Indexed Universal Life IUL April Deng 1 -10

Indexed Universal Life (IUL) April Deng 1 -10 -2015

The Evolution of Phone

The Evolution of Life Insurance

Types of Life Insurances • Term Life Insurances Pros: 1) Affordable and therefore can get large face amount. 2) Some employers may provide it. Cons: 1) You have to die to get death benefit; 2) Not portable if provided by employer; 3) May be denied at renewal if though employer • Permanent Life Insurances Whole Life u Variable Life u Universal Life u Indexed Universal Life u Variable Universal Life u

Savings program mirroring Index: § § § Guaranteed growth 0 -15% Tax advantages Access cash value at any time Lawsuit/creditor proof No effects on college financial aid

6 Not for The Public, Internal Training Only For Internal Training Purpose Only

IUL: Index Universal Life Indexed UL credits interest based on performance (or weighted) of a linked Index or Indexes, multiplied by a participation rate, subject to a cap and a floor rates. Index NW IUL 8% 8% 20% 12% (Cap) -20% 0% (Floor)

Concept of IUL Never Lose Money – Warren Buffett IUL Market

What Can IUL Do For You?

Case Study 1 Mr. Young ◦ 30 -year-old ◦ Father to a new born baby ◦ $300 K mortgage ◦ Family AGI $140 K ◦ 10% contribution to 401 K What can IUL do for him?

30 Year Old, 700 K IUL At age 85, Total return = $168, 806 + $744, 053 + $555, 162 = $1, 468, 000

Case Study 2 Mr. Mature ◦ 50 -year-old ◦ Family AGI $200 K ◦ Kids have grown up ◦ $220 K Rental property What can IUL do for him?

50 Year Old, 800 K IUL How likely will his 220 K house become a 2 million house in 35 yrs? Maintenance free ? Tax free?

College Education Funding

Asset Protection STATE LIFE INSURANCE CASH VALUE LIFE INSURANCE PROCEEDS Texas 100% Texas Ins. Code§ 1108. 051 Same as life insurance cash value Maryland 100% if made for the benefit of spouse, child or dependent. Md. Code Ann. Ins. § 16 -111 Same as life insurance cash value Lousiana Beneficiary’s interest in proceeds and avails 100% protected. Limited to $35, 000 if issued within 9 months. La. Rev. Stat. Ann. § 22. 912 100% La. Rev. Stat. Ann. § 22. 912 New York 100% N. Y. Ins. Law § 3212(b). In re Mesinger, 29 F. 2 d 158 (2 nd Cir. 1928) 100% N. Y. Ins. Law § 3212(b) Pennsylvania Income or return of $100/mo 42 Pa. C. S. § 8124(c)(3) 100% if payable to spouse, child or dependent. 42 Pa. C. S. § 8124(c)(6)

Frequently Asked Questions about IUL

IUL too expensive? Case I. 40 Years old Male, Preferred plus rate class, $500 K face amount From Age 40 -80, total 40 years, IUL Case II. 40 Years old Male, Preferred plus rate class, $500 K face amount From Age 40 -80, total 40 years, Term 20 years + another term 20 years Buy a BMW vs a Ford. A Mansion vs renting an apartment

IUL too expensive? Case I 40 Years old Male, Preferred plus rate class, 500 K face amount From Age 40 -80, total 40 years, IUL Cost total: $5, 252 + $4, 800 + $14, 625 + $26, 602 = $41, 279 Annual average cost : $1, 032 Case II 40 Years old Male, Preferred plus rate class, 500 K face amount From Age 40 -80, total 40 years, Term 20 years + 20 years Cost total: $8, 160 + $51, 160 = $59, 320 Annual average cost : $1, 483, Actually $2, 100

It’s Too Good To Be True? Shift to Wealthier Clientele Puts Life Insurers in a Bind The Wall Street Journal - October 3, 2010

Any Drawback in IUL? Depending on health condition Not for short term investment Designed to be adequately funded, not under-funded. Early cancellation strongly discouraged. Need discipline!

Just like the BMW M-6, IUL is a great vehicle, If only you know how to drive it!

REAL SHORT-COMINGS OF IUL Too complicated ◦ Like all modern cars, the BMW M 6 is very complicated ◦ BMW sends the buyer of their M 6 to special driving school before they hit the road ◦ M 6 needs true professionals who can maintain the vehicle in a proper way Designed to be sufficiently funded ◦ You buy a super car like the M 6, you expect it to consume some gasoline, so fill up the tank before expecting it to outrun a Mazda You lose money if the policy is cancelled early on ◦ You buy a brand new M 6, and sell it next year, you’ll not get all your money back. Aren’t those common sense?

Conclusion A well maintained IUL can do tremendous things for family! Thank You!