nationwide yourlife indexed ul presentation [read-only] · 2011-12-02 · nationwide may...
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Nationwide YourLife®
Indexed UL
Why Nationwide’s Indexed UL? November, 2011
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• Life Insurance issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, individually and collectively “Nationwide.”
• Guarantees are subject to the claims paying ability of Nationwide.
• As your clients' personal situations change (i.e., marriage, birth of a child or job promotion), so will their life insurance needs. Care should be taken to ensure this product is suitable for their long-term life insurance needs. They should weigh any associated costs before making a purchase. Life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as gender, health and age, and has additional charges for riders that customize a policy to fit their individual needs.
• Indexed universal life policies are not stock market investments and do not directly participate in any stock or equity investments. Past index performance of an index is no indication of future crediting rates because you are buying an indexed universal life insurance policy does not involve actually purchasing or owning securities or stock, so it’s not the same as investing directly in the stock market and therefore does not receive dividend or capital gains participation.
• Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution• Not insured by any federal government agency May lose value
• © 2011 Nationwide Financial Services, Inc. All rights reserved
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Disclosure
• S & P 500® is a trademark of Standard & Poor's and has been licensed for use by [Nationwide / Nationwide Life Insurance Company / Nationwide Life and Annuity Insurance Company]. The [Policy / Nationwide YourLife ® Indexed UL / Nationwide MarathonSM Indexed UL] is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the Product.
• NASDAQ®, OMX®, NASDAQ OMX®, NASDAQ-100®, and NASDAQ-100 Index® are registered trademarks of The NASDAQ OMX Group, Inc. (which with its affiliates is referred to as the "Corporations") and are licensed for use by [Nationwide / Nationwide Life Insurance Company / Nationwide Life and Annuity Insurance Company]. The Product has not been passed on by the Corporations as to their legality or suitability. The Product is not issued, endorsed, sold, or promoted by the Corporations. The Corporations make no warranties and bear no liability with respect to the product.
• The "Dow Jones Industrial AverageSM" is a product of Dow Jones Indexes, the marketing name and a licensed trademark of CME Group Index Services LLC ("CME"), and has been licensed for use. "Dow Jones®", "Dow Jones Industrial AverageSM" and "Dow Jones Indexes" are service marks of Dow Jones Trademark Holdings, LLC ("Dow Jones") and have been licensed for use for certain purposes by Nationwide / Nationwide Life Insurance Company / Nationwide Life and Annuity Insurance Company. Nationwide's Nationwide YourLife® Indexed UL based on the Dow Jones Industrial AverageSM is not sponsored, endorsed, sold or promoted by CME Indexes, Dow Jones or their respective affiliates, and CME Indexes, Dow Jones and their respective affiliates make no representation regarding the advisability of trading in such product(s)
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Disclosure
Agenda• Indexed Universal Life Sales Trends
• Why IUL so attractive?
• Nationwide’s IUL
• Why Nationwide’s IUL is ideal?
• Sales Applications
• Benchmarking: Income solves, Protection solves (endow), Extended Death Benefit Guarantee (EDBG)
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IUL Sales Trends
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• As of year end 2010: IUL is the fastest growing Individual Life product
• It’s estimated that IUL represents 22% of total Universal Life sales*
• 8 out of top 10 UL Market Share leaders for year 2010 now offer an IUL
Indexed Universal Life Sales trend*
Year Total Indexed UL Sales Note2008
$580 Million + 2008 Sales were up 12% over 20072010 $695 Million + 4Q2010 sales were up 33% over 3Q2010
4Q 2010 record setting quarter2010 record setting year
* Source: AnnuitySpecs.com’s Indexed Sales Market Report
Why IUL attractive?Producer- No Securities license and CE- Compensation- Meet consumer need
Consumer-Protected from market losses-Potential for growth
Insurance Company- Low interest rate environment and volatile equity market- Alternative to NLG UL, VUL, and Current Assumption UL
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Nationwide’s IUL.
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Why Nationwide’s IUL is Ideal?140% current Participation Rate- Consider current bear market- Expecting modest market performance – 140% is ideal
Monthly Averaging- Minimize market timing risk - Smooth volatility by averaging returns over 12 points in time vs. 2
Weighted Multi-Index Blend: 50% (best), 30% (2nd best), 20% (3rd)- S & P 500®, NASDAQ-100®, Dow Jones Industrial AverageSM
- Takes the guess work out of allocation
Nationwide may discontinue any index that becomes unavailable (i.e, is no longer published) or the calculation of which is substantially changed. Nationwide may substitute with a comparable index or may adjust the
method of calculating Index Segment Interest. 88For Insurance professional use only
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How does Monthly Averaging work
At the end of the segment period, the 12 values are averaged for each index, and compared to the initial values to determine growth. Index A Example: 11,073.51 (average) – 10,525.84 (initial value) = 547.67 / 10,525.84 = 5.20% growth
At the end of the segment period, the 12 values are averaged for each index, and compared to the initial values to determine growth. Index A Example: 11,073.51 (average) – 10,525.84 (initial value) = 547.67 / 10,525.84 = 5.20% growth
Initial valuesInitial values
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The hypothetical illustration used above are actual/hypothetical figures for the dates indicated, however they may not represent actual results. Past performance is no guarantee of future performance or of values of indexed life insurance. Cap rates are illustrative in nature, are not guaranteed, are subject to change. Cap rates and participation rates may vary. Different time scenarios will produce varying results which could be less favorable or more favorable for depending on the performance of each entity. Indexed universal life policies are not stock market investments and do not directly participate in any stock or equity investments
Power of Weighted Blend and 140% on Interest Credited
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* Reference Index Performance RateFor Insurance professional use only
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Applying Participation Rate, Cap, Floor
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12% cap, 0% floor and 140% participation rate are all current rates and subject to change
Premium Allocated to Indexed Strategy
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Example Assumes Annual Premium
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Note: Amounts deducted from the Indexed Interest Strategy to pay for charges, surrenders and/or declared rate policy loans will be credited no interest.
Sales applications of IUL:
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Majority of IUL sales: Accumulation and Income• Alternative to VUL
IUL can be used for Death Benefit Protection sales:• Alternative to NLG UL
• Alternative to Current Assumption UL
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Pricing Insights
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• IMPORTANT BENCHMARKING INFORMATION: All competitive information is believed to be current as of October 2011. All information presented is deemed reliable and Nationwide has made every effort to make sure it is accurate; however, it’s possible that there are differences between the products compared which are not reflected and/or of which we are unaware. For this reason, its completeness and accuracy cannot be guaranteed.
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Disclosure
Income solve w/ Alternative LoansNationwide should compete in the top 1/3 with Alternative Loans
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Income solve with Withdrawals/Declared LoanExpect Nationwide’s competitiveness to vary when traditional income solves are used
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Income solve with Withdrawals/Declared LoanNationwide will compete better with Option 1 DBO (Level) case designs
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IUL Premium Solves (Endow)Nationwide YourLife Indexed UL will compete well in protection oriented premium solves
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IUL EDBG Rider (NLG rider)• Nationwide IUL EDBG priced similar to the rider on our Protection VUL
product– NLG-UL will typically solve for lower premiums ($500k DB+)
• High target premiums for Nationwide IUL w/EDBG
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Quick Summary of Nationwide’s IUL Sweet Spots
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• Income solves with Alternative LoansOpt 1 DBO more competitive than Opt 2
• Low premium Solves to EndowEspecially when illustrative rates are same
• Competitive Target Premiums (2-yr rolling)
• EDBG rider cash accumulation (No Lapse Guar Rider)More premium participates in Index vs. others
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