aviva iul presentation

For agent use only. Not for use with the general public.

Aviva USA“Product Overview & Sweet Spots”Levi Robinson, CLU, FLMIField Training and Development

CompetitiveEdge

We’ve been here from thebeginning.

In 1998, a few select carriers introduced thefirst Indexed Universal Life products. A year

later, Aviva USA’s predecessor companyjoined the market and has since become the leading provider of IUL, a position we have

not relinquished. For agent use only. Not for use with the general public.

CompetitiveEdge

1 Source: AnnuitySpecs.com’s Indexed Sales and Market Report

The IUL landscape has changed considerably since those early days. A few of the IUL pioneers dropped out while many others have jumped on the bandwagon. But

only Aviva can claim a decade of sustained leadership in Indexed Universal Life.


Aviva Product Portfolio - CoreOur Commitment to Winning with You

Index UL Traditional UL

Lifetime Builder Advantage Builder Aviva LifeStage UL Guarantee UL Solution

Highest Earnings Potential Lowest Cost Current Assumption Guarantee Universal Life

2% Guaranteed Interest Rate

2% Guaranteed Interest Rate 3.5% Guaranteed Interest

Rate3% Guaranteed Interest

Rate

Great for Cash Value Accumulation & retirement

incomeDeath Benefit Sales; No-Lapse

Guarantee under age 65Meet death benefit protection

and cash accumulation Low cost, guaranteed death

benefit protection over age 65

Products issued by and all policy benefits are the responsibility of Aviva Life and Annuity Company, West Des Moines, IA.

Death Benefit ProtectionNo Lapse Guarantee

• Meet market need

• Provide fair return for risk taken– High capital requirements & risk profile require active product management– Re-pricing every 9-15 months to manage UL mix of business (<= 50% NLG)

• Package within valuable proposition– NLG portfolio with value-added Wellness Rider provides differentiation

Survey question % Agree

I feel that I need more life insurance.1 50%

Our household would have trouble keeping up with expenses within a few months after the death of the primary breadwinner.2

70%

1 – LIMRA “Trends in Life Insurance Ownership” 2010 survey, all responses2 – LIMRA “Trends in Life Insurance Ownership” 2010 survey, responses from households with children under 18.


Lifetime Guarantee Death Benefit with Aviva’s No-Lapse Guarantee

No-Lapse Guarantee Portfolio

• Advantage Builder IV with NLG Rider – More competitive under 65

• Guarantee UL Solution III – More competitive over 65– Lower NLG premium than Advantage IV at those

issue ages• Competitiveness

– Most competitive with limited pay scenarios• Target Premiums

– Increased to align with lifetime NLG premiums

Low Cost Guaranteed Death Benefit Protection

Policy Form 2EDB08, 2UDA10, 2NLEEA10, WL16579 #15579 0261410Products issued by and all policy benefits are the responsibility of Aviva Life and Annuity Company, Des Moines, IA. - 01/11/2010

Wellness for Life® Rider v2*Benefits AND Rewards for Life Products

Wellness Benefits• Available to all insureds• Provided by Mayo Clinic

Health Solutions• Includes:

– EmbodyHealth website– Online health risk

assessment– 24 hour nurse hotline– Quarterly newsletter– Discounts on publications

Wellness for Life RewardsSM

• Available to insureds that satisfy wellness qualification criteria

• Qualification criteria– Routine physical once

every 24 months– Maintain weight within

range set at issue• Rewards can potentially

increase cash values or be used to offset No Lapse Guarantee premium

*May not be available in all states. Rider issued by and all rider benefits are the responsibility of Aviva Life and Annuity Company, West Des Moines, IA. Policy form 2WFLAJ07-2. It is anticipated that Wellness for Life® services will be provided by Mayo Clinic Health Solutions for the life of the Program. It is possible that the provider and/or menu of Wellness Services may change or be enhanced at some future date. Wellness benefits not available in Oregon or Tennessee. Products issued by Aviva Life and Annuity, West Des Moines, IA. Product and Rider availability may vary by state.

For agent use only. Not for use with the general public. 16076 098550

Wellness Benefits from Mayo Clinic

EmbodyHealth website– Free online health risk

assessment• 24/7 nurse hotline• Discounts on publications• Agent personalized

– Quarterly EmbodyHealth Newsletter

Products issued by Aviva Life and Annuity, West Des Moines, IA. Product and Rider availability may vary by state.For agent use only. Not for use with the general public.

13964 075249

Wellness for Life RewardsSM

Aviva’s Wellness for Life RewardsSM!

Level I Discount is .50%Multiplied by the policy

year (3 X .50%)1.50% COI Discount

Level II Discount is 1.00%Multiplied by the policy

year (3 X 1.00%)3.00% COI Discount


• Wellness for Life RewardsSM:– Available to insureds that satisfy defined

wellness qualification requirements– Potential COI reductions beginning in 3rd

policy year– Guaranteed– Discount rates will be declared by Aviva– Reduce no-lapse guarantee premium

• Discount Formula:– COI discount = policy year x discount rate

declared– Policy year multiplier capped at 20

Wellness for Life V2 ® ProgramWellness for Life RewardsSM

Products issued by Aviva Life and Annuity, West Des Moines, IA. Product and Rider availability may vary by state.For agent use only. Not for use with the general public.

12704 283248

Sales Ideas

Products issued by Aviva Life and Annuity, West Des Moines, IA. Product and Rider availability may vary by state. 13964 075249For agent use only. Not for use with the general public.

FACTS…

• Male Age 30

• Standard Non-Tobacco

• Needing $500,000 in

Guaranteed Life Insurance

• What would work best for him?

Here’s the situation…Case Study #1

Products issued by Aviva Life and Annuity, West Des Moines, IA. Product and Rider availability may vary by state.


13964 075249


Advantage Builder IV | $500,000 Guaranteed Death Benefit | No Lapse Solve | Male Age 30 | Standard NT | Wellness Version 2

This hypothetical example is for illustration purposes only and is not indicative of past, nor intended to predict future performance of any Index or annuity product.Products issued by Aviva Life and Annuity, West Des Moines, IA. Product and Rider availability may vary by state. 13964 075249

$188,461

For agent use only. Not for use with the general public.Products issued by Aviva Life and Annuity, West Des Moines, IA. Product and Rider availability may vary by state.

Wellness for Life® Rider v2 Wellness/NLG Supplemental Illustration

13964 075249

• Shows level 2 wellness rewards from non-guaranteed ledger of basic illustration• Rewards from prior year offset current year NLG premium obligation• Highlights potential reduction in out-of-pocket NLG premiums

Total PremiumPaid:

$88,101Savings Of:

$100,360

Wellness rewards have the potential to significantly reduce the NLG premium!

Cash AccumulationIndexed UL

• Meet market need

• Provide a fair return for risk taken– Premium patterns, capital usage and profit profile of cash accumulation

provides balance to NLG products• Package with a valuable proposition

– Upside accumulation without downside risk for the consumer– High target premium enhances revenue opportunity

Survey % AgreeFor pre-retirees, Social Security will be able to pay me a benefit when I retire.1

36%

Regularly setting money aside, other than in a pension, is the most important way to fund my retirement.2

32%

1 – Gallup poll, July 20102 - Aviva’s 2010 Customer Attitude to Savings Survey – USA results

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%S&P Returns - Uncapped/unfloored

Standard & Poor’s”, “S&P 500”, “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Aviva. These products are not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s make no representation regarding the advisability of purchasing these products.

Historical ReturnsS&P500 – Uncapped One-Year Point-to-Point1/1/2000 – 12/31/2009

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%S&P500 - Uncapped/unfloored S&P500 - Capped/floored

Standard & Poor’s”, “S&P 500”, “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Aviva. These products are not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s make no representation regarding the advisability of purchasing these products.

Historical ReturnsS&P500 –One-Year Point-to-Point1/1/2000 – 12/31/2009

Even in the worst decade since the existence of the

S&P 500, Aviva still credited as much interest as a

traditional UL on average and considerably more in the

up years.

*As reported in LIMRA’s Individual Life Insurance Sales Survey from 3/30/2010

Year Aviva’s IUL

Industry UL*

2000 5.88% 6.08%

2001 0.00% 5.93%

2002 0.06% 5.78%

2003 6.11% 5.23%

2004 9.86% 4.95%

2005 6.61% 4.85%

2006 8.13% 4.83%

2007 9.33% 4.80%

2008 0.02% 4.80%

2009 2.99% 4.78%

Segment Term Avg 5.36% 4.81%

Historical ReturnsFoundation Builder Plus Actual Results 1/1/2000 – 12/31/2009

Summing up the Proof

Aviva’s guideline illustrated rates (our long-term outlook) is 2.15% - 2.95% above the median traditional UL

credited rate.

Even in the worst decade in the S&P history, Aviva’s Indexed UL products credited at least as much on

average as a traditional UL.


Lifetime Builder III

Cap Rates/Illustrated Rates Lifetime Builder III

Lifetime Builder III

Strategy Participation Rate

Cap Rate Illustrated Rate/Credited Rate

1-Year Point-to-Point 100% 12.25% 7.65%

2-Year Point-to-Point 100% 30.0% 7.75%

Monthly Average 100% 15.0% 6.45%

Monthly Cap 100% 4.50% 8.70%

Multi-Index 100% 13.0% 7.10%

1-Year Fixed N/A N/A 4.85%

5-Year Fixed N/A N/A 4.10%

Lifetime Builder III unique cap rates/illustrated rates.

*Two-Year Point-to-Point Strategy Not Available In New York. Strategies may not be available in all states. Dollars in strategies can be redirected at the end of each segment term.

CompetitiveEdge

What they’re not telling you about those higher illustrated rates.

While a higher illustrated rate sounds great in theory, what other carriers may not openly disclose is that those higher rates may be masking a cost structure

that can weigh down an IUL policy’s cash accumulation potential.


CompetitiveEdge


One way to demonstrate the impact of policy charges on the cash accumulation potential of an IUL product is to compare the Gross Illustrated Rate with the Net

Illustrated Rate.

CompetitiveEdge

The right IUL product starts with afoundation of guarantees.

And Aviva has the strongest foundation.

Aviva’s indexed universal life structure, which has led the industry for 10 years,

begins with a solid foundation of guarantees. Even as more competitors enter

the IUL marketplace, our Lifetime Builder product continues to boast the most

solid level of guaranteed features in the industry.For agent use only. Not for use with the general public.

CompetitiveEdgeAviva’s guaranteed interest rate level and timing in combination with the guaranteed account value

enhancementprovide a solid foundation regardless of future index returns.

1 only on funds linked to indexed strategies 2 only on funds not linked to indexed strategiesSource: Full Disclosure IUL Survey, July 2011, and individual contract review. For agent use only. Not for use with the general public.

Competitive Loan Features

• Variable Rate Loan*• Interest charged based on Moody’s Corporate Bond

Yield• The crediting rate is the same for borrowed and non-

borrowed funds– Never less than 3% or more than 9.5%

• Annually Declared Fixed Rate Loans• Net cost of 2% on non-preferred loans• Preferred loans available after 10th policy year at net

cost of 0%Outstanding loans are treated as a lien against

the policy’s cash value and death benefit. Loan repayments may be made at any time.

* Not available in the state of New YorkFor agent use only. Not for use with the general public. 17859 115141

NEW Loan Feature

• Ability to switch from a variable interest rate

loan to a fixed interest rate loan (vice versa)

• Up to a maximum of three times during life of

contract

• Only illustratable one time

Switching Loans…

• Client has been taking $20,000 in variable loans for 10

years and is age 70

• At age 70 the Moody’s Corporate Bond Yield is now at 9.5%

when the client began taking out loans it was at 5.7%

• The S&P is down and client is currently earning the 2%

minimum guarantee, therefore your net rate 7.5%

• With the new feature the client can elect to switch to a fixed

loan without paying off the outstanding loan balance and

now have a preferred fixed loan at a rate of Zero%


LIF PRO“Life Insurance Funded

Personal Retirement Option”

54% of non-retired Americans say they doubt they will have

enough money to live comfortably once they retire.*

45% say that their 401(k) and other tax exempt plans will

be a major source of retirement income.*

18% (up from 10% in 2001) say part-time employment will

be a major source of retirement income.*

The case for LIF PRO…

Sources of Retirement Income

Annual Limits on

ContributionsTax-Deferred Accumulation

Tax-Preferred Distribution

Income Tax Free Death

Benefit

Traditional IRA Yes Yes No No

Roth IRA Yes Yes Yes Yes

Qualified Plan (401(k)) Yes Yes No No

CD No No No No

Mutual Funds No No No No

Municipal Bond Fund No No No No Individually Owned Deferred Annuity No Yes No No

Life Insurance No Yes Yes Yes

LIF PRODiscrimination Against High Wage-Earners

Income Replacement with 401(k) & Social Security

Compensation (age 45) $50,000 $150,000 $250,000401(k) Annual Contribution

(10% of Compensation) $5,000 $15,000 $16,500

401(k) Annual Benefits (beginning at age 67) $18,054 $54,162 $59,579

Social Security Annual Benefits (age 67) $20,088 $29,484 $29,484

Total Annual Retirement Income (age 67) $38,142 $83,646 $89,063

% of Income Replaced 76% 56% 36%Compensation (age 45) $50,000 $150,000 $250,000

• Tax-deferred accumulation

• Tax-preferred distributions

• Income tax-free death benefit

• No income limits on participation

Why INDEXED U.L.?• Upside potential

• Limited downside market risk

LIF PROWhy Life Insurance:

1. Select Policy – Aviva’s IUL2. Client is Owner/Insured3. DB set to Minimum Non-MEC4. Client pays scheduled premiums

– Usually short-pay until retirement5. Policy cash value can be accessed during

retirement for supplemental income6. Beneficiaries will receive valuable income tax-

free death benefit


LIF PROHow it Works:

Beneficiaries

Death Benefits Owner/Insured

Premiums

Cash Value

Access

LIF PRODiagram

• Steve Smith

• Age 45, premier, 35% income tax bracket

• Contributing max to 401(k)

• Roth IRA, Traditional IRA Challenges?

• Can afford $500 a month

• Plans on retiring at age 67

Client Profile

• $500 monthly premium• Minimum Non-MEC death benefit• Increasing death benefit

This hypothetical example is for illustration purposes only and is not intended to predict future performance.

22 Years Premiums

LIF PROAn Example: Premier Non-Tobacco

• 20 years distributions beginning at age 67• $28,013 annual income tax-free distributions• $37,817 before-tax equivalent (assuming 35%

income tax bracket)


Begin Distributions

Age 68

LIF PROAn Example: $500 monthly premium

• 20 years of distributions• Significant death benefit remaining after final distribution


LIF PROAn Example: $500 monthly premium

Death Benefits Still Increasing

Distributions Thru Age 87


Term Exchange Program

Guaranteed Term Exchange

• Term policy must be with an eligible company

• Conversion must occur within 36 months of the term policy

issue date

• Original term policy must have been fully underwritten

• $100,000 minimum face; $1 million maximum face

Aviva will issue the policy with same rating, same face with no underwriting

as long as it meets these criteria and FULL COMMISSIONS to the writing agent!

Guaranteed Term Exchange


Table Reduction Program

Table Reduction Program

• Rated cases eligible for standard issue• Available on Indexed Survivorship product subject to a special joint-

life rule• Client Eligibility

– Ratings up to and including Table 3– Issue ages 20-70– Lifetime face amount maximum of $10 million

• Product Eligibility– All Aviva permanent life products– Excludes Term and Single Premium Life

Top 10 Ratable Health Conditions

High Blood Pressure DiabetesBuild Asthma

Crohn’s Disease AnxietySleep Apnea Colitis

Arthritis Arterial Fibrillation

Rated Case ExampleLifetime Builder III

• Female age 35• Standard NT• Minimum Death Benefit• $500 PAC Premium To Age 65• Variable Loan 65-85 with Table 3 = $28,556• Variable Loan 65-85 No Table = $38,949

What if insured is rated Table 3?

36% Increase!

IUL Expertise & Commitment

• Aviva has been industry leader in annual indexed UL sales every year since 2001.– Expertise in product design and investment

management

• Competitive advantages include:– Patented interest crediting approach– Flexibility in access to funds– Multiple index strategies available

Questions

We are building insurance around you SM


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