USING FIXED INDEX ANNUITIES

(FIAs)TO PROTECT AND GROW

YOUR WEALTHBy: Neal B. Inscoe, CWPP

Founder/President APB, Inc.

Typical Wealth Building

The Stock Market Individual Stocks Mutual Funds

Problems with the Stock Market? No downside protection Inconsistent results Tougher to recover from down years

There is nothing wrong with building wealth in the Stock Market so long as you understand the risk and have a long time investment horizon.

Losing your Hard Earned Dollars

Did you have money invested in stocks and mutual funds between 200-2002?

How about the end of 2007 and the beginning of 2008?

Did you lose money? The Stock Market went down approximately

40% between 2000-2002 and over 46% from November of 2007 to November of 2008.

Millions of people lose billions of dollars when the stock market takes a downturn.

Mitigating Risks CDs vs. Fixed Annuities

Certificates of Deposits (CDs) Low rates of return Taxed annually Your money is SAFE

Fixed Annuities Income tax deferred (which is good) Traditionally they have higher fixed annual return

than CDs Your money is SAFE

Many People over the age of 55 would be better off with Fixed Annuities vs. CDs

Fixed Indexed Annuities (FIAs)

FIAs started to become popular in 2000-2002 when the Stock Market declined 40%

Millions of people were looking for SAFE ways to grow wealth

Why look to FIAs? Principal protection Good upside growth potential

FIAs…Continued

FIAs are “fixed” annuities with a few “kickers” An “indexed” rate of return

FIAs peg the returns to a measuring stock Index such as the S&P 500* (*minus dividends)

FIAs are tax-deferred annuities wherein your account balance can never go backwards due to market returns

Lock in the gains FIAs lock in the investment returns (products vary

but most lock gains annually)

Caps On Returns

Most FIAs have caps 5.5 to 12%+

FIAs give you 100% principal protection However, the cost for that protections is some

of your upside growth potential Example: Annual point to point with an 8% cap

January 1, 2008 – you fund $100,000 into a FIA Assume the S&P 500 index value = 1000

January 1, 2009 – the value of the S&P 500 index = 1100 (10% positive return)

The account value in your FIA = $108,000

Principal Protection

Remember, your FIA will not go backwards when the market goes negative

Example: Annual point to point with an 8% cap January 1, 2008 – you fund $100,000 into a

FIA

Assume the S&P 500 index value = 1000 January 1, 2009 – the value of the S&P 500

index = 900 (10% negative return) The account value in your FIA = $100,000

Fixed Indexed Annuity

Your stairway to financial peace of mind

Deposit Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Growth

Illustration

2.4% UPSIDE POTENTIAL

CD FIA SECURITIES

SECURITY 100% RISK

Tic-Tac-Toe

Surrender Charges

FIAs are no different than most annuities There are surrender charges They can last 5-12+ years (diminish as years

progress) Longer surrender periods usually = better

annuity terms It is a good idea for many to ladder FIAs 10% withdrawal option Short-term money should not be in FIAs

If You Only Knew… How Much of Your Money Would be in FIAs?

5 year historic review of the S&P 500 2003 14.71% 2002 -22.09% 2001 -11.88% 2000 -9.10% 1999 21.04%

The average rate of return over the five year window was -1.45%

If You Only Knew…Continued

$100,000 $100,00

Invested in S&P Invested in FIA

Year A B

1 $114,710.00 $112,000

2 $89,370.56 $112,000

3 $78,753.34 $112,000

4 $71,586.78 $112,000

5 $86,648.64 $122,080

ZERO is HERO!

The Crash of 2007-2008

$100,000 $100,000

Invested in S&P Invested in FIA

Month/Year A B

Nov 2007 $100,000 $100,000

Nov 2008 $54,000 $100,000

From November 2007 to November 2008, the S&P 500 was down over 46%.

ZERO is HERO!

Where Do You Find Money to Fund FIAs?

IRAs* 401(k) plans* Profit Sharing Plans* Defined Benefit Plans* The Safe College Plan TM

Brokerage Accounts CDs Money Market Accounts

*Not withstanding that a FIA is a tax-deferred tool inside a tax-deferred retirement account.

Would You Like a 7% Guaranteed Rate on Return of Your FIA?

Not discussed in detail in this presentation, however, you should know that there is a FIA that offers a 7% annual guaranteed rate of return (on accumulation value)

For information on this very exciting product, please see your trusted financial/insurance professional.

Summary of FIAs

A FIA is a unique and exciting tool that has the following characteristics: Principal Protection Upside Potential pegged to our best measuring

stock index Locking of Gains on an annual basis

If you are looking to build wealth in a secure manner with good upside potential, you should look to allocate some portion of your money into one of these unique products.

This presentation covers on specific type of FIA. There are many different kinds of FIAs and you should consult your local financial/insurance professional to determine which on best fits your individual needs.