products and financial services provided by t he s tate l ife i nsurance c ompany | a o ne a merica...

Products and financial services provided by

THE STATE LIFE INSURANCE COMPANY | a ONEAMERICA® company



STATE LIFE CARE SOLUTIONS

ASSET-BASED LONG-TERM CARE TRAINING

Webinar

1/3/12 1

For company and recruiting use only. Not for public distribution.



First some house keeping A fixed annuity is a long-term, tax-deferred insurance contract designed for retirement. It allows an individual to create a fixed stream of

income through a process called annuitization and also provides a fixed rate of return based on the terms of the contract. Fixed annuities have limitations. If your client decides to take money out early, they may face fees called surrender charges. Plus, if your client is not yet 59 ½, they may also have to pay an additional 10% tax penalty on top of ordinary income taxes. Your client should also know that a fixed annuity contains guarantees that are subject to the issuing insurance company’s ability to pay for them.

As your clients’ personal situations change (e.g., marriage, birth of a child, job promotion, retirement, relocation, etc.), so will their life insurance needs. Care should be taken to ensure this product is suitable for their long-term life insurance needs. They should weigh any associated costs before making a purchase. Life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as gender, health and age, and has additional charges for riders that customize a policy to fit their individual needs.

Riders are optional and carry an additional cost. The long-term advantage of an optional benefit will vary with the terms of the benefit option and the length of time the product is owned. As a result, in some circumstances, the cost of an option may exceed the actual benefit paid under the option.

Please note that the replacement of an existing annuity must not be made unless all factors are weighed and it is documented as suitable for the client.

Products underwritten and issued by The State Life Insurance Company, Indianapolis, Indiana. Policy Forms: Asset-Care: L301, SA31 and R501 (or state variation); Annuity Care and Annuity Care II: SA34, SA35, R508. Product and riders may not be available in all states or may vary by state.

All guaranteed are subject to the claims paying ability of State Life.


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LTC Market

• Declining sales

• Inforce rate increases

• Companies exiting the market

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LTCI New Business Trends 2005 - 2009

Annual Review 2009, LIMRA For company and recruiting use only. Not for public distribution.



Result? More relying on Assets

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Leveraged Assets

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THE STATE LIFE INSURANCE COMPANY | a ONEAMERICA® company 7

• Husband and wife, each 65

$100,000 single

premium

Immediately

$195,312death and

LTC benefit

Need it for LTC? You receive: $3,906 monthly LTC benefit

If you die? You receive$195,312

If you surrenderYou receiveat least your $100,000

Plus:•4% minimum guaranteed interest rate•Optional lifetime coverage available with guaranteed premiums•Patented joint life option

Life Insurance with LTC benefits:

Available lifetime benefits


Numeric examples are hypothetical and were used for educational purposes only.



• Sales Idea:

2/28/09 8




Annuity Statistics

• 1.57 Trillion = total deferred annuity assets LIMRA, The 2008 Individual Annuity Market

• 141 billion = 2008 non-qualified deferred annuity sales

LIMRA, The 2008 Individual Annuity Market

• Non-qualified annuity average purchase age – 66

The Gallup Organization, 2009 Survey of Non-Qualified Annuity Contracts

• How Many will Die with Annuity?

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Annuities

• According to 2009 Gallop survey of Non-Qualified Annuity owners:

– 83 % intend to use their annuity as a financial resource to avoid being a financial burden on their children

– 73% intend to use their annuity as an emergency fund in the case of a catastrophic illness or for nursing home care

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Changing Market Place

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• Interest rate market vs. value market

Low interest rates

Low guarantees

Value – PPA and Annuity Care® can give new life to annuities.




Leveraged Asset

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$50,000 basis+

$100,000 gain=

$150,000 cash value

1035 Exchange Long-term care expenses

$150,000

Existing annuity (funded with after-tax dollars)

HIPAA qualified PPA

eligible annuity

Taxes owed on gain which is withdrawn first

Income tax-free as a reduction of cost basis

Withdrawal

Withdrawal

KEY SIMILARITES: PENSION PROTECTION ACT

13 Not FDIC Insured-May Lose Value-Not Bank Guaranteed –For company and recruiting use only - Not for Public Distribution




ANNUITY 36 Months C.O.B 36 months

Annuity Based LTC

Separate Contracts

CONTINUATION OF BENEFITS

C.O.B. is Optional



Note: benefit periods listed are shared if two annuitants




ANNUITY 36 Months

C.O.B 36 months

C.O.B. is Optional

Life Time BenefitsLife Time Benefits

Annuity Based LTC





ANNUITY 36 Months

$150,000 / 2.9% per MO

C.O.B 36 months$150,000 = Total $300,000

C.O.B. is Optional

Life Time Benefits = UnlimitedLife Time Benefits = Unlimited

Annuity Based LTC

Max Age 85

Initial Monthly Benefit $4,350

For company and recruiting use only. Not for public distribution.Numeric examples are hypothetical and were used for educational purposes only.



Annuity Based LTC


C.O.B. is Included


ANNUITY

C.O.B.




Annuity Based LTC

PAYMENT OF C.O.B. PREMIUM


ANNUITY

C.O.B.

Monthly charge

for COB

C.O.B. is Included




Annuity Based LTC

PAYMENT OF C.O.B. PREMIUM


ANNUITY

C.O.B.

Monthly charge

for COB

36 Mo

C.O.B. is Included




Annuity Based LTC

ANNUITY

C.O.B.

Monthly charge for

COB

36 Mo

72 Mo


C.O.B. is Included




Annuity Based LTC

ANNUITY 24 Mo Single30 Mo Joint

C.O.B.

Age 80

Monthly charge

for COB

36 Mo

Age 75 72 Mo

Age 70 108 Mo

C.O.B. OPTIONS

C.O.B. is Included




Annuity Based LTC Female Age 70

ANNUITY $100,000

C.O.B.$150,000

Monthly charge

for COB

36 Mo

72 Mo

108 Mo

C.O.B. OPTIONS

$250,000 LTC$250,000 LTC

C.O.B. is Included



Note: The amount of COB benefit is based on sex, age at issue and the LTC claims method chosen



Annuity Based LTCFemale Age 70

ANNUITY $100,000

C.O.B.$150,000

Monthly charge

for COB

36 Mo

$300,000 72 Mo

108 Mo

$250,000 LTC$250,000 LTC

$400,000 LTC$400,000 LTC

C.O.B. OPTIONS

C.O.B. is Included

For company nd recruiting use only. Not for public distribution.Numeric examples are hypothetical and were used for educational purposes only.





Annuity Based LTCFemale Age 70

ANNUITY $100,000

C.O.B.$150,000

Monthly charge

for COB

36 Mo

$300,000 72 Mo

$450,000108 Mo

$250,000 LTC$250,000 LTC

$400,000 LTC$400,000 LTC

$550,000 LTC$550,000 LTC

C.O.B. OPTIONS

C.O.B. is Included






The State Life Sales Desk

1-800-275-5101

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