strong, experienced & focused minnesota life insurance company independent distribution group...
TRANSCRIPT
Strong, Experienced &Focused
Minnesota Life Insurance Company
Independent Distribution Group (IDG)
Michael Langenfeld
Case Design Consultant
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Agenda
• Minnesota Life’s Longevity and Strength
• Product Overview
• Eclipse Index Focus (PDA & Variable Loans)
• Eclipse Protector Focus (PDBGA & Long Term Care)
• Policyholder Treatment Story
• Underwriting Niches
• Questions
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Minnesota Life
• Insurance company with a mutual tradition extending back more than 130 years
• One of the highest rated insurance companies in the United States
• Historically focused on a career distribution model• One of the largest carriers in the group life insurance
industry.
Ratings for financial strength and claims-paying ability are important; however they are not reflective of the performance of any registered securities or variable subaccounts. For more information about the rating agencies and to see where Minnesota Life’s ratings appear relative to other ratings, please see ourweb site at minnesotalife.com/financials.
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Minnesota Life – Value of Top Ratings
Board of Directors – April 8, 2013
Comdex RankSecurian versus Peers
As of November 8, 2013. Change represents net change from March 2008.
5
Company Rank Change*
Northwestern Mutual
100 0
New York Life 100 0
Mass Mutual 98 -1
Guardian 98 2
Western & Southern 96 -2
OneAmerica 96 6
Great West Life 96 1
Met Life 95 0
Transamerica 93 -2
Securian 93 0
Company Rank Change*
Ohio National 93 4
Penn Mutual 93 2
John Hancock 93 -6
Principal Life 93 -2
Lincoln National 91 0
Prudential 91 -1
Pacific Life 89 -5
Nationwide 87 -2
Standard 82 0
Mutual Companies
F79627 Rev 11-2013
Board of Directors – April 8, 2013
Minnesota Life Product Portfolio
Fixed Indexed Variable
Accumulation Protection Accumulation Protection Accumulation Protection
Single Life Accumulator UL (AUL)
Eclipse Eclipse Protector
Accumulator VUL (AVUL)
Joint Life Legacy Protector
Eclipse Survivor
Eclipse Survivor Pro
Board of Directors – April 8, 2013
Eclipse Indexed Life Product Suite
• Eclipse Indexed Life
• Eclipse Protector Indexed Life
• Eclipse Survivor Indexed Life
• Eclipse Survivor Pro Indexed Life
Board of Directors – April 8, 2013
Eclipse Index Life Product Suite
Index Accounts• Guaranteed 0% floor• Annual point to point crediting strategy• Five Index Accounts available
– Index A: S&P 500®, participating at 100% up to the cap– Index B: S&P 500®, participating at 140% up to the cap– Index D: S&P 500®, 3-year, participating at 140% up to the cap– Index E: Blended Index, participating at 100% up to the cap– Index F: EURO STOXX 50, participating at 100% up to the cap
• 2% guaranteed lifetime crediting rate at lapse, surrender or death
Growth caps can change over time as economic conditions vary.
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Minnesota Life’s Indexed Products – Cap comparison(effective August 17, 2012)
Index account Eclipse Eclipse Survivor
Eclipse Survivor Pro
Eclipse Protector
Index Account AS&P at 100%
13% 13% 10% 10%
Index Account BS&P at 140%
8% 8% 6.5% 6.5%
Index Account D3-year S&P 500 and 140% participation
32% 32% 27% 27%
Index Account EBlended Index
16% 16% 13% 13%
Index Account FEuro Stoxx 50 Index
15% 15% 12% 12%
Growth caps subject to change as economic conditions vary.
Board of Directors – April 8, 2013
Eclipse Indexed Life
Target Market• Individual Strategies
– Wealth Accumulationo Supplemental Retirement Income
– Term/Perm Combo Sales
• Estate Strategies– Premium Finance
o 2 early cash value riders availableo Sum of Premiums DBO available
– Private Split DollarPlease keep in mind that the primary reason to purchase a life insurance product is the death benefit.
Board of Directors – April 8, 2013
Access to Cash Value
• Partial Surrenders (or withdrawals)– Fixed Policy Loan
• Loan Interest charged at 4%• Credited at 3% in policy years 1-10• Credited at 3.9% in policy years 11+
– Variable Policy Loan• Loan Interest charged
– Greater of 3%, or – Monthly average of the Moody’s corporate bond yield
index• Cap on Rate Charged: 1% over the fixed crediting rate
– Eclipse and Eclipse SurvivorPolicy loans may create an adverse tax result in the event of a lapse or policy surrender, and will reduce both the cash value and death benefit.
Board of Directors – April 8, 2013
Premium Deposit Account
What is it?• Account attached to a life insurance policy• Provided through a rider/agreement• Client can “pre-pay” and set up schedule for paying future
premiums into the policy • Money in PDA accrues interest while waiting to be applied as
policy premium– No guaranteed interest rate listed in the contract (current
interest rate = 2.5%) – Interest rate is “locked in” for the specific deposit amount at
the time the PDA deposit is received in the home office
Board of Directors – April 8, 2013
PDA Case Study
• Male, age 50• Preferred Non-Tobacco underwriting class• $200,000 matured CD deposited into
Premium Deposit Account Agreement• 10 payments at $22,294.39 results in a total
of $222,943 available to fund policy• Interest rate guaranteed for life of deposit
Board of Directors – April 8, 2013
Eclipse Protector Life
Target Market• Individual Strategies
– Family Protection beyond 30 yrs
– Wealth Transfer to heirs
• Estate Strategies
– ILIT
• Business Strategies
– Buy/Sell
– Key Person Coverage
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Minnesota Life’s Long Term Care AgreementUnique agreement. Growing Market. Significant opportunity.
For Financial Professional use only. Not for use with the public.1
A00245-011
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Competitive Features Monthly Indemnity Choice of Monthly Benefit (2% or 4%) Informal Care Minimum (residual) Death Benefit Benefits paid no matter what
Long Term Care Agreement
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How it works
1. Life insurance face amount is determined.
2. Owner adds the LTCA, choosing the LTCA Face Amount and Monthly Benefit Amount
3. Owner pays life insurance premium, LTCA expense is deducted (along with other charges)
4. Insured qualifies for LTCA benefits.
1. LTCA charges are waived, all other charges continue to be deducted.
2. Policy will not lapse while on claim.
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How it works
5. Monthly LTCA benefits are paid.
a. Owner determines payment amount up to the maximum % selected or IRS Per Diem. Remainder stays within the policy.
b. Payments are made to the Owner
c. Dollar for dollar reduction of death benefit - basically, it is proportionally taken from Cash Value and Face Amount
d. If loans exist, a portion of benefit used to pay off loan
6. Insured passes away and remaining life insurance death benefit is paid to beneficiaries.
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Performance Death Benefit Guarantee Agreement (PDBGA)
• First in the industry on index products• Strong index account crediting potentially
improves policy• Policy performance checked each anniversary
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GOOD RELATIONSHIPS GET BETTER WITH TIME
Policyholder Treatment
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Keeping promises of all sizes
• 2012: paid over $249 million to 2,541 families• We kept our promises to every policyholder in
2012. It didn’t matter...– If a claim was over $12 million or a mere $36– If the coverage had been in place for 80 years or
8 days– If the individual was 99 or 19 years old
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Proof is in our client loyalty
2012 stats:•94% of our policyholders remained with us•96% of our policyholders were satisfied with our overall service•94% would recommend us
Source: Securian 2012 Annual Report
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Policy Conversions
Term conversions•Allow term clients to convert into ANY available permanent product
– Whole life, fixed, indexed, variable
•Allow conversions to existing permanent policies
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A lifetime of upgrades
• Offering existing policyholders the same enhancements & products as new clients
• Eclipse (2006) - 15 enhancements made available to existing policyholders
• Two areas of enhancements1. Agreements
2. Features
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Index Crediting Bonus
• 1% annual bonus based on index credits• Based on a 120-month rolling period of index
credits• Initial bonus paid on 11th policy year anniversary• Bonus is applied to the accumulation value• Enhances Cash Value potential
– Potential to increase distributions
Index crediting bonus is not guaranteed and is distributed at the discretion of Minnesota Life and Securian Life.
*Male, 35, Preferred, Pay to Age 65, Min Non-MEC Death Benefit
Board of Directors – April 8, 2013
Competitive Comparison - Eclipse
Ranking CompanyMaximum
DistributionCash Value at
age 65Death Benefit at
age 65
1 North American (Builder IUL) $174,009 $1,888,269 $2,336,026
2 Minnesota Life (Eclipse IUL) $164,653 $1,716,757 $2,191,176
3 Pacific Life (Pacific Indexed Performer LT) $161,697 $1,665,297 $2,116,756
4 Life of the Southwest (LSW FlexLife) $153,762 $1,643,422 $2,159,527
5 Nationwide (YourLife Indexed UL) $151,488 $1,495,546 $1,980,909
6 Lincoln Financial (LifeReserve IUL Accumulator) $146,644 $1,573,214 $2,024,484
7 Penn Mutual (Accumulation Builder Choice IUL) $145,152 $1,545,310 $2,049,258
8 Pacific Life (Pacific Prime IUL) $142,220 $1,495,248 $1,948,243
9 John Hancock (Accumulation IUL) $133,566 $1,429,420 $1,880,562
10 AXA (Athena Indexed UL (153)) $132,262 $1,428,051 $1,891,794
11 Aviva (Lifetime Builder III) $127,674 $1,443,378 $1,924,727
12 ING (ING IUL-Global Choice) $124,284 $1,363,367 $1,852,367
13 Allianz (Life Pro+) $111,431 $1,337,765 $1,786,796
14 Transamerica (Freedom Indexed UL II) $114,263 $1,327,621 $1,816,621
15 Prudential (Index Advantage UL) $84,101 $1,088,940 $1,537,371
Male, 35, Preferred, Pay to Age 65, Min Non-MEC Death Benefit
Source: Competitor Illustration Software, September 2013.. Increasing death benefit switching to level at age 65; fixed annual premium of $15,000 to age 65; 20 annual distributions starting at age 65; fixed loans (where available) targeting $10,000 cash surrender value at age 100; Maximum illustrated rate - Annual S&P 500® Point-to-Point Index Account option (where available). Ranking based on maximum distribution. This comparison does not take all material factors into account and must not be used with the public. These factors include but are not limited to: rider availability, surrender periods, or fees and expenses. For information regarding these and other factors please consult the prospectuses or offering documents of these products.
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Underwriting
Our Vision: To be your partner of choice delivering …
•Innovative Solutions•World Class Underwriting•Remarkable Service
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Underwriting Value Proposition
• Concierge level of service• Aggressive R&D• We will not be outworked on a case• Unique facultative reinsurance program• Never lose sight of the fundamentals:
• Consistent and fair decisions• Meaningful “sweet spots”• Retention and capacity to handle large cases• Professional and responsive underwriters
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Underwriting / Current Sweet Spots
• Aviation• Asthma• Non Inhaled Tobacco• Early Stage Melanoma• Mental Nervous• Prostate cancer• Build • Preferred Criteria – to include treated hypertension and treated
cholesterol• Preferred exception guidelines• Estate Growth Rates
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Questions
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Thank You for attending!
Questions?
Minnesota Life Sales Desk
1-800-413-7860, opt 1
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Disclosures
Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods. Policy holders could lose money in this product.
The DBGA value is only used for the purpose of determining whether the benefit under this rider is available. It does not represent any value that the policyholder can access.
Guarantees are based on the claims-paying ability of Minnesota Life Insurance Company
It is not permissible to download any Securian produced and approved advisor use only materials to your firm’s website or other public space where they would be accessible to the general public.
Please keep in mind that one cannot invest directly in an index.
Eclipse Indexed Life, Eclipse Protector Indexed Life, Eclipse Survivor Indexed Life , and Eclipse Survivor Pro are designed first and foremost to provide life insurance protection. While the interest crediting options are attractive for cash accumulation, the product should always be promoted to first meet the death benefit needs of families and businesses with cash accumulation as a secondary benefit.
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Disclosures
“Standard & Poor’s®,” “S&P®,” “S&P 500®,” “Standard & Poor’s 500®,” and “500®,” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Minnesota Life. The Product is not sponsored, sold or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of purchasing the Product. The S&P 500® Index is an index of 500 stocks that are generally representative of the performance of leading companies in leading industries within the U.S. You cannot invest directly in the S&P 500® Index.
S&P 500®, Standard & Poor’s 500® index, Standard & Poor’s®, “S&P ®”, “S&P 500®”, “Standard & Poor’s 500®”, and “500” are trademarks of Standard & Poor’s and have been licensed for use by Minnesota Life Insurance Company (“Minnesota Life”). The Eclipse Survivor Pro Indexed Life Insurance Policy (“the Policy”) 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. The Policy is not sponsored, endorsed, sold or promoted by Standard & Poor’s (“S&P”) or its third party licensors. Neither S&P nor its third party licensors makes any representation or warranty, express or implied, to the owners of the Policy or any member of the public regarding the advisability of investing in securities generally or in the Policy particularly or the ability of the S&P 500® (the “Index”) to track general stock market performance. S&P’s and its third party licensor’s only relationship to Minnesota Life is the licensing of certain trademarks and trade names of S&P and the third party licensors and of the Index which is determined, composed and calculated by S&P or its third party licensors without regard to Minnesota Life or the Policy. S&P and its third party licensors have no obligation to take the needs of Minnesota Life or the owners of the Policies into consideration in determining, composing or calculating the Index. Neither S&P nor its third party licensors is responsible for and has not participated in the determination of the prices and amount of the Policy or the timing of the issuance or sale of the Policy or in the determination or calculation of the equation by which the Policy is to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Policy.
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NEITHER S&P, ITS AFFILIATES NOR THEIR THIRD PARTY LICENSORS GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN OR ANY COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P, ITS AFFILIATES AND THEIR THIRD PARTY LICENSORS SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS OR DELAYS THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE MARKS, THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P, ITS AFFILIATES OR THEIR THIRD PARTY LICENSORS BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE. Barclays Capital Inc. and its affiliates (“Barclays”) is not the issuer or producer of Eclipse Survivor Pro Indexed Insurance Policy (“the Policy”) and Barclays has no responsibilities, obligations or duties to investors in the Policy. The Barclays Capital U.S. Aggregate Bond Index is a trademark owned by Barclays Bank PLC and licensed for use by Minnesota Life Insurance Company (“Minnesota Life”) as the Issuer of the Policy. While Minnesota Life may for itself execute transaction(s) with Barclays in or relating to the Barclays Capital U.S. Aggregate Bond Index, the Policy investors shall not acquire any interest in Barclays Capital U.S. Aggregate Bond Index nor do they enter into any relationship of any kind whatsoever with Barclays upon making an investment in the Policy. The Policy is not sponsored, endorsed, sold or promoted by Barclays and Barclays makes no representation regarding the advisability of the Policy or use of the Barclays Capital U.S. Aggregate Bond Index or any data included therein. Barclays shall not be liable in any way to the Issuer, investors or to other third parties in respect of the use or accuracy of the Barclays Capital U.S. Aggregate Bond Index or any data included therein. 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. The interest crediting for the Eclipse Survivor Pro Indexed Insurance Policy 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. Russell Investment Group. Russell 2000® Index is an equity index that measures the performance of the 2,000 smallest companies in the Russell 3000® Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000® is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not affect the performance and characteristics of the true small-cap index. Russell 2000® is a registered service mark of Frank Russell Company. The Eclipse Survivor Pro Indexed Insurance Policy (the Policy) is not sponsored, endorsed, sold or promoted by Russell Investment Group and the Russell Investment Group makes no representation regarding the advisability of the Policy or use of the Russell 2000® Index or any data included therein. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group.
This material may contain a general analysis of federal tax issues. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer. Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues applicable to their specific circumstances
Disclosures
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Questions
Guarantees are based on the claims paying ability of Minnesota Life Insurance Company.
This is for financial professional use only. Not for use with the general public. This material may not be reproduced in any form where it is accessible to the general public.
The Comdex ranking is not a rating. It is a composite index which is created by combining the ratings of multiple insurance rating agencies into a single number from 1 (lowest) to 100 (highest). The number is a percentile showing where a company stands in comparison to other ranked companies based on the ratings it has received from rating agencies. A company needs to be rated by at least 2 rating agencies to receive a Comdex rank but may be rated by more than 2 rating agencies. For more information about Comdex rankings you may visit their website at www.ebixlife.com.
This presentation is intended to be used as training material for financial advisors and professionals. Financial advisors and professionals are reminded that any use of this or other related material must be in accordance with all Securian broker dealer and insurance company guidelines.
Securian Financial Group, Inc.www.securian.com
Insurance products offered by Minnesota Life Insurance Company, 400 Robert Street North, St. Paul, MN 55101-2098 · 1-800-820-4205
©2012 Securian Financial Group, Inc. All rights reserved.
DOFU 10-2011