Nationwide Business Solutions Group

Transcription

1 Nationwide Business Solutions Group Making the Business Life Market Effective for you CLM-0724AO 08/13 1

2 Important to Remember Life Insurance is issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Ohio. The general distributor is Nationwide Investment Services Corporation, Member FINRA. In MI only : Nationwide Investment Svcs. Corporation Guarantees are subject to the claims paying ability of Nationwide Life insurance is issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio. The general distributor is Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation Life insurance is issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio. The general distributor for variable life insurance policies is Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation As situations change, so will the business' life insurance needs. Care should be taken to ensure these strategies and products are suitable for the business and the client s long term goals. Weigh the business objectives, time horizon and risk tolerance as well as any associated costs before investing. Also, be aware that market volatility can lead to the possibility of the need for additional premium in the policy. Variable life insurance has fees and charges associated with it, which include costs of insurance, underlying fund expenses and administration fees. Investing involves risk, including possible loss of principal. Federal income tax laws are complex and subject to change. Nationwide and its representatives do not give legal or tax advice, so please contact your attorney or tax advisor for answers to these specific questions. Variable life insurance products are sold by prospectus. For more information about the product and funds available, including all charges and expenses, your client should consult a prospectus. Before investing, the client should carefully consider the investment objectives, risks, charges and expenses. Your clients should read the prospectus carefully before investing. Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution Not insured by any federal government agency May lose value CLM 0702AO (5/13) 2013 Nationwide Financial Services, Inc. All rights reserved. 2

3 Who is NBSG? Nationwide Business Solutions Group (NBSG) has been a leader in the business life insurance market for over 15 years Provide services to 650+ businesses 1 many in the Fortune 1000 Over $11 billion in assets under management 1 Industry leader in customer service Products and solutions created for the business insurance market Exclusive resource to Nationwide 1 Nationwide s Policy Administrative Reporting System as of 04/15/2013 3

4 Who is NBSG? A group of over 40 people dedicated and focused on supporting you and your clients needs The NBSG team includes dedicated: Internal Sales External Sales Sales Support New Business Services Underwriting Policy Services Business Technology Support Business/Product Development Actuarial Customer Retention Investment Consultant Products designed specifically for the business market 4

5 NBSG is a Market Leader 1 Second year in a row for #1 market share 2011 market share 25.9% - $337.4 Million in sales 2012 market share 30.7% - $381.1 Million in sales Fixed Account Sales - #2 Position Register VUL Sales - #3 Position Private Placement VUL Sales - #1 Position 1 Market Assessment Source: IBIS Associates, Inc. March

6 Products & Solutions 6

7 Possible Underwriting Options 1. Guaranteed Issue offered in many cases, but not all. Availability is dependent on case design, size of the insured group and amount of premium. 2. Modified Guaranteed Issue an option for certain cases that qualify for GI consideration but are outside the GI guidelines. 3. Simplified Issue an option for cases that don t meet criteria for either GI or MGI underwriting. We review plan participants individually based on limited underwriting requirement and approve and are approved on a standard or rated basis, or in some cases we pivot to Regular Issue or deny coverage. 4. Full Underwriting Regular Issue is available for business cases that don t meet the criteria for our other underwriting options. In some instances we will be able to offer Preferred and Preferred Plus rates 7

8 Case Qualifications We ve designed our products specifically for business clients. To help you know whether or not your case is a good fit, we need to review the: Intended uses for business life products Non-intended uses for business life products 8

9 Case Qualifications 9

10 Case Qualifications 10

11 Case Study #1 The Need A commercial construction company had a large term policy on its owner and founder. It covered two important needs key person protection and buy/sell funding. The death benefit would help compensate the company for the loss of the owner in the event of his untimely death, and it would also help the company buy back his stock according to the buy/sell agreement. The term policy had a $10,000,000 death benefit The annual premium on the term policy was $30,375 The premium is a net expense to the company This example is based upon a real case, different scenarios may have different outcomes. 11

12 Case Study #1 The Solution Because large commercial construction businesses have substantial bonding requirements, the company had to keep a lot of liquid assets on its balance sheet. By replacing the term policy with a $10,000,000 Nationwide Future Executive UL (FEUL) policy, the company would be able to reposition those liquid assets into it and implement a solution that could provide all of this: Key person protection to help compensate for the loss of the owner Buy/sell agreement funding to help buy back the company stock at his death An improved financial position; the company may book the cash surrender value of the new policy as an asset (i.e., other assets cash surrender value life insurance), which results in a net gain A better rate of return; instead of the.25% to.50% it had been earning on the liquid assets where they were, the company could now earn a 1.86% rate of return on the cash surrender value in the life insurance policy, net of all fees in Year 1 Please reference Sample Illustration #1 12

13 Case Study #2 The Need Four owners of an engineering and manufacturing company needed to invest more for their retirement. Although their 401k plan had great participation and allowed them to max out their contributions, it still wasn t enough. The owners thought about additional profit sharing and qualified defined benefit/cash balance plans, but didn t pursue them. They would cost a lot more money and couldn t provide the desired results. Nondiscrimination rules still apply Matching contributions were still required This example is based upon a real case, different scenarios may have different outcomes. 13

14 Case Study #2 The Solution To help get beyond the constraints of qualified plans, their financial advisor showed them several after tax strategies that all offered these advantages: No contribution limits The opportunity for tax advantaged growth Access to cash for supplemental retirement income without taxation They chose the IBRP, which may sound somewhat typical, but the advisor and clients chose it for a not so typical reason. The Nationwide Future Executive VUL (FEVUL) policy is designed to work efficiently within corporate sponsored, individually owned arrangements like these. Because of that, each of the four owners could individually own a policy and take advantage of: Institutional pricing based on Nationwide s 15 years of experience in business life insurance that offers the opportunity to accumulate cash value more quickly A cash value enhancement to help offset the effect of early policy charges No surrender charge to provide flexibility and liquidity if they need access to their money Please reference Sample Illustration #2 14

15 Case Study #3 The Need The owners of an independent investment firm needed a way to ensure enough cash flow for a buyback program for individuals that left the company with equity ownership. Additionally, they had a clear need for cash if one of those equity owners were to die. Term insurance was considered, but it didn t provide the assets needed to cover the equity buyback program The company wanted to make the process as easy and as quick as possible The company had a specific obligation to its top 20 equity holders to ensure funds for the buyback This example is based upon a real case, different scenarios may have different outcomes. 15

16 Case Study #3 The Solution The investment firm decided to establish a buy/sell between the corporation and the top 20 equity holders of the company. The company determined to use corporate cash, the insurance cash surrender value and the insurance death benefits to offset the need of the liability The insurance design is an equal death benefit that is aggregately funded at the minimum non MEC levels that will be paid for seven years The corporate cash pool and cash surrender value from Nationwide s Future Executive UL product will be used to buyback equity holders as they leave the company The death benefit proceeds will be used as a cost recovery mechanism to meet their buy/sell obligations Additionally, because they had 20 participants and the life insurance design met the underwriting parameters, they were able to get the policies with guaranteed issue underwriting Please reference Sample Illustration #3 16

17 Case Study #4 The Need A law firm had a need to protect their investment in their partners in the form of a Key Person plan. They were seeking a way to help offset the loss of business and the funds to assist in recruiting replacement talent for their partners in the event of an untimely death. They wanted 4x s salary coverage Term insurance coverage would have provided the funds, but with an unknown duration, it was inefficient Additionally, with busy partners they wanted to have the insurance plan implemented with little to no hassle Majority of partners wanted the upside a VUL offers, but the business need required some certainty for planning purposes This example is based upon a real case, different scenarios may have different outcomes. 17

18 Case Study #4 The Solution The firm reviewed several product options and decided to move forward with Nationwide s Yourlife Executive Indexed UL. The product provided the death benefits they needed, while still providing them with more earning upside than a UL with minimal downside Since this product is designed for business use, the partners like that guaranteed issue and simplified issue underwriting may be available for their case Please reference Sample Illustration #4 18

19 Future Executive UL A more predictable future for your business customers Target market Small- to medium-sized businesses looking for corporate-owned life insurance (COLI) or corporate sponsored, individually owned (CSIO) fixed life insurance solutions Product Focus Has a unique dialable feature allowing the product to be structured with a death benefit or accumulation focus, or anywhere in between Interest Rate (as of 04/01/2013) Accumulation component: 4.2% Death Benefit Component: 3.7% GMIR: 2.0% Selling Solutions Executive Bonus, REBA, Split Dollar, Key Person, Buy-Sell 19

20 Future Executive VUL A variable solution for the CSIO market Target market Small- to medium-sized businesses that are interested in corporate sponsored, individually owned (CSIO) variable life insurance solutions Investment Choices Our comprehensive investment lineup more than 100 funds is designed by people who understand the specific needs of the business insurance market. It s uniquely focused on meeting the investment needs of businesses and key employees. Selling Solutions Executive Bonus, REBA, Split Dollar 20

21 NBSG Territory Map 21

22 Nationwide Business Solutions Group QUESTIONS? 22