learn iul: basics - nfpinternal use only. not for public distribution. additional positioning ideas...

Celeste MoyaAVP, Product Management

Presented By:

Sell IUL

INTERNAL USE ONLY. Not for public distribution.

Series Recap

Learn IUL: Basics

Think IUL: Structure & Design


Sell IUL


IUL Positioning


Common Positioning Strategies

Early & Long‐Term Cash Accumulation



Early Cash Accumulation Solve:ECV Rider (aka: Surrender Value Enhancement Rider, Early Cash Endorsement, Enhanced Surrender Value Rider, Cash Value Enhancement Rider, Cash Value Plus Rider)

Short‐Pay & Overfund in First Few Years

Minimum Non‐MEC DB

Increasing DB (option 2) While Paying Premiums



Early Cash Accumulation Leaders:No Restrictions:AXA – Athena Indexed UL (Cash Value Plus Rider)Pacific Life – Pacific Indexed Accumulator (PIA) IV (SVER)Nationwide – YourLife Indexed UL (Conditional Return of Premium Rider)

Business or Premium Finance Cases Only:Aviva – Lifetime Builder III (Early Cash Value Rider)



Long Term Cash Accumulation Solve:Short‐Pay (5‐20 yrs.), Will Depend On Clients Age & CV Goal

Minimum Non‐MEC DB Works Best but a Target DB Can Also Utilized

If Solving for a Min. DB, Increasing DB (option 2)



Long Term Cash Accumulation Leaders:

Aviva – Lifetime Builder III & Advantage Builder IV

American General – Elite Index & Choice Index GUL

Pacific Life – Pacific Indexed Performer (PIP) LT



Income/Distributions



Income Solve:Short‐Pay (Usually Up to Retirement Age)

Minimum Non‐MEC DB

Increasing DB (option 2) While Paying Premiums

Solve for Income for 15‐20 Yrs., Starting At Retirement to About Life Expectancy (Ex: A66‐85)



Income Leaders:

Aviva – Lifetime Builder III


American General – Elite Index



Premium Finance


Additional Positioning Ideas

Minimum Premium/Death Benefit Solve



Death Benefit Solve:Conservative Solve, Similar to CAUL DB Solves

Potential for Higher Upside than CAUL

Typical Solves:• $1 of CSV @ Maturity• $1K @ Age 100• $1 @ Age 100



CAUL vs. IULMale, A55, PNT, $1MM DB, Solve for $1 of CSV at Maturity; Life Expectancy = A87 (per 2008 VBT Primary Table)

Carrier Product Current/Assumed Interest Rate Premium CSV Yr 10 CSV Yr 15 CSV Yr 20 CSV Yr 25 CSV Yr 30

John Hancock Protection UL 12 5.20% $10,935 $56,349 $81,932 $102,691 $141,306 $180,795American General Elite Index 6.00% $11,344 $58,875 $146,578 $218,762 $289,369 $340,466


John Hancock Protection UL 12 5.20% $10,935 $56,349 $81,932 $102,691 $141,306 $180,795American General Elite Index* 6.00% $10,935 $53,472 $136,882 $202,891 $264,093 $299,333


John Hancock Protection UL 12 5.20% $10,935 $56,349 $81,932 $102,691 $141,306 $180,795American General Elite Index* 5.20% $10,935 $50,557 $128,349 $183,812 $227,005 $231,516

Assuming Same Premium as UL

Assuming Same Premium & Crediting Rate as UL

*Lapses at Age 98

*Lapses at Age 94



Death Benefit Solve Leaders:

American General – Elite Index & Choice Index GUL

Pacific Life – PIA IV


Educational Funding




Educational Funding:

Similar to Income Solve

Fund Till College Age

Take Distributions During College Years (around ages 18‐22)



Educational Funding Example:

Child = Age 5

Current Avg. College Cost = $25K/year

Approx. College Cost at Age 18 = $48,500/year* (assumes a 5% inflation)

*https://bigfuture.collegeboard.org/pay‐for‐college/college‐costs/college‐costs‐calculator



Educational Funding Example:Pacific Life PIP LTAssuming: 6.5% Crediting Rate; 50/50 Blend

Premium Years 1‐12(Age 6‐17)

Distributions Years 13‐16 (Age 18‐21) Death Benefit

$12,500 ($150,000)

$48,718($194,872)

Approx. $1.2MM to A100

Premium Years 1‐12

(Age 6‐17)CSV A25 CSV A45 CSV A65 Death Benefit

A85

$12,500 $328,325 $1,215,828 $4,485,906 $16,499,230

College Funding

Assuming No Distributions Taken



Educational Funding Leaders:

Aviva – Lifetime Builder III



Whole Life Alternative




Whole Life Alternative:Certain IUL Policies Offer “Dialable” Guarantees to A121

Good to Great Cash Accumulation

Much More Flexible Than Most WL Policies

Can Compete w/Heavily Term Blended WL Policy’s, Like Most NML



Whole Life Alternative Leaders:

ING – IUL‐GDB

Nationwide – YourLife Indexed UL

American General – Choice Index GUL

• Customizable Guaranteed DB Amount Between 50‐100% of the Base Policy

• Another Way to Compete w/WL Premiums, Especially Those That Are Heavily Blended


Premium Financing

Amanda J. Zukowski, CLU, ChFCAVP, Advanced Sales ResourcesLife Finance Specialist


Overview of Premium Financing


TRENDS

Aggressive Modeling

Source of Supplemental Income

Premium Financing & IUL


DESIGN CONSIDERATIONS

Illustrated Crediting Rate

Participating vs. Fixed Loans

Increasing DB vs. Return of Premium

Collateral Value of Cash Surrender Value

Riders

Premium Financing & IUL


NFP Premium Financing Resources

Client Brochure

Advisor Brochure

Financing Whitepaper

Exit Strategies Whitepaper Factfinder Analysis Checklist

PROSPECTING KNOWLEDGE DESIGN IMPLEMENTATION


Mr. 38

Bay Financial Success Story


Mr. 38Bay Financial Success Story

• State Trooper and father of 3 young children• Had a Phoenix policy purchased 8 yrs. ago:

• CAUL, Pay to A60, Endow at 100, Waiver of Premium Rider• Used as part of a Pension Maximization strategy• Issued Preferred Best NS• By 2012 premiums increased by 17% and would have to pay to

A70 to have $1 of CSV at A100• 8 Yrs. Into a 15 Yr. Surrender Charge Period

• Phoenix Comdex Dropped to 51


Mr. 38Bay Financial Success Story

• 2012 Proposal:• ING’s Underwriting Program = Super Preferred NS (even though

client now has sleep apnea)• Stop making premiums to Phoenix policy• Purchase ING IUL‐GDB w/Waiver of Premium Rider• Premiums slightly higher but only has to pay to A65 and policy

is guaranteed to A100• At 6.02% policy endows at A105; at 7.15% policy endows at A84• At end of Surrender Charge Period (7 years), client will

surrender Phoenix policy and deposit the CSV into the ING policy


Mr. 38

Bay Financial Success Story

• ING IUL‐GDB Offered:• Competitive premiums• Guaranteed DB to age 100 • Upside potential• Carrier w/stronger financial ratings• Waiver of Premium Rider


The Hebets Company Success Story

Family Business



Family Business• Two Brothers• Own a company together• Both still in great health• Existing coverage:

• Each purchased identical amounts of VUL, individual & survivorship for business/estate planning

• Concerned about being in the market



Family Business• New Proposal to Replace VUL/SVUL• Considered GUL/SGUL, UL/SUL and IUL/SIUL• Chose IUL/SIUL

• Opportunity for growth• Downside protection

• Exchanged VUL’s for Nationwide IUL‐Global• One brother exchanged SVUL for Aviva SIUL;

other brother still in the process of exchange



Family Business• ING IUL‐Global & Aviva SIUL Offer:

• Lower premiums than existing VUL/SVUL• Upside potential they were accustomed to with

VUL• Downside protection to appease investment

concerns• Still offer necessary business/estate protection



Health Center

162 Bonus Plan



162 Bonus Plan• Health Center Group• Numerous federally funded clinics in rural

areas• Wanted to provide a retirement plan for

employees without dealing with rules/regulations of qualified plans



162 Bonus Plan• Proposed:

• 162 Bonus Plan• Employees own policy (can access benefits at

any time)• Suggested the Pacific Life PIA III to give the

employees account options (offers multiple index accounts and a fixed account) and strong cash accumulation



162 Bonus Plan• Outcome:

• 162 Bonus Plan proposal accepted

• Plan currently has 370 participants

• Ongoing monthly premiums of approx. $150K ($1.8MM annually)



162 Bonus Plan• Benefits to Employer:

• No max/min contribution requirements• No IRS approval required• Administrative expenses are nominal• Planned may be terminated at anytime• Simple and straight forward design



162 Bonus Plan• Benefits to Employees:

• Employee owns the plan• Employee controls plan (account selection,

beneficiary(s), etc.)• Income tax costs are being covered by an

additional bonus• Tax‐free income when necessary


Resources


Resources

NEW IUL Benchmark

“$1 of CSV at Maturity”


Resources

Coming Soon:Historical Cap & Par

Changes Grid


Resources

Celeste [email protected]

x6208

Stephanie [email protected]

X6207


IUL Call Series Survey

learn iul: basics - nfpinternal use only. not for public distribution. additional positioning ideas...

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