1. © 2013 ING North America Insurance Corporation CN0904-12224-0916 RETIREMENT INVESTMENTS INSURANCE BLUEPRINT FOR BUSINESS: KEEP WHAT YOU’VE BUILT Key Person Protection

2. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Disclosures Neither ING nor its affiliated companies or its representatives offer tax or legal advice. The strategies suggested may not be suitable for everyone and you should consult with your tax and legal advisors before implementing any of the strategies suggested here. These materials are not intended to and cannot be used to avoid tax penalties, and were prepared to support the promotion or marketing of the matter addressed in this document. The taxpayer should seek advice from an independent tax advisor. Life insurance products are issued by ReliaStar Life Insurance Company (Minneapolis, MN), ReliaStar Life Insurance Company of New York (Woodbury, NY) and Security Life of Denver Insurance Company (Denver, CO). Within the state of New York, only ReliaStar Life Insurance Company of New York is admitted and its products issued. All are members of the ING family of companies. All guarantees are based on the financial strength and claims paying ability of the issuing insurance company who is solely responsible for all obligations under its policies. © 2013 ING North America Insurance Corporation CN0904-12224-0916 2

3. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 3 You’ve Invested A Lot In Your Business Time Money Passion Your Business

4. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 4 Your business is probably your most valuable asset Your lifestyle and your financial foundation depend on it.

5. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 5 Do You Have Some Special Employees? Do some of your employees have special skills that make you profits? n UNIQUE CONTACTS/CONNECTIONS n INNOVATIVE/TECHNICAL ABILITIES n SALES TRACK RECORD n MANAGEMENT/LEADERSHIP SKILLS n FINANCIAL EXPERTISE

6. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 6 Key People Increase Your Profits If you’ve done a good job hiring, you have some key people whose skills create profits Your income and economic security may depend on them staying with your business and continuing to do a good job The unexpected loss of even one key employee can reduce your profits for years

7. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 7 What would it mean to your business if your most valuable employee died unexpectedly? We often take our key people for granted

8. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Losing A Key Employee Can Be Devastating Who will take over the key person’s duties? How long will it take to find a good replacement? Will you have to pay the new person more? How long until he/she is up to speed? © 2013 ING North America Insurance Corporation CN0904-12224-0916 8

9. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Losing a Key Employee Can Be Devastating Will you have to do both your job and the key employee’s job at the same time? What will be the impact on your customers? What will be the impact on the other employees? What will happen to business profits? © 2013 ING North America Insurance Corporation CN0904-12224-0916 9

10. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Protecting Your Business Smart business owners hope for the best But they plan in advance for the worst They anticipate disasters and are prepared if the unexpected happens They have contingency plans ready if they are needed © 2013 ING North America Insurance Corporation CN0904-12224-0916 10

11. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 11 Do you have a plan in place to minimize the loss if one of your key people dies unexpectedly?

12. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Preparation Is Key Smart business owners protect their businesses Many businesses use a four step process: 1.Identify their key people 2.Determine how much value would be lost 3.Explore the alternatives available 4.Decide how much of the risk to self-insure © 2013 ING North America Insurance Corporation CN0904-12224-0916 12

13. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 13 Calculating A Key Person’s Value Jim Williams is CFO for CRAZY Tools, Inc. He is a key employee responsible for $100,000 of profits annually. Other facts: Total salary & perks $175,000 annually A replacement would cost $225,000 annually A new person would need 4 years to equal him Recruiting costs/commissions would be $50,000 Training costs would be $25,000

14. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 14 Key Person Valuation Tool

15. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 15 Key Person Valuation Tool

16. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Consider Using Key Person Life Insurance Key Person Life Insurance can protect your business for a relatively small cost Life insurance on the key person can help: Provide funds to recruit, hire and train a qualified replacement Replace lost profits Provide funds to pay business debts © 2013 ING North America Insurance Corporation CN0904-12224-0916 16

17. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet How Key Person Life Insurance Works Business purchases a life insurance policy on key person and pays premiums Business names itself as the beneficiary If key employee dies, death benefits are paid to the business; they can be used to pay expenses or replace lost profits © 2013 ING North America Insurance Corporation CN0904-12224-0916 17

18. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Key Person Life Insurance © 2013 ING North America Insurance Corporation CN0904-12224-0916 18  Policy  Premiums  Death Benefits  Policy Life Companies

19. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Income Tax Aspects of Key Person Life Insurance Premiums are NOT income tax deductible Death Benefits are generally income tax free (IRC Sec. 101)* If the business is a C corporation, then cash value growth and death benefits may be subject to the corporate alternative minimum tax (AMT) * Assuming a 101(j) consent form has been signed by the key employee © 2013 ING North America Insurance Corporation CN0904-12224-0916 19

20. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Key Person Life Insurance © 2013 ING North America Insurance Corporation CN0904-12224-0916 20 Some Potential Advantages n Income tax free death benefits under IRC section 101* (subject to the AMT for C corporations ) n Policy cash values are an asset on the business’ balance sheet n Growth in cash values is income tax-deferred (subject to the AMT for a C corporation) n Risk of loss is transferred to the insurance company *Assuming a 101(j) consent form has been signed by the key employee

21. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 21 Some Potential Advantages Income tax free death benefits under IRC section 101* (subject to the AMT for C corporations ) Policy cash values are an asset on the business’ balance sheet Growth in cash values is income tax-deferred (subject to the AMT for a C corporation) Risk of loss is transferred to the insurance company * Assuming a 101(j) consent form has been signed by the key employee Some Potential Disadvantages Premium payments are NOT income tax deductible Determining a key employee’s value is an art, not a science Key employees can leave the business before death; the business may incur similar losses / expenses Insured key employee needs to execute a 101(j) notice and consent form Key Person Life Insurance

22. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet What About You? Are You A Key Person In Your Business? What would happen if you died on the way home from work? Would happen to the value of your business? What would that mean to your family’s finances? © 2013 ING North America Insurance Corporation CN0904-12224-0916 22

23. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Suppose you died in an accident on the way home from work tonight © 2013 ING North America Insurance Corporation CN0904-12224-0916 23 How much of the value of your business would be lost? Would your business survive? What would your family do?

24. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 24 Do you have a plan in place to protect your business and your family?

25. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 25 Suppose You Die Unexpectedly There is a Plan: What does it say? When was it created? What value does it place on your interest? Is there enough money backing it up Does it make sense today? There is NO Plan: Who makes decisions? Will customers stay loyal? What will happen to your business interest? Will your key employees stay or be hired away? How much business value will disappear?

26. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 26 Your death (or that of another owner) could create another difficult financial problem. The bank may be able to change lending terms or call an outstanding loan.

27. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet © 2013 ING North America Insurance Corporation CN0904-12224-0916 27 Even worse, if the loan is personally guaranteed, the bank may be able to demand repayment from your estate. The terms of the personal guarantee may place the bank ahead of your spouse and children in the settling of your estate.

28. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet I May Be Able To Help You Protect Your Business’ Value I may be able to help you get the most for the time, money and emotion you’ve put into your business by protecting the value of your key employees: Calculate each key employee’s value Explore alternative solutions Gather information on insurance alternatives Determine how much exposure you have through personal lending guarantees Assist in keeping your plans up-to-date © 2013 ING North America Insurance Corporation CN0904-12224-0916 28

29. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet What I Need From You To assist you, I need some information: Who are your key employees? Have your calculated their value to your business? Has that value been updated for today? Are you self-insuring the entire risk? What alternatives have you considered for transferring part of the risk? Has there been an analysis of the business debts that have been personally guaranteed? What’s your current situation? © 2013 ING North America Insurance Corporation CN0904-12224-0916 29

30. Do not put content on the brand signature area Orange RGB= 255,102,000 Light blue RGB= 180,195,225 Dark blue RGB= 000,000,102 Grey RGB= 150,150,150 ING colour balance Guideline www.ing-presentations.intranet Next Steps Smart business owners hope for the best, but they plan for the worst If something happens, they are prepared Where would you like to start? Calculating your key employees’ value, Considering self-insurance / professional insurance alternatives, or Analyzing your current risk exposure under personal loan guarantees © 2013 ING North America Insurance Corporation CN0904-12224-0916 30