1. Welcome to The Utah Valley Estate Planning Council Due Diligence in Recommending the Correct Life Insurance Policy Presented by Michael W. Halloran, AEP, CLU, ChFC, CFP ® May 4, 2011

2. Establishing the Need for Coverage

3. Need Temporary need – term insurance Temporary need – term insurance Permanent – Continuing need Permanent – Continuing need

4. Term Coverage Annual Renewable Annual Renewable 10-20-30-Year Level 10-20-30-Year Level Renewable Renewable Convertible Convertible Waiver of Premium Waiver of Premium

5. Permanent or Continuing Need Whole Life Whole Life –Participating  Portfolio  New Money Variable Life Variable Life –Mortality and Expense Cost Universal Life Universal Life –No guarantees –Secondary guarantees  Mortality Table  Company Financial Ratings  Guarantees and Problems  Purpose of Cash Variable Universal Life Variable Universal Life –Investment Risk

6. Amount of Coverage Amount of Coverage  Estate  Business  Charitable

7. Understanding the Policy Illustration – –Pro forma – –Product Illustration   NAIC Illustration   Product enhancements (non-guaranteed)   Current experience   Past history   Current scale vs. portfolio method   Third party references

8. Professional Liability and Disclosure  Who are you liable to? –Policyowner –Insured –Beneficiaries  What happens if your recommendations are wrong?  How can you limit your liability?

9. Rates  Mortality  Expenses charges  Interest –Investing long –Investing short

10. Rating Agencies  Standard & Poor’s  Moody’s  Fitch  A.M. Best

11. Standard & Poor’s www.standardandpoors.comMoody’swww.moodys.comFitchwww.fitchratings.com A.M. Best www.ambest.com Superior AAA 7 AAApi 0 Exceptional Aaa 5 Highest AAA 8 Superior A++ 16 A+ 64 Excellent AA+ 10 AA 16 AApi 4 AA- 44 Excellent Aa1 3 Aa2 6 Aa3 23 Very High AA+ 8 AA 14 AA- 17 Excellent A 67 A- 34 Good A+ 25 A 16 Api 15 A- 12 Good A1 26 A2 21 A3 13 High A+ 23 A 21 A- 9 Very Good B++ 5 B+ 6 Adequate BBB+ 4 BBB 0 BBBpi 3 BBB- 1 Adequate Baa1 0 Baa2 0 Baa3 0 Adequate BBB+ 1 BBB 0 BBB- 1 Vulnerable/Fair B 2 B- 1 Vulnerable BB+ to R 7 Not Rated 62 Weak Ba1 to C 3 Not Rated 122 Non-investment grade BB+ to CCC- 3 Not Rated 107 Vulnerable C++ to F 1 Not Rated 24