Values can be accessed TAX-FREE via withdrawals & loans Many new Policies have “wash” or 0% net loans Gains can avoid ANY taxation unless you let policy lapse. No penalty taxes for early withdrawal. Free of federal income, capital gains, AMT, state and income doesn’t trigger taxation of Soc. Security benefits.

Reasons for a Policy Review More Competitive Product Pricing Many newer policies have better Guarantees Older policies needed interest rates to remain much higher than current rates to stay in-force – High incidence of Lapses. Independent review of trust – owned policies showed 86% could be improved with a policy review. Improved Life Expectancy* – Lower Insurance (Mortality Costs) 40 Yr. old Male in 1975 – 68.8 yrs. LE 40 Yr. old Male in 2006 – 75.2 yrs. LE *Source: National Cernter for Health Statistics

Consumer – Friendly Enhancements

Trends in Life Insurance Term Insurance Return of Premium Term Stretch DB payout to beneficiaries rather than lump sum = helps to reduce premium cost EXAMPLE: 50 Yr. Old Male (Preferred N/T) 20 yr. $500K = $1, yr. level - Payout 15 yrs. = $ (28% Lower Premium)

Trends in Life Insurance (pg. 2) Cash Value Insurance Enhancements New popular policies are issued WITHOUT surrender charges. Available on UL/VUL/IUL (Index Life) chassis. Index Life offers upside participation while providing downside protection using popular stock indices like the S&P 500, Hang Seng, Euro Stoxx 50 & World Index. Participate in Index Gains with a CAP but NOT Losses. 100% Participation in the S&P 500 index up to a 16% Cap 140% Participation in the S&P 500 index up to a 14% Cap Advantage of a Lookback – 75% into best performing index, 25% in next best performing index & 0% in the worst performing index. MUCH higher early cash values and in some cases, the 1 st yr. surrender values => premium. Example*: 35 Yr. Old Male Excellent Health $1M DB ($27,500 8 yrs.) ** Old Style – Yr. 1 SURRENDER Value = $3, Yr. 10 Projected Surrender Value = $323,850 ** New-Style – Yr. 1 SURRENDER Value = $27, Yr. 10 Projected Surrender Value = $320,210 * MN Life Eclipse IUL without SVEA Rider

Trends in Life Insurance (pg. 3) LONG TERM CARE riders Popular for insured who doesn’t like to pay premiums and not receive any benefits. Tax-Free Death Benefits & Long Term Care Benefits 90% Mortality Underwriting – possibly a little easier to qualify for some Life + LTC plans. Tax-Free 1035 exchange from existing life policy. Example: 60 Yr. Old Female Good Health ($50K Single Prem.) - Guaranteed Death Benefit of $101,481 - Guaranteed Return of Premium after 3 yrs. - Guaranteed Cash Value - age Guaranteed LTC pool of $$ = $304,443 ($4,228 mo. benefit 72 months) ► LTC $$ available for Home Health, Assisted Living and Nursing Home.

LTC – Facts concerning Women Women have a 10X chance of reaching age 85 than a man. (1) Women need care longer than a man 3.7 yrs. versus 2.2 yrs. (2) Women who live past age 65 50% greater chance of entering a nursing home than a man & (3) Are TWICE as likely to live alone. (1) (1) American Association for Long Term Care Insurance (AALTCI) 2009 (2) National Clearing House for LTC Information, US Dept of Health & Human Services, 11/14/2007 (3) AHIP (America’s Health Insurance Plans Aug. 2007)