Wealth Transfer Offered by National Western Life
Old Concept w/ Some New Features Fits into Jack Marrion’s New FINANCIAL PYRAMID 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! Estate/Bequest Additional Income Essential Income
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?
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 Call ESP ESP 12 Minutes to Success Lifetime Returns Select or Solutions Point of Sale Interview MIB searched Inteli-Script Fraud statement reviewed Decision is made – Approve/Decline Agent Sends Paperwork Either Way! NWL Applies Premium or Requests Transfer POLICY ISSUED! COMMISSIONS PAID!!
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 • Agent and Applicant complete the application • 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? AnnuityLifetime Returns Solutions Death Benefit Death Benefit $100,000 $194,635 Taxablegain $30,000Tax Free Net to Heirs after taxes Net to Heirs $91,600$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 Tax-Free 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? IRALifetime Returns Solutions Death Benefit Death Benefit $150,000 $199,979 Taxablegain $30,000Tax Free Net to Heirs after taxes Net to Heirs $108,000$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