created exclusively for financial professional use meeting chronic and terminal illness care needs...

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONAL USE

Meeting Chronic and Terminal Illness Care Needs with Life Insurance

0248082-00001-00 ED. 6/2013 EXP. 01/24/2015

PruLife® Universal Protector featuring BenefitAccess Rider

Mike TollefsrudTitle: Regional Life Consultant Date: Thursday, Aug. 8, 2013

The Prudential Insurance Company of America, Newark NJ 07102

NOT FOR CONSUMER USE.


Important Information

Bank of America Corporation (“Bank of America”) is a financial holding company that, through its subsidiaries and affiliated companies, provides banking and investment products and other financial services .

Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), a registered broker-dealer and member SIPC, and other subsidiaries of Bank of America Corporation (“BAC”).

Investment products offered through MLPF&S and insurance and annuity products offered through Merrill Lynch Life Agency Inc.:

Merrill Lynch Life Agency Inc. is a licensed insurance agency and a wholly owned subsidiary of Bank of America Corporation.

The views and opinions expressed in this presentation are not necessarily those of Bank of America Corporation; Merrill Lynch, Pierce, Fenner & Smith Incorporated; or any affiliates.

Nothing discussed or suggested in these materials should be construed as permission to supersede or circumvent any Bank of America, Merrill Lynch, Pierce, Fenner & Smith Incorporated policies, procedures, rules, and guidelines.]

Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed

Are Not Insured by Any Federal Government Agency Are Not Deposits

Are Not a Condition to Any Banking Service or Activity



Agenda

1. The 5 Ws of chronic illness care

2. How PruLife® Universal Protector featuring

the optional BenefitAccess Rider can help

3. Target markets and value proposition for

your FPs

4. UL Protector Repricing



The Realities of an Aging Population

10,0001 Baby Boomers Retire. Pew Research Center, December 2010. Last accessed on March 29, 2013.



Who

What duration

WhenWhere

Why

?

What you don’t know could hurt you:Understanding the 5 Ws of chronic illness care

7 in 10 Americans age 65 and older willrequire chronic care2

Care can be needed for manyyears, sometimesDecades3,4

At older ages,often when alone

73% of people who needChronic care receive it athome from a familymember5

Primarily for conditionsthat require care forlong durations:• Alzheimer’s Disease• Stroke• Arthritis

5 Ws of Life Insurance



Sources

1 Baby Boomers Retire. Pew Research Center, December 2010. Last accessed on March 29, 2013.

2 http://www.longtermcare.gov/LTC/Main_Site/index.aspx. Last accessed April 29, 2013.

3 Kemper P, et al. Long-term care over an uncertain future: What can current retirees expect? Inquiry Winter 2005/2006. Vol.42:335-50. Data derived from Tables 1 and 2.

4 http://longtermcare.gov/the-basics/how-much-care-will-you-need/. Last accessed April 29, 2013.

5 Redfoot DL, Houser A. More older people with disabilities living in the community: Trends from the National Long-Term Care Survey, 1984-2004 AARP Public Policy Institute. September 2010.


http://www.longtermcare.gov/LTC/Main_Site/index.aspx

http://www.longtermcare.gov/LTC/Main_Site/index.aspx


What is BenefitAccess?

Life Insurance Accelerated Death Benefit Rider• BenefitAccess advances up to 100% of policy’s face amount if insured becomes chronically or

terminally ill and otherwise satisfies terms of rider• It is not long-term care insurance nor is it intended to replace the need for long-term care

insurance• It is an optional rider for an additional cost, that provides benefits if the insured is diagnosed

as chronically and/or terminally ill by a Licensed Health Care Practitioner• Must be purchased at point of sale- requires additional underwriting

Benefit• Provides a maximum monthly benefit equal to lesser of the 2% of the face amount

or the IRS Per Diem. Also provides an annual lump sum option. IRS Per Diem Limit (2013: $320/day) and IRS Per Diem Limit at issue compounded at 4% annually

• Benefit payments reduce death benefit dollar-for-dollar and may eliminate it completely

• Benefits may be used for any care, services or needs that the insured may have during their illness

Premium Impact• Generally, adding the rider increases premium about 5-15% for males and 15-20% for

females of the base policy premium

Compensation• CTP is increased in relation to the rider



The Reality

•Chronic illness is likely

•Primary caretaker = family member

•Emotional and financial sacrifices

•Financial considerations need to address chronic illness care



A New Choice

Introducing …

BenefitAccess on PruLife® Universal Protector (UL Protector)

Guaranteed death benefi

t protec

tion

Chronic and termin

al illness protec

tion

DualProtection

UL Protector can provide lifetime death benefit protection. With the optional BenefitAccess Rider, the insured may also qualify for 100% acceleration of the policy’s face amount



UL Protector + BenefitAccess = Answer to 5 Ws

5 Ws of Life Insurance

BenefitAccess Rider accelerates up to 100% of the death benefit* if insuredbecomes chronically orterminally ill and qualifiesunder the terms and conditions of the rider.

Clients who want to planfor the future in case of a chronic or terminal Illness

The insured has theflexibility to receivecare at home.

No waiting period.

Cost-effective way toaddress clients’ deathbenefit and chronic and terminal illnessneeds

*Face amount on UL Protector.

• Any claims payments made for chronic or terminal illness will reduce the amount the policy’s death benefit, which could be reduced to $0.

• A discount factor is applied to payments made under the terminal illness option

Who

What

WhenWhere

Why5Ws with

BenefitAccess Rider and UL

Protector



How BenefitAccess Works – Chronic illness

Qualification for Benefits• Certification of Chronic Illness by a

Licensed Health Care Practitioner

• The condition is expected to last the rest of the insured's life

• Recertified annually

Maximum Monthly Benefit • Maximum Monthly Benefit is equal to

2% of the death benefit at the time of claim, not to exceed the lesser of:

• The IRS per diem limit at the time of claim ($320 per day for 2013); or

• The IRS per diem limit at the time of policy issue, compounded annually at 4%

• Maximum Total Benefit = 100% of death benefit

BenefitAccess Benefit Payments—Impact on Policy

• Death benefit reduced $ for $

• Account Value reduced proportionately

Charge for the Rider• Generally, 5% to 20% increase of

UL Protector, lifetime premium

• Included as part of Monthly Deductions

We suggest that clients seek assistance from a personal tax advisor regarding the implications of receiving payments.



Activities of Daily Living

Basic functions needed for self-care

& independent living (BCDETT)

Continence

Dressing

Eating

Bathing

Transferring

Toileting



How BenefitAccess Works – Terminal illness

Qualification for Benefits• Certification by a Licensed Health Care

Practitioner as being terminally ill with a life expectancy of six months or less

Benefit Payment Options• One-time total lump sum

• One-time partial lump sum1

• Available even if chronic illness option has been partially exercised2

Terminal Illness Benefit Payments—Impact on Policy

• Benefit payment is reduced by a discount factor resulting in lower net payment to client

• Account Value of policy is reduced proportionately

Charge for the Rider• No up-front charge for terminal illness

benefit

• Benefit payment is reduced by a discount factor, resulting in lower net payment to client

• Fee = Max of $150 per transaction (may vary by state)

1If a partial lump sum is taken, $25,000 must remain as a death benefit in the policy. If a second and final acceleration is requested, it must be the full amount that remains available.

2Chronic illness benefits are not available after the terminal illness benefit has been exercised



BenefitAccess vs Living Needs BenefitSM

Key Feature BenefitAccess Living Needs Benefit

Advances the death benefit1 if insured has a chronic illness condition ●

Up-front charge for rider (generally 5%-20% additional premium) ●

Pays a monthly benefit, generally tax-free, with no restrictions on how benefits can be used 2 ●

Provides lapse protection feature while policy is on chronic illness claim ●

Advances the death benefit3 if insured has a terminal illness condition ● ●

Terminal Illness benefitreduction for early payment is applied. ● ●

Advances death benefit if insured requires an organ transplant and would have only six months or less to live without the transplant ●

Advances an amount to an insured who has been confined to an eligible nursing home for at least six months and is expected to be permanently confined3

●4 ●

1 Face amount on UL Protector. 2 The IRS per diem limit at the time of claim ($320 per day for 2013); or The IRS per diem limit at the time of policy issue, compounded annually at 4%3 Not available in all states4 Assumes the insured is chronically ill and meets the terms and conditions of the rider.



BenefitAccess Rider Feature Chart

Issue ages• Minimum: 20• Maximum: 80 • Maximum rating class: Class D

Face Amount Bands• Minimum: $ 100,000• Maximum: $5,000,000

Death Benefit option• Option A is only DB available on UL

Protector starting July 1, 2013

Riders • Living Needs Benefit or Benefit Access• Enhanced disability benefit is not

available with BenefitAccess Rider

BenefitAccess rider will be available on repriced UL Protector, based upon state approval, beginning July 1, 2013

Qualifying Conditions• Insured is unable to perform 2 of the 6

ADL’s or has a severe cognitive impairment.

• Chronic condition is expected to last the rest of the insured's life

Elimination Period• None

Benefit Type• Indemnity

Compensation• CTP increases in relation to the rider



Target Market

Target Market • 45 to 70 year-olds • Consumers with annual household income of $75k+• Worried about chronic or terminal illness • See chronic and terminal illness rider as a complementary benefit in their life insurance

policy• While life insurance sales are skewed towards males, buyers of chronic and terminal

illness riders are skewed towards females• Generally, for face amounts between $100K and $1M

Potential Emotional Drivers• Desires flexibility in how to spend benefit payments• Experienced a loved one go through a chronic illness event• Desire to have a family member as a caregiver• Likes multiple benefits available in one policy• Skeptical of “use it or lose it” aspect and unpredictable cost of stand-alone LTC



Value Proposition for Financial Professionals

Why PruLife Universal Protector with BenefitAccess?Provide lifetime death benefit guaranteed protection with

chronic and terminal illness benefits

Differentiate yourself to achieve a competitive edge

Grow your business



Marketing Tools

]NOT FOR CONSUMER USE.


Printed Chronic and Terminal IllnessConcept Kit

• Provides a step-by-step action plan • Producer focused• Sets up chronic and terminal illness care need• How to engage clients• Target client profiles• Talking points

Concept Kit Contents

Action Plan Folder•Benefit Access Consumer Brochure•Chronic Illness Consumer Prospecting Sample Letter•Chronic Illness Consumer Prospecting Sample Email

Educational Material (enclosed as a training guide or sleeve with individual pieces)

•UL Protector 10-in-10 Marketing Ideas•UL Protector Fast Facts•BAR Talking Points•LNB vs. BAR Flyer•eKit Content Flyer (outlining additional resources

available)

BenefitAccess Concept Kit



Marketing pieces for you

Fast Facts

FAQ’s

Talking Points



Marketing pieces for your clients



Next Steps

•Review the Kit

•Familiarize yourself with the Talking Points, Fast Facts and FAQ

•Check State Availability

•Prospect with Kit’s Letter and/or Email text

Additional Resources:

•Your CMG General Agency

•PruXpress.com




PruLife Universal Protector is issued by Pruco Life Insurance Company except in New York, where, if available, is issued by Pruco Life Insurance Company of New Jersey. Both Pruco Life companies are Prudential Financial companies and are located at 213 Washington Street, Newark, NJ 07102-2992. Each is solely responsible for its own financial condition and contractual obligations. These products may not be available in all states.

All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. Policy guarantees and benefits are not backed by the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company.

The BenefitAccess Rider is available for an extra premium. Additional underwriting requirements and limits may also apply. Obtaining benefits under the terms of the rider will reduce and may eliminate the death benefit.

Benefits paid under the BenefitAccess Rider are intended to be treated for federal tax purposes as accelerated life insurance death benefits under IRC §101(g)(1)(b). Tax laws related to the receipt of accelerated death benefits are complex and may be taxable in certain circumstances. Receipt of benefits may affect eligibility for public assistance programs such as Medicaid. Accelerated benefits paid under the terms of the Terminal Illness portion of the rider are subject to a $150 [($100 in FL)] processing fee. You should consult your tax and legal advisors prior to initiating any claim.




A licensed health care practitioner must certify the chronic or terminal illness to qualify for benefits. Chronic illness claims will require recertification by a licensed health care practitioner. Other terms and conditions may apply. This rider is not long-term care (LTC) insurance and it is not intended to replace LTC. The rider may not cover all of the costs associated with chronic illness. The rider is a life insurance accelerated death benefit product, is generally not subject to health insurance requirements, and may not be available in all states.

The Living Needs Benefit is an accelerated death benefit and is not a health, nursing home, or long-term care insurance benefit and is not designed to eliminate the need for insurance of these types. There is no charge for this rider but, when a claim is paid under this rider, the death benefit is reduced for early payment, and a $150 processing fee ($100 in Florida) is deducted. If more than one policy is used for the claim, each policy will have a processing fee of up to $150 ($100 in Florida) deducted. Portions of the Living Needs Benefit payment may be taxable, and receiving an accelerated death benefit may affect your client’s eligibility for public assistance programs. The federal income tax treatment of payments made under this rider depends upon whether the insured is the recipient of the benefit and is considered “terminally ill” or “chronically ill.” We suggest that your clients seek assistance from a personal tax advisor regarding the implications of receiving Living Needs Benefit payments. This rider is not available in Minnesota to new purchasers over age 65 until the policy has been in force for one year, and the nursing home option is not available in Connecticut, Florida, Massachusetts, New York, or the District of Columbia. This rider is not available in Washington state. In Oregon, term policies must include the waiver of premium benefit to be eligible for this rider.




This material is designed to provide general information about the subject matter covered. It should be used with the understanding that we are not rendering legal, accounting, or tax advice. Such services should be provided by the client’s own professional advisors. Accordingly, any information in this document cannot be used by any taxpayer for purposes of avoiding penalties under the Internal Revenue Code.

This marketing material includes an expiration date, and use of this material must be discontinued as of the expiration date.

Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc., and its related entities.

Securities and Insurance Products: Not Insured by FDIC or Any Federal Government Agency. May Lose Value.

Not a Deposit of or Guaranteed by Any Bank or Bank Affiliate.

[ML #]



Appendix

[

]



UL Protector repricing, July 1, 2013

Repricing• Due to impacts of ongoing low interest environment that continues to impact Prudential and

our competitors

Pricing Summary• Lifetime guarantee premiums

• $250K: average of + 2%; range of ; - 3.0% to 9.0% • $1M : average of + 2%; range of; - 5.2 to 8.8%

• Single pay, lifetime guarantee premiums*• $250K: average of + 5.3%; range of ; 2.0% to 12.0%• $1M: average of + 5.2%; range of ; 1.0% to 12.0%

Feature Changes• Benefit Access Rider available • Death Benefit B no longer be available• Changed the guaranteed interest rate to 1%

[PruLife® UL Protector

*Premium limitations apply]NOT FOR CONSUMER USE.

created exclusively for financial professional use meeting chronic and terminal illness care needs...

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consumer use

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merrill lynch life agency

financial services

subsidiaries of bank

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