AG Secure Lifetime GUL ® Lifestyle Income Solution SM Introducing… FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC.

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Presentation transcript:

AG Secure Lifetime GUL ® Lifestyle Income Solution SM Introducing… FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Long-term protection and maximum flexibility with…  Guaranteed death benefit  Guaranteed access  Guaranteed cash value  Lifestyle Income Solution SM helps protect against outliving retirement income AG Secure Lifetime GUL ® FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 Need the death benefit protection of life insurance  Are age and in reasonably good health  Are risk averse and want strong guarantees  Need to provide cash or replace income following death  Seek a policy that can adapt to changing circumstances  Seek additional protection against outliving income Target Market FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 Create an additional income stream in retirement while maintaining a guaranteed death benefit  Reduce the death benefit and premium while maintaining the original coverage guarantee period  Withdraw cash value from the policy yet still maintain the original coverage guarantee period  Terminate coverage and surrender the policy for cash value  Exchange the policy for one that better suits the current need Optionality SM in Action FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

AG Secure Lifetime GUL ® Creates Options Dial-a-Guarantee Age 95, 100, 121, etc Guaranteed Cash provides flexibility Guaranteed Access to cash without losing guarantee as needs change Unmatched Producer Value High, rolling Targets Standard Plus may create a discount of nearly 15% for some clients 5 FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Face $500K, guaranteed to 121 Annual Premium $9,636 Guaranteed Cash at age 85 3 $77,207 Face $1M, guaranteed to 121 Annual Premium 2 $21,001 Guaranteed Cash at 85 $154,415 AG Secure Lifetime GUL Flexibility & Choice Unique Partial Withdrawal Capability Access Cash and Preserve Death Benefit Guarantee Male, age 65, PNT, guaranteed to % Withdrawal at 85 $77, Not an actual case. Presented for illustrative purposes only. 2. Quoted dated 12/10/2012 for the state of Texas. 3. The reduction in specified amount will be subject to the same guidelines and restrictions as outlined in the policy. The resulting remaining death benefit amount must be no less than $50,000 FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Lifestyle Income Solution SM

 In addition to the valuable protection guarantee that AG Secure Lifetime GUL provides, it can also help protect a client against outliving their retirement income with American General’s Lifestyle Income Solution.  The Lifestyle Income Solution was developed to help preserve the clients standard of living during retirement.  It provides the option to receive a living benefit to help supplement their retirement income. Lifestyle Income Solution SM FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Increased longevity is not just a possibility – statistics show it’s very likely:  In 2050, the number of Americans age 65 and older is projected to be 88.5 million, more than double its projected population of 40.2 million in  For a married couple age 65, there is a 50% chance that at least one spouse will live to 94, and a 10% chance that one will live to The Case… 1 The Next Four Decades, The Older Population in the United States: 2010 to 2050 U.S. Department of Commerce, Economics and Statistics Administration, U.S. CENSUS BUREAU, Issued May 2010, P Prepared by Ernst & Young Insurance and Actuarial Advisory Services practice. The analysis uses the Annuity 2000 mortality table with Scale G2 mortality improvements. FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

The positive aspects of living longer do come with some financial concerns:  61% of Americans surveyed said they were more afraid of outliving their assets than they were of death. 1  48% of Americans ages have no financial plans in place to protect themselves against outliving their assets and the rising cost of healthcare should they live longer than expected. 1 The Case… 1 State of the Insured Retirement Industry: 2012 Recap and a 2013 Outlook, Insured Retirement Institute FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Think about what may contribute to the possibility of outliving your retirement income. Do any of these issues concern you? Credit card debt Historically low interest rates Poorly performing 401(k)s Changes in health insurance Concern Social Security uncertainty Health Care Expenses Insufficient retirement income Stock Market Corrections FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 Issue ages  Minimum Specified Amount $100,000  Maximum Specified Amount $10,000,000  Only available at policy issue  Terminal Illness Rider must also be selected when adding the Lifestyle Income Solution Specifications FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 Minimum Eligibility Period: 15 Years  Have received enough premiums to guarantee the death benefit to age 100  Guaranteed Withdrawal Benefit Percentage: 0.83%  The Benefit will Provide a minimum of 120 Monthly Withdrawal Benefit Payments  There is no indebtedness on the policy  Policy is not a Modified Endowment Contract  No claim is pending as to any accelerated death benefit rider attached to the policy Conditions FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 Female Age 40 PNT  Wants $1,200 a month in LIS benefit at the age of 85  Premium requirement is $2,096 annually  Death Benefit is $400,000  Let’s look at the quotation Example FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

The Calculation $1,200 X 12 = $14,400 X 10 = $144,000 $400,000 DB $144,000 BB = 36% FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

The Calculation FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

The Application Must check and write in the Other Riders/Benefits line “Lifestyle Income Solution” and include the withdrawal benefit percentage in the Amount/Units field. FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC Lifestyle Income Solution 46%

 The owner may request to withdraw less than the full amount but not below $500.  A lesser withdrawal amount could extend the period for which monthly withdrawals can be taken under the rider.  The owner may request a suspension of monthly withdrawal benefits by sending the company a written request.  Withdrawal benefits may be resumed at a later time. Withdrawals FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

The rider will waive the amount necessary to prevent the policy from entering into a grace period beginning on the initial election date for withdrawal benefits and while eligibility requirements under the rider continue to be met. Waiver Benefit FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 If the death benefit under the policy is increased prior to the benefit eligibility date, the withdrawal benefit basis may also be increased subject to the limits in effect at the time of the increase.  If the death benefit under the policy is reduced (due to partial surrenders, requested decrease in specified amount, or accelerated benefit payments), the withdrawal benefit basis will also be reduced. Change in DB Impact FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 You will not be able to run a quote with the Lifestyle Income Solution and illustrate the “Optionality” of taking a normal withdrawal.  The owner/insured will still have that capability but it will not longer be illustratable. Quoting Withdrawals FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Why do better rated clients pay more for the Lifestyle Income Solution? If our underwriters determine that the Insured is in overall good health and/or is a non-user of tobacco and/or otherwise has a reasonable expectation of longer life, the premium for the Lifestyle Income Solution may be higher than the premium for someone whose overall health condition is not as good and/or who uses tobacco because of the greater potential that the policy owner may receive benefits under the Lifestyle Income Solution. Underwriting FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 Case #1  Retirement  Case #2  Taking Withdrawals Early Sales Concepts

Case #1 Retirement

 Paul age 55, plans to retire in about ten years. His 401(k) is expected to generate $2,000 per month for life. Paul estimates he will receive $1,500 per month in Social Security benefits, and he also has $300,000 in a savings account.  He plans to withdraw about $1,500 a month from his savings account which, when combined with social security and his 401(k), should generate an income stream of $5,000 per month. Case #1 FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Case #1 FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Case #1 FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC $400,000 $300,000 $200,000 $100,000 $0 Age 65Age 85Age 95 $490,000 Life Insurance Coverage Income Guaranteed Withdrawal Benefits begin at age 85 Reduction of Death Benefit as Guaranteed Withdrawal Benefits are paid as income Remaining Death Benefit $309,425 $180,575 paid under Lifestyle Income Solution Death at age 95

Case #2 Taking Withdrawals Early

 What if the policyowner insured wants to take the Lifestyle Income Solution withdrawals prior to the target age of 85?  How much more will it cost?  Is it worth it?  Let’s take a look… Case #2 FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

The client…  Jeff is 55 Preferred Non-Tobacco  He is concerned about outliving his retirement nest egg  He has saved money in his 401(k) plan as well as a Roth IRA but he’s concerned it won’t be enough.  So what can Jeff do? Case #2 FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Jeff speaks with his life insurance agent and determines that one solution would be to purchase the AG Secure Lifetime GUL with the Lifestyle Income Solution to protect him from outliving his assets. The life insurance death benefit provides him and his family important protection if Jeff were to die unexpectedly. And with the LIS Jeff knows he has an income stream that he can access in the future guaranteed. Case #2 FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 Male 55 Preferred Non-Tobacco  Death Benefit $1,000,000  Annual Premium to Age 85 $13,167  Lifestyle Income Solution $3,000 a month Case #2 FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

LIS Quote FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

LIS Quote FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 What if he is concerned with running out of income sooner?  What if he takes the LIS beginning at age 80 as opposed to age 85?  Lets take a look at the numbers. What if? FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

 New premium requirement now paying to age 80 is $14,486  Which is 9.5% higher than the initial premium but now only paying until age 80.  Totaling $32,975 of additional premium over the 25 year timeframe.  Total aggregate premium is $362,154 to age 80  Total aggregate premium is $395,009 to age 85  Which is a difference of $32,855  Total payout with the LIS is $365,703  Pay less in total to get the same amount earlier! What if? FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Residual DB $630,000 Age 85 Distribution Residual DB $470,000 Age 80 Distribution What is the cost? FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC

Policies issued by: American General Life Insurance Company, 2727-A Allen Parkway, Houston, Texas Policy Form Numbers 10460, ICC-10460; Lifestyle Income Rider Form Number 13972; Accidental Death Benefit Rider Form Number 82012; Children’s Insurance Benefit Rider Form Number 82410; Spouse/Other Insured Term Rider Form Number 88390; Terminal Illness Rider Form Number 91401; Waiver of Monthly Deduction Rider Form Number The United States Life Insurance Company in the City of New York, One World Financial Center, 200 Liberty Street, New York, New York, Policy Form Number 10460N; Lifestyle Income Rider 13972N; Accidental Death Benefit Rider Form Number ADB791E; Children’s Insurance Benefit Rider Form Number CI791E1; Waiver of Monthly Deduction Rider Form Number 82001N. The underwriting risks, financial and contractual obligations and support functions associated with the products issued by American General Life Insurance Company (AGL) and The United States Life Insurance Company in the City of New York (US Life) are the issuing insurer’s responsibility. Guarantees are subject to the claims paying ability of the issuing insurance company. American General does not solicit business in the state of New York. Policies and riders not available in all states. American General Life Companies, is the marketing name for a group of affiliated domestic life insurers, including AGL and US Life. 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. © All rights reserved. AGLC Important Information FOR PRODUCER USE ONLY-NOT FOR DISSEMINATION TO THE PUBLIC