Download - For Agent Use Only – Not To Be Used With The Public National Life Insurance Company ® | Life Insurance Company of the Southwest™ National Life Group ®

For Agent Use Only – Not To Be Used With The Public

National Life Insurance Company® | Life Insurance Company of the Southwest™

National Life Group® is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of the Southwest, Addison, TX and their affiliates. Each company of National Life Group is solely responsible for its own financial condition and contractual obligations. Life Insurance Company of the Southwest is not an authorized insurer in New York and does not conduct insurance business in New York.

Help Protect Your Client’s Familyand Diversify Their Portfolio

TC65657(1111)

Life Insurance: Beyond the Death Benefit



The Current Situation

• The economy is unstable

• People have lost money in their personal and retirement savings

• The dollar doesn’t stretch as far as it used to

• People still have the need for protection that life insurance provides, but the same dollar is competing for multiple needs



So Where is the Money?



Where is the Money

• There is over $2.6 Trillion in money market accounts

• There is $6 Trillion in certificates of deposits1

What does this tell us?

People are looking for safety and don’t have lots of choices on where to put their money

1 Source: www.ici.org October 2011.



How can you help your clientsProtect their family and

Diversify the Fixed Asset portion of their portfolio



Protection First



Evaluating Human Capital

• Human Capital is the actuarial Present Value of future wages

– It is an individuals ability to earn income and save

– It equals the present value of all future wages, including pension and social security

• It directly affects a persons ability to take on risk regarding their financial capital



Human Capital

• The younger the individual, the greater their human capital • As we age, financial capital replaces human capital

25 30 35 40 45 50 55 60 65$50,000

$100,000

$200,000

$300,000

$500,000

$1,000,000

Insurance Need

Age

Financial Capital

Human Capital



Three risks to consider

• Dying Too Soon

• Becoming Ill

• Living Too Long



The Need to Protect Human Capital

25 30 35 40 45 50 55 60 65$50,000

$100,000

$200,000

$300,000

$500,000

$1,000,000

Protection Need

Age

Financial Capital

Human Capital



Why not Term and Invest The Difference?

How long does your client need protection?



The Need to Protect Human Capital and Preserve Financial Capital

25 30 35 40 45 50 55 60 65$50,000

$100,000

$200,000

$300,000

$500,000

$1,000,000

Protection Need

Age

Financial Capital

Human Capital

Preservation Need



Why not Term and Invest The Difference?

How long does your client need protection?



Manage Risk with Whole Life Insurance

• Death Benefit protects Human Capital and Preserves Financial Capital

• Accelerated Benefit Riders provide funds in the event of illness1

• Cash Value Accumulation can be accessed to supplement future income needs2

1Accelerated Benefit Riders are optional and may not be available in all states. Receipt of Accelerated Benefits will reduce the Cash Value and Death Benefit otherwise payable under the policy, may result in a taxable event, and may affect your client’s eligibility for public assistance programs. There is no restriction placed on the use of the benefit received.

2Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event.



Portfolio Diversification

By combining an asset allocation strategy with

Whole Life InsuranceYou are able to protect human capital

and manage the risk of Dying Too Soon

Plus

Cash value accumulation can serve as a

Cash or Fixed Asset in a portfolio



Whole Life Complements a Well Designed Long-Term Financial Strategy

• When properly funded, cash value continues to accumulate during good times and bad, through policy guarantees.2

• Lifetime access to cash value through policy loans and withdrawals, potentially income tax-free.3

Life Insurance as an Asset Class

Equities Fixed Whole Life Cash Value

1Internal Revenue Code 101(a)(1). There are some exceptions to this rule. Please consult a qualified tax professional for advice concerning your individual situation2Guarantees are dependent upon the claims-paying ability of the issuing company.3Policy loans and withdrawals reduce the policy cash value and death benefit and may result in a taxable event. Withdrawals up to the basis paid into the contract and loans thereafter will not create an immediate taxable event, but substantial tax ramifications could result upon contract lapse or surrender. Whole life insurance may not accumulate significant cash value in the early years of the policy.

• Immediate liquidity at death, income tax-free.1

• Cash value can serve as the long-term Cash or Fixed component of an asset allocation strategy



Three Good Reasons Why Consumers Purchase Whole Life

#1 – Guarantees*• Guaranteed Death Benefit

• Guaranteed Level Premium

• Guaranteed Cash Value

No other life insurance product offers the guarantees that Whole Life provides

Product guarantees are the most important feature for buyers, regardless of

age or incomeLIMRA

Life Buyers Report 2005

*Guarantees are dependent upon the claims paying ability of the insurer.




#2 – Buy it and don’t worry about it

Whole Life Insurance is the only insurance contract that you can purchase, pay the required premium, and not worry

about the coverage

No need to track market returns or make reallocations

Let the insurance company do the heavy lifting




#3 – DiversificationDoesn’t add additional risk to a financial portfolio

Whole life insurance allows your clients

the ability to potentially take on risk

with other aspects of their finances while guaranteeing their death benefit



With Whole Life the client transfers the risk to National Life Group

National Life Group is committed to its long-standing conservative investment philosophy that seeks to create value for the enterprise over the long term, while minimizing investment losses in the short term.

Total: $17.1 billion investment portfolio as of December 31, 2010 representing consolidated assets of National Life Insurance Company, Life Insurance Company of the Southwest and NLV Financial Corporation.



NL LifeBuilder



NL LifeBuilder

Year

Gtd. Cash Value

Projected Cash Value

IRR On Projected

CVGtd. DB Current

DB

IRR On Current

DB

5 34,251 35,128 -11.54% 426,510 426,857 82.62%

10 97,586 103,744 -.66% 427,579 429,502 25.57%

20 230,880 251,807 3.35% 432,225 456,995 7.30%

30 292,001 403,565 3.99% 423,276 580,540 5.63%

Male Age 45 PNS

$10,000 Annual Premium Paid-up @ 65

$423,276 Death Benefit

Human Capital

Financial Capital

Projected Cash Value and current Death Benefit are derived from dividends, which are not guaranteed, and should not be construed as estimates of dividends to be paid in the future.



Ready to Move Assets? The Premium Deposit Account (PDA) Can Help

• What Does It Do?– Avoids modified endowment status for large lump-sum amounts moving

into LifeBuilder

• Why Use the PDA? – Short-paying LifeBuilder can be matched to a PDA– Avoids MEC– Convenient for Policyowner, pay once– PDA deposits earn interest

• How Does It Work? – Lump-sum amounts are held in an interest-paying fixed account outside

of the LifeBuilder policy– Premiums are automatically paid from that account

Due to regulatory restrictions, the Premium Deposit Account is not available to active members of the military or in the states of Illinois, Indiana, Kansas, Pennsylvania, Tennessee or Texas. The premium payment period is restricted to 10 years in California.



Premium Deposit Account

The Premium Deposit Account may only be surrendered upon death or if the life insurance policy associated with the PDA is surrendered. If the associated policy is surrendered, the PDA surrender penalty is the lesser of: 10% of the account value, or the interest earned.



Protect Your Client’s Family and Help Diversify Their Portfolio

Get your clients out of the Blue

And into the Green

For more information contact the

Life Sales Desk – 1-800-906-3310, Option 2

Download - For Agent Use Only – Not To Be Used With The Public National Life Insurance Company ® | Life Insurance Company of the Southwest™ National Life Group ®

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