1. Insurance Community University Insight on Life Insurance The webinar will begin shortly. There is no audio at this time. This presentation is being recorded for your viewing pleasure at a future date. The attendance and proctor forms are available under ‘Materials’ in the Webinar’s Console to the right. The PowerPoint presentation is also available under ‘Materials’. You will receive the course number for your state near the end of class. Use the ‘chat’ window for questions on the content. Good things you should know…

2. Insurance Community University Welcome to your Insurance Community University All of you are currently on mute – Un-mute your own system – Telephone Option Select Telephone on your screen Dial in the PIN number so that your number becomes active – Microphone and/or Speaker Option You can use this option if you have a headset that you use with your computer 2 Audio

3. Insurance Community University Participation & Chat Window You will receive information from the monitor via the ‘Chat’ window. – Please locate window in the control panel Q & A is welcomed during the presentation and at the end of the presentation You will find the question box on your control panel – Write your question in that box and send it to the presenter/organizer The presenter will take those questions in the order submitted 3

4. Insurance Community University DOI Requirements When you see a slide with the hand up symbol, touch the “hand” icon on your control panel – Click ONCE only If you do not raise your hand, the monitor will be in contact with you in the chat box If you are in a group, the designated proctor is responsible to make certain you are all in attendance at all times 4 = Hand is down

5. Insurance Community University Polling Throughout the class we will be conducting periodic polls We need 100% participation on the polls The polls are intended to check participation but also to create discussion topics throughout the presentation 5

6. Insurance Community University Forms To Complete for CE After class ends – Return attendance form – Proctors – return your form to email address Email address is in chat window or in email sent to you today 6

7. Insurance Community University DOI Requirements We will file your hours with the DOI after the completion of this webinar and we have received the attendance form. You have 48 hours to return the form You will be sent a Certificate of Attendance/Completion by email. Please retain this for your records for five years. 7

8. Insurance Community University Disclaimer Insurance forms and endorsements vary based on insurance company; changes in edition dates; regulations; court decisions; and state jurisdiction. This instructional materials provided by Insight is intended as a general guideline and any interpretations provided by Insight do not modify or revise insurance policy language. The authors of these materials, Insight Insurance Consultants is a division of Insight Consulting and Management Inc. and Quick Life. In providing these materials, Insight assumes neither liability nor responsibility to any person or business with respect to any loss that is alleged to be caused directly or indirectly as a result of the instructional materials provided. Copyright 2010 – 2013 All Rights Reserved www.insurancecommunitycenter.com 8

9. Insurance Community University Your Instructor Today Presented by: George Fraser, Director of Annuities Quick Life, a strategic partner of the Insurance Community Center 9

10. Insurance Community University About George Fraser, III George Fraser has over 40 years of Life and Annuity sales experience. In that time, he has acted as an agent, General Agent and Vice President of Retail Sales for leading Insurance providers. George has served as National President of GAMA International, Chairman of the Board for AMTC as well as committee work for LIMRA. He also serves as a Director for Rainmaker Advisory LLC a leading consulting firm within the retail insurance broking sector.

11. Insurance Community University Polling Question #1 11

12. Insurance Community University What this course will cover: Types of Life Insurance – Term Insurance – Universal Life Insurance – Whole Life Insurance – New Product design Personal uses for Life Insurance Business uses for Life Insurance Marketing Programs

13. Insurance Community University Types of Life Insurance 13

14. Insurance Community University Term Life Level term for a specific period Contracts are written for specific periods of time 14

15. Insurance Community University Term Life 5 year, 10 year, 15 year, 20 year and 30 year term At the end of the written term premiums increase dramatically or the insured can rewrite with evidence of insurability Many contracts have a conversion option Most carriers give volume discounts 15

16. Insurance Community University Term Life Carriers typically issue in 4 underwriting classes Super preferred Preferred Standard Multiple substandard classes 16

17. Insurance Community University Decreasing Term Life Written for specific periods Reduces at a uniform rate Level premium 17

18. Insurance Community University Universal Life Insurance Two policy forms Fixed universal life Variable universal life 18

19. Insurance Community University Universal Life Insurance Basic Policy Design The life Insurance policy is unbundled Policy holder retains the risk – Premiums can be variable as long as enough money in subaccount to cover cost of insurance – Minimum premium – Target premium – Maximum premium 19

20. Insurance Community University Universal Life Insurance Basic Policy Design Cost of Insurance is not guaranteed and can be changed by company Death benefit is typically has two options – Level death benefit – Face amount plus cash value of contract 20

21. Insurance Community University Polling Question #2 21

22. Insurance Community University Modified Endowment Contract (MEC) Law changed in 1988 to curb abuses in contract The 7 pay test determines MEC status If contract fails MEC test it looses its tax advantage features Once a MEC always a MEC Substandard ratings only applied to cost of insurance 22

23. Insurance Community University Fixed Universal Life Insurance company determines annually the crediting rate to policy Contract will have a minimum guaranteed crediting rate Only requires a state life Insurance license to sell Typically will have a higher premium need in low interest rate environment 23

24. Insurance Community University Variable Universal Life Requires a securities license to sell Stock and bond sub-accounts are created in contract If sub-accounts have large losses could require a premium call Typically sold to younger insureds because of longer investment time frames 24

25. Insurance Community University Whole Life Two forms of Whole Life Participating Non-Participating 25

26. Insurance Community University Participating Whole Life Fixed premium Guaranteed death benefit Guaranteed cost of Insurance 26

27. Insurance Community University Participating Whole Life Pays an annual dividend – Accumulate with interest – Accumulate with the purchase of paid up additions – Used as a single premium to purchase one year term rider – Used to reduce premium payment – Paid in cash Sold by mutual insurance company Cash value increases at prescribed rate 27

28. Insurance Community University Non Participating Whole Life Fixed premium Guaranteed death benefit Guaranteed cost of Insurance Sold by stock Insurance company Excess interest determined yearly by Insurance company 28

29. Insurance Community University New Product Designs 29

30. Insurance Community University Index Universal Life A fixed universal Life product Crediting rate is determined by performance of the index Cash value cannot decrease in value due to poor index performance Does not require a securities license Designed to compete with Variable Universal Life 30

31. Insurance Community University Polling Question #3 31

32. Insurance Community University Guaranteed Death Benefit Universal Life Contract will guarantee payment of a death benefit as long as minimum premium payments are made Will pay death benefit even if no cash value in contract Basically allows the creation of a level term contract to specific ages in the future 32

33. Insurance Community University Personal Uses of Life Insurance 33

34. Insurance Community University Family Needs Cover risk for dependent children – Typically level term is used to cover the income loss caused by premature death of husband or wife Used as savings plan for long term needs such as college expense Gifts of policies from Grand Parents to Grand Children 34

35. Insurance Community University Family Needs Estate Planning – To cover settlement costs at death – Payment of potential estate tax costs – Estate equalization – Provide income in non-liquid estates 35

36. Insurance Community University Family Needs Retirement planning – To insure retirement benefit – Accumulation vehicle using the tax deferred benefits of a life insurance contract – Create income stream at retirement 36

37. Insurance Community University Business Insurance Needs 37

38. Insurance Community University Key Man Life Insurance Insures company against loss of revenue because of premature death of key employee Proved company with funds to replace key employee Required by a lending institution Amount of coverage determined by need being covered 38

39. Insurance Community University Buy Sell Agreements Two methods: funded and unfunded Funded provides money in advance to executed agreement Unfunded means that funds out of current earnings will be used to fund agreement 39

40. Insurance Community University Buy Sell Agreements Valuation methods Agreed on in advance in agreement Agreement calls for valuation at death Periodic valuation 40

41. Insurance Community University Buy Sell Agreement Two types of agreements – Cross Purchase Agreement – Stock Redemption Agreement 41

42. Insurance Community University Cross Purchase Agreement Typically no more than 3 partners The remaining partner agrees to purchase decedents interest at death Business value gets a “step up in basis” Reduces possibility of litigation Provides certainty of value for family of decedent Partners purchase life Insurance on each other 42

43. Insurance Community University Stock Redemption Agreement Typically used with more than 3 partners Sometimes used as part of a section 303 strategy Company purchases decedents interest of death and retires stock Remaining interest do not have “step up in basis” Company purchases Life Insurance on all participants 43

44. Insurance Community University Types of Life Insurance Used to Fund Agreements In a cross purchase sale many times Universal Life is used because funds are created for a “living” buyout Term Life Insurance is mostly used large amounts of Insurance are needed with limited cash flow as premiums are paid by the individual partner Amount of premium can be given as bonus to participant 44

45. Insurance Community University Types of Life Insurance Used to Fund Agreements In a stock redemption plan company can purchase Universal Life and set funds aside to augment retirement plan of participant Since the need is long term in redemption plans some type of cash value life Insurance or Guaranteed Premium Life Insurance is typically used to fund agreement 45

46. Insurance Community University Polling Question #4 46

47. Insurance Community University Non-Qualified Deferred Compensation Plans In a stock redemption plan company can purchase Universal Life and set funds aside to augment retirement plan of participant Since the need is long term in redemption plans some type of cash value life Insurance or Guaranteed Premium Life Insurance is typically used to fund agreement 47

48. Insurance Community University Non-Qualified Deferred Compensation Plans Participant is not taxed currently on the contribution Plans can be funded or unfunded In a funded plan money is typically held in a life Insurance contract or some other type of accumulation vehicle Unfunded means that the company is agreeing to pay out a benefit at a later date and will fund it out of current earnings 48

49. Insurance Community University Non-Qualified Deferred Compensation Plans Assets of the plan are owned by the company and therefore subject to the creditors of the company Assets of the plan are reflected on the company’s balance sheet Company takes a tax deduction when the benefit is paid to the participant Life Insurance is the preferred funding vehicle as the money accumulates tax deferred 49

50. Insurance Community University ESOP Plans 50

51. Insurance Community University ESOP Plans A trust is created to purchase the business interest from the owner with the employee being the beneficiary of the trust The trust is a qualified plan trust Owner still controls business as the trustee of the plan 51

52. Insurance Community University ESOP Plans Life Insurance is used to insure the owner during the payout to have funds to complete purchase in the event of premature death Life Insurance is used as keyman Insurance to cover successor management while buyout is occurring. 52

53. Insurance Community University Polling Question #5 53

54. Insurance Community University Marketing Life Insurance 54

55. Insurance Community University Marketing Life Insurance Cross market to existing clients who have businesses that involve partnerships or corporations with multiple owners Include family need questions as part of your client annual review Create your own webinar program and invite existing clients to join in 55

56. Insurance Community University Marketing Life Insurance Look at existing clients who own businesses and are over age 55 most are thinking about creating an exit plan Look at available online support programs for the sale of life Insurance you do not need to recreate the wheel 56

57. Insurance Community University Contact Information George Fraser III Main Phone: 925 634 4914 (main) Cell Phone: 408 313 1165 Email: george@rainmakeradvisory.comgeorge@rainmakeradvisory.com www.quicklifecenter.com 57

58. Insurance Community University Upcoming Classes Upcoming University/Paid CE Classes FREE to University Members $50.00/charge for non university members 4/18Business Income Worksheets 4/23Personal Auto 4/25 & 26Insight on Errors and Omissions 58 Upcoming Community ClassesFREE to University Members $25.00/charge for non university members To Be announced Join the University TODAY. www.insurancecommunitycenter.comwww.insurancecommunitycenter.com Click Join University at the top of the bar