Protection. Accumulation. Taxes. Health. With Marty Ruby, FSA

Martin H. Ruby, FSA  Founded Stonewood Financial Solutions in 2001  Decades of experience developing, pricing and selling insurance and annuity products  Former CEO of Integrity Life and Senior Executive at Capital Holding (now part of AEGON)  Developed one of the first Universal Life Insurance product brought to market.

Founding Vision Our company exists to help people safely protect and grow their wealth – in ways they’ve never imagined before. Stonewood Financial Solutions was founded to bring actuarial expertise to individual clients.

The Challenge How to save long term when the odds are stacked against you Savers in their 20s, 30s, 40s and 50s face:  Volatile stock market  Low interest rates  Few pensions left  Low or no employer contributions to retirement savings  Questions about Social Security  Insecurity about tax environment  Increasing longevity

DEMOGRAPHICS: Age 25 to 65 Annual household income of $100,000 a year + Ability to contribute a minimum of $10,000 a year (or $5,000 per individual for couples) Low or no corporate 401(k) match Could be your existing annuity client or the adult- age children of your existing annuity clients. IDENTIFIERS: Wants to save long-term: for funds not needed in the next 10 to 15 years Frustrated or frightened by high levels of market volatility Likely to make more income in the future Concerned about tax rates at time of retirement The Prospect

401(k)Roth 401(k)PATH / IUL Growth Many options, typically mutual funds; account value can go down Indexing credits a portion of the market’s rise; protected by floor of zero Taxes Paid DeferredUpfront Taxes On Account Growth Entire account valueNoneNone (Assuming Policy Loan) Penalties on funds withdrawn before 59 ½ 10% tax penalty10% tax penalty on earnings onlyNo Mandatory withdrawals at 70 ½ YesNo Money borrowed or withdrawn from account Can not be put back in Can be put back in by repaying policy loan Limits on annual contributions Yes No Death benefit Account value Death benefit above account value Expenses and fees 1%- 2% per year.35% per year over thirty years (1.15%- 1.3% if COI included) The Options For agent and administrator use only. Not for use with clients.

The Solution Engineer IUL to look like a retirement savings plan Deposit funds during working years based on target annual savings rate Achieve meaningful accumulation through the “Power of Indexing” Access funds tax free in retirement through zero- net-cost loans Have flexibility on timing and size of inflow and outflow patterns Security through downside guarantees Death benefit paid tax free to complete the plan

Indexed Universal Life The most common form of permanent life insurance. Premium paid, interest credited, charges deducted annually, grows year after year. How interest is credited to the policy: your account value can hold steady or ‘ratchet’ up. It cannot go down.

Net-Zero-Cost Loans Cash values are accessed through net-zero-cost loans. Zero net interest cost on amount borrowed.* Death benefit reduced dollar-for-dollar by amount borrowed Client is borrowing against future death benefit: *For loans after fifth policy year $2,000,000 death benefit -$50,000 loan ________________ New death benefit amount of $1,950,000

Flexibility Annual premium can be adjusted: For a limited time Reduced premium for a year or series of years. Can overfund in future years to make up the difference, but not required. Permanently May require rebalancing the policy Can access funds at any time: No penalties for withdrawals before age 59½ NO required minimum distributions at age 70½

Considerations When Structuring the Policy #1: Adjustments for initial deposits above planned annual deposit levels.  Power future growth by injecting extra funds early on  Existing assets  1035 exchange for life insurance policy #2: Rated cases  Strategy works well with rated policies  IRR only slightly impacted

Three Ways to Use This Strategy #1: Retirement Savings For individuals and couples age 25 to 50, this solution can be used in place of a traditional IRA or 401(k) (above any employer 401(k) match). #2 Deferred Compensation For high-income individuals up to age 55, this solution can be used to shelter future earnings from high tax rates. #3 Tax Planning For high-income couples up to mid-60s, this solution can be used to access tax-free assets during retirement.

The Stonewood Advantage We’ve developed the perfect balance that meets the needs of agents, clients and the IRS. Structure policies to provide attractive income levels and IRRs Analyze various IRS tests to optimize benefits Product chosen from in-depth analysis of all IUL products in the market Product chosen for specific accumulation needs Ability to structure complex and challenging cases

The Sales Process Three Meetings - Meeting 1: Educate - Meeting 2: Propose - Meeting 3: Close Sales cycle takes approximately 40 to 60 days Rushing the sales process tends to backfire. Each meeting is important for building trust, understanding and confidence.

Meeting #1: Educate Get to know the client Explain strategy and benefits Offer to prepare a custom proposal for the client

Meeting #2: Propose Review strategy features and benefits Share custom proposal Complete application and set up underwriting

The values presented in this table are based on a North American Rapid Builder IUL Supplemental IRR Illustration dated 2/19/13. The surrender value IRR is the annual interest that each year’s cumulative premiums would have to earn in order to accumulate the surrender value shown at the end of the applicable year. The death benefit IRR is the annual interest rate that each year’s cumulative premiums would have to earn in order to accumulate the death benefit shown at the end of the applicable year. This supplemental illustration is not a policy contract and must be accompanied by the basic illustration. Refer to the basic illustration for guaranteed elements and other important information. The illustrated values are not guaranteed. The illustration assumes that the currently non-guaranteed elements used will not change for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown. Non-guaranteed elements are not guaranteed. This supplemental illustration includes the same premium outlay and non-guaranteed elements used in the basic illustration. Retirement Savings

The values presented in this table are based on a North American Rapid Builder IUL Supplemental IRR Illustration dated 2/19/13. The surrender value IRR is the annual interest that each year’s cumulative premiums would have to earn in order to accumulate the surrender value shown at the end of the applicable year. The death benefit IRR is the annual interest rate that each year’s cumulative premiums would have to earn in order to accumulate the death benefit shown at the end of the applicable year. This supplemental illustration is not a policy contract and must be accompanied by the basic illustration. Refer to the basic illustration for guaranteed elements and other important information. The illustrated values are not guaranteed. The illustration assumes that the currently non-guaranteed elements used will not change for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown. Non-guaranteed elements are not guaranteed. This supplemental illustration includes the same premium outlay and non-guaranteed elements used in the basic illustration.

Deferred Compensation

The values presented in this table are based on a North American Rapid Builder IUL Supplemental IRR Illustration dated 2/19/13. The surrender value IRR is the annual interest that each year’s cumulative premiums would have to earn in order to accumulate the surrender value shown at the end of the applicable year. The death benefit IRR is the annual interest rate that each year’s cumulative premiums would have to earn in order to accumulate the death benefit shown at the end of the applicable year. This supplemental illustration is not a policy contract and must be accompanied by the basic illustration. Refer to the basic illustration for guaranteed elements and other important information. The illustrated values are not guaranteed. The illustration assumes that the currently non-guaranteed elements used will not change for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown. Non-guaranteed elements are not guaranteed. This supplemental illustration includes the same premium outlay and non-guaranteed elements used in the basic illustration.

Tax Planning

Meeting #3: Close Show actual policy benefits based on underwriting outcome Collect check, make arrangements for money transfer, or set up monthly auto-debit Deliver policy

Support Materials For the Agent: Training Webinar and Power Point Training Manual Sales script Client in-take form Detailed custom reports for clients Sample prospecting letters For the Client: Solution brochure and overview Client Seminar Sample client case studies Indexing chart Custom proposal: overview, FAQs, illustration E-books for lead generation and prospect support For agent and administrator use only. Not for use with clients.

Here To Help You Martin H. Ruby, FSA CEO Becky Ruby Swansburg Chief Marketing Officer Dennis L. Carr, FSA Chief Actuarial Officer Neil Wilding Executive Vice President

Next Steps Contact Jenny to enroll Access training guide and materials binder Schedule 1:1 with Marty Contact Mary Semenza (502) or

DISCUSSION

Protection. Accumulation. Taxes. Health. With Marty Ruby, FSA