A description of the unparalleled advantages that comes with owning a life insurance policy

1. The Life Insurance
Advantage

2. Why Life Insurance is Important
 Protect your family
 Leave a legacy
 Pay off debt
 Tax-free strategy to supplement retirement/college
planning
 Portfolio diversification
 Living Benefits
 Peace of Mind

3. Term vs. Permanent Insurance
 Term Insurance: Life insurance that provides coverage for
a specified term (years). There is no cash value, or
investment portion. Premiums are lower than permanent
insurance.
 Permanent Insurance: Life insurance that is permanent!
Assuming that all premiums are paid, the timing of death
does not affect whether the policy will pay out or not.
There is cash value growth that can be invested in
different ways.

4. Different Types of Permanent Life
Insurance
 Whole Life Insurance- Permanent insurance that builds
cash value. Premiums and death benefits are locked in
for a specified period of time. Policy owner can not
switch premium amount or death benefit. Cash value is
credited at a declared rate of interest.
 Universal Life Insurance- Permanent insurance, similar
to whole life insurance. Premiums and death benefits
are flexible and adjustable. Cash Value is credited at a
declared rate of interest.

5. Different Types of Insurance (cont.)
 Variable Life Insurance- Permanent Insurance in which
cash value participates in the stock market. Cash value
and death benefit may increase or decrease
accordingly.
 Index Universal Life Insurance- Permanent insurance
in which cash value is credited based on an index’s
performance, with a floor and a cap. It has the security
of a traditional universal life policy, as well as the
potential to participate in stock market gains like a
variable life insurance policy.

6. A quick example of how the cash value
in the IUL is credited
Last year Joe purchased the Builder IUL 7 from North American Insurance
Company which has a floor of 0% and a cap of 13.5%.
Joe has decided to have his cash value account linked to the S&P 500.
In year 1 of the policy, the S&P grows at 15%. Because the cap is at
13.5%, Joe’s cash value is credited 13.5%.
In year 2 of the life of the policy, the S&P grew 10%, Joe’s cash value
was credited 10% for that year.
In year 3 of the life of the policy, the S&P dropped by -25% for the year.
Joe’s cash value in the policy was then credited 0% and did not lose
value.

7. Real-life Example
(foxbusiness.com)

8. Tax-Advantages
 A loan taken from a life insurance policy that is
not classified as a modified endowment contract
under IRC Section 7702A is not includable in
income because it is not treated as a distribution
under IRC Section 72.

9. Living Benefits
 Chronic Illness Rider- The owner qualifies for this benefit
if a physician has certified that the insured is chronically
ill.
 Terminal Illness Rider- The policy owner qualifies for this
benefit if a physician has certified that the insured is
terminally ill.
 Depending on the policy, the insurance policy will
accelerate a portion or all of the death benefit.
 Each company has different stipulations in place.

10. Leaving a Legacy Behind
 Life insurance death benefits are generally not taxable
 Estate planning
 Family protection
 Financial flexibility
 Peace of mind knowing your family and loved ones won’t be
burdened with additional financial pressure.

11. Financial Flexibility
Premiums paid are not married to a specific cause.
 Money will grow and can be used for anything you desire.
 Not like a 529 plan where if proceeds are not used for school you lose
tax advantage.
 Not like a traditional IRA/401k in which you have to wait until age
591/2 to access the capital.
 No contribution limits!–- When structured properly, you may
contribute as much as you would like (unlike IRA’s and 401k’s)

12. The Verdict
You will leave a legacy behind that gives you the owner financial
flexibility to use the cash value for college, bills, disposable income or
anything you desire.
With life insurance, you will further diversify your portfolio with a
product that provides protection to you (living benefits) and your family
(death benefit).
You will have a tax-free income strategy that will grow at impressive
rates without market risk resulting in 25-40% more in usable income.