1. “LIFE” in the MILITARY BRYAN MUELLER DEVIN REID
Welcome everybody. For those new faces in the room I am XXXXXX from CompEdge Financial and we are on of your primary resources when it comes to Life Insurance, Annuities & Asset-Based Long Term Care Insurance.
Today we are here to talk about “Life” in the Military. Now don’t worry…as someone who did not serve in the armed forces I am not here today to speak to the trials & tribulations of a military career and there will be no PT Test as part of today’s training.
What we are going to talk about however are the sales opportunities that exist in which life insurance can play a significant role in protecting one throughout & beyond their military career.
BRYAN MUELLER
VP, FIELD TRAINING & SALES SUPPORT
COMPEDGE FINANCIAL
DEVIN REID
PRODUCT MANAGER, LIFE INSURANCE
FIRST COMMAND
For Advisor Use Only

2. Our Primary Partners Life Insurance LTCi Partners Genworth
Represents $20B of inforce death benefit and $181M of inforce premium
Represents $12.5B of inforce death benefit and $110M of inforce premium
Represent $7B of inforce death benefit and $43M of inforce premium
New Life Insurance Partner for GUL & Level Term
LTCi Partners
Genworth
Transamerica
Lincoln – Asset-based
AIM / Goldencare
Mutual of Omaha
DI Services
Assurity
Illinois Mutual
Lloyds of London
MetLife
Principal
The Standard
Direct Relationship
UNUM

3. Field Support Overview Life Insurance
Home Office Support
Product Managers, Sales Support Team, Insurance Operations Team
Life Insurance
CompEdge
Midland National
Annuities
CompEdge
Metlife
Axa
Lincoln
Long-Term Care
LTCi Partners
AIM-Goldencare
Disability
DI Services
UNUM
LTCi Partners
Genworth
Transamerica
Lincoln – Asset-based
AIM / Goldencare
Mutual of Omaha
DI Services
Assurity
Illinois Mutual
Lloyds of London
MetLife
Principal
The Standard
Direct Relationship
UNUM

4. TODAY’s AGENDA… THE MILITARY OPPORTUNITY
What is the Opportunity with Young Active Duty?
Who is your Competition?
GETTING STARTED WITH YOUNG ACTIVE DUTY
Cash Management Visual to support the Military Planning Initiative
Risk Management Visual to support Commitment
THE ROLE OF OPAIs THROUGHOUT A MILITARY CAREER
Revisiting the Visual
OPAI Conversation Best Practices
OPAI Comparison Case Study
LIFE INSURANCE & THE SBP DECISION
SBP Case Study
How purchasing WL along the way helps
Don’t let the VA get in the way!
Specifically we will cover the following 4 topics:
THE MILITARY OPPORTUNITY
What is the Opportunity when working with Young Active Duty Service Members?
Who is your Competition?
GETTING STARTED WITH YOUNG ACTIVE DUTY
Cash Management Visual to support the Military Planning Initiative (MPI)
Risk Management Visual to support Commitment
THE ROLE OF OPAIs THROUGHOUT A MILITARY CAREER
Revisiting the Visual
OPAI Conversations - Advisor Panel
OPAI Comparison Case Study
LIFE INSURANCE & THE SBP DECISION
SBP Case Study
How purchasing WL along the way helps
Don’t let the VA get in the way!
For Advisor Use Only

5. THE OPPORTUNITY
Why working with young active duty makes sense & who is Your competition?
For Advisor Use Only

6. The MILITARY Opportunity…
Each Year on Average 60,000 E-5s & O-1s enter into the Military
Yet in 2016 only 1,500 of these individuals became First Command Clients
Every year the attrition from the military is even greater*
The best place to start our presentation today is to look at the opportunity that exists to help young active duty members right from the ground floor as they begin their careers. Each year on average ~60,000 E-5s & O-1s enter into the military…a staggering number.
In 2016, 1,500 of these individuals became First Command clients. This means that while you are doing an incredible job of serving those young active duty members you come across, there is still a large “chunk of the pie” if you will that needs to hear from you!
In addition, every year more than 60,000 leave the military! With the new Blended Retirement System leading to even more choices to be made for those getting out (in addition to the choices that were already in place) it is more important than ever that these folks have a plan. The key word there is PLAN which can only be truly accomplished with a planning firm such as First Command. This leads me to a question…which is if only 1,500 of these folks out of 60,000 became First Command clients last year then what are the other 58,500 doing and who are the competitors that many of these service members may be turning to?
For Advisor Use Only

7. “COMPETITORS”… For Advisor Use Only
The reality is that many of these folks likely have no plan at all and many have likely never taken financial advice from anyone off base. For those that have, who are the likely companies that these individuals are to come across?
Show the 3 logos on the slide.
All 3 of these companies are highly rated, highly respected companies that do a lot of good when it comes to the military. All 3 offer clients banking options and more importantly to the topic on hand today, all 3 offer varying forms of life insurance to their members as well. But do these companies offer the value proposition that you as a First Command Advisor can bring to the table…one on one consultation from a financial planner…or are these companies even really competitors at all?
To answer these questions, let’s take a deeper look at the company on this slide that is almost synonymous with the military…USAA.
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8. USAA 8 Money Moves to Make…
Build a Budget
Save for Emergencies
Sign Up for TSP
Guard your Credit
Protect your Stuff
Use Pay Increases to your Advantage
Read up on SCRA (Service Members Civil Relief Act)
In fact the best place to start when trying to find what USAA is offering to these E-5 & O-1s is to take a look at their ROTC launch (no login required). Here USAA promotes that those starting their military careers must begin their journey to financial independence and they can do so all in one place through USAA. With USAA they can handle their banking needs, protect their stuff (property/renter’s/car insurance), built their credit (through a USAA Credit Card), and start their career off on the right foot through a USAA Starter Loan of up to $25k. There is no mention of life insurance on the home page or on any of the 4 links mentioned.
In addition to these links, USAA provides an article entitled, “8 Money Moves to Make in Your First Few Years of Military Service”. The first 7 moves are:
Build a Budget…solid advice and something any planner should do (see FLI)
Save for Emergencies…also very important and again must be accounted for as part of a plan (think )
Sign up for TSP…get those matching “free” dollars working for you with more emphasis put on saving than ever before under the new BRS
Guard your Credit
Protect Your Stuff
Use Pay Increases to Your Advantage by putting at least half of those pay increasing towards savings…good advice as you build your emergency savings (think again)
Read on SCRA to help alleviate issues such as debt & mortgage payments, breaking leases when PCSing, etc…so gain…great advice
These 7 steps are all important and valuable for all active duty service members to hear. BUT, it is the 8th point that is particularly important in that they recommend Visiting a Financial Counselor. Now one would think this means talking to a USAA representative but the key word here is VISIT and USAA has no retail offices. Therefore they have no true in person planners who can help those starting their military career accomplish all 7 steps listed above while also helping them tackle both their investment and insurance needs. More importantly by not having YOU USAA cannot offer the ability to adapt and make changes to one’s plans over time as life changes. A true plan is only accurate the minute you hit print. Life is always changing and having someone like you by their side is a value proposition USAA simply cannot offer.
Because of this fact, they instead recommend that these individuals speak to a personal financial manager on their installation and attend classes to help. Why not meet with you? Long story short, USAA, AAFMAA & Navy Mutual (as well as any other company you may run into that focuses on the military) all offer valuable products and programs but none of them offer the most valuable commodity when it comes to securing their financial futures….YOU! Never forget that!
Now then, while USAA does not promote life insurance on their ROTC landing page (or subsequent pages), rest assured (as I am sure all of you know) they do offer life insurance in many forms (as do Navy Mutual and AAFMAA as well) and they have the sales to prove it.
Despite not being something they openly promote USAA still came in 42nd last year on the NAIC’s top life insurance carriers list with a staggering $983,626,910 in direct written premiums! This shows that the opportunity is there for First Command to vastly expand its footprint on the military market and one way in which you can do so is through solid planning which includes risk management. Therefore let’s take a deeper dive into what USAA has to offer their clients on this front…
VISIT A FINANCIAL COUNSELOR
“Every installation has personal financial managers and classes to help.”
For Advisor Use Only

9. First Command Premiums
USAA…
When you go to the life insurance page on USAA’s website you will see a nice summary of their offerings, who those offerings are appropriate for according to USAAA and a sample monthly premium for each. On the far left they list level term and military term which are priced the same.
The difference here is that the Military Term offers a Military Dismemberment Rider at no additional cost that none of our carriers offer and they also have a Military Future Insurability Rider which allows a separating/retiring serviceman/servicewoman to buy up to $400k or the Face Amount of their Base Policy (whichever is less) in 10 Year term coverage to help replace SGLI. Don’t get caught up in this second rider as we can typically buy that coverage TODAY and save the client quite a bit long term.
Back to the point though, according to USAA Level Term is for “most people” and quite frankly that may be true of anyone who has a TEMPORARY need.
Moving right, we next stumble upon Universal Life. According to USAA this is appropriate for “some people”. The pricing is quite a bit more than what you would expect to pay for term but you get permanent insurance. The key thing to recognize here is that permanent does not mean Guaranteed. USAA’s UL is not a guaranteed policy meaning many times these policies won’t last unless current ASSUMPTIONS hold true over the course of time. This brings risk into risk management that is unnecessary and overpriced at that!
Lastly we come to their Whole Life (known as Simplified Whole Life). USAA claims this is only “For a few people”. There is no explanation to what this means but needless to say if you call a USAA Rep today chances are they will be super friendly & easy to work with BUT will likely promote Term without even a mention of Whole Life. Using generalities like we see here coupled with the likely response from an over the phone agent sure sounds a lot like our old friend Dave Ramsey doesn’t it?
Now despite their insurance philosophy, their pricing on their products is not too bad! Many of the carriers you can offer as a First Command Advisor off products that come in at a lower premium for term coverage (but riders must be accounted for), offer significantly lower premiums on the UL front (and are guaranteed) but this is not necessarily true when it comes to WL premiums as USAA’s pricing is competitive as seen here. On younger military prospects/clients we find that the WL pricing through both Liberty National & Transamerica Premier will beat the pricing offered by USAA by a decent margin. USAA does however become much more competitive at 40+ and in some instances may offer a better rate than what you have to offer.
That being said, what do we really know about the USAA Simplified Whole Life product outside of the premium shown here? Why don’t we do a little Q & A to learn more…
First Command Premiums
$11.00
$11.00
$42.34
$85.30
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10. USAA… (Q) USAA OFFERs _____ NON-TOBACCO RATE CLASSES?
(A) Only Non-Tobacco & Tobacco
(B) Two
(C) Five
(A) USAA OFFERS 5 NON-TOBACCO RATE CLASSES
Standard
Standard Plus
Preferred
Preferred Plus
Preferred Ultra
Our first question as it pertains to not only USAA’s Whole Life but all of their products is, “USAA Offers _______ Non-Tobacco Classes?
The answer….5! How many does Trans Premier & Liberty National offer? 1! DON’T LET YOUR CLIENTS GET CAUGHT UP BY TERMINOLOGY AND A PERCEIVED BETTER RATING! The fact is at younger ages your Whole Life carriers’ premiums at Std. NT match up VERY WELL with the Preferred Ultra class at USAA. At older ages this may not be true but if you have ever called in and spoken with a USAA Agent then you likely know that no matter your age or health situation you are likely to get a Preferred Ultra or Preferred Plus rate class quoted. Even if your clients/prospects use USAA’s online calculator to help “filter” their likely rate class you see that it simply asks if you have health issues and adjusts the rate arbitrarily based on answering yes or no without any further detail provided!
This begs the question that as our client’s get older how likely is it that they would actually qualify for the better underwriting classes with USAA? The best tool you can use to combat this is to give your clients a realistic expectation by utilizing your 624-e Underwriting Expectations Form. This will help your clients determine what is realistic and allow you to do a fair, apples-to-apples comparison when competing with USAA. It is also your chance to show the client that as an independent advisor you represent multiple companies allowing you to find the best possible fit for their unique situation…a value proposition USAA and others simply cannot match.
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11. USAA… (Q) TRUE / FALSE: USAA OFFERS A PAR WL POLICY? (A) FALSE
The Offer a Non-Par Policy like all First Command Whole
Life Policies
Moving on to our next question regarding USAA Simplified Whole Life we ask, “True or False…USAA offers a Participating Whole Life Policy”?
The answer…FALSE! Many people thing that USAA’s (who is an Insurance Exchange...not a stock or mutual company as most insurance carriers are) policy is participating but like the policies you offer it is a non-participating policy meaning everything you see is guaranteed under the contract…no promise of non-guaranteed dividends.
For Advisor Use Only

12. USAA… (Q) TRUE / FALSE: USAA NON-PAR WL ALLOWS (A) FALSE
FOR AN RPU TO BE ELECTED AT ANY TIME?
(A) FALSE
Policies can be set up AT ISSUE for limited pay (i.e. 20-pay or
pay to 65), but an RPU is not available on USAA Whole Life.
That being said, our next question is, “True or False…USAA’s Non-Participating Whole Life allows for you to elect Reduced Paid Up Insurance at any time like the policies you offer?
The answer is….FALSE! Though USAA is a non-par policy, it is designed to allow for you to choose a limited pay period AT ISSUE (either a 20 Pay or a Pay to 65). This is a nice feature BUT does not provide the flexibility your policies offer to choose the RPU non-forfeiture option in any given year (after Year 2 or 3). This is a big deal! Paying-up a policy early can certainly be planned in advanced but in many instances the value of an RPU benefit is that it is there for the unknown circumstances that life can throw one’s way at any time….not just at a certain age. USAA allowing for short pays is great but having to determine that up front, before life happens, certainly offers less control to your active duty clients.
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13. USAA SIMPLIFIED WHOLE LIFE
LIFE EVENT RIDER DETAILS
$100k Available
25,28,32,36,40 & 45
Marriage, Stork & Separation
from Service Options available
This leads to another question that I hear quite often though which is, “If they can show a short pay then how do I compete? Both of our carriers don’t allow for me to show the policy being paid-up early”. This is a true statement in that the guaranteed values calculators do not allow us to show premiums stopping at an early age. HOWEVER, we do have the RPU option so now we are going to look at a quick case study that shows you how you can compare to the USAA Simplified WL when you come across it (please also note we can do these comparisons for any carrier).
Here we have an actual policy illustration from USAA on a 28 year old Male. The Policy is for $100k in coverage with Waiver of Premium Rider included and is a Pay to 65 policy. This coverage comes in at a cost of $91.22/month but is completely paid-up at Age 65. As a side note, USAA does offer a Life Event (OPAI Rider) but that was not quoted here. This is common (that it is not quoted) despite the value it brings (more on OPAI in a bit).
In addition, the Life Events Rider, while a solid rider, is not as competitive as the rider you have to offer. It offers options to purchase additional insurance through guaranteed insurability but the options are more spread out. They start with 3 year intervals like the options you can offer BUT increase to 4 year intervals and eventually 5 years. They do offer marriage, stork and separation from service however but Liberty offers the latter and both carriers offer 3 year intervals and contingent options for $100k!
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14. USAA SIMPLIFIED WHOLE LIFE
Back to our case study though, here is another page of the illustration that shows the premiums stopping at Age 65 and the WP Rider costs dropping of at Age 60. So how do we go about doing an apples-to-apples comparison here?
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15. USAA SIMPLIFIED WHOLE LIFE
We do so by solving for what Death Benefit we could buy today with your carriers that would allow for us to have an RPU value of $100k at Age 65. If you do not wish to do this plug and chug yourself that is fine! That is what we at CompEdge are here to help with! Let us work your comparisons for you!
In this instance, in order to have an RPU Value of $100k at Age 65 on our 28 year old male, we would need to buy $119,048 in coverage today. This gives our prospect/client almost 20% more coverage until Age 65….the same coverage of $100k at 65+(if one chooses to RPU at that time)…and does so for $9 less per month! What a deal…but wait…THERE’S MORE!
In addition to the benefits just mentioned, also note that we have added a $100k OPAI Rider as well which will provide your client with the option to purchase additional insurance without proof of insurability (in the amount of $100k) at Ages 31, 34, 37 & 40….contingent options (if available) at 43, 46 & 49 as well as marriage and stork options too…all for $9 less per month than what USAA has to offer.
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16. USAA SIMPLIFIED WHOLE LIFE
So what if we wanted to match premiums? This slide shows doing exactly that and by doing so we get all the benefits mentioned on the last page but now our Death Benefit for the next 37 years comes in at $133,211 or 33% more coverage!
The reason for this comparison, and breakdown of what USAA has to offer, is that when it comes to competition for those 60k new servicemen and women each year you really have no competition. Your products stand up to any other offerings, you have better support through planning, product management and your business partners and most importantly your clients get YOU.
So with that being said, we now want to turn our attention to the different life insurance opportunities that exist throughout one’s military career. Through the use of visuals, case studies and even an advisor panel, we hope this information is valuable to you in helping you identify these opportunities when they present themselves! So let’s begin!
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17. Visuals that support the FLI for Young Active Duty Prospects
GETTING STARTED
And where else to begin than at the beginning of one’s military career. Now the reality is, we here at CompEdge in no way want to reinvent the wheel. When it comes to meeting with young servicemen and women the Client Engagement Process (CEP) currently in place at First Command works! From the PIE/Seminar to the FLI and beyond the training you have received from Field Force Training, your VPDTs, DAs and peers over the years are tried and true processes that we dare not try to recreate. Instead, what we would like to do now is show you a few visuals that we believe only help to reinforce the CEP process already in place!
Visuals that support the FLI for Young Active Duty Prospects
For Advisor Use Only

18. CASH Management…THE “PAY YOURSELF FIRST” Plan
ADVISOR: In summary, common strategies for those striving for financial success is that they:
• Pay themselves first,
• Live on less than they earn, and
• Avoid high interest debt.
Are you committed to living off less than you earn?
Ed & Geri: Yes, we are.
ADVISOR: Are you committed to saving and investing for a more secure tomorrow?
Ed & Geri: Yes, we are!
ADVISOR: Great. Please mark your answers here.
We will start with a portion of the FLI that speaks to Cash Management, and more specifically, to paying yourselves (meaning the client) first! Part of any good plan is to establish a budget that works and make sure you take care of your immediate needs and future needs before turning to wants. There must be a commitment there and what better way to get a young military member not used to living on a budget to commit than through the establishment of a First Command bank account (as part of the MPI which includes a life insurance and investment purchase).
That being said, for individuals who likely would rather buy a car or live it up early in their military career, it can be hard to get buy off on the investment and insurance commitments under The best way to accomplish this though is to have those $s be “out of site and out of mind” immediately upon being paid. This creates discipline desperately needed at the early stages of one’s career.
For Advisor Use Only

19. CASH Management…THE “PAY YOURSELF FIRST” Plan
Budget Items
Budget Amount
First Command Bank Account
Mortgage/Rent
$900
Utilities
$200
Food
$400
Gas
$150
Car
$300
Entertainment
$100
Gifts
$50
Travel
Clothes
10% Investment
5% Insurance
5% Savings
Total
$3,050
$1,000
Investment Company
Transfer via Government Allotment
or Bank Draft from existing
Bank Account
And the best way to accomplish this, again, is through a First Command Bank Account. The visual we have here is likely one many of you already use. The idea is to simply list out a client’s monthly budget that you have established, pin point those $s in the budget that go towards, “paying your client first” and set those $s up to be sent to an FC Bank Account via allotment or bank draft at each pay check. From there we can set up drafts from the FC Bank Account to go to the insurance and investment companies and be on our way. The client wins by starting a disciplined savings plan and you get an additional $450 under the MPI! A true win-win!
Am I ok to mention the $450 incentive here?
Insurance Company
For Advisor Use Only

20. Summary & commitment…COVERAGE UNDER 5-5-10
ADVISOR: Ok, thank you for that. Previously, we discussed a formula for allocating your income toward your financial plan.
Notionally using our model, we would be allocating: $450 to Risk Management, $450 to Cash Management, and $900 to Wealth Management. If the full 20% of your gross income was available would you have any hesitation about distributing your monthly dollars according to ?
Ed & Geri: No, that sounds good.
This leads us into our next visual which helps support the long term affects of committing to the when it comes to your life insurance budget. Most clients when taken through the FLI will see value in committing to the but putting aside this amount (20% one’s income) can be daunting to young folks (hence the need for the FC Bank account just described). To help assist with showing the positive affects of committing to such a plan, we have borrowed and tweaked a visual provided to FFT from DA Carlos Garza.
For Advisor Use Only

21. Summary & Commitment…COVERAGE UNDER 5-5-1022
Rank
O-1
Insurance Budget (5%)
$200
WL Coverage
$375,000
WL Gtd. CV $0
WL RPU 25
O over 3
$286
$475,000 $0 28
O over 6
$347
$575,000
$5,104
$38,250 31
O over 8
$361
$621,502
$13,744
$91,875 34
O over 12
$438
$710,511
$25,981
$154,694 37
O over 14
$449
$718,795
$41,259
$218,618 40
O over 18
$514
$774,464
$60,500
$285,016 43
Retired O-5 over 20
$514
$774,464
$82,579
$346,447
The visual (seen here) is based on a prospect/client who is an O-1 just beginning their military career. If this client/prospect were to commit to the plan to purchase Whole Life to supplement SGLI then they would not only meet their ongoing insurance needs as they move through the ranks but would also put themselves in a very favorable position at their military retirement. The visual you may notice looks just like the graph you will find in your Liberty National & Transamerica Premier Guaranteed Values Calculators that show the Death Benefit, Guaranteed Cash Values & RPU amounts (in addition to other benefits/values).
To assign some numbers to this visual, we start by showing our O-1 with a $4k monthly budget when all allowances are factored in. Under the this means committing $200 per month to their life insurance plan. Again this can be daunting and many service members may choose to simply rely upon their SGLI but we must remind them of the pitfalls or relying on a group plan that is temporary in nature (see insurance 101).
If we were to use this $200 however to buy WL then we could get $375k in coverage today (with Waiver of Premium) to help cover their permanent long term needs. The idea from there is that we add additional coverage at regular intervals to meet ongoing needs while staying at 5% of our prospect/client’s budget. The client may be left questioning why so much WL today (especially if not married) but it is important to show them the impact that this will have down the road in addition to meeting their income replacement needs today.
If our prospects/clients commit to this idea and add additional $s along the way then at Age 43 they are left with $774,464 in Guaranteed, Permanent WL coverage with Guaranteed Cash Values of $82,579 & an RPU amount of $346,447! This means that when SGLI goes away we already have a solid base of permanent, commercial protection (bought at a younger more advantageous age) all while meeting our needs along the way as our client gets married, buys a house, has kids etc! This also will play a significant role in military retirement decisions which we will explore later.
If we look even further down the road then by Age 65 (designated full retirement age for many) we have $774,464 in coverage BUT our Cash Values have grown to $327,987 and we now have an RPU amount of $643,680.
Now when you look at this visual/these numbers and think about the additional purchases of Whole Life along the way what comes to mind? More specifically, how can we go about setting up a program that allows for such increase throughout one’s military career?
OPAIs! In fact, what I hadn’t mentioned until now is that our initial base policy of $375k not only included the Waiver of Premium Rider but included $100k OPAI Rider as well! As you can see, the years we added additional coverage were at Age 25, 28, 31, 34, 37 & the same years in which options under our OPAI Rider would be available.
Therefore let’s now turn our attention to the OPAI Rider, how it works with each of our carriers and how it allows us to purchase additional insurance at regular intervals without having to worry about insurability. From there we will speak to OPAI Conversation Best Practices (based on conversations with advisors who have found success in clients taking OPAIs) and then end we will end this section with an OPAI Comparison Case Study.
For Advisor Use Only

22. DURING THE CAREER
Using OPAI Options to meet life insurance needs During a Military Client’s career
For Advisor Use Only

23. Options to Purchase Additional Insurance (OPAI)
Before we jump right into the visual re-worked to allow for OPAI options to be taken, lets first start with a quick review from Insurance 101 on how OPAI works…
Read slide notes and present slide from 101.
Additionally, I’d recommend we include a feature called Options to Purchase Additional Insurance or OPAI. OPAI allows you to increase your coverage at specific intervals and events regardless of your health, occupation, or avocation. If you exercise half but no less than two of those guaranteed options, you qualify for options at ages 43, 46 and 49, with each contingent upon exercising the previous one. Can you see the benefit of adding OPAI to your policy?
**End of Insurance 101**
When evaluating insurance options, a need for the specific type of insurance coverage should be clear. Any guaranteed benefits associated with insurance coverage are dependent on the claims-paying ability of the insurance company issuing a particular policy.

24. Carrier OPAi Comparison…
Transamerica Premier Quality Whole Life
Liberty National Whole Life
OPAI (All Ages up to Age 37)
Max Units Ages 0-15 = 100 (5-1)
Max Units Ages 16+ = 100 (1-1)
Min Units = 5
Issue Ages: 0-37
OPAI Ages: 22, 25, 28, 31, 34, 37 & 40
Up to Age 33 Trans Premier least expensive
OPAI Rider Premium drops Age 43
Contingent OPAI Ages: 43, 46 & 49
@ 43 must have taken ½ of previous OPAIs (5 units count as OPAI taken)
@ 46 must have taken Age 43 OPAI
@ 49 must have taken 43 & 46 OPAIs
Stork & Marriage Options
OPAI (All Ages up to Age 39)
Max Units Ages 0-15 = 50 if <$50k, 100 if $50k or more in DB
Issue Ages: 0-39
Age 33+ Liberty National least expensive
OPAI Rider Premium drops Age 40
@ 43 must have taken ½ of previous OPAIs (& no less than 2).
Stork, Marriage & Separation of Service Options (until to Age 45)
Now then, OPAI riders for the most part are very similar in nature but there are a few distinguishing characteristics we should discuss between Liberty National and Transamerica Premier.
The first thing to bring up is that recently, on September 18th of 2017, Liberty National made the commitment to offering $100k OPAI on adult policies for the first time! As many of you know, they have always offered $100k OPAI on Juveniles but you had to purchase at least $50k on the Base Policy (whereas Trans Premier will do a 5-1 ratio) and it was not available to adults. Now, both carriers offer the ability to get a $100k OPAI for those purchasing at least $100k in base coverage (1-1 ratio).
Both carriers have the same option dates and contingent option rules with 2 small differences:
With Transamerica Premier, an option taken for only $5k (minimum) counts as an option taken when trying to qualify for contingent options at 43, 46 & 49 and
With both Trans Premier & Liberty National you must have taken at least half of the previous options available in able to qualify for the contingency options. The difference is that with Liberty at least 2 options must have been taken to qualify for contingent options.
Both carriers also offer marriage and stork options that do not take away from regular options as they do with other outside carriers. The only difference here is that in addition to these options Liberty does offer a Separation from Service/Retirement option up until Age 45 as well!
For Advisor Use Only

25. Summary & Commitment…COVERAGE UNDER 5-5-1022
Rank
O-1
Insurance Budget
$200
WL Coverage
$375,000 ($100k OPAI & WP Riders)
WL Gtd. CV $0
WL RPU 25
O over 3
$286
$475,000 ($100k OPAI) $0 28
O over 6
$347
$575,000 ($100k OPAI)
$5,104
$38,250 31
O over 8
$361
$621, ($46,502 OPAI)
$13,744
$91,875 34
O over 12
$438
$710, ($89,009 OPAI)
$25,981
$154,694 37
O over 14
$449
$718, ($8,284 OPAI)
$41,259
$218,618 40
O over 18
$514
$774, ($55,559 OPAI)
$60,500
$285,016 43
Retired O-5 over 20
$514
$774,464
$82,579
$346,447
$258
$324
So now that we have done a quick review on the intricacies of the OPAI Rider with both Transamerica Premier & Liberty National, lets review our visual again but this time highlight the use of OPAI options at Ages 25, 28, 31, 34, 37 & 40 to meet ongoing, increasing needs throughout our prospect/client’s military career.
Ads we go through the option dates the first thing you will notice is that at Ages 25 & 28 we are able to take the full $100k OPAI while remaining within our 5% budget. However, when we get to the Age 31 option we are only able to take $48,502 out under the rider while staying on budget. Ideally we would take the full amount but the good news here is that if this were a Trans Premier option then taking less than the full option would still count as an option taken in order to qualify for future contingent options! It does not have to be all or none. Keep those contingent options alive for life’s “what-ifs”!
Now if we fast forward to military retirement our client would have $774,464 in coverage with $82,580 in Cash Values & an RPU amount among all policies of $346,451. This is also without considering additional OPAI options that could be taken for Marriage or the Birth of a Child. It also does not factor in inflation on one’s base pay that could leave to an even larger budget for insurance purposes…all factors that would make this visual look even better than it already does!
One additional thought we have not discussed yet is the fact that at both the Age 25 & Age 28 options the full $100k Option still left us below our actual budget. At 25 our budget under would be $286 yet if we take the full $100k OPAI our total premiums would be only $258 per month. At 28 the budget is $347 per month but our total costs after taking the full $100k option only come to $324 per month.
This leads us into the discussion that if a client can afford to purchase more than the full OPAI today then why wait an additional 3 years (if healthy) to increase their insurance plan. Why not “pre-pay” a portion (if not more) of their next OPAI option today while younger and therefore at a lower cost!
For Advisor Use Only

26. “pre-pURCHASING” opai options…
To drive home this point, here is another slide that speaks to the value (when able) of purchasing additional coverage TODAY vs buying it over time.
Read off the numbers in the slide to show the impact long term of buying more today…

27. Summary & Commitment…COVERAGE UNDER 5-5-1022
Rank
O-1
Insurance Budget
$200
WL Coverage
$375,000 ($100k OPAI & WP Riders)
WL Gtd. CV $0
WL RPU 25
O over 3
$286
$523,262 ($100k OPAI + $48,262 policy) $0 28
O over 6
$353
$623,262 ($100k OPAI)
$5,104
$38,250 31
O over 8
$361
$636,084 ($12,822 OPAI)
$14,530
$97,073 34
O over 12
$438
$725,093 ($89,009 OPAI)
$27,759
$165,255 37
O over 14
$449
$733,377 ($8,284 OPAI)
$43,357
$229,259 40
O over 18
$514
$789,046 ($55,559 OPAI)
$62,958
$296,662 43
Retired O-5 over 20
$514
$789,046
$85,436
$358,438
If we then go back to our example and were to look into pre-purchasing additional coverage beyond the $100k OPAI at Age 25 (assuming health is still intact) then our prospect/client can buy an additional $48,262 in coverage while remaining on budget. This means adjusting future OPAIs downward potentially BUT buys more coverage while younger which always leads to savings & improved benefits. In fact, this improves our totals at military retirement by ~$15k on the Death benefit, $3k on the Cash Value & $12k on the RPU value!
As you can see the OPAI Rider can be extremely valuable and most of the quote requests we receive (where it makes sense) ask for the OPAI Rider to be included. This however does not speak to the fact that you as advisors our potentially missing out on a golden opportunity for both the clients and yourselves…
For Advisor Use Only

28. THE OPAI OPPORTUNITY… For Advisor Use Only
Here we see the amount of OPAIS available annually with Transamerica Premier (Monumental) from 2001 through We also see how many of those options were taken and eventually place. For instance, in 2014 there were 6,337 options there were eligible to be exercised. Of those options only 1,730 of them were actually placed for a rate of 27.3%!
For Advisor Use Only

29. THE OPAI OPPORTUNITY… Average % taken 2001-2014 30.01%
In fact over this time period the average percentage taken in a given year came to only 30.01%. Even during the time frame the number still only topped out at just under 35%.
So what’s the point….
For Advisor Use Only

30. OPAI Conversation BesT Practices…
Discussing the OPAI Rider on the Base Policy
How to have the OPAI conversation with clients when an option is coming up
How to speak to “Pre-Purchasing” OPAIs
The point is that I believe First Command Advisors do a good job of adding the OPAI Rider to the base policy on new contracts as most quote requests we receive at CompEdge have some amount of OPAI Rider attached. However, how that OPAI Rider is being described/sold upfront, how advisors speak to clients about OPAI options when they become available and how advisors speak to the opportunity of “pre-purchasing” future options TODAY are all conversations that we believe can lead to an increased % of OPAI options being taken. This is low hanging fruit if you will and as Alan Orr once told me, “Why buy a rider you never plan on using or will only use in a dire situation?” “Why not make it a part of your plan?”
With that being said, we now will explore best practices that we have gathered from successful advisors when it comes to how they handle OPAI conversations that take place during the initial sale (rider on the base policy), at option dates and when an opportunity exists to pre-purchase an OPAI as well.
NOTE: This has the ability to be an advisor Panel instead
For Advisor Use Only

31. DISCUSSING THE BASE POLICY OPAI RIDER…
When evaluating insurance options, a need for the specific type of insurance coverage should be clear. Any guaranteed benefits associated with insurance coverage are dependent on the claims-paying ability of the insurance company issuing a particular policy.
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When it comes to adding the OPAI Rider to the base policy from the get go, FC advisors as a whole have a ton of success in doing so and most utilize the simple 101 conversation (slide seen here) in order to introduce the idea of guaranteed insurability to clients.
What we learned from speaking to a few top advisors though is they go the additional mile and really focus in on the role it (THE OPAI RIDER) will play in future needs and decisions (see model). This is important. The guaranteed insurability aspect is huge in that we cannot guarantee our clients health long term but there is more to OPAI than just being an out if unhealthy.
For starters it provides guaranteed insurability no matter what which come in big when looking at other, non-medical reasons one might not be insurable or rated:
Occupation (EOD, Special Forces, etc.)
Avocation (Pilot, Jumper, etc.)
Geographical Location (Hazardous areas)
It is also equally important to show them how OPAI options (at regular intervals) align with future need increases throughout their military career. Why have your clients pay for a rider that the only plan on using if they are highly ratable or uninsurable due to healthy reasons? The need for additional coverage (and the ability to pay for it through an increasing income/budget) will be there so make sure to highlight this when speaking to your young active duty clients/prospects. As one advisor told us, “I always tell them by purchasing the OPAI Rider they are purchasing the privilege to add additional insurance coverage at opportune times throughout their military career.” He then told us this is a big deal when discussing OPAI options as they come due which is where we will turn our attention in a second.
Before we do so however, the other tip we received from a top advisor when it comes to the OPAI visual shown here (from Insurance 101) is to use the visual as a reminder of when future options dates come up. Print out the slide and when your client agrees to purchase the WL with OPAI Rider go ahead and write down all future option dates on the slide to use as a reminder when options are coming up. These tips make a world of difference when it comes to the discussion advisors have with clients when an option is coming due which is where we will now focus our attention.
NOTE: This has the ability to be an advisor Panel instead
For Advisor Use Only

32. DISCUSSING AN UPCOMING OPTION…
When evaluating insurance options, a need for the specific type of insurance coverage should be clear. Any guaranteed benefits associated with insurance coverage are dependent on the claims-paying ability of the insurance company issuing a particular policy.
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Do you have a current need for more coverage?
Will you have a future need for more coverage?
Are there any insurability concerns?
Is the cost affordable?
Do you have a need to preserver contingent options?
The first thing to speak to when it comes to upcoming options is to make sure everyone is aware of the fact that they should be getting a Consolidated Suspense Report that details all client options coming up within the next 90 days. This is a great list to remind advisors that they have clients with options coming due that they need to speak to.
How you go about contacting these clients differed from advisor to advisor that we speak to but all said selling the rider correctly on the base policy (whether them or another advisor) is the first key to having the client understand the importance of taking OPAIs…especially early on.
That being said, one advisor we spoke to says he hates waiting until her gets the CSR to speak to clients about an upcoming option. To him, this comes across as a “fire sale” in which he becomes a salesman instead of the planner he is. Instead, he prefers to tie these discussions/decisions into the planning process. In fact he pulls up the visual we mentioned on the last slide that has all future option dates written on it and brings up the next option date at every single AFR. This ties it to the planning process and always keeps the topic on the clients mind and allows the advisor to remind the client of the importance of the OPAI Rider. Then when an option is coming due the following year he can notify the client in the prior year’s AFR and schedule the next future AFR in advance of the OPAI Option Date coming up!
During the AFR (in the year of the Option Date) would then be the perfect time to reiterate the sentence from the previous slide…”Remember that by purchasing the OPAI Rider years ago you purchased the privilege to add additional insurance (without proof of insurability) at opportune times throughout your military career…this is one of those times.”.
Three other tips we received when it comes to discussing a current/upcoming option with clients:
Don’t talk price over the phone. This makes it all about cost and not about value. It is important to get them to come into the office and
One advisor we spoke with uses a set of 5 questions when discussing with the client whether an Option makes sense. Those 5 questions are:
Do you have a current need for more coverage?
Will you have a future need for more coverage?
Are there any insurability concerns?
Is the cost affordable?
Do you have a need to preserver contingent options?
Based on our discussion do you feel it is prudent to exercise this option today?
If clients took smaller base policies with the OPAI Rider added due to budgetary reasons then make sure to recognize the importance of the first few OPAI options…and the Pre-Purchase opportunities that exist at these options as well!
NOTE: This has the ability to be an advisor Panel instead
For Advisor Use Only

33. Discussing the Pre-Purchase of OPAIS…
Age 22
Rank
O-1
Insurance Budget
$200 25
O over 3
$286 28
O over 6
$353
This leads us to our last slide on OPAIS which deals with how some of the advisors we spoke to have the discussion with their clients regarding purchasing more whole life now vs waiting for future OPAI options. Just like the other discussions, this discussion differed from advisor to advisor but again there were a few common themes that became very obvious during this discussion:
The idea of showing the client the value & control gained by pre-purchasing today vs in the future was extremely important. This in and of itself is not a big deal as most if not all of you have seen the visual we already covered (seen here) and utilize it as well. The key takeaway I got here was that every advisor we spoke to said showing a slide or generic visual wasn’t good enough….that you have to show client’s numbers that are applicable to their specific situation (age, need, etc.). Every single one of them said that in order to do this they use the GVC Calculators (for both Liberty & Trans Premier) on the CompEdge Website (as well as FC’s website) to demonstrate the increase in Cash & RPU Values at some specified time in the future (i.e. military retirement or full retirement around Age 65) by purchasing more today vs waiting for future OPAIs. This allows client’s to actually visualize the value of implementing this strategy as part of their risk management plan and also allows for the advisor to speak to how these enhanced CVs & RPU values can play a big role upon retirement from the military…more on that point in a few minutes.
The second common thing I heard was be smart (pick & choose your battles if you will) as to when you approach the “pre-purchase” idea with clients. Many times advisors, as we already discussed, go for the big sale right out of the gate but when a client is trying to establish a plan and budget this may not be the best time to have this discussion. Yet it will lead to the long term best results but what good will that do if the client cancels upon PCSing or talking to parents or if $s get tight? A better time to have this discussion is around the time of the first couple of regular option dates (25 & 28) when we see some of the biggest increases in income due to promotion (see prior slide). On our visual this was certainly the case and when clients feel comfortable about the commitment they are much more likely to pull the trigger on a “pre-purchase”.
This ends our OPAI best practices section so let’s finish the OPAI conversation today to speak to a case study centered around upcoming options/conversions available through AG (Old Line & All-American).
NOTE: This has the ability to be an advisor Panel instead
+43%
+21%
For Advisor Use Only

34. CASE STUDY…Age 25 OPAI vs new WL
Female
Age 24 (Nearest Age 25)
Current AG Elite Whole Life Policy for $25k with $25k GIO & WP Rider
Upcoming OPAI Available
Client is a healthy non-smoker
Specifically we want to show you 3 situations/case studies involving upcoming OPAI options/conversion opportunities with AG and how if the client is healthy & insurable better options may exist through the purchase of a new policy with either Liberty Nation or Transamerica Premier. Our comparison template can help you lay out this discussion with clients in a way that may better their situation moving forward while also rewarding you the advisor as well!
The template you are about to see in all 3 situations has been around for a few years but we are seeing requests for such comparisons more and more. This is due to the fact that a few years back AG made the decision to increase rates on their Elite Whole Life policy, drop commissions and stop new sales of the product as well and more recently they approved the Elite Whole Life 2 policy which further reduced Cash Values on policies taken via an OPAI or conversion option.
Our first example is going to be a Female, Age 24 (nearest Age 25) who has a current Elite Whole Life policy for $25k that her parents bought for her back in the day. It has a $25k GIO Rider as well as WP Rider on it and she has her first option coming up at Age 25! The client is a healthy non-smoker which means other options outside of the GIO Rider may exist so let’s explore those options!
For Advisor Use Only

35. The comparison… $125k AG Elite WL 2 w/ WP & Keeping Base GIO
$100k Trans Premier QWL w/ $100k OPAI & WP +
$25k AG Elite WL w/ WP
$100k Liberty National WL w/ $100k OPAI & WP + $25k AG Elite WL w/ WP
Monthly Premium
$73.08
$ $16.08
$ $16.08
New Effect on Premium vs Stand-Alone Option with AG
$75.19
($ $ $1.81 for dropping GIO on Base Policy)
$76.36
($ $ $1.81 for dropping GIO on Base Policy
AG GIO Refund
$543.75
Cumulative Total of Future Options/ Contingent Options
$350,000
$900,000
(save Age 25 option by Age 24)
Marriage & Stork Options
None
Available
Available + Separation from Service Option
Starting on the left we have the option of sticking with AG. At Age 25 our client would have a 5x multiplier on her $25k GIO Rider meaning she could get up to $125k of additional coverage. This would come at a cost of $73.08 per month, would get her a GIO Refund of $ and would allow for to have future cumulative options on her base policy of $350,000 but no Marriage & Stork options.
Regarding the GIO Refund, don’t forget that if you take an option, all prior GIO Rider premiums paid are refunded! This is a big deal especially on the first option on what was a juvenile policy in which the rider may have been paid for over a 20+ year period (hence the nice size refund here). Future options will only return 3 years worth of rider premiums and if the Age 25 option is not taken then at 28 you only get the previous 3 years not all prior years so this is important to remember.
That being said, in order to get the full GIO refund one does not have to take the full option of $125k! All that is required is that you take at least a 1x multiple which in this instance would be $25k. So what if instead of taking $125k with AG, we instead took $25k with AG & took out $100k with $100k OPAI Rider & WP Rider with either Trans Premier or Liberty National and dropped the GIO Rider on the Base AG Policy?
If we did so with Trans Premier the total premium would come in at $2 more per month than $ HOWEVER, we gain the following advantages for that $2 extra per month:
We still get the refund check from AG of $ for taking the $25k minimum option.
By purchasing a $100k OPAI Rider with Trans Premier and dropping the GIO Rider on the AG base policy we gain $550,000 in potential future guaranteed insurability through normal options & contingent options for a total of $900k (note that Trans Premier is age nearest so we still have our Age 25 option available almost immediately in this situation).
We also gain Marriage & Stork options in addition to the options already mentioned!
The same holds true for Liberty National! Liberty would be an additional $1 above Trans Premier but all the same benefits apply PLUS you gain the separation from service/retirement option if in the military and exercised before Age 45!
These are all great benefits to pursuing a new policy with Trans Premier or Liberty National to better your client’s plan and along the way you get paid more as well. A true win-win again! (LET ME KNOW IF I NEED TO DROP THE COMP TALK ON THIS SLIDE AND LAST)

36. CASE STUDY…AGE 28 OPAI vs NEW WL
THE CLIENT
Female
Age 28
Current AG Elite Whole Life Policy for $25k with $25k GIO & WP Rider
Upcoming option Available
Client is a healthy non-smoker
This line of thinking doesn’t just apply to the Age 25 GIO Option however. In fact it applies even more so at Ages 28 and above when options become available. This is because the refund of rider premiums on AG for an option taken only applies to the years in between options. This means the Age 25 option, from a refund perspective, is by far the most important but the other options will only provide a refunds of up to 3 years of rider premiums. Therefore in many of these instances you would turn down the option with AG all together, drop the base GIO rider and take a new policy with Liberty National or Transamerica instead.
Here we have a 28 year old female with a $25k policy and $25k GIO Rider (WP Rider as well). She has an upcoming option available and is a healthy non-smoker.
For Advisor Use Only

37. The COMPARISON… $100k AG Elite WL 2 w/ WP & Keeping Base GIO
$100k Trans Premier QWL w/ $100k OPAI & WP
$100k Liberty National WL w/ $100k OPAI & WP
Monthly Premium
$66.31
$72.09
$73.17
New Effect on Premium vs Stand-Alone Option with AG
$72.09 total premium
($3.92 more*)
*($ $1.86 = $70.23 for dropping GIO on Base Policy)
$73.17 total premium
($5.00 more*)
*($ $1.86 = $71.31 for dropping GIO on Base Policy)
AG GIO Refund
$66.75 $0
Cumulative Total of Future Options/ Contingent Options
$250,000
$700,000
Marriage & Stork Options
None
Available
Available + Separation from Service Option
If we chose to take the AG option of $100k (4x multiple) with WP then it would come in at a cost of $66.31 per month, would provide a $66.75 refund and we would have future cumulative options on the base policy of $250k.
If we instead were to purchase a $100k Liberty or Trans Premier WL policy with WP Rider and add a $100k OPAI Rider as well then the cost would be more but only $3.92-$5.00 more per month. This by itself doesn’t sound great but if we didn’t add OPAI then either option would be less than AG. We add OPAI however because of the future guaranteed insurability it can provide when compared to future options on the AG Base Policy. Trans Premier & Liberty would offer up to $700k in future options and contingent options and in addition would offer up the potential for marriage and stork options as well as a Separation option with Liberty!

38. CASE STUDY…AGE 25 CTR vs NEW WL
THE CLIENT
Female
Age 24
Child Rider Conversion coming up at Age 25
$10k Child Rider
Issue Age WILL BE 25 (no opportunity to 24)
Client is a healthy non-smoker
Our last case study in regards to AG focuses on a Child Term Rider Conversion vs as GIO Option. Here we have a 24 year old female who is coming up on the last chance to convert a CTR on her father’s policy to a WL policy of her own. The CTR rider is for $10k and the issue age will have to be Age 25 in this instance. The client is once again a healthy non-smoker.
For Advisor Use Only

39. THE COMPARISON… $50k AG Elite WL 2 w/ WP
$50k Trans Premier QWL w/ $50k OPAI & WP
$50k Liberty National WL w/ $50k OPAI & WP
Monthly Premium
$29.70
$30.92
$31.38
New Effect on Premium vs Stand-Alone Option with AG
$30.92 total premium
($1.22 more)
($1.68 more)
Cumulative Total of Future Options/ Contingent Options $0
$450,000
(save Age 25 option by Age 24)
Age, Marriage & Stork OPAI Options
None
Available
Available + Separation from Service Option
If our female were to take the 5x multiple on our $10k CTR then she could get $50k in AG Elite WL 2 with Waiver of Premier. OPAI could not be added. This would come in at a cost of $29.70 per month but would provide no future guaranteed insurability.
If we instead took out a $50k with $50k OPAI & WP Riders policy with either Liberty or Trans we could get the same amount of coverage today for $1.22-$1.68 more per month BUT build in up to $450k in future guaranteed insurability + marriage, stork and separation from service (Liberty only)
options through the added OPAI Rider!
For Advisor Use Only

40. THE COMPARISON… $50k AG Elite WL 2 w/ WP (Max Available is $50k)
$100k Trans Premier QWL w/ $100k OPAI & WP
$100k Liberty National WL w/ $100k OPAI & WP
Monthly Premium
$29.70
$60.92
$62.09
New Effect on Premium vs Stand-Alone Option with AG
$60.92 total premium
($31.22 more)
($32.39 more)
Cumulative Total of Future Options/ Contingent Options $0
$900,000
(save Age 25 option by Age 24)
Marriage & Stork Options
None
Available
Available + Separation from Service Option
In this situation though the client likely has a larger need than just $50k and why stop at $50k OPAI! Here are the numbers if we were to do $100k with $100k OPAI instead. While double the price we also have now established a solid foundation of WL with room to add for our client’s future!
This wraps up our OPAI section that speaks to the value that OPAI can add to one’s Risk Management Plan throughout their military career. We now want to fast forward to retirement and speak to how life insurance plays a role the decisions one makes when retiring from the military…
For Advisor Use Only

41. USING LIFE INSURANCE TO SUPPLEMENT the SBP DECISION (CASE STUDY)
We have no talked about visuals to support the initial sale of life insurance to those just beginning their military careers as well as explored how OPAI can play an important role in meeting their needs along the way and now we want to turn our focus to the SBP Decision that must be made when retiring from the armed forces and how life insurance can play a key role in that decision.
Before diving into our case study though it must first be said that unless an extenuating circumstance exists that Full SBP should always be considered and in many instances is the best choice for a client to make. This does not mean a life insurance opportunity does not exist however as 55% of one’s pension if Full SBP is elected is not near enough properly protect a surviving spouse in retirement. The goal of this case study is to look at choosing Full SBP vs choosing minimum SBP and supplementing up to the equivalent of 55% protection (FULL SBP) with life insurance. We will then explore options to meet the additional need above and beyond this to properly protect the surviving spouse and will end with an idea on how to avoid potentially bad situation regarding one’s VA Disability rating.
LET ME KNOW IF A SLIDE DEDICATED TO FIRST COMMAND’S STANCE ON ELECTING SBP SHOULD BE ADDED AND WHETHER SHOWING A MINIMUM SBP/LIFE INSURANCE COMBO vs FULL SBP IS SOMETHING THAT WOULD BE OK
USING LIFE INSURANCE TO SUPPLEMENT the SBP DECISION (CASE STUDY)
For Advisor Use Only

42. Client… John Doe Age @ Retirement: 42
0-5 (20 Years) Pension- $4,244.70/month
Full Survivor Benefit (SBP) - $2,334.59/month
Full Survivor Benefit (SBP) Cost - $275.91/month pre-tax
State – Colorado
For our case study we have John Doe, Age 42, who is an 0-5 with 20 years and is getting ready to retire. His pension will be $4, per month and therefore should he elect Full SBP it would provide a benefit of $2, per month with non-gtd. COLA at a deductible cost of $ per month.
For Advisor Use Only

43. Savings of $256.41/month to use towards $650,000 Life Insurance
SBP Options…
Full SBP (55%)
Minimum SBP
No SBP
Cost
$275.91
$19.50 $0
Reduced Pension after SBP Cost
$3,968.79
$4,225.20
$4,244.70
Survivor Pension
$2,334.59
$165
When we look at our clients 3 options (many options exist but there are the most common choices) here is what we see. If we elect Full SBP then John’s current pension will be lowered to a pre-tax number of $3, per month BUT upon his death his spouse would receive $2, per month for the rest of her life.
If John instead chose Minimum SBP ($300 base pension) then it would come at a cost of $19.50 per month (6%) lowering his current pension payout to $4, per month BUT upon his death his spouse would only receive $165 per month (indexed for inflation). If John chose No SBP (not recommended but could be seen on client who have already retired and have not spoken to you) then his pension today receives no reduction but his spouse would be left with no benefit should he pass away.
When comparing taking Full SBP to Minimum SBP we need to take a look at 2 factors:
How much life insurance would be needed to fill the gap and
Could we purchase such insurance with the savings due to a lesser reduction on the pension today?
There are many methods for calculating the income tax-free lump sum that would be required to bridge the gap between Full & Minimum SBP but for the purposes of today we will utilize the rule of If we take the difference between to two survivor pensions and multiple by 300 we come up with a lump sum need of $650,877 so for the purposes of our case study I have said $650k. This leads to the second question we need to answer which is can we buy $650,000 in guaranteed, permanent death benefit protection for a cost of $256.41/month or less?
Savings of $256.41/month to use towards $650,000 Life Insurance
(*assumes Rule of 300)
For Advisor Use Only

44. Choosing Life Insurance…
$406.67/month ANICO SGUL 30 Pay + $19.50/month for Minimum SBP vs $ per month on Full SBP
$157,893 paid combined vs $157,519 paid for Full SBP in 30 Years assuming 3% inflation
65% ROP = $47,701
100% ROP = $97,848
The answer is likely always going to be know. In fact in our case study the cost of $650,000 in the ANICO Signature GUL would come to $406.67/month (assumes Pref. NT & a 30 Pay to mirror SBP). When we add in the cost of Minimum SBP of $19.50 per month we are left with a total monthly cost of $426.17/month that is only partially tax deductible ($19.50) vs an FULL SBP cost of $ per month… a difference of $ per month! Just like our WL story when comparing to term however, if we stop the story there then the obvious choice based on today’s price alone would always be to elect Full SBP (and again in many situations this will in fact be the best choice).
However, in this instance what we also know is that as John’s pension increases over time so will the costs of both Full & Minimum SBP. If we consider an assumed inflation rate of 3% over our 30 year premium paying period then the cumulative combined premiums for the SGUL/Minimum SBP combination would come to $157,893 vs $157,519 for Full SBP. Now this assumes a 3% inflation rate and that the client lives this long (likely) but this brings the cost over 30 years to a number that is almost identical under each strategy.
Still, it would be easy to look at this and say, “Hey give me the strategy that costs the same long term but less today” but again there are a few other things we must consider.
For instance, the ANICO Signature GUL has a built-in Cash-Out Rider that allows for the client at years 15, 20 & 25 to cancel their policy and received back a portion (up to 100%) of premiums paid. In year 15 in our case the client could get 65% of premiums back of $47,701. In year 20 they could get 100% back or $97,848 and in year 25 they could also get 100% back or $122,310.
100% ROP= $122,310
For Advisor Use Only

45. Choosing Life Insurance…
In addition, the ANICO SGUL also have built-in ABR for Chronic, Critical & Terminal Illnesses. This allows for John, should certain criteria be met, to accelerate his Death Benefit while living to cover the cost of care or to use in any ways he and his spouse deem fit. This is an added living benefit not available through SBP.

46. Other considerations…
IF SPOUSE DIES FIRST:
FULL SBP/Minimum SBP provide no benefits if spousal option chosen.
ANICO Signature GUL provides the ability to:
Change the Beneficiary on the policy
Utilize Cash-Out Rider if spouse passed before Year 25 (Yrs 15, 20 & 25)
IF JOHN LIVES TO LIFE EXPECTANCY THEN AT DEATH HIS SPOUSE WILL RECEIVE:
FULL SBP/ Minimum SBP provides 55% of John’s pension to spouse until she passes.
ANICO Signature GUL provides lump sum which is unused by the spouse provides a legacy to children/grandchildren.
SOME FORM OF SBP SHOULD ALWAYS BE CONSIDERED DUE TO THE GUARANTEES & OTHER BENEFITS IT PROVIDES.
But let’s come back to the Cash-Out Rider for a second and more specifically lets talk about how the SGUL/Minimum SBP combination compares to Full SBP in 2 scenarios:
What happens if John’s spouse that he is trying to protect dies first?
With FULL SBP & Minimum SBP there would be no benefits on something you have paid for over time (unless some form of child coverage is elected or your child is young enough in age to receive benefits).
With the ANICO Signature GUL John could:
Change the beneficiary to any children
Utilize the Cash-Out Rider mentioned on the previous slide if his spouse passed sometime before year 25 (would need to pay premiums until either year 15, 20 or 25 in order to get these options).
This creates additional control for John and his family.
2) The other scenario we have to discuss is, at least according to the law of large numbers, a very likely scenario which is that both John and his spouse live nice long lives to life expectancy or beyond. For example let’s say John passes at his Age 87 and that his spouse is Age 85 at the time of his passing.
1) With Full SBP and Minimum SBP, John’s spouse would receive her survivor pension until her passing but at her age this may be a very short period of time. This means John may have paid in a lot more than his spouse receives back out in benefits.
2) With the ANICO Signature GUL John’s spouse would receive a lump sum of $650k in addition to the Minimum SBP payment. If these $s were not all used during her lifetime then they would pas on to the next generation as a legacy ensuring someone will receive the full benefit of what was paid for.
For Advisor Use Only

47. Summary & Commitment…COVERAGE UNDER 5-5-1043
Rank
Retired O-5 over 20
Insurance Budget
$514
WL Coverage
$789,046
WL Gtd. CV
$85,436
WL RPU
$358,438
This template and analysis is something we can provide to you when doing an SBP analysis for your clients (though it is for advisor use only). Whatever decision your client ultimately makes however still does not change the fact that 55% of one’s pension is simply not enough to protect their spouse. This means we will either need other existing insurance or assets to bridge the gap or look into purchasing additional coverage on top of the numbers we just went through.
Speaking of existing insurance however, what about our client that started with us as a young officer and had followed the plan throughout the military career. That individual at the time of the SBP decision would already have $789,046 in guaranteed Death Benefit along with $85,436 in guaranteed Cash Values & $358,438 in Reduced Paid-Up insurance if elected. As I mentioned earlier, this is not just for show but can have a large impact at and through retirement!
For Advisor Use Only

48. WHOLE LIFE & THE SBP DECISION…
RPU OF EXISTING WHOLE LIFE COVERAGE AT THE BEGINNING OF AGE 43 WOULD BE $358,438.
This represents right at 28.15% of John’s Full Military Pension
28.15% + 55% (FULL SBP or Min. SBP/Life Blend) = 83.15% coverage of John’s Pension for Surviving Spouse!
What these policies do for John here (assuming he had followed ) is give him options…they give him CONTROL! In this situation John could do one of two things to supplement above and beyond the 55% protection provided to his spouse through either Full SBP or the ANICO SGUL/Minimum SBP Combo.
John could choose to RPU his existing whole life policies for $358,438. Quick math tells us (again assuming the Rule of 300) that this amount of paid-up insurance would be equal to right at 28.15% of John’s Military Pension. When added to the 55% we just discussed this brings his spouse to 83.15% protection before considering any investment $s which is fantastic!
For Advisor Use Only

49. WHOLE LIFE & THE SBP DECISION…
2) CONTINUE WHOLE LIFE PREMIUMS ON $789K EXISTING COVERAGE & SUPPLEMENT WITH SMALLER ANICO SGUL OF $250,001.
This would create an additional level of CONTROL for life’s “what-ifs”
Or if John wanted to keep options open and gain more control (albeit at a higher cost) he could simply keep all $780,048 in existing coverage in place (after all the $ commitment is already there) and supplement with a smaller ANICO SGUL of $250,001. The need on the GUL would actually be closer to $230k but there is a serious price break at $250,001 with ANICO in addition to better underwriting classes being available as well (Std. Plus, Pref. & Pref. Plus NT).
By doing so he would pay more than under option 1 BUT he keeps more control of his life insurance plan for life’s “what-ifs”. Now you may be asking what I mean by more control so let’s take a look by comparing John’s options side by side.
For Advisor Use Only

50. Taking CONTROL of your life insurance plan…
Keeping full Whole Life amount in force & buy less GUL
RPU existing Whole Life and buy more GUL
Monthly Premium
More Expensive
Less Expensive
What if Spouse Dies First?
Full Whole Life = Greater Gtd. Cash Value, RPU, ETI, APL or change beneficiary
ANICO SGUL = Lesser Cash-outs if prior to year 25 or change beneficiary
RPU Whole Life = Lesser Gtd. Cash Value or change beneficiary
SGUL = Higher Cash-outs if prior to year 25 or change beneficiary
Now this slide is quite “messy” but the point being made is that while more expensive than the option of RPUing the existing WL and buying a larger chunk of ANICO SGUL, by keeping the entire WL DB of $810k in place and supplementing the a smaller GUL John is able to maintain a large degree of control. The best way to illustrate this is to revert back to our SBP discussion on what happens should John’s spouse predecease him.
If he had RPUed his WL policy and purchased the large ANICO SGUL then upon his wife’s death John would simply keep the WL in force for $358,438 which would then pay to his children upon his death. On the ANICO policy, if she passed away before year 25 then the cash-out rider could be utilized and if not then the beneficiary could be switched giving us two options.
If instead we kept the full Death Benefit of $889,048 in place on the WL and chose a smaller ANICO SGUL policy then upon John’s spouse passing before him he would have the following options on his WL policy:
RPU the DBs for what could be a much higher amount than if he RPUed it at his military retirement.
Choose ETI non-forfeiture options
Cash out the policies for their guaranteed cash values
Go on Automatic Premium Loan if elected or
Change the beneficiaries
In addition the smaller ANICO policy would have the same options as mentioned above. This scenario provides for quite a few more options or CONTROL than RPUing the policy and buying a large ANICO SGUL would.
Either way, the client is left in a much better position at retirement that they would have been had they not taken advantage of the plan we spoke to earlier and either option also provides significantly more control than choosing a GUL without the optionality offered by the ANICO SGUL (see the far right column).
CONTROL
For Advisor Use Only

51. Control Age 45 $400k Term (30yr) Guaranteed UL Whole Life Premium
$102.17
$259.62
$278.20
$599.38 $0
$57,239**
$127k
$250k
Premium 65 65
**Cash value not guaranteed. Based on a 6% assumption

52. Don't let the Separation health EXAM be a misstep…
TINNITUS
Among disabled veterans of recent wars, 43% have tinnitus, the most common condition. 1
SLEEP APNEA
One of the latest trends, resulting from another policy change, is a rise in disability determinations related to sleep apnea — from 11,742 to 164,107 over the last decade. 1
PTSD
More than one in five veterans receiving federal disability payouts suffers from post-traumatic stress disorder, a figure that has spiked in the last decade.
Veterans Affairs officials told lawmakers Tuesday that the number of disability cases related to PTSD has nearly tripled in that time, from around 345,000 cases in fiscal 2008 to more than 940,000 cases today. 2
That wraps up our discussion on how life insurance can play vital role in the SBP decision at retirement. We have no covered the entire span of an individual’s military career and spoken to the opportunities where life insurance can make a big impact along the way.
One other though before we wrap things up though…the biggest issue we can run into regarding supplementing SBP with life insurance is if the client is no longer insurable or would be highly rated. In that instance they could still elect FULL SBP and RPU any WL should they choose BUT if any additional coverage is needed to truly protect the spouse then life insurance, the most efficient way to provide protection, may no longer be a viable option.
Now many things can cause a client to be less insurable (if insurable at all) but something that can have unintended consequences is one’s VA Disability Rating. When separating every service member goes through their Separation Health Exam where a VA Disability Rating, if any, is assigned. Individuals are typically encouraged to list all issues as it can drive up a large disability rating leading to additional tax-free income in retirement. The problem with this is that many of the conditions that lead to such a rating can cause any future life insurance or long term care policies to receive a rate-up or be declined as well.
Go through tinnitus, Sleep Apnea & PTSD points and speak to their affect on Underwriting
So how can we go about avoiding this issue before any SBP/Life Insurance decision is made?
1 -
2 -
For Advisor Use Only

53. A Strategy… For Advisor Use Only
One idea is to lock in your client’s insurability before the Separation Health Exam takes place. If you have had the chance to speak to them about their upcoming SBP decision then it is a great time to run them a 10 year level term quote for the amount of permanent insurance they will be needing in a year or 2 and go ahead and lock in their insurability before any tests take place. If John had sat down with you at Age 40, 2 years ahead of retirement then we could have locked him in on a 10 Year Level Term with ANICO (Signature Term) for $32.14 per month assuming Pref. NT rates!
For Advisor Use Only

54. A Strategy… For Advisor Use Only
Even better, the Signature Term with ANICO offers the ability to convert to the Signature GUL and if you convert in the first 5 years then 100% of the term premiums paid in the year of the conversion are credited to the GUL policy to enhance it even further!
For Advisor Use Only

55. Underwriting Advantages

56. Underwriting Case Study #1
Female / DOB: 12/10/1986
$100k Whole Life w / $50K OPAI
Underwriting:
3 speeding tickets & an accident in 2010
Diagnosed w/ Polycystic Ovarian Age 16:
2 Ovarian Cysts removed2007
On Birth Control to regulate hormones
Urinary Tract Infection & possible Intersticial Cystitis
History of Situational Depression & Anxiety. Cleared in 2011 and no longer on meds.
Bilanary Colic, Migranes & lower back pain

57. Case Study #1 Results Rates Quoted by Other Carriers
Company 1Table 4 NT
Company 2 Table 4 NT
Company 3Table 2 NT
Company 4 Standard NT

58. Underwriting Case Study #2
Male / DOB: 10/29/1968
$250,000 Permanent Coverage & $1,750, Year LT to replace $2,000,000 of expiring term with New York Life.
Underwriting
Diabetic with A1C Score of 6.7
Glucose Score of 136
Albumin/Globulin Score of 2.4
Triglycerisis – 328
Cholesterol of 6.58
Chewing Tobacco (positive for nicotine – 8.437)

59. Case Study #2 Results Other companies expected Table F & Smoker Rates
One company offered Table C & Standard Non-Smoker Rates.
This company offers a table shave program under age 70. Table A-C ratings on a permanent insurance policy would receive a standard rating class.

60. Underwriting Expectations Form Form 624-E
Underwriting Contact Matrix
available in forms online
Supplemental Questionnaires
1-3 day turnaround
Results are not reported to
MIB

61. Form 660-E

62. THANKS
This brings us to the conclusion of our time together today. I think you for allowing us to walk you through “Life” in the Military and hopefully everyone came away with at least 1 idea that can be applied to your business when you get back home. Thanks and have a great day!
Phone:
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