Life Insurance: Beyond the Death Benefit
Help Protect Your Client’s Family
and Diversify Their Portfolio
National Life Insurance Company® | Life Insurance Company of the Southwest™
National Life Group® is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of the Southwest, Addison, TX and their affiliates. Each company of
National Life Group is solely responsible for its own financial condition and contractual obligations. Life Insurance Company of the Southwest is not an authorized insurer in New York
and does not conduct insurance business in New York.
TC65657(1111)
For Agent Use Only – Not To Be Used With The Public
The Current Situation
• The economy is unstable
• People have lost money in their personal and retirement
savings
• The dollar doesn’t stretch as far as it used to
• People still have the need for protection that life insurance
provides, but the same dollar is competing for multiple
needs
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
So Where is the Money?
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Where is the Money
• There is over $2.6 Trillion in money market accounts
• There is $6 Trillion in certificates of deposits1
What does this tell us?
People are looking for safety and don’t have lots
of choices on where to put their money
1
Source: www.ici.org October 2011.
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
How can you help your clients
Protect their family and
Diversify the Fixed Asset portion
of their portfolio
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Protection First
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Evaluating Human Capital
• Human Capital is the actuarial Present Value of future wages
– It is an individuals ability to earn income and save
– It equals the present value of all future wages, including
pension and social security
• It directly affects a persons ability to take on risk regarding their
financial capital
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Human Capital
• The younger the individual, the greater their human capital
• As we age, financial capital replaces human capital
Financial
Capital
$1,000,000
$500,000
$300,000
$200,000
Insurance Need
$100,000
$50,000
25
30
35
40
45
50
55
Age
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
60
65
Human
Capital
Three risks to consider
• Dying Too Soon
• Becoming Ill
• Living Too Long
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
The Need to Protect Human Capital
Financial
Capital
$1,000,000
$500,000
$300,000
Protection Need
$200,000
$100,000
$50,000
25
30
35
40
45
50
55
Age
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
60
65
Human
Capital
Why not Term and Invest The Difference?
How long does your client need protection?
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
The Need to Protect Human Capital and
Preserve Financial Capital
Financial
Capital
$1,000,000
$500,000
Preservation Need
$300,000
Protection Need
$200,000
$100,000
$50,000
25
30
35
40
45
50
55
Age
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
60
65
Human
Capital
Why not Term and Invest The Difference?
How long does your client need protection?
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Manage Risk with Whole Life Insurance
• Death Benefit protects Human Capital and Preserves Financial
Capital
• Accelerated Benefit Riders provide funds in the event of illness1
• Cash Value Accumulation can be accessed to supplement future
income needs2
1Accelerated
Benefit Riders are optional and may not be available in all states. Receipt of Accelerated Benefits will reduce the Cash Value and Death
Benefit otherwise payable under the policy, may result in a taxable event, and may affect your client’s eligibility for public assistance programs. There
is no restriction placed on the use of the benefit received.
2Policy
loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event.
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Portfolio Diversification
By combining an asset allocation strategy with
Whole Life Insurance
You are able to protect human capital
and manage the risk of Dying Too Soon
Plus
Cash value accumulation can serve as a
Cash or Fixed Asset in a portfolio
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Whole Life Complements a Well
Designed Long-Term Financial Strategy
• Immediate liquidity at death, income tax-free.1
• Cash value can serve as the long-term Cash or Fixed component of an
asset allocation strategy
Life Insurance as an Asset
Class
• When properly funded, cash value continues
to accumulate during good times and bad,
through policy guarantees.2
Equities
Fixed
• Lifetime access to cash value through policy
loans and withdrawals, potentially income taxfree.3
1Internal
Whole Life
Cash Value
Revenue Code 101(a)(1). There are some exceptions to this rule. Please consult a qualified tax professional for advice concerning your
individual situation
2Guarantees are dependent upon the claims-paying ability of the issuing company.
3Policy loans and withdrawals reduce the policy cash value and death benefit and may result in a taxable event. Withdrawals up to the basis paid into
the contract and loans thereafter will not create an immediate taxable event, but substantial tax ramifications could result upon contract lapse or
surrender. Whole life insurance may not accumulate significant cash value in the early years of the policy.
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Three Good Reasons
Why Consumers Purchase Whole Life
#1 – Guarantees*
• Guaranteed Death Benefit
• Guaranteed Level Premium
• Guaranteed Cash Value
Product guarantees are
the most important feature
for buyers, regardless of
age or income
LIMRA
Life Buyers Report 2005
No other life insurance product offers the guarantees
that Whole Life provides
*Guarantees are dependent upon the claims paying ability of the insurer.
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Three Good Reasons
Why Consumers Purchase Whole Life
#2 – Buy it and don’t worry about it
Whole Life Insurance is the only insurance contract that you
can purchase, pay the required premium, and not worry
about the coverage
No need to track market returns or make reallocations
Let the insurance company do the heavy lifting
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Three Good Reasons
Why Consumers Purchase Whole Life
#3 – Diversification
Doesn’t add additional risk to a financial portfolio
Whole life insurance allows your clients
the ability to potentially take on risk
with other aspects of their finances while
guaranteeing their death benefit
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
With Whole Life the client transfers the
risk to National Life Group
National Life Group is committed to its long-standing conservative investment
philosophy that seeks to create value for the enterprise over the long term, while
minimizing investment losses in the short term.
Total: $17.1 billion investment portfolio as of December 31, 2010 representing consolidated assets of National Life Insurance
Company, Life Insurance Company of the Southwest and NLV Financial Corporation.
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
NL LifeBuilder
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
NL LifeBuilder
Male Age 45 PNS
$10,000 Annual Premium Paid-up @ 65
$423,276 Death Benefit
Year
Gtd. Cash
Value
Projected
Cash
Value
IRR On
Projected
CV
5
34,251
35,128
-11.54% 426,510
426,857
82.62%
10
97,586
103,744
-.66% 427,579
429,502
25.57%
20
230,880
251,807
3.35% 432,225
456,995
7.30%
30
292,001
403,565
3.99% 423,276
580,540
5.63%
Gtd. DB
Current
DB
IRR On
Current
DB
Financial Capital
Projected Cash Value and current Death Benefit are derived from dividends, which are not
guaranteed, and should not be construed as estimates of dividends to be paid in the future.
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Human
Capital
Ready to Move Assets?
The Premium Deposit Account (PDA) Can Help
•
What Does It Do?
– Avoids modified endowment status for large lump-sum amounts moving
into LifeBuilder
•
Why Use the PDA?
– Short-paying LifeBuilder can be matched to a PDA
– Avoids MEC
– Convenient for Policyowner, pay once
– PDA deposits earn interest
•
How Does It Work?
– Lump-sum amounts are held in an interest-paying fixed account outside
of the LifeBuilder policy
– Premiums are automatically paid from that account
Due to regulatory restrictions, the Premium Deposit Account is not available to active members of the military or in the states of Illinois,
Indiana, Kansas, Pennsylvania, Tennessee or Texas. The premium payment period is restricted to 10 years in California.
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Premium Deposit Account
The Premium Deposit Account may only be surrendered upon death or if the life insurance policy associated with the PDA is surrendered. If
the associated policy is surrendered, the PDA surrender penalty is the lesser of: 10% of the account value, or the interest earned.
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public
Protect Your Client’s Family and Help
Diversify Their Portfolio
Get your clients out of the Blue
And into the Green
For more information contact the
Life Sales Desk – 1-800-906-3310, Option 2
National Life Insurance Company® | Life Insurance Company of the Southwest™
For Agent Use Only – Not To Be Used With The Public