Classic Solution

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					  Classic Solution
(Single Premium Whole Life)
    Single Premium Whole Life
 Discussion Topics:
   Concept & Methods of “Wealth Transfer”
   Tax Time Bomb
   Introduction of our Single Premium
    Whole Life Policy – “Classic Solution”




         Agent Use Only: Not for public distribution
What is “Efficient Wealth Transfer”?


  Assetspass to beneficiaries:
   Income Tax Free
   Avoid Probate Process.




            Agent Use Only: Not for public distribution
Who Receives the Value of an Estate
         or “Nest Egg”?
 Beneficiaries:
   Family  & Loved Ones
    Favorite Charity or Church
 IRS




             Agent Use Only: Not for public distribution
 What does a “Nest Egg” consist of?

 Mutual  Funds
 Stocks & Bonds
 401k’s & IRA’s
 Real Estate
 CD’s, Money Market Funds & Savings
 Annuities
 Life Insurance


           Agent Use Only: Not for public distribution
   Financial Concerns of Seniors
 Outliving  Their “Nest Egg”
 Becoming Dependent on Others
 Taxes
 Inflation
 Inability to Leave Something ($) to
  Children & Grandchildren



          Agent Use Only: Not for public distribution
What takes away from a “Nest Egg”?
 Inflation
 Income  Taxes
 Capital Gains Tax
 Gift Taxes (Federal)
 Federal & State Estate Taxes
 Inheritance Taxes (State)
 Probate costs (executor commissions &
  attorney fees)

              Agent Use Only: Not for public distribution
         Wealth Transfer Continuum


CD’s---Annuities---SPWL
(Tax & Probate=Yes)       (Probate=No, Tax=Yes)                 (Tax & Probate=No)




                      Agent Use Only: Not for public distribution
           “Tax Time Bomb”
 Issue for Annuities
 Tax Deferred, Not Tax Free
 Great for Growth and Income, not for
  Wealth Transfer
 Beneficiaries will pay taxes at their tax
  bracket when they receive the funds
 SPWL will Avoid those taxes



           Agent Use Only: Not for public distribution
                “Tax Time Bomb”: Example
                                                         Wealth Transfer
       Annuitant Dies:                     Surrenders Annuity:        Purchases SPWL:
Annuity               100,000       Surrender            100,000*     Female/65/
Value:                              Value:                            NS
Purchase              - 50,000      Purchase Price:       - 50,000    Premium:     90,000
Price:
Taxable Amt:         = 50,000       Taxable Amt:          = 50,000    Face Amt:    191,489
Tax Bracket:            X 30%       Tax Bracket:            X 20%     Received:    191,489


Tax Paid              =15,000       Tax Paid              =10,000
(Beneficiary):                      (Annuitant):
Annuity               100,000       Surrender              100,000
Value:                              Value:
Taxes                  -15,000      Taxes:                 -10,000
Received:             =85,000       Received:             =90,000
*   Assuming No Surrender Charges Apply.
                             Agent Use Only: Not for public distribution
                  SPWL Sales
 ClientDoes Not Require the Funds for
  Income or Living Expenses
 Wants to pass on a legacy
 Has concerns regarding a Nursing
  Home or a Terminal Illness
 Not Buying a Policy, Repositioning
  Wealth. (Single Premium)

           Agent Use Only: Not for public distribution
        Classic
       Solution
Single Premium Whole Life Insurance
      (Policy Form #: 05-9621)




      Agent Use Only: Not for public distribution
         Why Classic Solution?
 Efficient   Wealth Transfer
   Avoids Taxation
   Avoids Probate

 Easy to Qualify for Coverage
 Attractive Built-In Riders (BGIR-Unique)
 Competitive Premiums
 Access to Cash



              Agent Use Only: Not for public distribution
  Classic Solution: Access to Cash
 Partial   Surrenders (Available After 1st
  Year)
  Policy Year 1        2         3         4          5    6+
  % of CV       0% 10% 20% 30% 40% 100%

Policy   Loans:
  Available After 1st Year
  Loan Interest Rate of 7.4%
  Up to Full Surrender Value Less Loan Interest in
  Advance to the Next Policy Anniversary
             Agent Use Only: Not for public distribution
   Classic Solution: Policy Specs
 Issue   Ages (Age Last Birthday):
   45 – minimum
   85 – maximum

 Minimum   Single Premium - $5,000
 Maximum Single Premium - $250,000 (or
  $150,000 net amount at risk), which ever
  is less
 Policy Fee: Single Premium Policy Fee
                  $5,000 - $9,999 $120
                  $10,000+        $0
             Agent Use Only: Not for public distribution
       Classic Solution: (NAR)
 Maximum Amount Underwritten is Determined by
  Net Amount at Risk (NAR).
 (NAR) = Initial Death Benefit - Initial Single
  Premium Payment

        Issue Age: Max Underwritten Amt:
        45-70      $150,000 (NAR)
        71-80            $100,000 (NAR)
        81-85            $50,000 (NAR)

           Agent Use Only: Not for public distribution
          Maximum NAR Examples:
      Age:           Male/65/NS           Male/75/NS            Male/85/NS

  Acceptable:

Death Benefit           $318,949            $319,149             $261,780

Premium                 $170,000            $225,000             $250,000

NAR                     $148,949             $94,149              $11,780

Non Acceptable:

Death Benefit           $375,234            $354,609             $250,001*

Premium                 $200,000            $250,000

NAR                     $175,234            $104,609

* Single Premium can’t exceed $250,000

                  Agent Use Only: Not for public distribution
  Classic Solution: Underwriting Chart

Age & (NAR)                         45-70         71-80        81-85
$0 - $25,000                           T             T           T
$25,001 - $50,000                      T             T         T, APS
$50,001 - $100,000                     T             T
$100,001 - $150,000                    T

T = Telephone Interview
APS = Attending Physicians Statement


                 Agent Use Only: Not for public distribution
   Classic Solutions Underwriting
Telephone Interviews (2 Ways to Complete):
  1. Point of Sale (Preferred)
 Completed at Time of Application from Client’s Home
 Call vendor using Toll Free Number
 Identify Yourself, Company, Product Being Applied for
  (Classic Solution)
 Applicant Completes the Rest of the Interview on their
  own
 Indicate on Application that Interview has been
  completed
 Results of Interview Transmitted to Home Office
  electronically
 Toll Free Number, Available Hours, and Details on page
  6 of Agent Guide

            Agent Use Only: Not for public distribution
   Classic Solution - Underwriting
Telephone Interviews (2 Ways to Complete):
  2. After Point of Sale
 Indicate on Application that Interview has NOT been
  completed, and provide Applicant’s Phone #, and a “Best
  Time to Call”
 Vendor will contact Applicant to complete Interview or
  schedule a time to complete
 Results of Interview Transmitted to Home Office
  electronically



            Agent Use Only: Not for public distribution
   Classic Solution – Underwriting
     Medical Information Bureau (MIB)
 Member Companies report conditions to
  MIB database during the underwriting
  process
 Our Company accesses the MIB
  database on all Golden Solution
  applications
 MIB replies can trigger additional
  underwriting requirements (i.e. APS’s,
  Exams, etc.)
         Agent Use Only: Not for public distribution
   Classic Solution – Underwriting
  Pharmaceutical Database Check
 Check  of National Pharmacy
  Databases
 Databases are checked on every
  Golden Solution Application
 Provides information on medications /
  prescriptions taken by the Applicant
 May trigger additional underwriting
  requirements (i.e. APS’s, Exams, etc.)

          Agent Use Only: Not for public distribution
App Completion/Submission
 Good Field Underwriting is essential to avoid
  unnecessary Underwriting delays
 Always Fully Complete All Required Sections and
  Questions
 Provide Complete Details to “Yes” answers on health
  questions.
 List any Medications currently taken and their associated
  conditions
 If additional space is needed for details regarding health
  questions or medications, please provide on a separate
  sheet of paper and submit with app
 Telephone Interview Completed at Point of Sale – always
  answer “Yes” or “No”
              Agent Use Only: Not for public distribution
   Classic Solution: Substandard Cases
            “Table 4 Standard”
                Table:           Age Adjustment*:
                  5                   4 years
                  6                   6 years
                  8                   9 years
                  10                 11 years
                  12                 13 years
              * Resulting Age Cannot Exceed Max Issue Age of 85.

        Applicant Age = 50 with a Table 5 Rating = Issue Age 54
Applicant Age = 80 with a Table 10 Rating = Issue Age 91 (Not Available)


                   Agent Use Only: Not for public distribution
              Classic Solution: Riders
 Accelerated             Benefit Terminal Illness*:
      Receive up to 80% of Death Benefit
      Diagnosed with Terminal Illness (Less than 12
       months)
 Accelerated             Benefit Confined Care*:
      FullTime, Permanent Resident in Nursing
       Home
      Fixed Monthly Pmt of Equal to the Lesser of
       2.5% of face amt or $5,000
* Not all riders available in all states.
                   Agent Use Only: Not for public distribution
     Classic Solution: Riders (con’t)
 Beneficiary              Guaranteed Insurability*
      Unique Benefit
      Upon Insured’s Death, Beneficiary can:
         Purchase   Their Own SPWL Policy w/o
          Evidence of Insurability. Max Face of New
          Policy is Lesser of Initial Face Amt of
          Original Policy and $150,000
         Receive Death Benefit Proceeds
         Combination of Above Options
      Rider      Must be in Force for 5 Years
* Not all riders available in all states.
                   Agent Use Only: Not for public distribution
Classic Solution: Proposal
Classic Solution: Proposal (Con’t)
                        Agent Guide
   Policy Specification (Issue Ages, Premiums, Min & Max
    Amounts etc.)
   Application Completion/Submission
   Information on riders
   Height and Weight Charts
   Point of Sales Interview instructions
   Medical Impairment Guide
       Impairment - Usually Acceptable
       Impairment - Require Medical Records to Consider
       Impairment – Unacceptable
       Combination Medical Impairment Guide
   Handle Sub-Standard Cases
   Underwriting Requirement Chart


                  Agent Use Only: Not for public distribution
    Classic Solution: Sales Materials
            # 9665 (Yes/No)*
 Application
 HIPAA Form # 9526*
 Replacement Form (Varies by State)*
 Payment*:
     Check , or COD
     Transfer of Funds/1035 Exchange – use form
      # 9689
*   Required to be Submitted to Home Office


                 Agent Use Only: Not for public distribution
Classic Solution: Sales Materials (Con’t)

 ClientBrochure # 9694
 Agent Guide # 9688
 Money Purchase Sheets # 9686
 Disclosure Terminal Illness ABR # 9673*
 Disclosure Confined Care ABR # 9675*
 Modified Endowment Contract (MEC)
  Disclosure # 9667*

* Left with Applicant; No Signature Requirement

                   Agent Use Only: Not for public distribution
   Classic Solution: Advantages
 Immediately     Increases Estate Value to
  Beneficiaries
 Proceeds Pass to the Beneficiaries Federal
  Income Tax Free
 Proceeds Payable to a Loved One Bypass
  the Costs and Delays of Probate
 Guaranteed Cash Value That Grows Over
  Time
 Guaranteed Death Benefit

           Agent Use Only: Not for public distribution
Classic Solution

Questions??? Call
      R.F.S.
 877-968-5757

				
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