PREMIER FINANCIAL ALLIANCE
FINANCIAL PLANNING PRESENTATION
The Road To Financial Freedom
THREE ENEMIES OF YOUR MONEY “ T I P ”
HOW MONEY WORKS
TYPES OF MONEY
INSURANCE MARKET
THREATS TO YOUR FINANCIAL SECURITY
THE REVOLUTIONARY SOLUTION
THE SECRET OF MONEY
THREE ENEMIES OF YOUR MONEY
TAXES
THREE ENEMIES OF YOUR MONEY
INFLATION
THE SILENT KILLER OF YOUR MONEY
THREE ENEMIES OF YOUR MONEY
PROCASTINATION
HIGH
COST
OF
WAITING
HOW MONEY WORKS
Rule of 72
Divide 72 by the interest rate to estimate the number of years it
takes for your money to double.
Age
4%
Money Doubles Every 18 Years
29
47
65
$10,000
$20,000
$40,000
Age
8%
Age
12%
Money Doubles Every 9 Years
Money Doubles Every 6 Years
29
38
47
56
65
29
35
41
47
53
59
65
$10,000
$20,000
$40,000
$80,000
$160,000
The person with the most “doubles” wins.
* These hypothetical examples are for illustrative purposes only and do not represent any particular investment vehicle.
The Rule of 72 is a mathematical concept that approximates the number of years it would take to double the principal at a constant rate of return.
The performance of investments fluctuates over time, and as a result, the actual time it will take an investment to double in value cannot be predicted with any certainty.
$10,000
$20,000
$40,000
$80,000
$160,000
$320,000
$640,000
TYPES OF MONEY
FREE
MONEY
• 401K,
LOTTERY
TAX FREE
MONEY
• ROTH IRA
• LIFE INSURANCE
TAX
DEFFERED
MONEY
• 401K
• IRA
TAXABLE
MONEY
• EVERYTHING
ELSE
INSURANCE MARKET
TEMPORARY LIFE INSURANCE
PERMANENT LIFE INSURANCE
(RENTING)
(BUYING)
TERM LIFE
• EXPIRES AFTER
CERTAIN TIME
RETURN OF
PREMIUM
• EXPIRES AFTER
CERTAIN TIME
WHOLE LIFE
UNIVERSAL
LIFE
VARIABLE
UNIVERSAL
LIFE
• RATE OF RETURN
3%-3.5%
• RATE OF RETURN
4%-5%
• TIED WITH STOCKS
EQUITY INDEX • RATE OF RETURN
2%-12%
UNIVERSAL
• AVERAGE 7.3%-8.3%
LIFE
THREATS TO YOUR FINANCIAL SECURITY
PREMATURE DEATH
Households saying they own enough life insurance to replace their income for
only 2.8 years.
ILLNESS
Every 40 seconds someone in the US suffers a stroke. Every minute an
American will die from a coronary event1. .
DISABILITY
One in 5 working Americans suffers the effects of a disability for more than six
months during his/her working career2.
LONG-TERM CARE
The U.S. Bureau of Census estimates that by 2060 as many as 24 million
people will need long term care services.
OUTLIVING YOUR MONEY
People are living longer and longer, but they are saving less and less. Most
Americans retire in poverty. 73.8% of Americans 65 and older retire on a
combined income of private pension and Social Security of $10,000 less a year3.
1.
2.
3.
American Heart Association, American Stroke Association, Heart Disease and Stroke Statistics, 2008
Commissioners Group disability table and U.S. Bureau of Census
Social Security Administration, 1996
ACCELERATED BENEFITS RIDERS
•
ABR 1- Terminal Illness
•
Resulting in death within two years
• (1 year in VT and PA)
•
Lump-sum distribution (discounted from death benefit)
•
Funds can be used for anything
•
No additional cost
•
No elimination period
ACCELERATED BENEFITS RIDERS
•
•
ABR 2 - Chronically ill
Unable to perform 2 of 6 ADLs
•
Activities of Daily Living
•
•
•
•
•
•
•
•
•
•
Bathing
Continence
Dressing
Eating
Toileting
Transferring
Cognitive Impairment
Short-term or long-term memory impairment
Loss of orientation to people, places or time
Deductive or abstract reasoning impairment
Max. benefit calculated as 24% of the net death benefit (actual payment is discounted) in any calendar
year
• Funds can be used for anything
• No additional cost
• Policy must be I/F for 2 years
ACCELERATED BENEFITS RIDERS
• ABR 3 - Critical Illness
•
•
•
•
•
•
•
Heart Attack
Stroke
Cancer
End stage renal failure
Major organ transplant
ALS (Lou Gehrig’s disease)
Blindness
• Lump-sum distribution (discounted from death benefit) after 30
•
•
days
Funds can be used for anything
No additional cost
Form series 8165(0703)
Life Event Story
WHAT THE WEALTHY KNOW
THAT MANY PEOPLE DON’T
According to the Federal Reserve, the richest 10% Americans own
over half of the tax-free investment gains built up in life insurance1.
50th to 90th
Top 10%
percentile
own 55.1%
Own 38.4%
Has Life Insurance
Has Life Insurance
Families in bottom half of net-worth percentiles
own just 6.5% of these tax-free assets!
1. Federal Reserve, 2007
THE EQUITY INDEX CONCEPT
WHOSE TIME HAS COME
DOWNSIDE PROTECTION
UPSIDE POTENTIAL
However, during the years when the stock
market is down, your equity indexed
account will not lose any money.
When the stock market is up, an equity
indexed product will return to you a
portion of the stock market gain.
09/1998-09/2010
$170,000
.
$156,857
$156,857
$149,160
$150,000
$156,867
$140,930
$136,937
$160,747
$145,542
$145,749
$125,155
$130,000
$120,909
$125,080
$110,000
$134,091
$127,344
$125,080
$117,033
$108,789
$111,033
$115,090
$106,268
$100,770
$99,228
$100,000
$95,952
$90,000
S&P500
$78,869
$70,000
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
•The graph is based on actual S&P 500 data and actual credited rates for the period shown on one of our indexed annuity products. These results should not be an indication that Indexed Annuities
will outperform the S&P 500. This simply demonstrates the effectiveness of Indexed Annuities in years when the S&P 500 was negative.
CASH VALUE
 Upside growth potential
- Interest credit is tied to the S&P 500 Index
- S&P 500 Index – A dynamic index that consists of the 500 largest
companies in the US such as Exxon, Disney World, Walt Mart,
Citigroup, Microsoft, McDonalds… etc.
 Downside protection
- Equity Index concept guarantees you could never lose your cash value
due to a decline in the index
 Accessibility
- Tax free access after the 1 st year via loans