Key Person Insurance SALES IDEA. Help protect your business and retain your key employees using Foundation Builder Index UL

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1 Producer Material I Index Universal Life Insurance SALES IDEA Key Person Insurance Help protect your business and retain your key employees using Foundation Builder Index UL Protecting your business from the losses associated with the unexpected death of a key employee is prudent. Lost revenues, repayment of debts and the costs associated with recruiting and training a replacement can put a financial strain on your business. Key person life insurance provides a payout to the business to help offset these costs and buys time for the business to adjust in the event something were to happen to those most responsible for the success of the business. One disadvantage of most key person insurance policies is that they don t provide an incentive for the key employee to stay with the company. If the key employee resigns, the business is left with only the policy s cash value to offset the losses. One way to provide a compelling reason to stay is to add long term care coverage for the employee to the life insurance protection for the business. Life Insurance for the Business, Long Term Care Coverage for the Key Employee Competitive planned premiums, the potential for strong cash values and affordable long term care coverage make Foundation Builder Index UL a compelling option for businesses. Meet American Distributors and John American Distributors is highly reliant on its leading sales executive, John, to meet its revenue goals. John s relationships, knowledge and skill have proven invaluable to their success. The owners are concerned that losing John during his prime working years would create financial hardship for the company. They estimate the loss of revenues and cost to replace him at $1 million. John earns $150,000 per year Situation The company knows that John would be an attractive candidate for jobs at many of its competitors. So, in addition to the key employee protection they are seeking for the business, they are also looking for ways to provide John with additional benefits that might encourage him to remain with American Distributors for at least the next 10 to 15 years. John has expressed interest in a tax-free benefit plan that would help protect his family in the event he Life insurance underwritten by Genworth Life and Annuity Insurance Company, Genworth Life Insurance Company, Richmond, VA /20/15 For Producer/Agent Information Only. Not to be reproduced or shown to the public.

2 were to suffer a disabling event during his working years. He has life, health and disability insurance coverage, but is concerned that a temporary or permanent long term care (LTC) event could deplete much of his savings. The owners of American Distributors discuss their situation with their insurance professional, Tina. After listening carefully to their needs, Tina presents them with a unique strategy that could satisfy their need for key person coverage and provide John with an attractive benefit that would encourage him to remain with the company. Their Solution American Distributors will buy two $500,000 Foundation Builder Index UL policies on John. Both policies help protect the company. One policy includes the optional LTC rider which addresses John s concern and encourages him to stay with the company. American Distributors applies as owner and beneficiary on two $500,000 Foundation Builder Index UL policies as key person coverage insuring John for $1 million dollars. Policy #1: A $500,000 policy that includes the optional Accelerated Benefit Rider for Long Term Care Services 1 (LTC rider) for an additional cost of $416 per year. John is approved as Preferred No Nicotine Use, and the annual planned premium for the life insurance policy with the LTC rider is $3,690. Policy #2: Another $500,000 policy without the LTC rider. John is approved as Preferred No Nicotine Use, and the annual planned premium is $3,274. The net cash surrender value is available for the company to use should John resign. If John dies during the time the company owns the policies, the company will receive any death proceeds income tax-free as beneficiary. 2 If John qualifies for LTC benefits during the time of his employment, the company will pay the benefits and be reimbursed by the rider benefits from the policy with the optional LTC rider (or have rider benefits paid directly to the LTC service provider). These benefits would be income tax-free to John and the company. They will also reduce the amount of death benefit available under policy #1. 3 American Distributors and John enter into a written agreement providing that if John needs LTC coverage at any time during his employment with American Distributors, the company will pay his claims expenses up to the amount of benefits available in the policy that includes the optional LTC rider. If John leaves American Distributors, the company could choose to keep the policies but drop the LTC rider on policy #1; or, if both parties agreed, transfer ownership of both policies, or just the policy that includes the LTC rider to John. This can be done as either a taxable bonus or by sale. American Distributors pays all premiums on both policies. They are not deductible to American Distributors or taxable to John. The company can choose to pay more premium than needed on one or both policies to maintain the death benefit and rider allowing the potential for enhanced build up of cash values that might be accessed later by the company for cash flow needs. The company has the option of allocating this cash value in index crediting strategies linked to the percentage change in the S&P 500 Index, a fixed account, or some combination of the two. 1 Known as the Long Term Care Insurance Accelerated Benefit Rider in Florida. 2 For the death proceeds to be fully income tax free to the company, they will need to comply with the requirements of IRC 101(j), including satisfaction of Notice and Consent prior to policy issue. Genworth does not provide legal or tax advice. Your clients should consult their own legal and tax advisors. 3 Rider claims payments reduce both the death proceeds and the policy value.

3 How Their Solution Works Policy #1: Foundation Builder Policy #1: Foundation Index UL With LTC rider Builder IUL with LTC rider After 20 years After 40 years At age 100 Death benefit $500,000 $500,000 $500,000 Long term care benefit $500,000 = $10,417 per month for 48 months for qualified expenses Net Cash Surrender Value $86,001 $270,488 $421,003 Total premiums paid $73,800 $147,601 $206,641 NET CASH SURRENDER VALUE TOTAL PREMIUMS PAID DEATH BENEFIT $500,000 $400,000 $300,000 $200,000 $100,000 $168,310 $86,001 $26,139 $110,700 $73,800 $36,010 $270,488 $147,601 $373,419 $421,003 $206,641 $184,501 $0 Policy year At age 100 $500,000 of key person life insurance and LTC coverage for John Policy #2: Foundation Builder Index UL Policy Without #2: Foundation LTC rider Builder IUL - No LTC rider After 20 years After 40 years At age 100 Death benefit $500,000 $500,000 $500,000 Net Cash Surrender Value $75,647 $240,566 $412,989 Total premiums paid $65,488 $130,977 $180,094 NET CASH SURRENDER VALUE TOTAL PREMIUMS PAID DEATH BENEFIT $500,000 $400,000 $300,000 $200,000 $100,000 $22,407 $32,744 $75,647 $65,488 $147,033 $98,233 $240,566 $130,977 $412,989 $355,221 $180,094 $163,722 $0 Policy year At age 100 $500,000 of key person life insurance

4 Their Combined Solution Combined Values: For Policy #1 Combined Values for and Policy #2 Policy #1 and Policy #2 After 20 years After 40 years At age 100 Death benefit $1,000,000 $1,000,000 $1,000,000 Long term care benefit $500,000 = $10,417 per month for 48 months for qualified expenses Net Cash Surrender Value $161,648 $511,054 $833,992 Total premiums paid $139,289 $278,579 $386,735 NET CASH SURRENDER VALUE TOTAL PREMIUMS PAID DEATH BENEFIT LTC BENEFIT $1,000,000 $800,000 $600,000 $400,000 $200,000 $161,647 $48,546 $139,289 $69,644 $315,343 $208,933 $511,054 $278,579 $828,388 $722,446 $348,223 $386,735 $0 Policy year At age 100 $1,000,000 Combined key person life insurance with $500,000 LTC coverage for John These hypothetical examples are based on a 1-Year Cap Base Index Interest Crediting Strategy, a 6.5% illustrated rate throughout the life of the policy, a cap of 14%, and a participation rate of 100%, and current non-guaranteed charges as of 02/23/15, using the Guideline Premium Test, and a level death benefit. Examples are for a 45-year-old male with Preferred No Nicotine Use rates. No distributions are shown. It is possible that coverage will expire when either no premiums are paid following the initial premium or subsequent premiums are insufficient to continue coverage. While the insurer may change future cost of insurance charges based on changes to investment earnings, mortality expenses, and taxes, the no-lapse guarantee s minimum monthly premium will not change because of changes to future cost of insurance charges. Contact Genworth s Life Insurance Sales Desk at or gnwlifesales@genworth.com.

5 Key Person Sales Idea Attachment Genworth Underwriting Rules Specific to Business Ownership of Index UL with Accelerated Benefit Rider for Long Term Care Services (LTC rider) Genworth will consider allowing our Index UL (both Asset Builder Index UL II and Foundation Builder Index UL) with the Accelerated Benefit Rider for Long Term Care Services (LTC rider) to be owned by a business entity insuring a key employee if provided with the following documentation: (a) The business and the insured enter into a written agreement providing that the business will pay the LTC claims of the employee during the employee s tenure to the extent of LTC benefits available under the policy rider, and that this obligation will end upon the employee s termination of employment; (b) Acknowledgement Statement signed by employee: There is an ongoing charge for the Accelerated Benefit Rider for Long Term Care Services on this policy. This rider can be removed from the policy by contacting Genworth and requesting it be cancelled. Rider charges will cease upon cancellation. If this policy is owned by a business insuring an employee, the employer s obligation to pay LTC expenses for the employee ends upon termination of employment. If the business retains ownership of the policy after the insured s employment ends, the business will need to contact Genworth to request the rider be cancelled. Until this is done, rider charges will continue even though there is no longer any value to the business in having the rider on the policy. Specimen for Use by Counsel This specimen agreement may be provided to attorneys to illustrate matters ordinarily covered in such documents. The actual preparation of such an agreement is the responsibility of the business and its legal counsel. Only a licensed attorney may prepare legal documents. Genworth does not offer legal or tax advice. This agreement dated is by and between, hereinafter referred to as, Employer, and,, hereinafter referred to as, Employee. For valuable consideration received, the parties acknowledge and agree as follows: Employee is currently employed by Employer Employer is buying an index universal life insurance policy insuring Employee for key person purposes, with Employer as owner and beneficiary of such policy Employer desires to offer long term care benefits to Employee and will obtain such benefits through a long term care rider on the key person life insurance policy Employer agrees to pay all premiums, including rider charges on such life insurance policy Employer further agrees that it will be obligated to pay all qualifying long term care expenses incurred by the Employee during the term of employment, but only to the extent such expenses are covered claims under the life insurance policy s long term care rider Employee acknowledges and accepts that he/she has no legal right or interest in such life insurance policy or rider benefits other than those described above Owner Name, Title Date Owner Signature Insured/Employee Name Date Insured/Employee Signature

6 Important Information Tax-Free Death Benefit: Generally death proceeds paid are income-tax-free to the beneficiary. Death proceeds from certain employer-owned life insurance policies may not be income-tax-free unless the requirements of section 101(j) of the Internal Revenue Code (Code) are met. All or part of death proceeds may be taxable in other circumstances as well. The circumstances include, but are not limited to, the following: (a) the policy or an interest in it has been transferred for a valuable consideration and the transfer is not to a person identified in section 101(a) of the Code, (b) the death proceeds are received under the terms of a qualified pension or profit-sharing plan, (c) the proceeds are received as alimony by a divorced spouse. Important information: Genworth wrote this content to help you understand the ideas discussed and to support our marketing of the product(s) identified in the material. Any examples are hypothetical and are used only to help you understand the ideas. They may not reflect your client(s) particular circumstances. Your clients should carefully read their contract, policy and prospectus(es), when applicable. What we say about legal or tax matters is our understanding of current law; but we are not offering legal or tax advice. Tax laws and IRS administrative positions may change. We did not write this material for use by any taxpayer to avoid any Internal Revenue Service penalty and neither you nor your clients may use it for that purpose. Your clients should ask their independent tax and legal advisors for advice based on their particular circumstances. Refer to the policy for full information about product coverage, features, benefits and limitations. This brochure provides a summary of coverage. Policy terms and provisions will prevail. Although the policy value may be affected by the performance of an index, the policy is not a security and does not directly or indirectly participate in any stock, equity or similar investment including, but not limited to, any dividend payments attributable to any such investment. The index does not include dividends paid on the underlying stocks, and therefore does not reflect the total return of the underlying stocks. S&P 500 Index The S&P 500 Index is a product of S&P Dow Jones Indices LLC ( SPDJI ) and has been licensed for use by Genworth Life and Annuity Insurance Company and Genworth Life Insurance Company hereinafter referred to as Licensee. Standard & Poor s, S&P, and S&P 500 are registered trademarks of Standard & Poor s Financial Services LLC ( S&P ) and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Licensee. Licensee Index Universal Life Product(s) are not sponsored, endorsed, sold or promoted by SPDJI, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index. Foundation Builder Index UL is a flexible-premium, adjustable life insurance policy (commonly known as universal life insurance) with optional index interest crediting. The product, riders, and benefits are subject to the terms and conditions of its policy forms and to state availability and issue limitations. Foundation Builder Index UL is subject to Policy Form No. ICC14GA1009, ICC14GA1010, GA et al., or GA et al. Rider Form Nos. ICC12GA109R, ICC14GA115R, ICC14GA117R, GA109R-1212 et al., GA115R-0414 et al., GA117R-0714 et al., ONE-CIR-100 et al., ONE-WP-TL et al., ONE-ADB et al. (Genworth Life & Annuity) or Policy Form No. ICC14GL1009, ICC14GL1010, GL et al., or GL et al. Rider Form Nos. ICC12GL109R, ICC14GL115R, ICC14GL117R, GL109R-1212 et al., GL115R-0414 et al., GL117R-0414 et al., GE-ONE-CIR-100 et al., GE-ONE-WP-TL et al., GE-ONE-ADB et al. (Genworth Life). Policy, benefits and riders may not be available in all states. Terms and conditions may vary by state. All guarantees are based on the claims-paying ability of the issuing insurance company. Insurance and Are not deposits. Are not insured by the FDIC or any other federal government agency. annuity products: May decrease in value. Are not guaranteed by a bank or its affiliates Genworth Financial, Inc. All rights reserved.