1. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Survivor Universal Life Presented by… Levi Robinson, CLU, ChFC, FLMI Director Product & Market Training

2. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC  Why Survivor Universal Life Insurance?  Sales Applications  American General’s Survivor Products  Which One To Use?  Product Differences  Estate Planning 101  Optionality  Questions? Agenda

3. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC What is Survivorship Life Insurance?  This type of life insurance is a single policy that covers two lives.  It pays the death benefit after both of the people insured have passed away and is typically more affordable than purchasing two individual policies.

4. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC  Life insurance is the least expensive method for providing cash for the payment of estate taxes.  Since 1981, the law allows one spouse to transfer all their property to the other spouse at death tax free.  This is the “unlimited marital deduction”.  If there is an estate tax due, it is not due until the second spouse dies. What is Survivorship Life Insurance?

5. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC  In response, life insurance companies designed the survivorship life insurance contract.  Since the premium is lower, it can be an even a better solution than a policy insuring only one person. What is Survivorship Life Insurance?

6. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Sales Applications Estate LiquiditySupplemental Cash Flow Charitable GiftsWealth Transfer Gifts to GrandchildrenInsurance for Special Needs Children Insuring the UninsurableBusiness Applications

7. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Elite Survivor Index ® AG Secure Survivor GUL SM Elite Global Survivor ® American General’s Options…

8. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC AG Secure Survivor GULElite Survivor IndexElite Global Survivor Primarily used for estate planning/wealth transfer market where guarantees and the ability to adjust the death benefit without risk to heirs is important. Lower cost option for secondary guarantees. Primarily used in estate liquidity/wealth transfer sales where index interest crediting options can potentially help reduce premium outlays. Useful for estate planning/wealth transfer market where death benefit and cash value growth are a priority. Ideal for 1035 exchanges. Short pay scenarios are quite effective. Which One?

9. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC AG Secure Survivor GULElite Survivor IndexElite Global Survivor Lowest TargetMid TargetHighest Target Guaranteed Death BenefitNon-Guaranteed DB Lowest Cost Guaranteed Cash ValueCash AccumulationShort Pay Cash Accumulation Traditional Estate Planning Supplemental Income Planning Which One?

10. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Elite Survivor IndexElite Global Survivor Issue Ages20-9018-80 Minimum Death Benefit$250k$100k Monthly Guarantee Premium MGP-10 MGP-14 MGP-1 MGP-30 Alternative Value Provision N/A3.00% Key IUL Differences

11. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC StrategyRate Declared Interest Account3.00% Minimum Guarantee3.00% Cap Rate Index Account Cap Rate10.75% Illustrated Rate6.96% Minimum Guarantee1.00% Participation Rate Index Account Participation Rate60% Illustrated Rate7.60% Minimum Guarantee2.00% Elite Survivor Index

12. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC StrategyRate Declared Interest Account3.00% Minimum Guarantee3.00% 5-Year Index Account Participation Rate55% Illustrated Rate8.14 Minimum Guarantee0.00% 1-Year Index Account Participation Rate45% Illustrated Rate5.35% Minimum Guarantee0.00% Elite Global Survivor

13. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Monthly Anniversary Date S&P 500Dow Jones EURO STOXX Hang Seng Dec 201,423.534,118.5419,240.12 Jan 201,430.504,173.0720,327.72 Feb 201,459.684,250.3020,567.91 Mar 201,410.944,079.5219,356.90 Apr 201,484.354,416.7920,566.59 May 201,522.754,480.8120,904.84 Jun 201,512.844,545.6121,684.67 Jul 201,534.104,445.2323,291.90 Aug 201,445.554,173.2921,595.63 Sep 201,518.754,366.1625,701.13 Oct 201,500.634,411.2629,465.05 Nov 201,439.704,277.2427,771.21 Dec 201,460.124,314.7027,017.09 1-Year Index Account S&P 500 3.73% Avg Return S&P 500 3.73% Avg Return Dow Jones EURO STOXX 5.08% Avg Return Dow Jones EURO STOXX 5.08% Avg Return Hang Seng 20.52% Avg Return Hang Seng 20.52% Avg Return X 25% Weighting = 1.27% X 75% Weighting = 15.39% + = 16.66% Adjusted Index Return 16.66% X 55% Participation Rate = 9.16% Index Interest Credited

14. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC At anytime while both contingent insureds are living, this policy may be exchanged for two individual policies covering the insureds separately upon the occurrence of certain events such as divorce or tax law changes. The Policy Split Option

15. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC

16. YearName of BillYears Until Next Major Change 1939Internal Revenue Code15 Years 1954Internal Revenue Code20 Years 1974Employee Retirement Income Security Act (ERISA) 2 Years 1976Tax Reform Act of 1976 (TRA ‘76)5 Years 1981Economic Recovery Act of 1981 (ERTA) 1 Year 1982Tax Equity & Fiscal Responsibility Act of 1982 (TEFRA) 6 Months 1982Technical Corrections Act of 1982 (TCA ’82) 2 Years Stability In The Tax Code?

17. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC YearName of BillYears Until Next Major Change 1984Tax Reform Act of 1984 (TRA ‘84)1 Year 1984Retirement Equity Act of 1984 (REA ‘84) 1 Year 1985Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) 1 Year 1986Tax Reform Act of 1986 (TRA ‘86)2 Years 1988Technical & Miscellaneous Revenue Act (TAMRA) 1 Year 1989Revenue Reconciliation Act of 19891 Years 1990Revenue Reconciliation Act of 19903 Years Stability In The Tax Code?

18. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC YearName of BillYears Until Next Major Change 1993Revenue Reconciliation Act of 19933 Years 1996Small Business Job Protection Act of 1996 1 Year 1997Taxpayer Relief Act of 19974 Years 2001Economic Growth & Tax Relief Reconciliation Act of 2001 9 Years 2011The Tax Relief, Unemployment Insurance Reauthorization & Job Creation Act of 2010 3 Years 2013American Taxpayer Relief Act? Stability In The Tax Code?

19. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC  Estate Free Rules Replaced  QTIP Allowed for Marital Deduction  Unlimited Marital Deduction  Unified Estate and Gift Taxes  Gift Tax Repealed  Portability of Unused Estate Tax Exemption What About Estate Taxation?

20. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Decedents dying in: Estate Tax Exemption Amount Tax Rate 2000-2001$675,00055% 2002-2003$1,000,00049-50% 2004-2005$1,500,00047-48% 2006-2008$2,000,00045-46% 2009$3,500,00045% 2010$5,000,000 (or unlimited) 1 35% 2011$5,000,00035% 2012$5,120,00035% 1 An executor of the estate of a decedent dying in 2010 could opt out of the estate tax in exchange for Modified Carryover Basis. The Estate Tax Exemption?

21. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC 2013: Estate, Gift and Generation Skipping Tax $5.25 Million Exemption 40% top Tax Bracket Where Are We Today?

22. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC What Are People Thinking? It seems like the tax law changes constantly why should I do any estate planning now?

23. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Liquidity to Pay Estate Taxes  Liquidity  Some Estates are Liquid Enough to Pay Estate Taxes Owed without Selling Assets  Other Estates will need to Sell Assets to Raise Liquidity within 9 months... Regardless of the Current Market for those Assets  Sometimes forced-sales result in Pennies on the Dollar  Most Large Estates Prefund the Estate Tax Liability with Life Insurance

24. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Why Life Insurance  Tax Benefits  Income Tax Deferred Accumulation during Life  Income Tax Free Proceeds at Death of Insured  Liquidity  Paid in Cash  Timing  Paid when Needed  Financial Product  Acceptable Return on Investment at Life Exp.

25. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Life Insurance Trust  Life Policy Proceeds Included in Estate if it is Personally Owned  Life Insurance Trust Typically Established to be Owner & Beneficiary of Life Policy  Children, Grandchildren, etc. are Beneficiaries of Life Insurance Trust  Life Insurance Trust Provides Liquidity that can be used for Estate Taxes  Does not pay tax directly but can loan funds to estate for payment or buy assets from estate

26. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Benefits of an Irrevocable Life Insurance Trust (ILIT)  Life insurance premiums (annual exclusion gifts) reduce the estate (Crummy Notice/Present Interest Gift)  Life insurance can still be used to provide source of estate tax liquidity  Long term control of proceeds can be protected for your heirs  All life insurance death proceeds OUTSIDE of your estate

27. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Policies Transferred to Irrevocable Life Insurance Trust (ILIT)  New policies owned by ILIT are estate tax-free from policy inception  Existing policies transferred are estate tax-free after 3 years  provided there are no retained incidents of ownership

28. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC  Estate protection rider provides last survivor term insurance coverage during the first four policy years.  The additional death benefit is equal to 125 percent of the policy’s initial specified amount.  There is a charge for this optional rider; it can only be added at issue and terminates after four years. Four-Year Term Rider

29. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Benefits of an Irrevocable Life Insurance Trust (ILIT)  $2,000,000 Life insurance in an ILIT  Means – a net of $2,000,000 to family  $2,000,000 policy owned by the insured  Means – a net of $2,000,000 MINUS the estate taxes

30. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Michael (45) owns a successful construction business. Michael and his wife Jennifer (45) have two children. Greg age 22 and Nancy age 24 who both work in the family construction business and who Michael intends to pass the business to after his death. Michael & Jennifer have a total net worth of $13,750,000 mainly consisting of the family’s closely held business; with a potential estate tax liability of roughly $1,500,000 under current estate tax law. How will their children pay the estate taxes due upon their parents death without having to sell the family business? Traditional Estate Planning Case M45 F45PNT Max Annual Premium Solve $10,557.90 for 10 Yrs $1.5M DB

31. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC  Working with the attorney of Michael & Jennifer you work up a scenario whereby the attorney establishes an irrevocable life insurance trust (ILIT) on behalf of the couple.  The trust owns and is beneficiary of an Elite Index Survivor life insurance policy, with Michael & Jennifer as the insureds.  The couple can use a portion of their annual federal gift tax exclusion ($14,000) to fund the policy. The Solution M45 F45PNT Max Annual Premium Solve $10,557.90 for 10 Yrs $1.5M DB

32. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC The ILIT is the owner and beneficiary of an American General Elite Survivor Indexed policy. In this scenario, the required premium for 10 years is $10,558. Which is less than the couples annual gift tax exclusion. This premium is projected to support the $1,500,000 death benefit. Upon the second death, the ILIT can provide the liquidity needed to help pay estate taxes and transfer costs using proceeds from the policy. How it Works: M45 F45PNT Max Annual Premium Solve $10,557.90 for 10 Yrs $1.5M DB

33. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Offer your clients two opportunities for return of their premiums with AG Secure Survivor GUL® Optionality SM

34. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC  Male and Female, both age 50 preferred non tobacco*  Death benefit $3 million, guaranteed to age 100  Total premium paid in a 10- pay scenario: $343,182 Optionality in action  At the end of year 15 they could choose to exercise the return of premium feature and receive back $343,182 or  Continue their guaranteed coverage until year 32, when the insureds are age 82, and their guaranteed cash surrender value is $353,199 The Concept * For the State of Texas as of 4/11/2013. Not an actual case, presented for illustrative purposes only. Guarantees are subject to the claims paying ability of the issuing insurance company

35. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Questions

36. FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Policies issued by: American General Life Insurance Company, 2727-A Allen Parkway, Houston, Texas 77019.. Elite Global Survivor Policy Form Number 08414; Elite Index Survivor Policy Form Number 08327; AG Secure Survivor GUL Policy Form Numbers 11239, ICC-11239; Enhanced Surrender Value Rider Form 11990, ICC-11990 Four Year Term Rider Form Number 01904; Overloan Protection Rider Form Number 07620JT. The United States Life Insurance Company in the City of New York, One World Financial Center, 200 Liberty Street, New York, New York 10281. The underwriting risks, financial and contractual obligations and support functions associated with products issued by American General Life Insurance Company (American General Life) and The United States Life Insurance Company in the City of New York (United States Life) are the issuing insurer’s responsibility. All guarantees are subject to the claims-paying ability of the issuing insurance company. United States Life is authorized to conduct insurance business in New York. Policies and riders not available in all states. American General Life Companies, www.americangeneral.com, is the marketing name for a group of affiliated domestic life insurers including American General Life and United States Life. AGLC106962 © 2013. All rights reserved.