Total Living Coverage Same Initial Dollars Same Events Better Financial Outcome 162805CRUMP 3/24/15 Underwritten by Genworth Life Insurance Company, Richmond, VA 0 For 2015 Genworth Financial, Inc. All rights reserved.
Agenda in Certificates of Deposit (CDs) in Money Market Accounts (MMAs) Clients Trust in a Safe Investment The TLC Advantage 1
Total Living Coverage in Certificates of Deposit (CDs) 2
in CDs Slow Growth Accounts Can Leave Your Clients Unprepared for the Future CDs are FDIC insured only up to $25,000* Considered risk free* Because virtually no risk - interest rate is among the lowest of any financial product* Pay a penalty to withdraw your money early CD is most likely earmarked as emergency fund for future health care events Investopedia - http://www.investopedia.com/video/play/certificate-deposit-cd/ - 02/18/2015 3
in CDs Leverage potential on emergency asset $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 Year 1 Year 2 Year 3 Year 4 Year 5 $0 TLC CD* Assuming a $100,000 CD investment over 5 years at a 2% growth rate each year. 4
Total Living Coverage in Money Market Accounts (MMAs) 5
in MMAs Self Insuring Can Be Risky Money Market Accounts are very liquid and considered extraordinarily safe* Because they are extremely conservative, money markets offer significantly lower returns* Money market accounts most likely earmarked as emergency funds for future health care events Investopedia - http://www.investopedia.com/university/moneymarket/moneymarket1.asp - 02/18/2015 6
in MMAs Money Market Funds to Pay for LTC are Depleted After 14 Months and Do Not Offer the Leverage of Death Benefits 7
Total Living Coverage Three benefits in one policy 8
Clients Trust in a Safe Investment??? Typical TLC Clients Understand the need for long term care but hesitant to commit to paying for benefits they may never use Interested in leaving assets to heirs Concerned about self insuring the risk of a long term care event Want reassurance that they can change their mind and get their money back 9
Clients Trust in a Safe Investment? A Capital Transfer Could Lead from Low Performance to Strong Protection TLC has ROP feature TLC is a reposition of assets in CDs and MMAS (not an expense) TLC provides immediate LTC and death benefits TLC provides minimum death benefit if all the LTC pool is exhausted TLC provides a certainty of benefits being paid Gain Instant Leverage with a Linked Benefits Solution 10
A Smarter Way To Self-Insure An Asset-Allocation Approach TLC Portfolio Typical Portfolio LTC Benefits with TLC & Return of Premium Rider (ROP) Cash Reserves Life Insurance Bonds Mutual Funds Stocks Annuities IRAs Real Estate (Home) 11
Compare and Contrast Get Your Clients Up and Moving! Account consideration Attributes Interest features Money Market Account You already have money saved and want to keep it liquid. Traditionally higher interest rates than a savings account. Long Term Care Event Would deplete a $100,000 account if LTC event lasted longer than 14 months. No leverage available. Bank CD account Save your money and don t access it for a specified period of time. Interest rates are often higher for longer-term CDs. A penalty may apply for withdrawal of funds before CD matures. Would deplete a $100,000 account if LTC event lasted longer than 14 months. No leverage available. Access to Money Immediate access Penalty will apply for early withdrawal of funds. Total Living Coverage Gain both a substantial fund for long term care and a guaranteed death benefit. Instant leverage of almost 5.5x your initial premium. Money is immediately available for home care. There is a 90-day facility elimination period which is reduced by the number of days home care benefits are paid or by days Medicare pays for covered expenses. With the optional Return of Premium Rider you can get back at least the initial premium, less any outstanding loan balance, withdrawals or long term care benefits already received. Death Benefit None if money all used for long term care. None if money all used for long term care. Guaranteed 12
The TLC Advantage Typical Value Example $647,193 $215,731 $100,000 Initial Premium Initial Death Benefit Total LTC Benefits Lifetime Guaranteed Optional Return of Premium Rider (ROP) Residual Death Benefit (RDB) Pool of Benefits Can Grow with Inflation Protection These values are based on the average TLC client. Your clients specific values may be higher or lower based on issue age, gender, riders chosen and risk class. 13
Important Information Total Living Coverage is underwritten by Genworth Life Insurance Company, Richmond, VA. In all states excluding CA, CT, FL, HI and NY, Total Living Coverage universal life insurance with long term care benefits is subject to state availability and the terms, issue limitations and conditions of Policy Form No. ICC12-GL5000 and Rider Form Nos. ICC12-GL500R, ICC12-GL501R, ICC12-GL502R, and ICC12-GL503R or Policy Form No. GL5000 0212 et al. and Rider Form Nos. GL500R 0212 et al., GL501R 0212 et al., GL502R 0212 et al., and GL503R 0212 et al. Lincoln MoneyGuard II is issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, on Policy Form LN880/ICC13LN880 with Long Term Care Acceleration of Benefits Rider (LABR) on Rider Form ICC13LR881, Long Term Care Extension of Benefits Rider (LEBR) on Rider Form ICC13LR882, and Return of Premium Rider on Rider Form ICC13LN880. MoneyGuard is a registered service mark of The Lincoln National Life Insurance Company. Refer to the policy for definitions and more details regarding coverage and its features. This webinar provides a summary of coverage. Policy terms and provisions will prevail. All guarantees are based on the claims-paying ability of the issuing insurance company. 14
Important Information Covered long term care expenses may be paid for a longer or shorter period than the ABR and EBR periods. Expenses may be paid for a longer period if the actual expenses paid are less than the Maximum Monthly LTC Benefit. Expenses may be paid for a shorter period because some services supportive equipment, caregiver training and bed reservation do not count toward the Maximum Monthly LTC 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. The death benefit is generally received income tax-free by the beneficiary under subsection 101(a) of the Internal Revenue Code 2014 Genworth Financial, Inc. All rights reserved. 15
Important Information This policy is a Modified Endowment Contract (MEC) unless it is issued in exchange for a life insurance contract entered into before June 21, 1988. Partial withdrawals and policy loans taken from a MEC are taxable under federal income tax law to the extent that there is any gain in the policy. An additional penalty tax of 10% of the taxable amount may be due if the owner is under age 59½. LTC benefit payments made under the terms of a contract federally tax-qualified under section 7702B(b) are not subject to federal income tax. These benefit payments must be reported to the IRS on Form 1099-LTC. Monthly charges for the LTC coverage are considered to be withdrawals and reportable on Form 1099 to the extent that there is any gain in the contract in excess of the owner s income-tax basis. If this policy is exchanged for a contract entered into before June 21, 1988, partial withdrawals are taxable to the extent that there is any gain in the policy above the owner s income-tax basis (usually premiums paid). Policy loans are taxable upon lapse or surrender of the policy to the extent that there is any gain in the policy. The additional tax that could be payable with respect to MEC s does not apply. The company has provided this information to help producers understand the ideas discussed. Any examples are hypothetical and are used only to help producers understand the concepts of the policy. What the company says about legal or tax matters is its understanding of current law, but the company is not offering legal or tax advice. Tax laws and IRS administrative positions may change. This material is not intended to be used by any taxpayer to avoid any IRS penalty. Your clients should consult independent tax and legal professionals for advice based on their particular circumstances. 16