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Wealth Transfer
Offered by National Western Life
Mechanics for Leaving a Legacy
SPIA
Immediate Life Annuity
Life
Policy
Lifetime
Solutions
$100 K (Qualified) Wealth Transfer
67 Y/O F N/T
LTRS
Solutions 5
Solutions 10
$67 K buys policy
$100 K into 5 yr SPIA
$100 K into 10 yr SPIA
$33 K paid to the IRS
@33% tax rate
$6.9 K taxes per year
for 5 years @
33 % tax rate
$3.8 K taxes per year
for 10 years @
33% tax rate
Guaranteed DB
$127,376
Guaranteed DB
$192,046
Guaranteed DB
180, 337
Old Concept w/ Some New Features
 Fits into Jack Marrion’s New FINANCIAL PYRAMID
Estate/Beque
st
Additional Income
Essential Income
 Plan Designed for Today’s Seniors seeking discounted
bequeaths
 Growing Legacy in terms of DB and CASH VALUE
 Tax payments spread--using the governments $$ to buy a
bigger DB!
 ROTH Conversion offers 3 years to spread tax payments
Wealth Transfer offers up to 10!
Qualified Plans Asset or
Liability?
 Most folks hate the idea of an RMD
 Most Seniors Want to Leave a Legacy not a tax bill
 Savings Products yield next to nothing currently (8-1-2010)
 Many Investment Products could be Losing Money
 Taxes going up or down in the future?
November
$144,769
$269,970
($125,201)
December
$237,785
$289,540
($51,755)
January
$226,090
$289,547
($63,457)
$87,312
$281,171
($193,859)
March
$128,924
$320,513
($191,589)
April
$266,205
$287,112
($20,907)
May
$117,217
$306,868
($189,651)
June
$215,339
$309,671
($94,332)
July
$151,480
$332,160
($180,680)
August
$145,529
$249,083
($103,554)
September
$218,880
$264,087
($45,207)
Total 2009
$2,104,357
$3,520,082
($1,415,725)
$135,294
$311,657
($176,363)
November
$133,564
$253,851
($120,287)
December
$218,918
$310,328
($91,410)
January
$205,239
$247,873
($42,634)
February
$107,520
$328,429
($220,909)
March
$153,358
$218,745
($65,387)
April
$245,260
$327,950
($82,690)
May
$146,794
$282,721
($135,927)
June
$251,048
$319,470
($68,422)
February
October
(Fiscal 2010)
Source: Department of the Treasury Financial Management Service Summary of Federal Government Receipts versus Outlays Fiscal 2009& 2010 in $ Millions
Market Potential
 $2 Trillion Dollars of in force annuities: (IRI)
 Questions:
How much goes to beneficiaries?
How much will pass tax free?
 65% Qualifed
 35% Non-Qualified
 RMD’s must be taken at 70 ½ from Qualified Plans
 A significant tax burden can be redirected if life insurance is
used to transfer Qualified Wealth
Why Wealth Transfer Now?
 There is little in the way of guaranteed growth with
treasuries at 2.9% for 10 years
 Small tax burden addressed now versus larger burden
for beneficiaries later
 Agents, Clients & Beneficiaries WIN
 If you Don’t….
Less Goes to Heirs;
More to the IRS!
IRS
WASHINGTON
Two things are certain: Death & Taxes ?
Good Agents help Beneficiaries avoid excess taxes!
Overcoming the Underwriting Obstacle!
APS/ Dr.’s Exam/ Blood Test/ EKG’s—NO MORE
Wealth Transfer Made Easy
 Point Of Sale Underwriting
 Quick Decision made during 14 minute call
 Pivot to an annuity if declined
 Transition of qualified funds to life insurance if
client is comfortable with a tax bill spread out
over 5-10 years
14 Minutes to Success!
Agent & Applicant
Agent & Applicant
ESP
12 Minutes to Success
Lifetime Returns
Select or
Solutions
Point of Sale Interview
Call ESP
MIB searched
Inteli-Script
Fraud statement
reviewed
NWL Applies Premium or
Requests Transfer
POLICY ISSUED!
Decision is made –
Approve/Decline
Agent Sends
Paperwork Either
Way!
COMMISSIONS PAID!!
14
Elite Sales Processing
 Identified as National Western Life
 Open for Calls until 9:30 PM CST, Monday thru
Thursday! 5:00 PM on Fridays
 Will Call Prospect at Agent’s Direction
 No Exams, No APS: Instant Approval!
 Application Questions are central to the phone interview!
Agent Critical Pathway
1. Agent and Applicant complete the application
2. Agent calls Elite Sales Processing, Inc. (ESP) 1-888-367-9008
3. The ESP interviewer talks with the NWL® agent then asks for permission to
record the interview w/ the client
4. The Interviewer asks for permission to research MIB (Medical Information
Bureau) and IntelliScript (Prescription History)--the results will be back during
the interview
5. Interviewer asks medical questions + additional information FROM the application
6. If all questions are “No” in the medical history section, and MIB, IntelliScript are
within NWL® guidelines, the application is accepted!
7. Agent sends application to NWL (accepted or declined) process complete!
8. ESP notifies Home Office on decision, forwards interview for processing
Lifetime Returns Solutions
 Instant Approval Underwriting
 Guaranteed Death Benefit
 Cash Value Growth through Indexing
 Death Benefit Growth through Indexing
 Efficient Wealth Transfer
 A Rated Carrier
 Double Digit Street Commission to age 80
Looking for Prospects?
 Look at book of
ANNUITY CLIENTS!
 Cash value life policy holders might want to
1035 to LTRS not solutions?
(if non guaranteed DB set to implode)
 Whole life policy owners with cash above or
= DB
Case Study 1:
Mrs. Smith is 65 years old and has $100,000 in a Tax-deferred
Annuity with ABC Ins. Company. She is concerned that if she
passes away her two sons have to pay taxes on the $30,000 of
gain she has in her annuity contract. Mrs. Smith is healthy with a
few minor health issues. Does not need money to live on.
Using NWL’s Lifetime Solution's she could transfer the Annuity’s
tax liable DB into a Tax-Free DB of $194,635.
The $30,000 gain would be spread out over 10 years. If she should
pass away prior to the 10 year period the proceeds of the contract
would be paid out to her two sons tax-free.
Note: Mrs. Smith would receive a 1099 each year that the SPIA funds the life
insurance.
An Upgrade?
Annuity
Lifetime Returns Solutions
Death Benefit
$100,000
Taxable gain $30,000
Death Benefit
$194,635
Tax Free
Net to Heirs after taxes
$91,600
Net to Heirs
$194,635
(Assuming 28% tax bracket)
Case Study
2:
Mr. Johnson is 75 y/o. He has $150,000 in a Tax-qualified IRA. He
is concerned that if he passes away his daughter will have to pay
ordinary income tax on the $150,000. Mr. Johnson has a pension
and Social Security to live on.
He could transfer the IRA into Lifetime Solutions giving him a TaxFree Death Benefit of $199,979.
Income tax on the IRA is spread out over 10 years. And his
doaughter could gift him the funds to pay these taxes.
If he should pass away during the SPIA’s payout phase he is no
longer on the hook for any taxation as NWL is the irrevocable
beneficiary of those payments.
His daughter Immediately becomes the beneficiary of nearly
$200 K tax free at the death of Mr Johnson!
Note: Mr. Johnson would receive a 1099 each year for the amount funding the
life insurance.
An Upgrade?
IRA
Lifetime Returns Solutions
Death Benefit
$150,000
Taxable gain $30,000
Death Benefit
$199,979
Tax Free
Net to Heirs after taxes
$108,000
Net to Heirs
$199,979
(Assuming 28% tax bracket)
Lifetime Returns Select Solutions
 Issue Ages 45-85
 $25,000 Minimum Face
 5/10 or life SPIA (NWL Irrevocable Beneficiary)
 GUARANTEED DEATH BENEFIT
 Indexed Linked Interest grows account value and DB
 10% Liquidity
 Guaranteed Table Shave….Table 5!
Make an extra $100,000
 10 cases per year
 Less than 1 case per month
 Average case size $100,000
 Avg. Comp. $11,000 per case
 $11,000 x $10 cases = $110,000
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