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For Financial Professional Use Only.
Always providing you a choice of options...where the path becomes apparent.
FALL/WINTER 2018
Al idi h i f i h h h b
FALL/WINTER20R 18
Pension MaximizationPAGE 57
Life Insurance Business Solutions in ACTIONPAGE 37
Dr. Phil vs.WARREN BUFFETT
PAGE 23
Protecting theFamily FarmPAGE 62
Marvel of theNEW iPhone XR
INSIDE COVER
VOLUME ONE - 2015
fmiPathfinderAlways providing you a choice of options...
where the path becomes apparent.
The Marvel of the iPhone XR
When Apple releases a new gadget you see people line up or even camp out for days in front of the Apple Store, just to be one of the first to own
the latest piece of technology. While you may have not heard about the latest and hottest Index Universal Life plan or Index Annuity from newspapers or cable news channels, there is a lot going on with product innovation in our industry. The products you provide will; save a family farm or business, enhance a retirement lifestyle, pay for college, fund a charity, create a legacy, supplement costs in a healthcare event and many other important things. Even with these incredible benefits, there is no line with people at your door waiting to purchase the products you sell. Face it, Annuities and Life Insurance products are mostly “sold” not “bought”.
You are likely reading this publication since you are a Financial Professional believing in the true benefits provided to your clients, only offered by Insurance Products. You are so very knowledgeable about the products you sell. So too are the tech people at Apple, regarding their products. The Apple tech people know the latest iPhone has the A12 Bionic Chip with 64-bit architecture and an embedded M12 motion coprocessor, along
with a 1792 by 828 pixel resolution screen at 326 ppi. They know these facts make the iPhone XR the “best” smart phone ever. But
who cares about all of that jargon? The doctor, mother, carpenter, teenager or business person just wants a phone where they can do
their online banking, take pictures, send text messages, look cool, and maybe even make a phone call on this modern marvel of technology.
Does the tech person at the Apple store tell customers about the hardware specifications of the phone? No way! They talk about what it
will do for them. Their online “sales pitch” includes phrases like: Say hello to the future, Forward thinking, It’s all screen, The screen fills the hand and dazzles
the eyes, The most sophisticated technology we’ve ever developed. Not once do they mention the marvel of the amazing A12 Bionic Chip.
That takes us back to the products you provide your clients. Are you talking about the mechanics of option costs that drive index return opportunities or how the
plan is issued by a company with billions of dollars in assets and operating in 30+ countries? Or should you be talking about what the products you provide will do for
them? Will they feel better owning something you sell? Will their family feel more secure? Will their business avoid disruption and prosper more? How can we better
intrigue the public about the many, many things your products can and will do in the lives of those you serve?
Let’s get back to the basics and tell a story about what our products will do for them, rather than beginning with the mechanics of the plan. Life is short, own life insurance. Retirement may last too long, buy an annuity.
R. Neil Sperling, LTCPVice President, Financial Markets, Inc.
We are here for your life.SM
Publisher: Jessie Eckles, B.S. Graphic DesignCommunications Coordinator, Financial Markets, Inc.
For Financial Professional Use Only.
Copyright © 2018 Financial Markets, Inc.All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.
Contact Us Today!Address: P.O. Box 3980, Rapid City, SD 57709Toll Free: 800-888-2829 • Fax: 888-782-9062Marketing: Marketing@fmiAgent.comNew Business: Status@fmiAgent.comContracting: Contracting@fmiAgent.com
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Thank you for doing business with Financial Markets, Inc.We are honored to serve you.
Multi-Year Guarantee Annuities ..................3
Fixed Annuities ..............................................5
Fixed Indexed Annuities ...............................8
Immediate Annuities ................................. 11
Term Life Insurance .................................... 12
Return of Premium Term ........................... 15
Fixed Universal Life .................................... 17
Indexed Universal Life ............................... 20
Second-to-Die ............................................. 26
First-to-Die ................................................... 27
Traditional Whole Life ................................ 28
Final Expense................................................ 30
Long Term Care ........................................... 31
Life/LTC Linked Benefi ts ............................ 33
Disability Income ........................................ 35
Critical Illness ............................................... 35
Medicare Supplement ............................... 35
Table of Contents
2
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Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Company A.M. Best
Rating Minimum PremiumMYG
Durations OfferedIssueAges Penalty Free Withdrawals
A 0-85 $10,000 (Q) 15% Annually In All Years 5, 6, 7, 10 Years $10,000 (NQ) RMD
A- 18-85 $10,000 (Q) Interest Only 5, 6, 7 Years $10,000 (NQ) RMD American National A 0-85 $5,000 (Q) Interest Annually in All Years 5, 6, 7, 8, 9, $5,000 (NQ) 10% Annually Beginning 10 Years Year 2 RMD Americo A 0-85 $10,000 (Q) 10% Annually In All Years 5 Years $10,000 (NQ) RMD A 0-85 $10,000 (Q) Interest Only 3, 5, 7 Years $10,000 (NQ) RMD
A+ 0-85 $10,000 (Q) 10% Annually In All Years 5, 6, 7, 8, 9, $10,000 (NQ) RMD 10 Years
A+ 0-90 $2,000 (Q) Interest Only 3, 4, 5, 6, 7, 8, 9, $10,000 (NQ) RMD 10 Years
A+ 0-85 $10,000 (Q) Interest Only 5, 6, 7, 8, 9, $10,000 (NQ) 10 Years
American General
3For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Multi-Year Guarantee Annuities
Athene makes rollovers clean and easyNow you have the key tools needed to help identify rollover candidates, discuss the benefits, and roll over retirement assets into an Athene annuity — the clean and easy way.
FOR FINANCIAL PROFESSIONALS:
Rollover Quick Guide (20449)
IRA rollovers: A billion-dollar opportunity (20446)
FOR CLIENTS AND PROSPECTS:
Why roll over your 401(k) into an Athene annuity? (20448)
Plan for the retirement you’ve always dreamed of (21357)
Ready to roll over? Give us a call!
Need an illustration? Got a challenging case? The best Sales Desk in the business is just a phone call away. We’re here to help at .
This material is a general description intended for general public use. Athene Annuity and Life Company, headquartered in West Des Moines, Iowa, and issuing annuities in 49 states and D.C., and Athene Annuity & Life Assurance Company of New York, headquartered in Pearl River, NY, and issuing annuities in New York, are not undertaking to provide investment advice for any individual or in any individual situation, and therefore nothing in this should be read as investment advice.The term “financial professional” is not intended to imply engagement in an advisory business with compensation unrelated to sales. Financial professionals will be paid a commission on the sale of an Athene annuity.For financial professional use only. Not to be used with the offer or sale of annuities.
What makes a clean rollover?While every client’s situation is different, Athene has identified these common characteristics that may indicate a client is appropriate and suitable for a retirement asset rollover.
1. Clients who have…
Retirement assets from one or more employee-sponsored retirement plans (i.e., 401(k), 403(b), profit-sharing plans) to which they are no longer contributing.
Such as a:
Client who has changed jobs Soon-to-be retiree Recent retiree
2. And are looking for…
Continued tax deferralContinued growth potentialProtection from market lossGuaranteed lifetime income
Ability to create a legacy
3. Who have completed…
Athene’s suitability confirmation worksheet and the product comparison forms and understand why an Athene annuity is an appropriate choice for them.
Help your clients achieve their retirement goals with an Athene rolloverLeverage one of the strongest lineups of fixed and fixed indexed annuities in the market. An Athene annuity provides your clients with continued tax deferral, growth potential based, in part, on the performance of a market index and protection from market risk or losses. Plus, the ability to create a guaranteed stream of income they can’t outlive.
20449 (02/16)Products issued by Athene Annuity and Life Company, West Des Moines, IA
Rollover Quick Guide
ppaarissooon f
DDees MMoine
20446 (03/18)
For financial professional use only. Not to be used with the offer or sale of annuities. This material is provided by Athene Annuity and Life Company headquartered in West Des Moines, Iowa, which issues annuities in 49 states and D.C., and Athene Annuity & Life Assurance Company of New York headquartered in Pearl River, New York, which issues annuities only in New York.
IRA rollovers: A billion-dollar opportunity
Looking for a great way to expand your business and help clients solidify their retirement futures? It may be time to tap into the growing billion-dollar IRA market.
What is an IRA rollover?Typically a rollover occurs when an individual separates from service from their employer through a job change, layoff, termination or retirement. At that time, they will need to decide what to do with their assets in any employer-sponsored retirement plan (i.e., 401(k), 403(b) or profit-sharing plan). The three most common options include keeping their assets in the plan, cashing out, or rolling their assets over into another tax-qualified plan such as a new employer-sponsored plan or an Individual Retirement Account (IRA).
In this paper, we’ll touch on the advantages of rolling plan assets into an IRA funded with a fixed indexed annuity. This allows your client to maintain the tax-deferred treatment they received from their employer plan.1 And, they’ll avoid a 10 percent IRS penalty, provided the rollover is completed within 60 days. An IRA rollover also gives your clients the option to consolidate several plans into one.
IRA one-rollover-per-year rule:The IRS states that an individual can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own.
Exceptions:
• Trustee-to-trustee transfers between IRAs
• Rollovers from traditional to Roth IRAs (conversions)
For more information, including transition rules, visit the IRS website at IRS.gov.
20448 (02/16)Products issued by Athene Annuity and Life Company, West Des Moines, IA
Consider this…Do you have assets in one or more employee-sponsored
retirement plans (i.e., 401(k), 403(b), profit-sharing plans)
to which you are no longer contributing?
Do you want to continue…?
Tax deferral
Growth potential
With the added benefits of…
Protection from market downturns
Guaranteed lifetime income
Flexibility to customize income
Creating a legacy
Achieve your retirement goalsRolling over tax-qualified retirement assets into an Athene annuity can help you achieve your retirement goals. Plus, you’ll receive added benefits.
What is an annuity? Annuities provide insurance against the risk that you’ll outlive your money after you retire. They give you the potential to grow your savings and create a guaranteed income stream to last a lifetime.
Your Athene agent can help you find the annuity solution for your needs.
Why roll over your 401(k) into an Athene annuity?
20448 Products issued by Athene Annuity and Life Company, WWestt DDees MMoine
Achieve your retirement goalsR lliRolling ove lir tax-qualifi d ified retirem t tent assets i tinto
A han Athene aan Athene a innuity can nnuity can y h lhelp you achelp you acp y hihieve your hieve your yretirementretirement goals. Plusgoals. Plus, you’ll re, you ll receive addedceive added benefits.benefits.
What is an annuity? Annuities provide insurance against the risk that you’ll outlive your money after you retire. They give you thepotential to grow your savings and create a guaranteedincome stream to last a lifetime.
Your Athene agent can help you find the annuity solution for your needs.
21357 (03/18)
Plan for the retirement you’ve always dreamed of.Protect your retirement savings from market downturns with an Athene annuity.
Consider this…Funds in a 401(k) may be exposed to the highs and lows of the stock market, and may not be protected from losses. This exposure can be especially risky as you get close to retirement, because your savings have less time to recover from a market downturn.
Athene can help you achieve more with your retirement savings. Let us prove it to you.
Protect a portion of your retirement savings with an in-service distribution into an Athene annuity.
How do you benefit?The money in a fixed or fixed indexed annuity is not directly exposed to the risks of the stock market or individual stocks.1 We guarantee you will not lose money due to stock market risk or losses.2
How does it work?An in-service distribution, if permitted by your plan, allows individuals who are still working to directly roll over a portion of their vested balance from an employer-sponsored retirement plan into an Individual Retirement Account (IRA), such as an Athene fixed or fixed indexed annuity.3
In-service distributions may be taken from 401(k), 403(b) and 457 plans, as well as pensions and profit-sharing plans. Since the money directly moves from one qualified plan to another, in-service distributions are not a taxable event and the money remains shielded from taxes until you begin taking money from your annuity.
Additional featuresYou can withdraw money from your annuity without an IRS penalty before you retire once you reach age 59½.4 Plus, an annuity gives you the ability to create a guaranteed stream of income for life.
Are you currently working and have a 401(k)?
This material is provided by Athene Annuity and Life Company headquartered in West Des Moines, Iowa, which issues annuities in 49 states and D.C., and Athene Annuity & Life Assurance Company of New York headquartered in Pearl River, New York, which issues annuities only in New York. Products not available in all states.
GUARANTEED
20469 (03/18)
Athene Rollover Toolkit
4Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Company A.M. Best
Rating Minimum PremiumIncome
Rider AvailableIssueAges Plan Durations Offered
A- 18-80 $5,000 (Q) 7 & 10 Years Yes $5,000 (NQ)
American National A 0-85 $2,000 (Q) 5, 7, 10 Years No $5,000 (NQ)
A+ 0-85 $50,000 (NQ) 5 & 7 Years No
National Western A 0-90 $5,000 (Q) 10 Years Yes $5,000 (NQ)
A+ 40-85 $20,000 (Q) 7 & 10 Years Yes $20,000 (NQ)
A+ 18-85 $2,000 (Q) 7 Years No $2,000 (NQ)
5For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Fixed Annuities
71017 (04/18)
A Fixed Indexed Annuity With Enhanced Benefits Rider
55
65
2
4
Sam‘sThe Twists and Turns ofSometimes life is best explained through storytelling. The hypothetical scenario of “Sam’s Journey” can help you demonstrate for your clients the real benefits of the unique Enhanced Benefits Rider1 included with Athene Benefit 10SM.
Age 55Seeing retirement on the horizon, Sam purchases a $100K premium Athene Benefit 10 fixed indexed annuity to help support his future plans.
Age 65Ready to begin the next chapter, Sam retires and begins taking yearly $6,800 withdrawals, for a total benefit2 of $47,600 over 7 years.
Age 74Now requiring around-the-clock care, Sam is moved to a nursing home, and chooses to receive a $20,400/yr. confinement benefit4, equaling $61,200 over 3 years.
Age 77Sam passes away, and his beneficiary has the option to receive a lump sum of $28,5605 or continue to receive $20,4005 per year, equaling $40,800 over the two-year period following his death.
Age 72A serious skiing accident sidelines Sam who, unable to perform 2 of 6 activities of daily living (ADL), elects to receive $10,200/yr. enhanced income benefits3, for a total of $20,400 over 2 years.
For financial professional use only. Not to be used with the offer or sale of annuities. 1 The Enhanced Benefits Rider is included with the Athene Benefit 10 annuity; therefore it
must be purchased with the annuity. It has an Annual Rider Charge. 2 The Lifetime Income Withdrawal amount is equal to the Benefit Base multiplied by the
Lifetime Income Withdrawal Percentage. 3 The Enhanced Income Benefit increases the Lifetime Income Withdrawal amount by 50% if
certain criteria are met (see Certificate of Disclosure for details).
4 If Confinement Benefit or Terminal Illness provision are elected, the Benefit Base will be paid out over a five-year period if certain criteria are met (see Certificate of Disclosure for details). Once the Benefit Base has been depleted, the rider will terminate.
5 In this hypothetical example, Sam’s beneficiary has two Death Benefit options — Continue to receive the remaining Confinement Benefit payments or a lump sum benefit, which will be the greater of 70% of the Benefit Base, Accumulated Value or the Minimum Guaranteed Contract Value (please see the Certificate of Disclosure for details on the Rider Death Benefit).
6Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Think income plus flexibility.From the time he retired at age 65 until his death at age 77, Sam received $129,200 in income, using three different rider benefits.
Upon his death, if the beneficiary elects to receive the remaining payments under the Confinement Benefit provision, the remaining $40,800 would be paid to his beneficiary over a two year period following his death. Meaning the entire $170,000 was paid out, either to Sam or his beneficiary.
Athene Benefit 10 provides guaranteed lifetime income withdrawals1, enhanced income benefits, terminal illness and confinement benefits, and rider death benefit options — to cover the twists and turns that retirement may bring in real life. The charts below illustrate Sam’s elected withdrawals and death benefits to his beneficiaries.
The Benefit Base on Sam’s Enhanced Benefits Rider’s Benefit Base grew from the initial premium amount of $100,000 to $170,000 on the 10th contract anniversary.
Age Years Annual Amount Benefit Base2
Beginning Value (Premium) 55 $100,000Simple Interest Credits 10 $70,000 +70,000Lifetime Income Withdrawals Elected 65 $170,000
From the time he retired at age 65 until his death at age 77, Sam withdrew $129,200 utilizing three rider benefits:
Age Years Annual Withdrawal Total WithdrawalLifetime Income Withdrawals 65 7 $ 6,800 $47,600Enhanced Income Benefits 72 2 10,200 + 20,400Confinement Benefit 74 3 20,400 + 61,200 Total Withdrawals $129,200
Each of these withdrawals was subtracted from the Benefit Base. At the time of Sam’s death, the remaining balance was $40,800.
Age Benefit BaseBenefit Base at the time Lifetime Income Withdrawals began 65 $170,000Total Withdrawals 77 - 129,200 Remaining Benefit Base $40,800
Sam’s beneficiaries can elect to receive a lump sum payout or continue receiving the remaining Confinement Benefits until the Benefit Base is depleted.
Lump SumGreater of the Accumulated Value, Minimum Guaranteed Contract Value or 70% of the remaining Benefit Base $40,800 x 70% = $28,560
——— OR ———Continue Confinement BenefitsPrior to his death, Sam received three of the five annual Confinement Benefits, leaving two additional annual payments available to his beneficiaries. $20,400 x 2 years = $40,800
Summing it all up:
Sam’s initial premium of $100k generated: Withdrawals paid to Sam $129,200 Death Benefit to his Beneficiaries* + 40,800
Total Client Benefits $170,000*Assumes beneficiaries elected to continue Confinement Benefits upon Sam’s death.
Not for use in CA, CT, DC, HI, IL, LA, MA, MD, NJ, PA or WA.
1 Lifetime Income Withdrawals may be reduced or may stop if clients take Excess Withdrawals from their contract or meet the eligibility requirements for and elect Income Withdrawals under the rider’s Confinement Benefit or Terminal Illness provisions.
2 The Benefit Base is used only for the calculation of the rider benefits. It cannot be withdrawn in a lump sum. It does not have a cash value or a surrender value.
This material is a general description intended for general public use. Athene Annuity and Life Company, headquartered in West Des Moines, Iowa, and issuing annuities in 49 states and D.C., and Athene Annuity & Life Assurance Company of New York, headquartered in Pearl River, NY, and issuing annuities in New York, are not undertaking to provide investment advice for any individual or in any individual situation, and therefore nothing in this should be read as investment advice.Athene Benefit 10 with Enhanced Benefits Rider [GEN10 (04/14), EBR (04/14)] or state variations, is issued by Athene Annuity and Life Company, West Des Moines, IA. Product features, limitations and availability vary; see the Certificate of Disclosure for details. Product not available in all states.The term “financial professional” is not intended to imply engagement in an advisory business with compensation unrelated to sales. Financial professionals will be paid a commission on the sale of an Athene annuity.
ATHENE ANNUITIES ARE PRODUCTS OF THE INSURANCE INDUSTRY AND NOT GUARANTEED BY ANY BANK NOR INSURED BY FDIC OR NCUA/NCUSIF. MAY LOSE VALUE. NO BANK/CREDIT UNION GUARANTEE. NOT A DEPOSIT. NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY. MAY ONLY BE OFFERED BY A LICENSED INSURANCE AGENT.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 20187
Fixed Indexed AnnuitiesCompany
A.M. BestRating
MinimumPremium Index Options
IssueAges
Plan Durations Offered
A 0-85 $25,000 (Q) 7, 10 Years MLSB (LV), S&P 500®, Yes $25,000 (NQ) S&P 500® (LV), PIMCO Global Optima
Income RiderAvailable
A 0-85 $100 (Q) 8 Years S&P 500®, Russell 2000®, Yes $200 (NQ) MSCI EAFE®
A- 18-85 $5,000 (Q) 6, 7, 8, 9, S&P 500®, S&P 500® (LV), Yes $5,000 (NQ) 10, 16 Years DJIA®, U.S. Treasury Bond
Americo A 0-85 $10,000 (Q) 9 Years S&P 500®, NASDAQ-100® No $10,000 (NQ)
A 0-83 $5,000 (Q) 5, 7, 10, S&P 500®, S&P 500® (LV), Yes $5,000 (NQ) 15 Years BNPP MAD 5 Index (LV), Morningstar® Dividend Yield (LV), Janus SG
A+ 0-85 $2,000 (Q) 5, 6, 7, 8, 9, S&P 500®, S&P 500® (LV) Yes $5,000 (NQ) 10 Years
A+ 0-85 $2,000 (Q) 7, 8, 10, 12, S&P 500®, S&P 500® (LV), Yes $10,000 (NQ) 14 Years S&P MIDCAP 400®, NASDAQ-100®, DJIA®, RUSSELL 2000®, EURO STOXX 50®, Hang Seng
A+ 0-85 $10,000 (Q) 5, 6, 7, 8, 9, S&P 500®, Yes $10,000 (NQ) 10 Years Citi Flexible Allocation 6 Excess Return Index
American General
For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Lafayette Life A+ 0-85 $1,000 (Q) 10 years S&P 500®, Nikkei 225, Yes $1,000 (NQ) J.P. Morgan SBI GS Momentum Builder
National Western A 0-85 $2,000 (Q) 7, 9, 10, 13, S&P 500®, S&P 500 (LV), Yes $5,000 (NQ) 14, 15 Years Nikkei 225, EURO STOXX 50®, Hang Seng
8
This chart demonstrates the powerful benefits of an American Equity Choice fixed index annuity product with annual reset on the S&P 500® Annual Pt to Pt 54% Participation Rate (PR)1 crediting option. The Choice 10 product is designed to provide stable accumulation by participating in the positive annual growth of the S&P 500 while shielding against loss with principal protection.
Constructed with actual index growth over the past 66 years, the table below shows an annual point to point with 54% PR would have outperformed an annual point to point with 7.00% Cap 55 out of 57 ten-year rolling periods. Calculations based on $100,000 initial premium per period.2
For demonstrative purposes only. Participation rates can change annually. The graph is on actual rates for the time period shown for the S&P 500 only. Annuity contract issued under form series ICC14 IDX8-10, ICC11 E-APTPR and state variations thereof. Availability and form number may vary by state. Past performance does not guarantee future results. Indexed annuities were not available for the entire period shown, except for 1995-2017. The Chart demonstrates historical performance of the S&P 500 across 65+ years. The hypothetical fixed-indexed annuity in this example uses the annual point-to-point index method based on changes in the S&P 500 to calculate the indexed rate for each term. For purposes of this chart an Annual Point to Point 7.00% Cap is applied for all terms in the period as well as an Annual Point to Point 54% Participation Rate. Assuming $100,000 initial premium per 10 year period.1 54% par rate is only available with optional
Market Value Adjustment (MVA) Rider. Rider issued under form series ICC17 R-MVA and state variations thereof. Available only on the Choice Series 10 product. Availability may vary by state.
2 Indexed interest is credited only on amounts held for the entire term. This example assumes no money is withdrawn from the annuity. Early withdrawal charges will apply if money is withdrawn during the early withdrawal charge period. See the disclosure document for the early withdrawal charge schedule.
3 1995 is the year fixed index annuities (FIA) products became available.
4 1996 is the year American Equity had an FIA available with the participation rate strategy.
5 1998 is the year American Equity had both the participation rate and cap rate strategies available on an FIA.
6 2015 is the year when the Choice Series products became available.
The “S&P® 500” is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by American Equity Investment Life Insurance Company (“AEL”). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). These trademarks have been licensed to SPDJI and sublicensed for certain purposes by AEL. AEL’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and such parties make no representations regarding the advisability of investing in such product(s) and have no liability for any errors, omissions, or interruptions of the S&P. The S&P 500 Index (SPX) is a price return index and does not include dividends paid on underlying stocks.
Consecutive 10-Year Rolling Time Periods of the S&P 500 Between 1952-2017
Time Frame 54% PR ($100k)
7.00% Cap ($100k) Difference Time Frame 54% PR
($100k)7.00% Cap
($100k) Difference
1952 to 1961 $217,265 $154,005 $63,259.75 1981 to 1990 $181,388 $155,263 $26,124.861953 to 1962 $204,273 $143,930 $60,343.08 1982 to 1991 $207,163 $166,132 $41,031.681954 to 1963 $225,109 $154,005 $71,103.83 1983 to 1992 $196,495 $162,188 $34,307.331955 to 1964 $193,763 $154,005 $39,757.74 1984 to 1993 $186,574 $162,188 $24,386.411956 to 1965 $177,873 $154,005 $23,868.04 1985 to 1994 $185,167 $159,949 $25,218.421957 to 1966 $175,400 $150,073 $25,326.82 1986 to 19953 $191,976 $159,949 $32,027.231958 to 1967 $194,431 $160,578 $33,852.59 1987 to 19964 $197,403 $159,949 $37,454.291959 to 1968 $167,964 $160,578 $7,385.49 1988 to 1997 $227,960 $167,740 $60,220.441960 to 1969 $160,608 $150,073 $10,534.77 1989 to 19985 $244,411 $167,740 $76,671.191961 to 1970 $160,688 $150,223 $10,465.00 1990 to 1999 $235,527 $167,740 $67,786.991962 to 1971 $151,175 $150,223 $951.42 1991 to 2000 $235,527 $167,740 $67,786.991963 to 1972 $163,934 $160,739 $3,194.93 1992 to 2001 $206,223 $156,766 $49,456.391964 to 1973 $148,760 $150,223 -$1,462.98 1993 to 2002 $201,370 $150,073 $51,296.641965 to 1974 $139,028 $140,395 -$1,367.27 1994 to 2003 $221,621 $150,073 $71,548.061966 to 1975 $155,133 $140,395 $14,737.14 1995 to 2004 $232,370 $160,578 $71,791.571967 to 1976 $171,173 $150,223 $20,950.17 1996 to 2005 $199,404 $154,575 $44,828.681968 to 1977 $154,419 $140,395 $14,023.40 1997 to 2006 $192,951 $154,575 $38,376.001969 to 1978 $149,125 $132,602 $16,523.72 1998 to 2007 $168,425 $149,562 $18,862.981970 to 1979 $159,042 $141,884 $17,158.44 1999 to 2008 $147,225 $139,778 $7,447.041971 to 1980 $181,090 $151,664 $29,426.36 2000 to 2009 $150,035 $139,778 $10,257.041972 to 1981 $171,114 $141,742 $29,372.34 2001 to 2010 $160,387 $149,562 $10,824.991973 to 1982 $170,373 $141,742 $28,630.69 2002 to 2011 $160,387 $149,562 $10,824.991974 to 1983 $186,268 $151,664 $34,604.52 2003 to 2012 $171,999 $160,032 $11,967.671975 to 1984 $187,684 $153,787 $33,896.87 2004 to 2013 $174,604 $160,032 $14,572.131976 to 1985 $183,162 $153,787 $29,374.75 2005 to 2014 $176,769 $160,032 $16,736.981977 to 1986 $179,095 $153,787 $25,307.81 2006 to 20156 $173,951 $155,371 $18,580.101978 to 1987 $181,065 $156,909 $24,155.97 2007 to 2016 $170,386 $155,371 $15,015.201979 to 1988 $192,101 $166,132 $25,969.71 2008 to 2017 $184,731 $160,578 $24,152.781980 to 1989 $206,637 $166,132 $40,505.65
01F1155-10TTb 08.15.18 ©2018 American Equity. All Rights Reserved.
American Equity Investment Life Insurance Company®6000 Westown Pkwy, West Des Moines, IA 50266
Time After Time with Choice 10 Product54% Participation Rate1
For Agent Information Only. Not for use in solicitation or advertising to the public.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018 10
Company A.M. Best
RatingMinimumPremium
DIA Available
IssueAges Payout Options
QLAC Available
A 0-90 $10,000 Life Only Yes Yes Life + Certain Period (5-30 yrs) Life + Installment refund Life + lump sum refund Certain Period Only (5-30 yrs) A- 18-90 $10,000 Life Only No No Life + Certain Period (5-25 yrs) Certain Period Only (5-25 yrs)American National A 0-90 $3,500 Life Only No No Life + Certain Period (5-20 yrs) Life + Installment refund Life + lump sum refund Certain Period Only (5-30 yrs) A 0-85 $10,000 Life Only No No Life + Certain Period (5, 10, 15, 20 yrs) Life + Installment refund Certain Period Only (6-30 yrs)
A+ 0-95 $10,000 Life Only Yes Yes Life + Certain Period (5-20 yrs) Life + Installment refund Life + lump sum refund Certain Period Only (10-20 yrs)
National Western A 0-99 $5,000 Life Only No No Life + Certain Period (5, 10 yrs) Certain Period Only (5, 10 yrs) A+ 0-90 $2,000 Life Only No No Life + Certain Period (5-20 yrs) Life + Installment refund Life + lump sum refund Certain Period Only (7-20 yrs)
A+ 0-99 $50,000 Life + Certain Period (5-30 yrs) No No Life + Installment refund Life + lump sum refund Certain Period Only (10-30 yrs) Key: DIA: Deferred Income Annuity. Income is deferred greater QLAC: Qualifi ed Longevity Annuity Contract as defi ned than 1 year. by IRC 1.401(a)(9)-6 A-17
American General
Lafayette Life A+ 0-95 $10,000 Life Only No No Life + Certain Period (5, 10, 15, 20 yrs) Life + Installment refund
Immediate Annuities
For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 201811
AG Select-A- A 20-80 Not 1, 10, 15, 16 ADB, CTR, 70 Term Nearest Specifi ed 17, 18, 19, 20 TIR, WOP 21, 22, 23, 24 24, 25, 26, 27 28, 29, 30 & 35 Years
FLX Living A 18-80 Not 10, 15, 20 ADB, CIR, 65 Benefi ts Nearest Specifi ed & 30 Years CTR, NHB, Term TIR, WOP
Global Atlantic Term A- 18-75 Not 1, 10, 20, & ADB, CTR, 75 (Accordia Life) Nearest Specifi ed 30 Years OIR, TIR, WOP John Hancock John Hancock A+ 18-80 Not 10, 15,& TIR, WOP, 70 Term Nearest Specifi ed 20 Years WOPU
Company
A.M. Best
RatingPlan
Name
MinimumFace
Amount
MaximumFace
AmountTerm
DurationsAvailable
Riders
Maximum Conversion
Age CommentsIssueAges
Low cost table ratings.
Non-Med through $99,999
18 LivingBenefi t Triggers,
Non Med Through $300,000 & Age 60
ConvertibleWaiver ofPremium
Unique VitalityDiscounting
Option Available
$100,000
$50,000
$50,000
$100,000
American General
Value Plus A 18-80 Not 1, 10, 15, 20 ADB, CTR, 70 Term Nearest Specifi ed & 30 Years TIR, WOP
$100,000 Commission-able Conversion Credit Available
John Hancock John Hancock A+ 20-60 $1,000,000 10, 15,& TIR, WOPU NA Smart Protect Nearest 20 Years Term with Vitality
StreamlinedUnderwriting
$100,000
Assurity Term Life A- 18-75 $10,000,000 10, 15, 20, CIR, CTR, 65 Actual & 30 Years DI, OIR, ROP, WOP
AccelleratedUnderwriting
Available (Through $500,000 & Age 50, $350,000 & Age 65)
$25,000
Legal & OPTerm® A+ 20-75 Not 10, 15, 20, ATR, CTR, 70General Nearest Specifi ed 25 & 30 TIR (Banner Life) Years
Unique optionto ladder
coverage with Additional Term Rider
$100,000
Lafayette Life Centennial A+ 18-70 Not 10, 20, 30 CTR, TIR, 70 Term Actual Specifi ed Years WOP
ConvertibleWaiver of Premium
$100,000
Key: ADB: Accidental Death Benefi t NHB: Nursing Home Benefi t ATR: Additional Term Rider on Base Insured OIR: Other Insured Rider CIR: Critical Illness Rider RDR: Residential Damage Rider CTR: Child Term Rider ROP: Return of Premium DBIS: Death Benefi t as Income Stream TIR: Accelerated Death Benefi t for Terminal Illness DI: Disability Income Rider WOP: Waiver of Premium GPO: Guaranteed Purchase Option for Additional Coverage WOPU: Waiver of Premium for Unemployment Rider
12
Term Life Insurance
For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Company A.M. Best
RatingPlan
Name
MinimumFace
Amount
MaximumFace
AmountTerm
DurationsAvailable
Riders
Maximum Conversion
Age CommentsIssueAges
Life A+ 18-80 Not 10, 15, 20 CTR, TIR, 70 Elements® Nearest Specifi ed & 30 Years WOP Level Term
New York Life Level A++ 15-75 Not 10 & 20 ADB, CTR, 75 Premium Actual Specifi ed Years GPO, OIR, Convertible TIR, WOP Term Insurance
ADDvantage® A+ 18-75 Not 10, 15, 20 CIR, CTR, 74 Term Life Nearest Specifi ed & 30 Years NHB, TIR, WOP Protective A+ 18-75 Not 10, 15, 20, ADB, CTR, 70 Custom Nearest Specifi ed 25 & 30 DBIS, TIR, Choice UL Years WOP
Term A+ 18-75 Not 10, 15, ADB, CTR, 65 Essential® Actual Specifi ed 20 & 30 NHB, TIR, & Term Elite® Years WOP
TermAccel® A+ 18-50 $500,000 10, 15, 20 CTR, TIR, 70 Nearest & 30 Years WOP
Available only with eApp
process and ePolicy delivery
Non-tobaccorates for mostnon-cigarette
nicotine users
$100,000
$250,000
$100,000
$100,000
$100,000
$100,000
Brokerage Contract requires
minimum of $20,000 fi rst year premium
on all cases
Convertible to any Current
Permanent Plan
Unique Term/UL Design
Non-tobaccorates for mostnon-cigarette
nicotine users
Key: ADB: Accidental Death Benefi t NHB: Nursing Home Benefi t ATR: Additional Term Rider on Base Insured OIR: Other Insured Rider CIR: Critical Illness Rider RDR: Residential Damage Rider CTR: Child Term Rider ROP: Return of Premium DBIS: Death Benefi t as Income Stream TIR: Accelerated Death Benefi t for Terminal Illness DI: Disability Income Rider WOP: Waiver of Premium GPO: Guaranteed Purchase Option for Additional Coverage WOPU: Waiver of Premium for Unemployment Rider
Protective A+ 18-75 Not 10, 15, 20, ADB, CTR, Call Classic Nearest Specifi ed 25 & 30 TIR, WOP Choice Term Years
$100,000 Low costprotection
Lloyd's of Failure to N/A N/A Not Not Not 70London Survive Specifi ed Specifi ed Specifi ed
Specialty Coverage forSpecial Risks
$100,000
For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 201813
Term Life Insurance
We are here for your life.SM
FinancialMarkets, Inc.
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United Home Simple Issue A- 20-60 $200,000 20 & 30 ADB, CTR, NA Life Term 20 & 30 Actual Years ROP, TIR, WOP
$25,000 No MedicalExams
Transamerica Trendsetter® A+ 18-80 Not 1, 10, 15, ADB, CTR, 70 Super Series Nearest Specifi ed 20, 25 & DBIS, TIR, 30 Years WOP
$25,000 Low face amounts available
For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018 14
United of Term Life A+ 18-80 Not 10, 15, 20 ADB, CTR, 74 Omaha Answers Actual Specifi ed & 30 Years OIR, TIR, WOP, WOPU United of Term Life A+ 18-65 $300,000 10, 15, 20, ADB, CTR, DI, 70 Omaha Express Actual & 30 Years RDR, ROP, TIR, WOP, WOPU
Waiver of Premium for
Unemployment Rider Included
$100,000
Company A.M. Best
RatingPlan
Name
MinimumFace
Amount
MaximumFace
AmountTerm
DurationsAvailable
Riders
Maximum Conversion
Age CommentsIssueAges
$25,000 No MedicalExams
Key: ADB: Accidental Death Benefi t NHB: Nursing Home Benefi t ATR: Additional Term Rider on Base Insured OIR: Other Insured Rider CIR: Critical Illness Rider RDR: Residential Damage Rider CTR: Child Term Rider ROP: Return of Premium DBIS: Death Benefi t as Income Stream TIR: Accelerated Death Benefi t for Terminal Illness DI: Disability Income Rider WOP: Waiver of Premium GPO: Guaranteed Purchase Option for Additional Coverage WOPU: Waiver of Premium for Unemployment Rider
Term Life Insurance
PruLife® A+ 18-65 Not 15, 20 & NHB, TIR 65 Return of Actual Specifi ed 30 Years Premium Term
United Home Simple Issue A- 20-60 $200,000 20 Years CTR, TIR NA Life Term 20 ROP Actual
Assurity Term Life A- 18-60 $10,000,000 20 & 30 CIR, CTR, 65 Actual Years OIR, ROP, WOP
United of Term Life A+ 18-50 $300,000 20 & 30 ADB, CTR, 70 Omaha Express Actual Years RDR, ROP, TIR, WOP, WOPU
Key: ADB: Accidental Death Benefi t OIR: Other Insured Rider WOPU: Waiver of Premium for CIR: Critical Illness Rider RDR: Residential Damage Rider Unemployment CTR: Child Term Rider ROP: Return of Premium DI: Disability Income Rider TIR: Accelerated Death Benefi t for Terminal Illness NHB: Nursing Home Benefi t WOP: Waiver of Premium
$25,000
Company A.M. Best
RatingPlan
Name
MinimumFace
Amount
MaximumFace
AmountTerm
DurationsAvailable
Riders
Maximum Conversion
Age CommentsIssueAges
$100,000
$50,000
$25,000
Non-tobacco rates for most non-cigarette
nicotine users. Reduced Paid-Up Option Included.
No Medical Exams
No Medical Exams
AccelleratedUnderwriting
Available (Through $500,000 & Age 50, $350,000 & Age 65)
Visit and click on Status
Check status of your applications
www.fmiAgent.com
Return of Premium Term
For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 201815
© 201 Prudential Financial, Inc. and its related entities.
0150749-0001 -00 Ed. /201 Exp.
NOT FOR CONSUMER USE.
Some categories of individuals who may qualify for our Preferred Underwriting:
Most commercial and business pilots for U.S.-based airlines.
(May qualify for Preferred Best rates.)
Clients who plan to travel to most foreign countries for 6 months
or less annually (business or pleasure).1 (May qualify for Preferred
Best rates.)
Scuba divers who dive up to 100 feet
Individuals with a total cholesterol level up to and including 299 and a
total cholesterol / HDL ratio up to and including 6,
even if on cholesterol-lowering medications2
Males/females 6’0”, ages 18-59, up to 228 pounds, BMI up to 313
Males/females 6’0”, ages 60 and over, up to 258 pounds, BMI up to 353
Some categories of individuals who may qualify for our advantageous Non-Smoker Plus ratings:
Cigar/pipe smokers and smokeless tobacco users
Nicotine patch or Nicorette Gum® users
Individuals with a total cholesterol level up to and including 299 and a
total cholesterol / HDL ratio up to and including 7,
even if on cholesterol-lowering medications4
Male/Female 6’0”, ages 18–59, up to 242 pounds and BMI up to 33
Male/Female 6’0”, ages 60 and over, up to 294 pounds and BMI
up to 40
Pilots (excluding Student Pilots) 25 years of age or greater with more
than 600 hours in total flight time and between 30 and 300 hours
per year
Some categories of individuals who may qualify for our advantageous Non-Smoker Plus ratings:
Asthma Hepatitis C
Bladder cancer Mood disorders
Breast cancer Prostate cancer
Build Rheumatoid arthritis
Coronary artery disease Thyroid cancer
Diabetes mellitus (adult onset)
Elevated liver function tests
Get to Know Why Some Clients “Prefer” Us ...UNDERWRITING
CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS
1 This does not apply to foreign countries Prudential considers to be extremely hazardous. Refer to the Foreign Travel Highlighter (0156069) for additional information.
2Individuals with a total cholesterol level up to and including 299 and a total cholesterol / HDL ratio up to and including 5, may qualify for Preferred Best, even if on cholesterol-lowering medications.
3Individuals with BMI up to 29 for ages 18-59 and BMI up to 31 for ages 60 and over can qualify for Preferred Best.
4A rating may apply for cholesterol readings over 300.
Rates and availability will vary based on the satisfaction of our underwriting criteria; underwriting rules are subject to change at our discretion.
Life Insurance issued by The Prudential Insurance Company of America and its affiliates, Newark, NJ.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018 16
Company A.M. Best
RatingPlan
NameMinimum
Face Amount
MaximumFace
AmountAvailable
Riders CommentsIssueAges
Secure A 18-80 Not ADB, CIABR, Lifetime Nearest Specifi ed CTR, DBIS, GUL® LBIR, OIR, ROP, TIR, WOMD
Key: ADB: Accidental Death Benefi t DI: Disability Income Rider OPR: Overloan Protection Rider ATR: Additional Term Rider on Base Insured GPO: Guaranteed Purchase Option for ROP: Return of Premium CIABR: Chronic Illness, Long Term Care-Like, Additional Coverage TIR: Accelerated Death Benefi t for Accelerated Benefi t Rider LBIR: Living Benefi t Income Rider with Terminal Illness CIR: Critical Illness Rider No Medical Requirement WOMD: Waiver of Monthly Deductions CTR: Child Term Rider LTC: Long Term Care WOP: Waiver of Premium DBIS: Death Benefi t as Income Stream NHB: Nursing Home Benefi t WOPU: Waiver of Premium for OIR: Other Insured Rider Unemployment Rider
Excel A 0-85 Not ADB, CIABR, Essential Nearest Specifi ed CIR, CTR, DI, UL GPO, OIR, TIR, WOMD, WOP
Assurity LifeScape® A- 0-85 Not ADB, CIR, CTR, Actual Specifi ed DI, GPO, OIR, TIR, WOMD
Banner Life Life Step UL A+ 20-85 Not TIR Nearest Specifi ed Global Atlantic Lifetime A- 0-85 Not ADB, ATR, (Accordia Life) Assure UL Nearest Specifi ed CIABR, CIR, CTR, GPO, OIR, OPR, TIR, WOMD, WOP
John Hancock Protection UL A+ 0-90 Not LTC, TIR, Nearest Specifi ed WOP
Lincoln A+ 20-85 Not ADB, CIR, CIABR, LifeGuarantee® Nearest Specifi ed CTR, GPO, OIR, UL TIR, WOMD, WOP
$100,000
$50,000
$25,000
$50,000
$25,000
$50,000
$100,000
Expanded Standard issued through
table B. Unique ROP Option Included.
Unique No-Cost Critical & Chronic
Illness Rider Included
Non-Medical Up to $149,999 ages 0-60 &
$74,999 ages 61-85
Primarily used for term conversions
Wellness for Life® Program allows for
future Cost of Insurance Reductions
Vitality Program allows for future Cost of
Insurance Reductions
Non-tobacco rates for most non-cigarette
nicotine users
American General
Fixed Universal Life
For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 201817
18For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
New York Universal A++ 0-90 Not ADB, CTR, Life Life Insurance Actual Specifi ed GPO, OIR, TIR, WOMD
Custom A+ 0-85 Not ADB, CIABR, Guarantee® Nearest Specifi ed CTR, GPO, TIR, WOMD
Advantage A+ 18-85 Not ADB, CIABR, Choice UL Nearest Specifi ed CTR, DBIS, TIR, WOMD
PruLife® A+ 0-85 Not ADB, CIABR, Universal Actual Specifi ed CTR, NHB, Protector TIR, WOP
United of Guaranteed UL A+ 18-85 Not ADB, CIABR, Omaha Actual Specifi ed CTR, GPO, ROP, TIR, WOP, WOPU
United of Guaranteed UL A+ 18-65 $300,000 ADB, CIABR, Omaha Express Actual CTR, GPO, TIR, WOP, WOMD
Company A.M. Best
RatingPlan Name
MinimumFace
Amount
MaximumFace
AmountAvailable
Riders CommentsIssueAges
$25,000
$25,000
$50,000
$50,000
$50,000
$25,000
Brokerage Contract requires minimum of
$20,000 fi rst year premium on all cases
Excellent discounting
with lump sum and 1035 funding
Very competitive “Dial-In” No-Lapse Guarantee Product
Non-tobacco rates for most non-cigarette
nicotine users
Competitive Dial-In No-Lapse Guarantee
Product
No MedicalExams
Key: ADB: Accidental Death Benefi t DI: Disability Income Rider OPR: Overloan Protection Rider ATR: Additional Term Rider on Base Insured GPO: Guaranteed Purchase Option for ROP: Return of Premium CIABR: Chronic Illness, Long Term Care-Like, Additional Coverage TIR: Accelerated Death Benefi t for Accelerated Benefi t Rider LBIR: Living Benefi t Income Rider with Terminal Illness CIR: Critical Illness Rider No Medical Requirement WOMD: Waiver of Monthly Deductions CTR: Child Term Rider LTC: Long Term Care WOP: Waiver of Premium DBIS: Death Benefi t as Income Stream NHB: Nursing Home Benefi t WOPU: Waiver of Premium for OIR: Other Insured Rider Unemployment Rider
Fixed Universal Life
19
Policies issued by: American General Life Insurance Company (AGL), Policy Form Numbers 15646, ICC15-15646, 16760, ICC16-16760. Issuing company AGL is responsible for financial obligations of insurance products and is a member of American International Group, Inc. (AIG). AGL does not solicit business in the state of New York. Products may not be available in all states and product features may vary by state. Guarantees are backed by the claims-paying ability of American General Life Insurance Company.
AGLC110122-B © 2016 AIG. All Rights Reserved. FOR FINANCIAL PROFESSIONAL USE ONLY-NOT FOR PUBLIC DISTRIBUTION
Take a test drive at aig.com/LifeToTheMax
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consumer meetings
New consumer-facing, interactive sales tool, “Life To The Max”. Simplifies complex conversations into layman’s terms with easy-to-understand charts. Click on various scenarios to see creative solutions to common retirement challenges.
Looking to drive your IUL business forward?
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Works on any internet-enabled
device
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Company A.M. Best
RatingPlan Name
MinimumFace
AmountIndex OptionsAvailable Riders Comments
IssueAges
Max A 0-80 $50,000 ADB, CIABR, CTR, MLSB (LV), Accumulator+ Nearest DBIS, LBIR, OIR, S&P 500®, OPR, TIR, WOP, S&P 500® (LV) WOMD
Value+ A 0-85 $50,000 ADB, CIABR, CTR, MLSB (LV), Protector Nearest DBIS, LBIR, OIR, S&P 500®, OPR, TIR, WOMD S&P 500® (LV)
Excel Plus IUL A 0-85 $50,000 ADB, CIABR, CIR, S&P 500®, Nearest CTR, GPO, OIR, Russel 2000®, OPR, TIR, WOMD, MSCI EAFE® WOP
Global Atlantic Lifetime A- 0-85 $25,000 ABR, ADB, ATR, S&P 500®, (Accordia Life) Builder ELITE Nearest CIABR, CTR, GPO, Hang Seng OIR, OPR, TIR, WOMD, WOP
John Hancock Protection IUL & A+ 0-90 $50,000 ECV, LTC, TIR, WOP S&P 500® Accumuation IUL Nearest
Competitive No-LapseGuarantee Protection
Product with Strong Cash Values
Top in classAccumulation &
DistributionProduct
Wellness for Life®Program allows for
future Cost of Insurance Reductions
Long-term Accumulation& Distribution
Product
Vitality Program allows for future Cost of
Insurance Reductions
American General
American General
Key: ADB: Accidental Death Benefi t ATR: Additional Term Rider on Base Insured CIABR: Chronic Illness, Long Term Care-Like, Accelerated Benefi t Rider CIR: Critical Illness Rider CTR: Child Term Rider DBIS: Death Benefi t as Income Stream ECV: Early Cash Value Rider
GPO: Guaranteed Purchase Option for Additional Coverage LBIR: Living Benefi t Income Rider with No Medical Requirement LTC: Long Term Care LV: Low Volatility Index Methodology NHB: Nursing Home Benefi t OIR: Other Insured Rider
OPR: Overloan Protection Rider RDR: Residential Damage Rider ROP: Return of Premium TIR: Accelerated Death Benefi t for Terminal Illness WOP: Waiver of Premium WOMD: Waiver of Monthly Deductions
FLX Living A 0-85 $50,000 ADB, ATR, CIABR, S&P 500®, Benefi ts IUL Nearest CIR, CTR, ECV, GPO, Russel 2000®, LBIR, OPR, TIR, WOP BNPP Momentum 5 Index (LV)
Non-Med Through $300,000 Through
Age 60
Lincoln Wealth- A+ 0-85 $100,000 ATR, CIABR, CIR, S&P 500® Accumulate® Nearest CTR, ECV, OIR, IUL OPR, TIR, WOMD
Excellent Accumulation &
Distribution Product
Global Atlantic Lifetime Foundation A- 18-85 $100,000 ABR, ADB, ATR, S&P 500®, (Accordia Life) ELITE Nearest CIABR, CTR, GPO, Hang Seng OIR, OPR, TIR, WOP
Wellness for Life® Program Allows
for future Cost of Insurance Reductions
For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018 20
Indexed Universal Life
Guarantee A+ 0-85 $25,000 ADB, CIABR, CTR, S&P 500® Builder IUL® Nearest TIR, WOMD DJIA®, S&P Midcap 400®, NASDAQ-100®, Russell 2000®, EURO STOXX 50®
Competitive No-LapseGuarantee Protection
Product with StrongCash Values
Legacy Optimizer A+ 50-80 $25,000 CIABR, ECV, TIR S&P 500® Single Premium Actual (Premium) IUL
No exams,Quick issue
Lincoln Wealth- A+ 0-85 $100,000 ATR, CIABR, CIR, S&P 500® Preserve® Nearest CTR, OIR, OPR, IUL TIR, WOMD
Non-tobacco rates for most non-cigarette
nicotine users
Company A.M. Best
RatingPlan Name
MinimumFace
AmountIndex
OptionsAvailable Riders CommentsIssueAges
Builder A+ 0-75 $25,000 ADB, CIABR, CTR, S&P 500®, IUL® Actual ECV, OPR, TIR, DJIA®, S&P WOMD Midcap 400®, NASDAQ-100®, Russell 2000®, EURO STOXX 50®
Top in classlong-term
Accumulation &Distribution
Product
Key: ADB: Accidental Death Benefi t ATR: Additional Term Rider on Base Insured CIABR: Chronic Illness, Long Term Care-Like, Accelerated Benefi t Rider CIR: Critical Illness Rider CTR: Child Term Rider DBIS: Death Benefi t as Income Stream ECV: Early Cash Value Rider
GPO: Guaranteed Purchase Option for Additional Coverage LBIR: Living Benefi t Income Rider with No Medical Requirement LTC: Long Term Care LV: Low Volatility Index Methodology NHB: Nursing Home Benefi t OIR: Other Insured Rider
OPR: Overloan Protection Rider RDR: Residential Damage Rider ROP: Return of Premium TIR: Accelerated Death Benefi t for Terminal Illness WOP: Waiver of Premium WOMD: Waiver of Monthly Deductions
Builder Plus A+ 0-75 $50,000 ADB, CIABR, CIR, S&P 500®, DJIA®, IUL Actual CTR, GPO, TIR, NASDAQ-100®, WOMD S&P MidCap 400®, Russell 2000®, EURO STOXX 50®
Top in class Accumulation &
Distribution Product
Rapid Builder A+ 0-80 $100,000 ADB, CIABR, CTR, S&P 500®, IUL® Actual ECV, OPR, TIR, DJIA®, S&P WOMD Midcap 400®, NASDAQ-100®, Russell 2000®, EURO STOXX 50®
Top in class earlyAccumulation &
Distribution Product
21For fi nancial professional use only. Please see page 59 for important information and disclosures.
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Indexed Universal Life
Transamerica Financial A+ 0-85 $25,000 ADB, ATR, CIABR, S&P 500®, Foundation IUL Actual CIR, CTR, DBIS, GPO, Hang Seng, LTC, OIR, OPR, WOP EURO STOXX 50®
Long-Term Accumulation &
Distribution Product
United of Income A+ 0-85 $100,000 ADB, ATR, CIABR, S&P 500®Omaha Advantage IUL Actual CTR, GPO, OIR, ROP, TIR, WOP, WOMD
Long-Term Accumulation &
Distribution Product
United of Life Protection A+ 0-85 $100,000 ADB, ATR, CIABR, S&P 500®Omaha Advantage IUL Actual CTR, GPO, OIR, ROP, TIR, WOP, WOMD
Protection-FocusedIUL
PruLife® A+ 0-85 $100,000 ADB, CIABR, CTR, S&P 500® Founders Actual ECV, NHB, OPR, Plus UL TIR, WOP
PruLife® A+ 0-85 $100,000 ADB, CIABR, CTR, S&P 500® Index Actual ECV, NHB, OPR, Advantage UL TIR, WOP
No-Lapse GuaranteeProtection Product with
Strong Cash Values
Excellent Accumulation
& Distribution Product
Protective A+ 0-75 $100,000 ADB, CIABR, CTR, S&P 500® Indexed Nearest DBIS, OPR, TIR, Choice UL WOMD
Very competitive “Dial-In”No-Lapse
Guarantee Protection Product with Strong
Cash Values
Indexed Universal LifeCompany
A.M. BestRatingPlan Name
MinimumFace
AmountIndex OptionsAvailable Riders Comments
IssueAges
Key: ADB: Accidental Death Benefi t ATR: Additional Term Rider on Base Insured CIABR: Chronic Illness, Long Term Care-Like, Accelerated Benefi t Rider CIR: Critical Illness Rider CTR: Child Term Rider DBIS: Death Benefi t as Income Stream ECV: Early Cash Value Rider
GPO: Guaranteed Purchase Option for Additional Coverage LBIR: Living Benefi t Income Rider with No Medical Requirement LTC: Long Term Care LV: Low Volatility Index Methodology NHB: Nursing Home Benefi t OIR: Other Insured Rider
OPR: Overloan Protection Rider RDR: Residential Damage Rider ROP: Return of Premium TIR: Accelerated Death Benefi t for Terminal Illness WOP: Waiver of Premium WOMD: Waiver of Monthly Deductions
22For fi nancial professional use only. Please see page 59 for important information and disclosures.
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The Practice Management Minute...
f Dr. Phil and Warren Buff ett were trying to sell you a fi -nancial product, which one of those two people would you be most likely to buy from? This is actually rhetorical for you, the fi nancial professional, because I already know the answer to that question. Most of us would choose Warren Buff ett because of the fact that he is so fi nancially savvy and understands fi nance as well or better than anybody on Earth. He is called “The Oracle of Omaha” after all. However, ask your spouse this same question and I bet you will be surprised with the answer. I asked my wife, Noelle, two questions. The fi rst question I asked like this: “Noelle, picture yourself in an hour long conversation with both Warren Buff ett and Dr. Phil and they are discussing with you fi nancial matters that are important to you and will suggest a solution in the end. Based on the topic at hand and how you would view the meet-ing going, who do you think you would most likely buy from in the end?” She said, “Defi nitely Dr. Phil.” I then asked the second question that went like this: “Why Dr. Phil? He knows nothing about fi nance and Warren Buff ett knows everything!” She said, “I feel I would be less intimidated by Dr. Phil and he would just hear me out better and connect better with me. I don’t care about the brainiac stuff .” The above is pretty profound to me as it confi rms what I have been preaching for a while and I just have not, until now, tested it on my wife or my clients. I bet if you asked your spouse (who is not in fi nancial services), he/she would say the same thing. I bet if you asked your clients they would say the same thing! I emphasize that it is important that the person you do this test on is not in fi nancial services because we in fi nancial services will have our answer skewed toward the analytical Warren Buff ett. We in fi nancial services have been indoctrinated into the notion that being savvy with fancy language, data, charts, and statistics will make you a good fi nancial professional. Well, the 21st century fi nancial profes-sional is diff erent! Allow me to explain the shift that has taken place with our clients and thus how fi nancial professionals should change to abide by this “shift.” So far, in this new millennium, we all have witnessed terrorism that has had a profound eff ect on our perception of
safety. We have also witnessed events that have led to pro-found changes in our perception of fi nancial safety, such as bankruptcies that wiped out trillions of dollars of assets. For instance, Lehman Brothers, WorldCom, Washington Mutual, General Motors, Enron, etc. We also saw Bernie Madoff wipe out the retirement accounts of millions of people, ei-ther directly or indirectly. Furthermore, we saw from 2000 to 2002 the S&P 500 lost 49 percent because of the dotcom bust. Then, from 2007 to 2009, the S&P 500 lost 57 percent because of the fi nancial crisis. And because of the fi nancial crisis, the notion that your house would always be an implicit “piggy bank” was gone. As a matter of fact, many lost their houses! We realized that it was actually possible to be in a scenario where no place is safe for your money. Even more, those that have been fortunate enough to have not had their savings wiped out because of all of this have seen interest rates on their savings decline to almost nothing. As a matter of fact, a 5-year CD in 2000 yielded 5.54 percent versus .83 percent today. In short, the last 17 years have seen terrorism, two fi nan-cial crises, war, bankruptcies, unemployment, low savings interest rates, QE1, QE2, QE3, etc. Furthermore, all of these events have led to the public’s lack of trust with the players involved; government, big corporations, Wall Street, and fi -nancial professionals of various stripes. Because of all of this, the rules that applied in the 20th century do not apply any-more, especially when you work as a fi nancial professional. In order to be successful, what does a fi nancial professional need to do diff erently in this century that he/she may not have done in the previous century? In short, the 21st century fi nan-cial professional resembles Dr. Phil more than Warren Buff et. Allow me to explain in four points: 1. The 21st Century Financial Professional Under-stands Behavioral Finance: Prior to the new millennium it was all about “Traditional Finance.” Many believed that the value a fi nancial professional brings was in the technicalities and their communication of complicated matters relating to fi nance, with very little attention being paid to the client’s behavior.
ICHARLIE GIPPLE CLU, ChFCCHARLIE GIPPLE
fmiPathfinderAlways providing you a choice of options...
where the path becomes apparent.
23
Why Dr. Phil Can Sell More Insurance Than Warren Buff ett
is the vice president of Life Insurance Sales for North American Company for Life and Health Insurance. He is chiefl y responsible for managing and expanding sales and providing strategic direction in the distribution of life insurance products. He holds a Bachelor of Arts degree in Finance from the University of Northern Iowa. Gipple is well known in the industry as a keynote speaker on life insurance, annuities and behavioral fi nance as he has been asked to speak at NAFA, NAIFA and the MDRT Top of the Table meetings. As a life insurance and an-nuity thought leader, Gipple has also made media appearances on AMBest TV and thestreet.com. Charlie is a monthly columnist for Broker World and also regularly authors articles for LifeHealthPRO, Investment News, Financial Advisor Magazine, and nu-merous other media outlets.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
fmiPathfinderAlways providing you a choice of options...
where the path becomes apparent.
In other words it was believed, as I was taught in training as a career agent, if a fi nancial professional knew product specs inside and out, could fl uently speak to asset allo-cation, modern portfolio theory, alphas, betas, mortality tables, premium loads, TEFRA, DEFRA, TAMRA, etc., and also had a bunch of analytical spreadsheets to back up this information, that fi nancial professional would be successful. It was more technical Warren Buff ett type stuff rather than the behavioral Dr. Phil type stuff . Granted Warren Buff ett does have some very witty ways of explaining things and using analogies! Nevertheless, prior to the new millennium it was all about “Traditional Finance”. The calculus has changed! Prior beliefs are no longer true whether you are a life insurance agent or a registered rep. Trust has been lost in prior models that created the foundation for traditional fi nance. A simple example of a “traditional fi nance” belief that has been imperiled in this new millennium: The notion that a “buy and hold” strategy in the stock market will always work well for your money. We have all seen the mountain chart that is the Ibbotson “Stocks, Bonds, Bills and Infl ation Chart” that suggests that over the long run we should expect the S&P 500 to average 10 percent per year. Yes, I know past results don’t refl ect future performance but yet this chart is used all over the place! Well, what this chart “suggests” did not prove to be true. As a matter of fact, from 2000 to 2017, if you “bought and held” the S&P 500 you would have only attained a compound annual growth rate of 2.71 percent without the inclusion of dividends and 4.32 percent with the inclusion of dividends. The risk/return dynamic we have all been taught turned out to be very little return and a ton of risk! Fear and greed happens and resulting “bubbles” happen. We have experienced two examples of this over the last 17 years in the stock mar-ket and thus examples of traditional models and beliefs failing. As a result, today you have the proliferation of Be-havioral Finance which can be defi ned by: The study of how fi nance is aff ected by psychology. This study attempts to understand and explain how human emotions infl uence investors and the decision making process. In other words, consumers have a lot of biases against what we do and what we represent today because of what they have experienced over the last 17 years. And if your client is infected with one of these “biases” it does not matter how mathematically and scientifi cally sound your recom-mendation is to the client, it’s all an exercise in futility unless you address that bias with the client. There are 117 documented biases in behavioral fi nance. Learn the biases and learn how to speak with the client in a manner that overcomes these biases! I want to send a shout out to my friend and fellow columnist Jack Marrion for his studies in this area.
2. The 21st Century Financial Professional Is An Elephant Not An Alligator: Elephants have big ears and small mouths. Alligators have big mouths and small ears. If you have ever watched a Dr. Phil show (yes, I admit I have) you realize that he is an elephant. Dr. Phil speaks for a small portion of the time relative to the guests on his show and he does a great job of “refl ective listening.” Refl ective listening is when you hear what somebody has to say then articulate how they are feeling back to them so they understand that you understand the issue. Because of Dr. Phil’s ability to do this, people think he is brilliant—which I am sure he is! Conversely, I have sat with many agents that talked and talked and spent little time under-standing the client’s situation and the client’s emotions around money, retirement and insurance. These fi nancial professionals are alligators, and alligators do not last long in the 21st century where people have experienced the turmoil I mentioned earlier and just want to be heard rath-er than talked at. Refl ective listening is powerful and here is an anecdote that supports this. In Malcom Gladwell’s book entitled Blink he states this: “The overwhelming number of people who suff er an injury due to the negligence of a doctor never fi le a mal-practice suit at all. Patients don’t fi le lawsuits because they’ve been harmed by shoddy medical care. Patients fi le lawsuits because they’ve been harmed by shoddy medical care–and something else happens to them.” Gladwell then goes on to elaborate what that “some-thing else” is: “What comes up again and again in malpractice cases is that patients say they were rushed or ignored or treated poorly.” Whether you are a doctor or a fi nancial professional, people just want to be heard and listened to! They feel a signifi cant amount of distrust with many things today and by hearing them out you can build trust. Being an elephant and using refl ective listening will help you with this. 3. The 21st Century Financial Professional Under-stands That It Is About Simplicity: Note that I am a very technical person at heart and have the “fancy” des-ignations and securities licenses, and it would actually benefi t me if we thrived on just knowing the technicals. Unfortunately, it is not that easy. It is understanding the technical stuff but explaining it in a way that people un-derstand. Mark Twain once said in a letter to a friend, “I am sorry I did not have time to write a short letter so I wrote a long one instead.” Simplifying a complicated story is hard. Harder than understanding the complicated story in the fi rst place. The 21st century fi nancial profes-sional is very aware that “sounding smart” is actually in-timidating to people and the downside far outweighs the upside. Our clients just want us to make their lives easier and you can provide a huge amount of value in taking
what they fi nd complicated and making it make sense. Spend time thinking about and rehearsing analogies, sto-ries and ways to simplify a diffi cult concept. 4. The 21st Century Financial Professional Off ers Products That Allow For More Stability: This one is easy. In a world that has been uncertain for almost two decades, clients want certainty in lieu of, or in addition to, the traditional products. Mentalities are diff erent than they were in the late 90s. No longer is it “certain” that throwing money in the stock market will generate great results. This is also why I believe that the younger generations (X and Y) look at money more con-servatively. Because all they have known in their adult years is the turmoil we discussed. Indexed products, guaranteed income products*, life insurance, linked ben-efi ts, etc. can bring stability through guarantees which are backed by the fi nancial strength and claims-paying ability of the issuing company and a level of certainty beyond just investing in the stock market. When you look at what I just explained—Behavioral Finance, listening skills and simplifying the complicat-ed—it is all about soft skills which, by the way, RoboAd-visors will never have! When the statistic says that 85 percent of a person’s fi nancial success in life is about the soft skills, not technical skills, I believe it! This is why, although Warren Buff ett does have a good way of simpli-fying the complicated, I would put my money on Dr. Phil. *Guarantees are backed by the Financial Strength and claims-paying ability of issuing company
CD Rates: http://www.bankrate.com/banking/cds/ historical-cd-interest-rates-1984-2016Historic S&P 500 Returns: https://en.wikipedia.org/ wiki/S%26P_500_Index
This material is intended for educational purposes only. For fi nancial professional use only. Not to be used for con-sumer solicitation purposes. You should not treat any opinion expressed by Charlie Gipple as a specifi c induce-ment to make a particular investment or follow a partic-ular strategy, but only as an expression of his opinion and experiences.
*References
24Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
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For agent use only. Agent must be in good standing with Financial Markets, Inc. to qualify. Referral must place their first piece of business
with Financial Markets, Inc. All requirements and qualifications subject to change without notice. Actual product based on availability and subject
to change without notice. Omaha Steaks International, Inc. or any affiliates of Omaha Steaks is not a sponsor of Financial Markets, Inc.
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25
Company A.M. Best
RatingPlan NameMinimum
Face Amount Available Riders
IssueAges
AG Secure A 20-90 $100,000 4YTRNC, ROP Survivor GUL® Nearest
Excel LifeValue A 18-85 $100,000 4YTR, ATR, CIABR, CIR Survivor UL Nearest TIR, WOMD, WOP
Global Atlantic Survivorship Builder A- 20-90 $250,000 4YTR, CIABR, OPR, TIR
John Hancock Protection SUL A+ 20-90 $250,000 4YTR, CIABR, TIR, WOMD, Protection SIUL Nearest WOP
Lincoln A+ 20-85 $100,000 4YTR, CIABR, TIR, WOMD, LifeGuarantee SUL® Nearest WOP
New York Life Survivorship A++ 20-90 $250,000 TIR Universal Life Actual
Survivorship GIUL A+ 20-90 $200,000 4YTR, CIABR, ECV, TIR Nearest
Key: 4YTR: Four Year Term Rider OPR: Overloan Protection Rider 4YTRNC: Four Year Term Rider at No Cost PUAR: Paid Up Additions Rider ATR: Additional Term Rider on Base Insured ROP: Return of Premium CIABR: Chronic Illness, Long Term Care-Like, Accelerated Benefi t Rider TIR: Accelerated Death Benefi t for Terminal Illness CIR: Critical Illness Rider WOMD: Waiver of Monthly Deductions CTR: Child Term Rider WOP: Waiver of Premium ECV: Early Cash Value Rider GPO: Guaranteed Purchase Option for Additional Coverage
Protective A+ 25-75 $250,000 TIR Survivorship Term Nearest (10, 20 & 30 Years)
Protective A+ 20-85 $250,000 4YTRNC, TIR Survivor UL Nearest
American General
Second-to-Die
26For fi nancial professional use only. Please see page 59 for important information and disclosures.
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PruLife® A+ 18-85 $200,000 4YTR, ECV Survivorship Actual Index UL
PruLife® SUL A+ 18-85 $200,000 4YTR Protector Actual
Assurity Lifescape® Joint A- 0-85 $10,000 ATR, CTR, GPO, PUAR, TIR, WOP Whole Life Actual
Company A.M. Best
RatingPlan Name
MinimumFace
Amount Available RidersIssueAges
Company A.M. Best
RatingPlan Name
MinimumFace
Amount Available RidersIssueAges
Key: 4YTR: Four Year Term Rider OPR: Overloan Protection Rider 4YTRNC: Four Year Term Rider at No Cost PUAR: Paid Up Additions Rider ATR: Additional Term Rider on Base Insured ROP: Return of Premium CIABR: Chronic Illness, Long Term Care-Like, Accelerated Benefi t Rider TIR: Accelerated Death Benefi t for Terminal Illness CTR: Child Term Rider WOMD: Waiver of Monthly Deductions ECV: Early Cash Value Rider WOP: Waiver of Premium GPO: Guaranteed Purchase Option for Additional Coverage
Second-to-Die
First-to-Die
27For fi nancial professional use only. Please see page 59 for important information and disclosures.
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Company A.M. Best
RatingPlan Name
MinimumFace
Amount Available RidersIssueAges
Keystone Whole A 0-85 $10,000 Age 98 ADB, ATR, CIABR, CIR, Life Series Nearest CTR, GPO, PUAR, TIR, WOP
Assurity Lifescape® A- 0-85 $10,000 Age 121 ADB, ATR, CIR, CTR, DI, Whole Life Actual GPO, OIR, TIR, WOP
Key: ADB: Accidental Death Benefi t OIR: Other Insured Rider ATR: Additional Term Rider on Base Insured PUAR: Paid Up Additions Rider CIABR: Chronic Illness, Long Term Care-Like, Accelerated Benefi t Rider TIR: Accelerated Death Benefi t for Terminal Illness CIR: Critical Illness Rider WOMD: Waiver of Monthly Deductions CTR: Child Term Rider WOP: Waiver of Premium DI: Disability Income Rider GPO: Guaranteed Purchase Option for Additional Coverage
Growth Whole A 0-85 $25,000 Age 100 ADB, ATR, CIABR, CIR, Life Nearest CTR, GPO, PUAR, TIR, WOP
Growth 10-Pay A 0-85 $25,000 10 Years ADB, ATR, CIABR, CIR, Whole Life Nearest CTR, GPO, PUAR, TIR, WOP
Value Plus A 0-85 $25,000 Age 121 ADB, ATR, CIABR, CIR, Whole Life Nearest CTR, GPO, PUAR, TIR, WOP
New York Life Whole Life A+ 0-90 $25,000 Age 100 ADB, ATR, CIABR, CTR, Actual GPO, PUAR, TIR, WOP
PayPremium
Until
Lafayette Life Contender 15 A+ 0-85 $5,000 Age 95 ADB, ATR, CIABR, CIR, Actual (or 20 years CTR, GPO, OIR, PUAR, if longer) TIR, WOP
Lafayette Life Sentinel 15 A+ 0-85 $25,000 Age 65 ADB, ATR, CIABR, CIR, Actual (or 20 years CTR, GPO, OIR, PUAR, if longer) TIR, WOP
Lafayette Life Heritage 15 A+ 18-70 $5,000 Age 100 ADB, ATR, CIABR, CIR, Actual (or 20 years CTR, GPO, OIR, PUAR, if longer) TIR, WOP
Lafayette Life Patriot 15 A+ 0-85 $25,000 Age 75 ADB, ATR, CIABR, CIR, Actual (or 20 years CTR, GPO, OIR, PUAR, if longer) TIR, WOP
Lafayette Life 10-Pay Life A+ 0-85 $25,000 10 Years ATR, CIABR, CIR, CTR, Actual GPO, OIR, PUAR, TIR, WOP Lafayette Life Liberty 15 A+ 0-85 $25,000 Single CIABR, CIR, GPO, PUAR, Actual Premium TIR
Traditional Whole Life
28For fi nancial professional use only. Please see page 59 for important information and disclosures.
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2929
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Company A.M. Best
RatingPlan Name
MinimumFace
Amount Products OfferedIssueAges
Maximum Face
Amount
Americo Ultra Protector® A 50-85 $2,000 $30,000 GIGDB, SIGDB, SIWL Series Actual Assurity LifeScape® A- 0-80 $5,000 $50,000 SIGDB, SIWL Simplifi ed Whole Actual Life
Transamerica Final Expense A+ 0-85 $1,000 $50,000 SIGDB, SIWL Solutions Actual
Express Issue A- 20-80 $2,000 $100,000 GIGDB, SIGDB, SIWL Series Actual
United of Living Promise A+ 45-85 $2,000 $40,000 SIGDB, SIWLOmaha Whole Life Actual
Lafayette Life Protector 15 A+ 40-85 $3,000 $50,000 SIGDB, SIWL Actual
Key: SIWL: Simplifi ed Issue Immediate Death Benefi t Whole Life SIGDB: Simplifi ed Issue Graded Death Benefi t Whole Life GIGDB: Guaranteed Issue Graded Death Benefi t Whole Life
Final Expense
30For fi nancial professional use only. Please see page 59 for important information and disclosures.
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Company A.M. Best
RatingPlan NameElimination
Periods Benefi t PeriodsIssueAges
Genworth Privileged B++ 40-75 30, 90, 180, 2, 3, 4, 5 Years Compound (5%, 4%, 3% or Choice® Actual 365 Days 2%), 5% Simple, 3% Future Flex 3 Purchase Option, or None
Infl ation Options
Mutual of MutualCare A+ 30-79 90, 180, 365 2, 3, 4, 5 Years Compound (5%, 4% or 3%) Omaha Secure Solution Actual Days or None
Long Term Care
31For fi nancial professional use only. Please see page 59 for important information and disclosures.
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is the marketing name for the companies of OneAmerica | OneAmerica.com
© 2017 OneAmerica Financial Partners, Inc. All rights reserved.
I-30047 06/12/17
SALES IDEA
For use with financial professionals only. Not for public distribution.
The joint life coverage from Care Solutions allows two people to receive the valuable long-term care (LTC) protection under one policy!
One Policy
Why?One policy to cover two lives may provide a larger pool of shared benefits at a reduced cost compared to two individual policies.
Two Lives (Patented Survivorship)
Who? Joint protection can be a great fit for spouses, siblings, and even business partners.
Three Outcomes
How? Care Solutions provides guaranteed value in three different ways:• Monthly benefits to help pay for qualified LTC
expenses• Policies build cash value at a guaranteed rate• Any funds not used to LTC can pass to heirs tax-free
New Revenue: Easy as 1-2-3One Policy ... Two Lives ... Three Outcomes
You may not be aware of a simple way to provide more value to your clients, while generating more revenue for yourself.
NOT A DEPOSIT • NOT FDIC OR NCUA INSURED • NOT BANK OR CREDIT UNION GUARANTEED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • MAY LOSE VALUEProducts issued and underwritten by The State Life Insurance Company® (State Life), Indianapolis, IN, a OneAmerica company that offers the Care Solutions product suite. Not available in all states or may vary by state.
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Company
A.M. Best
RatingPlan Name Rider Type Benefi t TypeIssueAges Maximum Benefi t Amount
Secure Lifetime A 18-80 CIABR Indemnity, Dollar GUL®, Max (IRC Section for Dollar of DB Accumulator+ 101(g))
Excel Index UL A 0-85 CIABR Indemnity, Lien Excel PLUS Index UL, (IRC Section Method from DB Excel LifeValue UL, 101(g)) Excel Essential UL, Keystone Whole Life
Global Atlantic Lifetime Assure UL A- 18-75 CIABR Indemnity, Discounted (Accordia Life) (IRC Section Dollar Method 101(g)) from DB
John Hancock Protection UL/IUL A+ 20-75 LTC Reimbursement, (IRC Section Dollar for Dollar of 7702B) LTC Benefi t
Custom A+ 0-85 CIABR Indemnity, Discounted Guarantee® (IRC Section Dollar Method 101(g)) from DB
Lincoln A+ 20-80 CIABR Indemnity, Dollar LifeGuarantee® UL, (IRC Section for Dollar of DB Lincoln WealthAdvantage® 101(g)) Indexed UL, Lincoln LifeReserve® Indexed UL Accumulator
Advantage Choice A+ 20-80 CIABR Indemnity, Dollar UL, Protective Indexed (IRC Section for Dollar of DB Choice UL 101(g))
American General
Lincoln A+ 40-79 LTC Reimbursement, MoneyGuard® II (IRC Section Dollar for Dollar of 7702B) LTC Benefi t
Monthly 2% or 4% ofDB or IRS per diem
Monthly 1% or 2% ofDB or IRS per diem(Not to exceed 50% ofDB, Max of $1,000,000)
Annually 24% of the DBor monthly 2%, not toexceed IRS per diem
Monthly 1%, 2% or 4% ofthe DB, not to exceed$50,000 each month
24% of the DB annually,not to exceed $240,000each 12 months
Monthly 2%, not to exceed IRS per diem
$750,000 Long TermCare Pool
Monthly 5%, not toexceed IRS per diem
OneAmerica Asset-Care A+ 18-70 LTC Reimbursement, (State Life) (Actual) (IRC Section Dollar for Dollar of 7702B) LTC Benefi t
Monthly 2%, 3% or 4% of DB. Lifetime Benefi t Options Available.
Key: CIABR: Chronic Illness Accelerated Benefi t Rider as defi ned by IRC Section 101(g) DB: Death Benefi t Indemnity: Documented qualifi ed expenses not required to receive benefi ts
LTC: Long-Term-Care Rider as defi ned by IRC Section 7702BReimbursement: Documented qualifi ed expenses required to receive benefi ts
Life/LTC Linked Benefi ts
33For fi nancial professional use only. Please see page 59 for important information and disclosures.
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Life/LTC Linked Benefi tsCompany
A.M. Best
RatingPlan Name Rider Type Benefi t TypeIssueAges Maximum Benefi t Amount
Key: CIABR: Chronic Illness Accelerated Benefi t Rider as defi ned by IRC Section 101(g) DB: Death Benefi t Indemnity: Documented qualifi ed expenses not required to receive benefi ts
LTC: Long-Term-Care Rider as defi ned by IRC Section 7702BReimbursement: Documented qualifi ed expenses required to receive benefi ts
PruLife® Universal A+ 20-80 CIABR Indemnity, Dollar Protector, PruLife® (IRC Section for Dollar of DB Founders Plus UL, 101(g)) PruLife® Index Advantage UL
United of Guaranteed UL, A+ 0-85 CIABR Indemnity, Discounted Omaha Guaranteed UL Express, (IRC Section Dollar Method AccumUL Answers, 101(g)) from DB AccumUL Plus, Income Advantage IUL
Monthly 2% or 4%, not toexceed IRS per diem
Annually not to exceed thelesser of the annualized IRS per diem or 80% of the face amount, not to exceed$1,000,000
The ONLY Website You Will Ever Need! • Product updates and news from major carriers
• Printable applications, forms, and contracts
• Universal Life and Term Life Quick Quoter
• Current annuity interest rates
• Status updates on pending cases
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User friendly and informative, our site offers:
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Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018 34
Company A.M. Best
RatingPlan NameMaximum Benefi t
Amount Elimination PeriodsIssueAges Benefi t Periods
DInamic A 18-64 $20,000 30, 60, 90, 180, 365 1y, 2y, 5y, 10y, Age 65, 67 Foundation Actual Monthly 730 Days or 70 DInamic A 18-60 $100,000 0 (disability must be NA Fundamental Actual Lump Sum expected to last at least 365 days)Assurity Assurity- A- 18-59 $3,000 30, 60, 90, 180 Days 6mo, 1y or 2y Balance® Actual Monthly Simplifi ed Disability Income InsuranceAssurity Assurity- A- 18-60 $15,000 30, 60, 90, 180, 1y, 2y, 5y, 10y, Age 65 or 67 Balance® Nearest Monthly 365 Days Century+ Individual Disability IncomeMutual of Disability A 18-61 $12,000 0, 7, 14, 30, 60, 90, 3mo, 6mo, 1y, 2y, 5y, 10yr, Omaha Income Choice Actual Monthly 180, 365 Days Age 67
Company A.M. Best
RatingPlan NameMinimum Lump
Sum Benefi t AmountMaximum Lump
Sum Benefi t AmountIssueAges
Maximum Total LifetimePayout with Maximum
Benefi t AmountAssurity AssurityBalance® A- 18-64 $5,000 $50,000 $150,000 Simplifi ed Critical Actual Illness Insurance
Assurity AssurityBalance® A- 18-64 $50,000 $500,000 $1,500,000 Critical Illness Insurance Actual
Mutual of Critical Advantage A+ 18-64 $10,000 $100,000 $100,000Omaha Actual
Company A.M. Best
Rating Plans Offered (Varies by State)Mutual of Omaha Companies A+ Plans A, B, C, D, F, High Deductible F, G, M, N, Basic
Disability Income
Critical Illness
Medicare Supplement
35For fi nancial professional use only. Please see page 59 for important information and disclosures.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 201835
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
We are here for your life.SM
"Finding Financial Markets was like finding a new home! Personalized friendly service, with professional management of all details from quotes to placed policies. You will meet with your client knowing you are the competition." ~Mark, producer in South Dakota
"You and your staff far exceed my expectations!! It's great to know I have you and your team to take care of my clients' life insurance needs." ~Heather, producer in Wisconsin
• e-Apps• Carrier forms and quotes• Specimen documents including products, wills and trusts, buy-sell agreements and more• fmiAgent Mobile App• Fully electronic product kits• Turn-Key sales kits• Latest software downloads from major carriers
• Carrier and industry news feed• Annuity Bootcamp videos and training• Discounted CE credits• Licensing and training requirements for each carrier• Weekly live product and sales training
• Previous incentives have included: -All inclusive trips and cruises such as Alaska, the Caribbean, Mexico, Jamaica, Dominican Republic, and Las Vegas -2017 Ford Mustang -2016 Polaris Slingshot -2015 Chevy Camaro -2014 Ford Mustang
• Omaha Steaks• Big screen smart TV giveaways• Amazon shopping sprees• Weber grill giveaways
• Dedicated case manager and marketing contact for each producer• Overnight policies via UPS• Online case status• Underwriter on staff• Paperless contracting and appointments• Secure electronic applications and uploading services
For financial professional use only. Please see page 45 for important information and disclosures.
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Up-to-Date Training and Insurance Industry News
Easily Attainable fmiAgentAwards Program
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Professional Staff and Services
Financial Markets, Inc. is a wholesale insurance brokerage
committed to the success of our customers, you the
producer. Unlike other organizations in our industry, all
staff at Financial Markets, Inc. are paid the same way you
are paid, based upon premium volume. This empowers our
staff to treat every interaction with you as an important
mutually-profitable business transaction.
Financial Markets, Inc. corporate office is located in the
business district of Rapid City in the beautiful Black Hills of
South Dakota. We have a second office located in
Spearfish, South Dakota. Licensed in 49 states (all but New
York), Financial Markets, Inc. serves independent agents
across the nation, offering insurance products including
Life Insurance, Annuities, Disability Income Insurance, Long
Term Care Insurance, Medicare Supplement and other
related products through over 25 quality insurance carriers.
36
Business Need Strategy or Action Can Life Insurance Be Used?Business Continuation Upon Death, Retirement or Disability of Owner
Buy-Sell AgreementsCross-PurchaseEntity PurchaseWait-and SeeTrusteed Buy-SellOne-Way Buy-SellESOP Trusts
Protecting the Value of the Business
Key Person ProtectionEmployment ContractsNon-Compete Agreements
Recruit, Reward, Retain EmployeesExecutive Bonus PlansSERP PlansPure Deferral NQDCEndorsement Split Dollar (COLI)Loan-Based Split Dollar (Employee Owned)Dynamic DuoDBO
Development of Senior LeadershipStock Voting RightsBoard of Directors/Executive CommitteesMentoring and Employment of Children in the BusinessFamily Meetings and Retreats
Keeping the Business in the FamilyLifetime Gifts of Business Interests (with other techniques)Discounted Gifts of Business Interests (with other techniques)Transfers to GRATsSales to IDGTsInstallment Sales of Business InterestsSCIN/Private Annuity SalesAnnuities with Life InsurancePrivate Financing of PremiumsThird-Party Premium Financing
Obviously, life insurance can be effective in providing benefits to families who endure the loss of a loved one.
Life insurance can also be strategically used to help protect and grow a business. Take a look at some of the
ways life insurance can be an effective option for owners of small, medium and large businesses.
PLC.3219 (06.13)
Business Continuation
Summary of Business Needs
and Life Insurance
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 201837
Retirement Planning for OwnerNQDC
LIRP
Qualified Plans
S Corp Owners
Sale of Business as Exit StrategyEstate Planning for Owner
Estate Liquidity
Estate Equalization
Income Replacement
Tax-Efficient Transfer of Family Wealth
ILITs, Dynasty Trusts
Intentionally “Defective” TrustsGeneral Business Purposes
Lender Protection
Capital Projects
Group Benefits
HCE Carve-Outs
Asset Protection
Consulting Arrangements
Charitable Goals of OwnerCharitable Gifts of Business Interests
Charitable Trusts
Family Foundations
Business Need Strategy or Action Can Life Insurance Be Used?
PLC.3219 (06.13)
Life insurance is issued by Protective Life Insurance Company, 2801 Highway 280 South, Birmingham, AL 35223.
www.protective.com
This information represents only our current understanding of the law in general and is not to be considered legal or tax advice by purchasers.
Business tax rules and the tax treatment of life insurance are subject to change at any time. Neither Protective Life nor its representatives offer
legal or tax advice. Purchasers should consult with their legal or tax adviser regarding their individual situations before making any tax related
decisions.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018 38
As a business owner, you know the importance of protecting your business from risks
such as damaged property, personal injury to employees and others with liability coverage.
However, protecting your business also means protecting one of your most valuable
assets – your key employees.
Insurance on the lives of your key people can be a cost-effective means of providing funding to help recover from
the death of a person who is critical to the success of your business. The business should be the premium payor,
owner, and beneficiary of the policy. Premium payments are not tax-deductible. However, death benefits are
received tax free by your business.
These materials contain statements regarding the tax treatment of certain financial assets and transactions. These statements represent
only our current understanding of the law in general and are not to be considered legal or tax advice by purchasers. Business tax rules and
the tax treatment of life insurance are subject to change at any time. Neither Protective Life nor its representatives offer legal or tax advice.
Purchasers should consult with their legal or tax adviser regarding their individual situations before making any tax related decisions.
Business Continuation
Key Person Insurance
The death of a key person may subject a
business to economic loss from one or more of
these factors:• Reduction in earnings (impact on profits)
• Disruption of management
• Impairment of credit
• Possible loss of customers to competition
• Cost and time involved in finding and training a
replacement
Examples of Key Employees might include:• The business owners
• Key executives and corporate officers
• Top sales people
• Hard-to-replace specialists
(such as engineers, R&D scientists, etc.)
• Top managers
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 201839
PLC.3096 (09.17)
Life insurance is issued by Protective Life Insurance Company,
2801 Highway 280 South, Birmingham, AL 35223.
Business PlanningKey Person Insurance
The following guidelines may assist in determining the amount of insurance needed to cover the loss of a key person:
• One-Year Profit Method – The amount of life
insurance purchased is equal to one year’s
business profit associated with the experience
and performance of the key person. This buys the
business one year to find and train a replacement.
• Capitalization of Salary – This method uses a
capitalization factor between three and ten times
annual salary (five times being the average). The
more technical or difficult the skill is to obtain, the
higher the capitalization factor should be.
www.protective.com
1 Although the death benefit is not subject to regular corporate income taxes, the corporate alternative minimum tax could apply.
Step 1 The business purchases and retains all ownership rights to a policy on the life of the key person (employee). EOLI Notice and Consent form must be completed before the date of issue in accordance with IRC Section 101(j).
Step 2 The business pays non-deductible premiums to the life insurance company to keep the policy in force.
Step 3 At the key person’s death, the death benefit is generally received income tax-free by the business.1
How it Works.
If a permanent life insurance plan is used for the coverage, policy cash values may grow on a tax-deferred basis.
Cash values may be accessed by the business tax free by taking withdrawals to basis and then switching to policy
loans thereafter. It is important to note that both loans and withdrawals from a permanent life insurance policy may
be subject to penalties and fees and, along with any accrued loan interest, will reduce the policy’s account value
and death benefit.
THE BUSINESS
LIFE INSURANCE COMPANY
Death Benefits
Premiums
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018 40
Problem. Small business owners are typically focused on their company’s day-to-day operations.
As a result, many closely-held businesses do not adequately prepare for continuing
the business after an owner’s death. As a solution to what could become a significant
problem, business owners may wish to enter into agreements with each other—called
buy-sell agreements—for the orderly sale of their business interests upon retirement,
disability, or death.
Solution. One type of buy-sell agreement is a Cross-Purchase Buy-Sell Agreement. With this method, the owners agree
to buy and sell their respective business interests to one another at a set price upon retirement, disability or death.
Rather than rely on accumulating or borrowing money to fund the purchase, each owner buys life insurance on
the other owners. The life insurance proceeds can be used to fund their obligations to each other. For added
flexibility, the arrangement may be funded with permanent life insurance (paid for with bonuses from the business)
and the policy cash values may be used to fund a buy-out at retirement if an owner wants to sell his/her interests
before death.
These materials contain statements regarding the tax treatment of certain financial assets and transactions. These statements represent
only our current understanding of the law in general and are not to be considered legal or tax advice by purchasers. Business tax rules and
the tax treatment of life insurance are subject to change at any time. Neither Protective Life nor its representatives offer legal or tax advice.
Purchasers should consult with their legal or tax adviser regarding their individual situations before making any tax related decisions.
PLC.3097 (01.13)
Business Continuation
Cross-Purchase Buy-Sell Agreement
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 201841
42
Advantages of a Life Insurance Funded Cross-Purchase Buy-Sell Agreement
Some Concerns in Implementing a Life Insurance Funded Cross-Purchase Buy-Sell Agreement
Provides immediate cash to the surviving owners
to complete the purchase. Each surviving owner
receives the death benefit income-tax free and
each receives a new income-tax basis for the
acquired business interest. This results in tax
savings if the interest is later sold.
Policies may be insulated from creditors of the
business (varies by state).
Purchase Buy-Sell may need to be considered.
Lapse may occur if an owner doesn’t pay
premiums when due.
Creates a market to dispose of an interest in a
closely-held business at death.
Provides the deceased owner’s family with an
obligated buyer at a predetermined price to help
prevent IRS valuation disputes and family litigation.
Obligates the deceased owner’s family to sell the
business interests to the surviving owners.
The agreement prevents unintended transfers to
outsiders such as the deceased owner’s spouse
or children.
Difficult to design for more than two or three
owners because it may require many policies (e.g.,
12 policies for 4 owners). To reduce the number
of policies, other arrangements such as an Entity
PLC.3097 (01.13)
Life insurance is issued by Protective Life Insurance Company,
2801 Highway 280 South, Birmingham, AL 35223.
CROSS-PURCHASE BUY-SELLDeath of Owner A
www.protective.com
Deceased
Owner A33.33%
Surviving
Owner B33%
Surviving
Owner C33%
Policy
on APolicy
on APolicy
on cPolicy
on BHeirs of
Deceased
Owner A
2
Insurance Proceeds from Policieson Owner A (Purchase Price)
Step
4Step
4Step
3Step
3Step
1Step
1Step
Step
Step 1 Each Owner buys life insurance policies on each other. Each business owner is assumed to own one-third of the business (as shares or partnership units).
Step 2 Upon A’s death, A’s business interests pass to his/her heirs.
Step 3 The policy death benefit on A’s life is paid to Owners B and C, who then use the proceeds to purchase A’s shares from A’s heirs.
Step 4 The business interests of the deceased owner are transferred from the heirs of Owner A to the surviving owners, who then become equal owners. A’s estate will continue to own policies on each of the lives of B and C, which may be sold to thebusiness or directly to the insureds.
How it Works.
The above flow chart shows a Cross-Purchase Buy-Sell Agreement among three equal owners.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 201843
Problem. Small business owners are typically focused on their company’s day-to-day operations.
As a result, many closely-held businesses do not adequately prepare plans for continuing
the business after an owner’s death. As a solution to what could become a significant
problem, business owners may wish to enter into agreements with each other—called
buy-sell agreements—for the orderly sale of their business interests upon retirement,
disability, or death.
Solution. One type of buy-sell agreement is an Entity Purchase Buy-Sell Agreement, also known as a “Stock Redemption Agreement.” This is a binding agreement between the corporation or partnership, and its owners.
The entity agrees to buy, and the owners agree to sell, all of the business interest of an owner at a set price, upon
an owner’s retirement, disability or death.
Rather than relying on business revenues or loans, a cost-effective way to fund the agreement is for the business
to buy permanent life insurance on the lives of the owners. The business is the policy owner, premium payor and
beneficiary. A buy-out at an owner’s retirement or disability can be funded with policy cash values and the buy-
out at an owner’s death can be funded with policy death benefits.
These materials contain statements regarding the tax treatment of certain financial assets and transactions. These statements represent
only our current understanding of the law in general and are not to be considered legal or tax advice by purchasers. Business tax rules and
the tax treatment of life insurance are subject to change at any time. Neither Protective Life nor its representatives offer legal or tax advice.
Purchasers should consult with their legal or tax adviser regarding their individual situations before making any tax related decisions.
PLC.3098 (01.13)
Business Continuation
Entity Purchase Buy-Sell Agreement
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018 44
Advantages of a Life Insurance Funded Entity Purchase Buy-Sell Agreement
• Obligates the deceased owner’s family to sell the
business interests to the business entity. This
prevents unintended transfers to outsiders such as
the deceased owner’s spouse or children.
• Provides immediate cash to complete the
purchase. The business entity receives the death
benefit income-tax free.
• Creates a market to dispose of an interest in
a closely-held business at death, retirement or
disability.
• Provides the deceased owner’s family with an
obligated buyer at a predetermined price to help
prevent IRS valuation disputes and family litigation.
Concerns for the Business Owners
• Basis Increase – Entity Purchase Buy-Sell
Agreement with a C Corporation does not increase
the basis of the remaining owners’ shares.
• Risk of Business Creditors – Business-owned life
insurance used to fund a buy-sell arrangement is
subject to the claims of creditors (varies by state).
State law may prohibit any redemption when the
business is either insolvent or lacks adequate capital.
Concerns for the Business Entity
PLC.3098 (01.13)
• Tax Deductibility – Life insurance premiums paid bythe business are not tax deductible.
• Alternative Minimum Tax (AMT) – For larger C
Corporations, a redemption may increase their tax
liability due to the AMT.
• Increased Value of Corporation – Both the
ownership of the life insurance policies and the
receipt of policy death benefits, which may increase
the corporation’s value, should be considered when
determining selling price under an Entity Purchase
Buy-Sell Agreement.
ENTITY PURCHASE BUY-SELLDeath of Owner A
www.protective.com
Deceased
Owner A33.33%
Surviving
Owner B33.33%
Surviving
Owner C33.33%
Business Entity
Corporation or Partnership
Agreement Policy
on APolicy
on BPolicy
on C
Heirs of Deceased
Owner A
3Step
1Step
Step 1 The business enters an agreement with each owner and the business buys a life insurance policy on each owner.
Step 2 Owner A dies and his business interest passes to heirs.
Step 3 The death benefit on A’s life is paid to the business.
Step 4 The business uses the insurance proceeds to pay the heirs.
Step 5 Deceased Owner A’s business interests are transferred to the business, completing the redemption. The surviving owners B and C then become equal owners.
How it Works.
The flow chart above shows a standard Entity Purchase Buy-Sell Agreement between a business entity and its three equal owners.
In order to avoid adverse income tax consequences to the business, an Employer-Owned Life Insurance Notice and Consent must be completed before issuance of the policy pursuant to IRC Section 101(j), and the employer must file annually thereafter IRS Form 8925 with the Service.
4Step
5Step
Step 2
Problem. Small business owners may wish to enter into agreements with each other—called buy-
sell agreements—for the orderly sale of their business interests upon retirement, disability,
or death. The two basic agreements are Cross Purchase Buy-Sell (the owners serve as
buyers) and Entity Purchase Buy-Sell (the business serves as buyer). Choosing between
a Cross-Purchase and Entity Purchase Buy-Sell Agreement may be difficult due to
uncertainties about the owners, their business, or future tax laws.
Solution. One possible solution may be the Wait-and-See Buy-Sell Agreement, which combines features of
both Cross-Purchase and Entity Purchase Buy-Sell Agreements. Depending upon how the agreement
is funded—and whether the entity or surviving owners ultimately purchase the deceased owner’s
interest—the arrangement can function as either an Entity Purchase or Cross-Purchase Buy-Sell
Arrangement, or combination of both.
These materials contain statements regarding the tax treatment of certain financial assets and transactions. These statements represent
only our current understanding of the law in general and are not to be considered legal or tax advice by purchasers. Business tax rules and
the tax treatment of life insurance are subject to change at any time. Neither Protective Life nor its representatives offer legal or tax advice.
Purchasers should consult with their legal or tax adviser regarding their individual situations before making any tax related decisions.
PLC.3099 (12.12)
Business Continuation
Wait-and-See Buy-Sell Agreement
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 20184545
PLC.3099 (12.12)
In order to avoid adverse income tax consequences to the
business, an Employer-Owned Life Insurance Notice and Consent
must be completed before issuance of the policy pursuant to IRC
Section 101(j), and the employer must file annually thereafter IRS
Form 8925 with the Service.
Life insurance is issued by Protective Life Insurance Company
(PLICO), 2801 Highway 280 South, Birmingham, AL 35223.
WAIT-AND-SEE BUY-SELL ARRANGEMENT
The chart above shows a Wait-And-See Buy-Sell Agreement between three equal business owners.
Death of Owner A
Disadvantages of Wait-And-See Buy-Sell Arrangement
Care must be taken to avoid dividend treatment
where a C corporation is given the right of first
refusal. In some instances, the redemption may be
taxable as a dividend to the surviving owners.
When life insurance is used to fund the Wait And-
See Buy-Sell Agreement, the policies can be owned
by the business entity or the individual owners.
Deciding which is best can be a challenge.
www.protective.com
Deceased
Owner A33.33%
Trust on behalf of:(Option 1) Entity (Redemption), or
(Option 2) Surviving Owners
(Cross-Purchase)
Policy
on APolicy
on BPolicy
on CHeirs of
Deceased
Owner A
2
4
31
Insurance Proceeds from Policieson Owner A (Purchase Price)
Step
Step
StepStep
Special considerations are involvedto preserve the tax-free nature ofthe life insurance death proceedswhen using a trust as owner ofthe policies in conjunction with abuy-sell agreement, particularlyas it relates to corporations. Thecustomer should consult with hisor her tax advisors to fully addresssuch considerations.
Step
Step 1 The Trustee buys insurance policies on the lives of each owner
Step 2 Owner A dies, leaving his/her business interests to his/her heirs.
Step 3 The death benefit from the policy on A’s life is received by the Trustee and paid to A’s heirs
Step 4 The heirs complete the transaction by transferring the business interests of the deceased Owner A to the Trustee. The Trustee and surviving owners have two options. Option 1 (Entity Purchase) the Trustee acts on behalf of the business entity buying the business interests of the deceased owner. After the sale, the surviving owners would each own 50% of the business. Under Option 2 (Cross-Purchase), the Trustee acts on behalf of the surviving owners to buy the deceased owner’s business interest in a cross-purchase type transaction. Again, each remaining owner ends up with a 50% ownership in the business.
How it Works. Typically, the business entity is given a first option to buy all or any portion of the deceased owner’s business
interest within a specified time after the death. If the entity does not fully exercise its purchase option, the surviving
owners may buy the rest. But if they fail to do so, the entity must then redeem the balance. Wait-and-See
Buy-Sell Arrangements are often funded with life insurance policies, which can be owned by a Trustee on behalf of
the entity or individual business owners.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018 46
You have built a successful business that you now manage with one of your three children.
As the sole owner, you have realized for some time that in order to pass the business onto the next generation you
will need to do some careful planning. While the business is one of the most valuable assets in your estate, the
planning needed to keep it in the family may be more complex than you realize. You can use the flexible features of
life insurance to help keep the business in the family and equalize the overall inheritance for all your children.
These materials contain statements regarding the tax treatment of certain financial assets and transactions. These statements represent only
our current understanding of the law in general and are not to be considered legal or tax advice by purchasers. Estate and Business tax rules
and the tax treatment of life insurance are subject to change at any time. Neither Protective Life nor its representatives offer legal or tax advice.
Purchasers should consult with their legal or tax adviser regarding their individual situations before making any tax related decisions.
PLC.3141 (01.13)
Business Continuation
Keeping the Business in the Family
What are some of the planning issues?How do you make sure that your spouse does not
become an unwilling owner of the business at your
death, but receives a fair value at your death to assure
her financial security?
How do you make sure that the business is passed
on to the child or children who are truly interested in
its continued success?
These are issues that can often be addressed with a buy-sell agreement between the owner and the child who plans
to remain active in the family business. Frequently, the family and its advisors recognize that a life insurance policy is
an effective funding vehicle for the buy-sell agreement. This is especially true when the family prefers the purchase
price for the business be made in a lump-sum, rather than installments, or does not want to fund the payments with
distributions from business operations.
How do you value the business that is transferred
to the child active in the business?
How do make sure that the children who are not
pursuing careers inside the family business will
receive a fair inheritance?
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 20184747
PLC.3141 (01.13)
Life insurance is issued by Protective Life Insurance Company,
2801 Highway 280 South, Birmingham, AL 35223.
Here are the main points in using a buy-sell agreement while equalizing the inheritance for all the children.
1. In a written buy-sell agreement, the parent (sole owner) agrees to sell the business and the “business-active”
child agrees to buy the business, upon the death, disability or retirement of the owner. The agreement is in the
form of a “trusteed one-way buy-sell agreement”.
2. A definite price and manner of payment is specified in the agreement (or calculated based on an agreed formula
or appraisal method). The price may be adjusted from time to time.
3. A trust is created as owner and beneficiary of a life insurance policy on the parent’s life, for the benefit of the
active child. The trust is a helpful title-owning vehicle to give the parent greater assurance that the sale to his
daughter will occur as planned. The parent would also buy a second life insurance policy to provide the other
heirs (spouse and children) a “fair share” of the inheritance, since the business is passing to only one child.
4. The owner and his spouse can establish the value of a “fair inheritance” for each child not active in the business.
A “fair inheritance” does not need to be an “equal inheritance”.
5. Policy premiums may be funded through salary, bonus, family gift, out-of-pocket cash, or a combination. The
bonus may be tax deductible to the business—and reported by the child as ordinary taxable income.
6. Upon the owner’s death, the business interests pass to his estate. The trust receives the insurance proceeds,
which are used to buy the deceased parent’s business interests from the estate. The estate uses these funds to
pay any taxes, debts and expenses of the deceased owner.
www.protective.com
EQUALIZING KEEPING IT IN THE FAMILY
Susan
ESTATETrust
(Trusteed Buy-SellAgreement)
Mom
John
Bill
Dad
Family Business
Life Insurance Policy
5Step
6Step
4Step
8Step
2Step
How it Works.
Dad enters one-wayBuy-Sell Agreement withdaughter Susan
Family Business pays bonus to Susan to fund premiums for policy on Dad’s life
Susan receives stock after completion of Buy-Sell Agreement
Trustee holds insurance policy for benefit of Susan (funding Buy-SellAgreement)
Trust buys stockfrom Dad’s Estate
Death Benefit paidto Trust upon Dad’s death
Estate distributes “fair share”to Mom and two sons (from a separate life insurance
policy) after buy-sell with daughter
Upon Dad’s death, his stock passes to Estate, then is sold to Trust on behalf of Susan under Buy-Sell Agreement
100% ownership
StockPayment
Stock
1Step
7Step
3Step
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018 48
49
The increasing costs and complexities of qualified retirement plans have caused many small
business owners to seek alternatives for company sponsored retirement programs. One of
today’s most exciting executive benefits is Non-Qualified Deferred Compensation.
These materials contain statements regarding the tax treatment of certain financial assets and transactions. These statements represent
only our current understanding of the law in general and are not to be considered legal or tax advice by purchasers. Business tax rules and
the tax treatment of life insurance are subject to change at any time. Neither Protective Life nor its representatives offer legal or tax advice.
Purchasers should consult with their legal or tax adviser regarding their individual situations before making any tax related decisions.
PLC.1498 (02.13)
Executive Compensation
Non-Qualified Deferred Compensation Plans
Many businesses want to cover highly compensated employees, but qualified plans involve the complexity
of ERISA rules and the fear of over-funding and discrimination testing. Deferred Compensation arrangements
provide business owners with the kind of flexibility that is often unavailable in qualified plans.
Providing additional benefits to selected employees supports the objectives of both executives and businesses.
Using employer-owned life insurance, these plans permit highly compensated or key management employees
to have an informally funded arrangement over and above qualified plan limits. From the perspective of
business owners, these plans are an effective tool to recruit, retain and reward the key people in their business
organization.
With employer-owned permanent insurance, your business can implement a Non-Qualified Deferred Compensation Plan while realizing tax advantages and a higher degree of control.
Salary Reduction Plan (also known as “Pure” or “True” Deferral) – With elective deferral plans, the plan design
is typically a defined contribution, where the employee agrees to defer receipt of some portion of his/her
current compensation—a specified percentage or an amount designed to meet a “target” retirement benefit.
See reverse side for important information
Types of Non-qualified Deferred Compensation Plans
These plans may be elective or non-elective. It is helpful to understand their features and differences:
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PLC.1498 (02.13)
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Supplemental Executive Retirement Plan (SERP) – These are unfunded salary continuation plans, sponsored and
paid for by the employer, to provide supplemental retirement income for a select group of management or highly
compensated employees, above and beyond current compensation. When used with a vesting schedule, this plan
can provide “golden handcuffs” to retain key employees.
401(k) “Mirror” Plan – This plan allows key executives to voluntarily defer their compensation on a tax-deferred basis
with employer matching contributions.
EmployerInsurance Company
EmployeeEmployee
Beneficiary
AgreementLife Insurance Policy
How it Works.
Life insurance is issued by Protective Life Insurance Company,
Birmingham, AL.
1 Benefits must conform to the requirements of IRC Section 409A and applicable Treasury Regulations, and may be subject to the Alternative
Minimum Tax. In order to avoid adverse income tax consequences to the business, an Employer-Owned Life Insurance Notice and Consent
must be completed before issuance of the policy pursuant to IRC §101(j), and the employer must file annually thereafter IRS Form 8925 with
the Service.
In order to avoid adverse income tax consequences to the business, an Employer-Owned Life Insurance Notice and Consent must be
completed before issuance of the policy pursuant to IRC Section 101(j), and the employer must file annually thereafter IRS Form 8925
with the Service.
Step 1 A written agreement is established between employer and executive. A vesting schedule may tie benefits to years of service.
Step 2 Life insurance is used as a tool to finance an employer’s promise under a Non-Qualified Deferred Compensation plan. To offset future liability, the employer purchases a life insurance policy on the executive. The employer is the applicant, owner, premium payer, and beneficiary of a life insurance policy on each covered employee under the plan. Policy cash values grow on a tax deferred basis.1
Step 3 Tax-advantaged benefits are paid by the insurance company to the employer upon the retirement or death of the executive. The Employer can access policy cash values to informally fund all or some of the deferred benefits on a tax-advantaged basis through withdrawals to basis and then policy loans.
Step 4 Employer premium payments as plan contributions are before tax to the employee. Retirement plan benefits are deductible to the employer and income taxable to either the executive or the executive’s beneficiary upon retirement or death.
2Step
3Step
4Step
1Step
Retirement Benefits
Premium
Cash Value
Death Benefits
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51
An Executive Bonus Plan—also called a “Section 162 Plan” —provides a basic,
affordable method for small business owners to reward selected employees. The employer
pays the premiums on a life insurance policy owned by the key employee. The policy
provides an immediate death benefit, and the policy cash values, which grow tax-deferred,
can be used by the employee to supplement retirement income.
These materials contain statements regarding the tax treatment of certain financial assets and transactions. These statements represent
only our current understanding of the law in general and are not to be considered legal or tax advice by purchasers. Business tax rules and
the tax treatment of life insurance are subject to change at any time. Neither Protective Life nor its representatives offer legal or tax advice.
Purchasers should consult with their legal or tax adviser regarding their individual situations before making any tax related decisions.
PLC.3100 (02.13)
Executive Compensation
Executive Bonus
The premium payments are tax deductible to the employer as a bonus paid to the employee (provided the
amount is reasonable compensation), and are reported as taxable income to the employee. These benefits can
be provided at little or no cost to the employee if the employer also distributes an additional bonus to cover the
employee’s tax consequences (“double bonus”).
Advantages for Employer
Premiums are tax deductible to the employer
as long as they are considered reasonable
compensation
Participants may be selectively chosen
Helps to attract, retain and reward key
employees
Plan is generally exempt from IRS approval
and reporting requirements
Advantages for Employee
Personally-owned life insurance is available at little
or no out-of-pocket expense because the employer
pays the premium
Employee retains control of personally-owned life
insurance, even after separation from service
Control over beneficiary designation
Life insurance provides family protection for
beneficiaries and policy cash values may be
withdrawn for any reason, including emergencies
and educational funding
See reverse side for important information
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52
PLC.3100 (02.13)
Advantages for Employee
Executive bonus may meet your needs if you
Important considerations
www.protective.com
Employee doesn’t need to worry about post-retirement solvency of the business to support retirement income from
the plan
At retirement, policy cash values may be used to supplement retirement income
If the policy includes a Disability Benefit Rider (within rider limits) the policy may provide benefits even if the employee
becomes disabled.
Own a closely-held company (regular C Corporation, S Corporation, LLC or Partnership)
Want to reward and retain your best employees and are interested in maximizing dollars to provide life insurance for
key persons
Want to do more than is allowed under IRS-regulated qualified plans
The employee needs to be in reasonable health to qualify for life insurance
The employee should have a need for life insurance (family protection, personal retirement)
The premium amount (as part of total compensation) must be “reasonable”
If the participant is the owner of a pass-through business entity, the premium will not be tax-deductible
Employee PaysIncome Tax on Bonus
Employer Pays PremiumTreated as tax-deductible
bonus to employee
EmployeeReceives tax-favored benefits
for life needs and retirement
Employee’s BeneficiaryReceives income-tax
free death benefit
IRSLife Insurance
Company
TAX-DEFERRED GROWTH
How it Works.
Life insurance is issued by Protective Life Insurance Company,
Birmingham, AL.
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53
Ninty percent of U.S.-based businesses are taxed as pass-through entities, such as S
corporations, partnerships, and sole proprietorships – where the results of operations are
passed through and taxed to the individual owner, partners, or shareholders.* Like most
successful business owners, pass-through entity owners may already own term insurance
or mutual funds. They may be taking full advantage of contributions into 401(k) plans, SEPs
or Simple IRA plans. However, unlike owners of C Corporations, deferral of pass-through
entity owners’ earned income is problematical outside of a qualified plan. Nevertheless,
these business owners often are very interested in ways to obtain benefits on a tax-
advantaged basis.
These materials contain statements regarding the tax treatment of certain financial assets and transactions. These statements represent
only our current understanding of the law in general and are not to be considered legal or tax advice by purchasers. Business tax rules and
the tax treatment of life insurance are subject to change at any time. Neither Protective Life nor its representatives offer legal or tax advice.
Purchasers should consult with their legal or tax adviser regarding their individual situations before making any tax related decisions.
PLC.3122 (04.17)
Executive Compensation
Life Insurance as a Retirement Planning Tool
for Business Owners of Pass-through Entities
See reverse side for important information
Is there a method for the owner of business taxed as a pass-through entity to save money on a tax-advantaged
basis; to provide pre-retirement death benefits for their family; and to supplement their retirement income?
Benefits of Permanent Life Insurance
One technique that may be overlooked is using permanent life insurance, paid for with after tax-dollars, as a
means to supplement retirement income. This is an efficient financial strategy that provides multiple benefits and
helps to:
* Tax Foundation Special Report No. 227: An Overviewof Pass-through Businesses in the United States, datedJanuary 21, 2015
• Accumulate money on a tax-advantaged basis.• Provide tax-free death benefits to the business
owner’s surviving spouse or beneficiaries (whether
death occurs before or after retirement).
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54
PLC.3122 (04.17)
www.protective.com
• Provide access to policy cash values on a tax-advantaged basis in order to fund supplemental retirement income.
Current tax laws permit the policyowner to withdraw cash values up to the policyowner’s basis or investment in
the contract on an income tax-free basis. Additional cash values can be obtained through policy loans to avoid
taxable distributions.1
• Policy death benefits and cash values may be protected from creditors (will vary according to state laws).
The flexible features of universal life insurance provides the means for this strategy. If the business has a
down year, its owner may choose to pay a lower premium or even skip a premium payment entirely. In years
when business profits are exceptional, the owner may choose to increase the premium contributions.
Life insurance is issued by Protective Life Insurance Company,
Birmingham, AL
How it Works:
Pass-through Entitydistributes profits
Business Ownerreceives tax-favored benefits for
life needs and retirement
Business Owner’sbeneficiaries receive
income tax-free death benefits
IRS
Ownerpays premium on
insurance policy
Pays income tax
on profits
Shareholder-Ownedinsurance policy
TAX-DEFERRED GROWTH
1 Policy loans and withdrawals will reduce cash value and death benefit. Policy loans are subject to interest charges. This concept will not work
with a modified endowment contract. If the policy is determined to be a MEC, loans and withdrawals may be subject to taxes and penalties.
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55
Type of Business Entity
Benefits Concerns Insurance Strategies
Sole Proprietorship
· Simple to create and operate· Owner controls business andassets
· Owner has unlimited access tobusiness assets and income
· Unlimited personal liability· Income is subject to fullwithholding for unemploymentand Medicare tax
· Business assets are notprotected from personalcreditors
· Owner-owned policy for supplemental retirement income· Estate planning for owner· Business continuation (“one-way buy-sell” to employee orthird party)
· Key person policy on owner’s life· Bonus Plan (only for non-owner employees)· Split-Dollar SERP for non-owner employees
General Partnership
· Simple to create and operate· Manage and control is held bypartners
· One level of taxation· Partnership assets protectedfrom partners’ personalcreditors
· Each partner is liable for allpartnership activities
· Partnership profits aretaxable to partners even if notdistributed
· Each partner has legalauthority to makemanagement decisions
· Partner-owned policy for supplemental retirement income· Estate planning for partners· Business continuation (entity, cross-purchase or wait-and-seebuy-sell plans)
· Key person policy on partners and key employees· Bonus Plan (only for non-owner employees)· Non-Qualified Deferred Compensation/ Split-Dollar SERPfor non-partner employees
Limited Partnership
· Created under state law· Managing partners controlday-to-day businessoperations
· Limited partners havelimited liability
· One level of taxation· Partnership assets (not apartner’s interest in thepartnership) are generallyprotected from personalcreditors of each partner
· Partnership profits aretaxable to partners even if notdistributed
· General partner has unlimitedliability
· The transferability of interestsof limited partnership may berestricted
· Partner-owned policy for supplemental retirement income· Estate planning for partners· Business continuation (entity, cross-purchase or wait-and-seebuy-sell plans)
· Key person policy on key partners and employees· Bonus Plan (only for non-owner employees)· Non-Qualified Deferred Compensation/Split-Dollar SERP fornon-partner employees
Limited LiabilityCompany
· Informal setup andmanagement
· Can choose equalmanagement or centralizedmanagement
· All members have limitedliability, without the complexityof corporations
· Choice of taxation (dependingon type of LLC (e.g. as C corp, S corp or Partnership)
· LLC law varies by state· Generally cannot offer publicshares
· Restrictions on transferabilitymay apply
· U.S. law on legal issuesinvolving LLCs is relatively newand uncertain
· Member-owned policy for supplemental retirement income· Estate planning for members· Business continuation (entity, cross-purchase or wait-and-seebuy-sell plans)
· Key person policies on key members and employees· Bonus Plan (only for non-owner employees)· Non-Qualified Deferred Compensation/Split-Dollar SERP(depending on tax classification)
Business Continuation
A Brief Comparison of Business EntitiesBenefits, Concerns and Life Insurance Strategies
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56
Type of Business Entity
Benefits Concerns Insurance Strategies
Regular C Corporation
· Shareholders have limitedliability
· Unlimited number of owners· Control and voting rights can
vary according to class ofstock
· Formal requirements to createand manage; subject tovarying state corporate taxlaw systems
· Two tiers of taxation (corporatetax and taxation on dividendsto shareholders)
· Executive Bonus Plan for executives/owners for supplementalretirement income
· Estate planning for owners· Business continuation (entity, cross-purchase or wait-and-see
buy-sell plans)· Key person protection on top executives, managers, and key
employees
S Corporation
· No taxation at corporate level· Income and level taxed only
once at shareholder level· Shareholders have limited
liability
· Shareholder limited to 100persons
· Shareholders must be qualified· Must be U.S. citizens or
residents· Two classes of stock not
allowed
· Shareholder-employee owned policy or Split-Dollar SERP forsupplemental retirement income
· Estate planning for shareholders· Business continuation (entity, cross-purchase or wait-and-see
buy-sell plans)· Key person policy on key shareholders and employees· Executive bonus for non-shareholder employees
Professional Corporation
· Shareholders have limitedliability
· Management and controlby professionals is sameoccupation (physicians, attorneys, architects, engineers, etc.)
· Stock only issued to personslicensed in same profession oroccupation
· Owners have limited liability, but not for activities directedrelated to professionalservices
· Shareholder-owned policy or Split-Dollar SERP for supplementalretirement income
· Estate planning for shareholders· Business continuation (entity, cross-purchase or wait-and-see
buy-sell plans)· Key person protection on top managers and key employees· Executive bonus for employees (including owner-employees)
PLC.3102 (09.17)
Life insurance is issued by Protective Life Insurance Company, 2801 Highway 280 South, Birmingham, AL 35223.
www.protective.com
These materials contain statements regarding the tax treatment of certain financial assets and transactions. These statements represent only
our current understanding of the law in general and are not to be considered legal or tax advice by purchasers. Business tax rules and the tax
treatment of life insurance are subject to change at any time. Neither Protective Life, nor its representatives offer legal or tax advice. Purchasers
should consult with their legal or tax advisor regarding their individual situations before making any tax-related decisions.
Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
57
PLC.3266 (07.13)
Retirement Planning
Pension Maximization
See reverse side for important information
One of the toughest decisions for participants of employer-sponsored defined benefit
pension plans is how to select the payout of their benefits.
Unfortunately, the decision is often made without enough information. Since the decision is irrevocable and affects
a couple’s total retirement income, care should be exercised before making the election. The most common
options are:
LIFE ONLY INCOME OPTION: The maximum monthly income based on the retiree’s life expectancy. Income ends at the retiree’s death with no further benefits to the surviving spouse.
JOINT AND 50% INCOME OPTION: Less monthly income benefit for life of the retiree, but 50% of the benefit will continue for life of the surviving spouse.
JOINT AND 100% SURVIVOR INCOME OPTION: A lower benefit compared to the other options, but income continues until the second death.
While the Life Only Income Option produces the highest payout, payments end at the retiree’s death. Due to this
risk, many participants choose one of the Joint Income Options since they provide continuing income until both
spouses are deceased. The income for a Joint Income Option is based on the life expectancy of two people.
Therefore, the monthly income is less than the Life Only Income Option. The longer you both are expected to live,
the lower the monthly income. In assessing your options, life insurance may be considered using a strategy called
Pension Maximization. Here, the participant buys life insurance on his or her life, naming the spouse as beneficiary
of the policy. The policy is designed so there is enough death benefit to provide income approaching the benefit of
a Joint Income Option. With Pension Maximization, the participant can receive higher retirement income with the
Life Only Income Option, but provide for the surviving spouse with the insurance proceeds after the retiree’s death.
EXAMPLE: Jim (current age 57) and Valerie North (current age 56)
At Jim’s request, his employer recently provided him a projection of monthly income benefit for the Life Only
and Joint and 100% Survivor Options for his Defined Benefit Pension Plan. Based on his projected income at
retirement, the Life Only Income Option at his age 65 will provide a monthly income of $4,723. The Joint and 100%
Survivor Income Option will provide a monthly income of $3,600—a difference of $1,123.
12
3
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58
PLC.3266 (07.13)
www.protective.com
Most couples choose the Joint and Survivor Option to assure that a monthly income will continue until both spouses
die. Is this always the best option?
HERE ARE A FEW POSSIBILITIES:
Now let ’s look at Jim and Valerie North
At age 65, Jim elects the Life Only Option and
begins receiving the maximum benefit. At Jim’s
death, income would cease from the pension plan.
However, Jim and Valerie chose to purchase a life
insurance policy at his age 57 and named Valerie
as beneficiary. The death benefit will replace the
waived survivor income options since Jim elected
the Life Only Income Option at his retirement.
At Jim’s death, Valerie receives the death benefit
proceeds taxfree. She can elect to invest the
proceeds or she can elect to annuitize the
death benefit proceeds with a Single Premium
Immediate Annuity.
Life insurance is issued by Protective Life Insurance Company,
Birmingham, AL.
$1,123 additional monthly income($13,476 annually)10 years $134,76015 years $202,14020 years $269,520
Life Insurance Policy
Jim Elects the
Life Only Option
Valerie’s
Income
These materials contain statements regarding the tax treatment of certain financial assets and transactions. These statements represent only our current understanding of the law in general and are not to be considered legal or tax advice by purchasers. Estate tax rules and the tax treatment of life insurance are subject to change at any time. Neither Protective Life nor its representatives offer legal or tax advice. Purchasers should consult with their legal or tax adviser regarding their individual situations before making any tax related decisions.
*Guarantees and payments are subject to the claims-paying ability of the issuing insurance company.
1. Jim dies before Valerie after his retirement begins.
2. Valerie dies before Jim after retirement begins.
3. Jim dies before his planned retirement age of 65.
• The employee buys life insurance prior to
retirement and names his or her spouse as
beneficiary.
• At retirement, the employee selects the Life Only
Income Option as their choice of pension benefit
and starts to receive the maximum monthly
pension plan benefit (spousal waiver may be
required).
• Upon the death of the retired employee, assuming
the life insurance policy is in effect, the tax-free
insurance death benefit proceeds could be
4. Both Jim and Valerie die soon after retirement begins.
5. Both Jim and Valerie live long into retirement.
invested by the surviving spouse or used to purchase
an immediate annuity.
• If the retired employee’s spouse dies first, the pension
plan continues to provide the larger Life Only Income
Option benefit from the pension plan. The life insurance
policy can be cashed in or the beneficiary changed.
• If both retiree and spouse live, they continue to enjoy
the larger Life Only benefit from the pension plan.
If they die simultaneously, the life insurance death
benefit can be paid to any contingent beneficiary
(children, charity, etc.).
Annuitized death benefit provides guaranteed lifetime
income to Valerie.*
How it Works — Pension Maximization
The goal of this strategy is to provide funding at a reasonable cost so that the employee can select the Life Only
Option, yet also provide the spouse the same survivor’s benefit available in the Joint and 100% Survivor Option:
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59 Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Fall/Winter 2018 fmiPathfi nder Important Information and DisclosuresFinancial Markets, Inc. does not provide tax advice. Financial Markets, Inc. does not provide legal advice. All material contained in this publication is believed to be accurate and correct at the time of publishing. Every eff ort has been made to assure the accuracy of the information contained herein. We cannot guarantee accuracy and are not liable for errors or omis-sions. This publication is for Financial Professional Use Only. This material is not intended for consumers. Refer to issuing Insurance Company brochures, contracts and other material for complete details. Information contained herein is subject to change without notice. Products, riders and features may not be available in all states.Insurance Company names may be abbreviated or identifi ed by a marketing name in this publication. All products contained in this publication are issued by an Insurance Company. All guarantees provided are based on the fi nancial strength and claims paying ability of the issuing Insurance Company who is solely responsible for the obligations under its own policies.STANDARD & POOR’S, S&P, S&P 500, S&P 500 LOW VOLATILITY INDEX, S&P 100, S&P COMPOSITE 1500, S&P MIDCAP 400, S&P SMALLCAP 600, S&P GIVI, GLOBAL TITANS, DIVIDEND ARISTOCRATS, S&P TARGET DATE INDICES, GICS, SPIVA, SPDR and INDEXOLOGY are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”). DOW JONES, DJ, DJIA and DOW JONES INDUSTRIAL AVERAGE are registered trademarks of Dow Jones Trademark Holdings LLC (“Dow Jones”). These trademarks together with others have been licensed to S&P Dow Jones Indices LLC. Redistribution or reproduction in whole or in part are prohibited without written permission. This document does not constitute an off er of services in jurisdictions where S&P Dow Jones Indices LLC, S&P, Dow Jones or their respective affi liates (collectively “S&P Dow Jones Indices”) do not have the necessary licenses. All information provided by S&P Dow Jones Indices is impersonal and not tailored to the needs of any person, entity or group of persons. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties and providing custom calculation services. Past performance of an index is not an indication or guarantee of future results. The Nasdaq-100®, Nasdaq-100® Index and Nasdaq® are trademarks of the Nasdaq Stock Market Inc. (which with its affi liates are the “Corporations”) and are licensed for use by respective Insurance Companies where their products contain these Indices. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The respective Insurance Companies where their products contain these Indices are not issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE respective Insurance Companies where their products contain these Indices. Russell 2000® Index is a trademark of Russell Investments and has been licensed for use by Insurance Companies where their products contain these Indices. The Product(s) are not sponsored, endorsed, sold or promoted by Russell Investments and Russell Investments makes no representation regarding the advisability of purchasing the Product. The EURO STOXX 50 is the intellectual property (including registered trademarks) of STOXX Limited, Zurich, Switzerland and/or its licensors (“Licensors”), which is used under license by the respective Insurance Companies where their products contain these Indices. The Index Accounts in these Products based on the Index are in no way sponsored, endorsed, sold or promoted by STOXX and its Licensors and neither of the Licensors shall have any liability with respect thereto. The mark and name Hang Seng is proprietary to Hang Seng Data Services Limited (“HSDS”) which has licensed its compilation and publication to Hang Seng Indexes Company Limited (“HSIL”). HSIL and HSDS have agreed to the use of, and reference to, the Hang Seng by the respective Insurance Companies where their products contain these Indices (“the Issuer”) in connection with the Fixed Index Annuities or Fixed Index Life Insurance (the “Product”). However, neither HSIL nor HSDS warrants, represents or guarantees to any person the accuracy or completeness of the Hang Seng, its computation or any information related thereto and no warranty, representation or guarantee of any kind whatsoever relating to the Hang Seng is given or may be implied. Neither HSIL nor HSDS accepts any responsibility or liability for any economic or other loss which may be directly or indirectly sustained by any person as a result of or in connection with the use of and/or reference to the Hang Seng by the Issuer in connection with the Product, or any inaccuracies, omissions or errors of HSIL in computing the Hang Seng. Any person dealing with the Product shall place no reliance whatsoever on HSIL and/or HSDS nor bring any claims or legal proceedings against HSIL and/or HSDS in any manner whatsoever. For the avoidance of doubt, this disclaimer does not create any contractual or quasicontractual relationship between any broker, holder or other person and Hang Seng Indexes Company Limited and/or Hang Seng Data Services Limited and must not be construed to have created such relationship. The LBMA Afternoon (PM) Gold Price is available at the website http://www.lbma.org.uk/pricing-and-statistics. The Gold Price Index Option does not constitute a purchase of or direct investment in gold. The PIMCO Global Optima IndexTM (the “Index”) is a comprehensive equity and bond index,off ering exposure to global equity and U.S. fi xed income markets. The Index is a trademark of Pacifi c Invest-ment Management Company LLC (“PIMCO”) and has been licensed for use for certain purposes by American General Life Insurance Company (“the Company”) with this annuity (“the Product”). The Index is the exclusive property of PIMCO and is made and compiled without regard to the needs, including, but not limited to, the suitability or appropriateness needs, as applicable, of the Company, the Product, or owners of the Product. The Product is not sold, sponsored, endorsed or promoted by PIMCO or any other party involved in, or related to, making or compiling the Index. PIMCO does not provide investment advice to the Company with respect to the Product or to owners of the Product. The ML Strategic Balanced Index® (the “Index”) is the property of Merrill Lynch, Pierce, Fenner & Smith Incorporated, which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to calculate and maintain the Index. The Index is not sponsored by S&P Dow Jones Indices or its affi liates or its third party licensors (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices will not be liable for any errors or omissions in calculating the Index. “Calculated by S&P Dow Jones Indices” and the related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed for use by Merrill Lynch, Pierce, Fenner & Smith Incorporated. The BNP Paribas Multi Asset Diversifi ed 5 Index (the “BNPP MAD 5 Index”) is the exclusive property of BNP Paribas or one of its affi liates (BNP Paribas and its affi liates collectively, are hereinafter called “BNPP”) and is determined, composed and calculated by BNPP. “BNP”, “BNPP”, “BNP Paribas”, “BNPP MAD 5 Index” and “BNP Paribas Multi Asset Diversifi ed 5 Index” (collectively, the “BNPP Marks”) are trademarks or service marks of BNPP and have been licensed by Athene Annuity and Life Company (“Company”) for use in a fi xed indexed annuity off ered by the Company (the “fi xed indexed annuity”). The fi xed indexed annuity is not, in whole or in part, sponsored, structured, priced, endorsed, off ered, sold, issued or promoted by BNPP or any of its affi liates, or by Standard and Poor’s or any of its affi liates (collectively, “S&P”) or by any third party licensor of information to BNPP (the “Third Party Licensors”). BNPP’s only relationship to the Company is the licensing of the BNPP MAD 5 Index and BNPP Marks for certain purposes. For any index or other trademarked or licensed material mentioned in this publication, please refer to the Company approved material by the respective Insurance Company where their product may contain trademarked or licensed material.Unless otherwise noted, all material contained herein is Copyright © 2018 by Financial Markets, Inc. All rights reserved. No part of this publication may be reproduced, published, distributed, displayed, performed, copied or stored for public or private use in any information retrieval system, or transmitted in any form by any mechanical, photographic or electronic process, including electronically or digitally on the Internet, or over any network, or local area network, without written permission of Financial Markets, Inc.
60Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
For agent use only. See back for details. By invitation orrecommendation from Financial Markets, Inc. only. Minimum of 12 paid policies. Agent must have at least an 80% placement ratio. Qualification period: January 16, 2018 through January 15, 2019. Points vary by carrier and product. See complete points schedule at tinyurl.com/2018fmiAgentPointAwards
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300,000 POINTS
2019 MINI Hardtop 4 Door2019 MINI Hardtop 4 Door
The 2019 Mini Hardtop 4-Door is a small, two-door hatchback geared at
people who want a vehicle with nostalgic styling and a fun, sporty
nature. The MINI Hardtop features distinct British craftsmanship paired
with world-class engineering, and is built to fit a slightly fuller life,
with more legroom and storage space – all while retaining its compact
only parking access. A perky 134-hp 1.5-liter turbo three-cylinder
strikes a balance between fun and frugality with either the standard
six-speed manual or optional paddle-shifted six-speed automatic.
The 4-Door model means easy rear seat access. Good cabin tech
offerings prove useful for daily driving, and the Mini Connected
app adds a dose of fun.
The MINI Hardtop is powered by a MINI TwinPower Turbo
engine, and is loaded with premium features, ferocious
handling, and is built for sharing. Or for having a little
more MINI all to yourself.
Royal Caribbean®5-Night Western Caribbean Cruise
Monday, April 1, 2019 - Saturday, April 6, 2019
If you are looking for adventure, you’ll find it on Royal Caribbean’s
Independence of the Seas®. This ship features 10 pools and whirlpools,
22 bars, clubs and lounges and 273 slot machines. Outside you can climb
to the top of the ship on the rock wall or you can ‘hang ten’ on the
FlowRider surf simulator. For a different kind of adventure, get in a round
at the full-sized onboard boxing ring, or chill around the ice-skating rink.
Enjoy exciting onboard entertainment including ice skating and aqua
shows, live music, dancing, parades, pool parties, karaoke and more.
Every minute on the Independence of the Seas® is a thrill!
VIP Producer President’s Club
Points Required
Accommodations
COMP Excursions
Special Dinner
Airfare
60,000
$1000 Airfare Voucher
90,000
Included
Producer’s Club
30,000
--
Standard
--
Length of Stay 5 Nights
1 Off-Ship Excursion
5 Nights 5 Nights
Ocean View Balcony Suite
$1500 Airfare Voucher
--
--
1 Off-Ship Excursion
EARN POINTS WITH YOUR
PAID POLICIES
Royal CaribbeanR l C ibb
fmiAgentfmiAgent
2018POINT AWARDS
QUALIFICATION PERIOD: JAN. 16, 2018 THROUGH JAN. 15, 2019
61 Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Qualification Guidelines and Point System
Terms and Conditions
Terms and Conditions
201 Terms and Conditions
View point details for each available product by visiting tinyurl.com/201 fmiAgent Awards
• For agent use only.• By invitation or recommendation from Financial Markets, Inc. only.• Business that will be credited includes fully commissionable business placed and
paid through Financial Markets, Inc. during the qualification period. Certain plans may not be eligible.
• Business written on the agent or family members will not be eligible.• The points can be a combination of Life, Annuity and Health premiums. Please
see the points applicable to each individual policy for calculation.
• All policies must be issued, effective and paid no later than January 15, 201 .• General Agents may not qualify unless pre-arranged in writing prior to contest.• Agent may qualify only once.• Agent must be in good standing with Financial Markets, Inc. at time of
redemption (i.e. must be currently contracted with companies from whichqualification points are derived and actively producing business. No outstandingdebit balance allowed).
• Business must be issued and placed. Canceled and lapsed business will not beconsidered for Qualification Points.
• Contest credit dependent upon federal and state regulations.• Excess premium (premium beyond target) on Universal Life business or other
similar contracts will not receive any Qualification Points.
• Payroll deduction business Qualification Points will be determined on acase-by-case basis.
• Qualification Points will not be credited for subsequent annuity premiums.• Qualification Points are not redeemable for cash or other remuneration.• Qualification Points cannot be transferred.• This is a voluntary program; additional restrictions may apply. • A 1099 will be issued to all qualifiers for the fair market value of the items.• Points will be redeemed at one time at the end of the qualification period, which
is January 15, 201 .• Financial Markets, Inc. reserves the right to modify any qualification requirement
at its discretion without notice.• NO EXCEPTIONS TO CONTEST QUALIFICATIONS AND GUIDELINES WILL BE
CONSIDERED.
• This is a voluntary function; consequently, travel restrictions may apply. • A 1099 will be issued to all producers for the fair market value of the trip.• Agent and one guest may attend; guest may not be another licensed agent unlessa spouse.
•• Travel arrangements to and from are the responsibility of the qualifying agent.
• Producer’s Club: night stay in a standard room • VIP Producer’s Club: Five night stay in a
• President’s Club: Five night stay in a
• In cooperation with a third party, Financial Markets, Inc. is unable to make any
modifications to the incentives guidelines.
• Maximum value $25,000 including taxes and registration fees. • If dealer stock is not available, a cash equivalent will be presented in lieu of the
201 .
• A 1099 will be issued to all qualifiers for the fair market value of the item. •
. • logo
• Minimum of 12 paid policies.• Agent must have at least an 80% placement ratio.• Qualification Period: January 16, 201 through January 15, 201 .• Points vary by carrier and product.
• All points earned per product will be combined at the end of the qualification period for a final total.
• For complete points schedule, visit:
Producer’s Club
Points Required
Premium necessary to earn above points (any combination).
30,000 60,000 300,000
201
Points and Premium Requirements
Premier Carriers - Life Premium
Traditional Annuity Premium
LTC, CI, and DI Premium
Medicare Supplement Premium
MYG Annuity Premium
Other Carriers - Life Premium
$30,000
$1,000,000
$75,000
$250,000
$2,000,000
$60,000
$60,000
$2,000,000
$150,000
$500,000
$4,000,000
$120,000
$300,000
$10,000,000
$750,000
$2,500,000
$20,000,000
$600,000
VIP Club
Average Points Needed EachMonth to Achieve Goal 2,500 5,000 25,000
President’s Club
90,000
7,500
$90,000
$3,000,000
$225,000
$750,000
$6,000,000
$180,000
62Copyright © 2018. Financial Markets, Inc., PO Box 3980, Rapid City, SD 57709 • 800-888-2829 • www.fmiAgent.com fmiPathfi nder Fall/Winter 2018
Do you have clients who areFARMERS OR RANCHERS?
View the complete brochure at:tinyurl.com/fmiAgentLand1
Take a look at this excellent conversation starter to use Life Insurance to helpprotect their legacy.
Page 57
Always providing you a choice of options...where the path becomes apparent.Always prw oviding you a choiy ce of options where the path becomes apparentAlways prw oviding you a choiy ce of options where the path becomes apparent
PRESORTEDSTANDARD
US POSTAGEPAID
ABERDEEN SDPERMIT #200
We are here for your life.SM
Find us on social media!
EARN POINTS WITH YOUR
PAID POLICIES
f lif SM
Financial Markets, Inc.PO Box 3980Rapid City, SD 57709800-888-2829 - www.fmiAgent.com
FPR8
fmiAgentfmiAgent
2018POINT AWARDS
See page 60 for details!
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