MoneyGuard Reserve

1
MoneyGuard Reserve

• Wherever tomorrow takes them

The Mechanics of MoneyGuard Reserve John P.
Maselli Regional
Marketing Director Lincoln Financial Distributors
2
Selling MoneyGuard Reserve Faster and Easier
than Ever

• Simplify the Product
• Simplify the Story
• Simplify the Process!

3
What is MoneyGuard Reserve

• Asset Based Long Term Care Solution
• Single Premium Funded LTC Policy
• Lifetime Return of Premium
• Universal Life Insurance
• Tax-Free Level Death Benefit
• Tax Qualified Long Term Care Benefits
• Created by Two Riders
• Convalescent Care Benefit Rider
• Extension of Benefit Rider

4
Who needs MoneyGuard Reserve?

• Who buys MoneyGuard Reserve?
• Clients that are self-insuring for long term care
• Adequate invested assets (excludes primary
  residence and qualified plan assets)
• Net Worth 1,000,000 to 10,000,000
• Cash 100,000 - 500,000
• Target ages 5580 (maximum age 80)
• Couples, Boomers, Widows, Single Women

4
5
Identify source of funds

• Which assets are available topay for long-term
  care?
• CDs, Money Market, Annuities, Cash Value
• Life Insurance 1035 Exchange

5
6
MoneyGuard Reserve

• A solid alternative
• Based upon a 65-year-old nonsmoking female in
  good health, includes the optional Return of
  Premium Rider, 2-year Convalescent Care Benefits
  Rider, and 4-year Extension of Benefits Rider
• Hypothetical example only. Actual benefit
  amounts wouldbe different, depending upon your
  age, gender, and/or health status.

Unisex rates apply in Montana.
6
7
Profile Nancy Arneau

• Asset repositioning

100,000Moved (premium)
Hypothetical example only. Actual benefit amounts
would be different, depending upon clients age,
gender, and/or health status. Unisex rates
apply in Montana.
7
8
A win-win solution
499,218Total income tax-free long-term care
benefit
100,000 single premium payment, including the
Return of Premium Rider and the 4-year Extension
of Benefits Rider into MoneyGuard Reserve gives
Nancy
AcceleratedSpecifiedAmount
332,812 Extended long-term care benefits
166,406Income tax-free long-term care benefit
Max LTC 6,934/month
Hypothetical example only. Actual benefit amounts
would be different, depending upon clients age,
gender, and/or health status. Income tax-free
under IRC 104(a)(3) Unisex rates apply in
Montana.
8
9
CD / Savings Alternative

• MoneyGuard Premium 100,000
• Total LTC Benefit at age 80 is 499,221. Benefit
  is in place today
• Projected LTC need at age 80 for 6 years is
  420,000.
• Projected remaining value of 79,221 net of LTC
  costs,

• CD/Saving Value 100,000 earning 3 rate of
  return.
• Projected CD value at age 80, 140,765.
• Age 80 projected LTC need for 6 years is
  420,000.
• 279,235 of additional funds needed to cover
  projected costs for LTC!

10
Scenario 1 Single Female

• Nancy, 65 year old non-smoker, total net worth of
  1,000,000
• She has set aside 300,000 for LTC
• Reposition 100,000 into MoneyGuard Reserve in a
  single premium to create a 6 year benefit plan.
• Her is Nancys new Long-Term Care plan.
• Total LTC Benefit of 499,218, up to 83,203 a
  year, 6,934 a month, for 6 years.
• If Nancy never needs LTC care, her beneficiaries
  will receive a 166,406 income tax free death
  benefit. If Nancy uses some of her death benefit
  for LTC, the remaining portion will pass income
  tax-free to her family.
• What if Nancy changes her mind about MoneyGuard?
  She can get 100 of her premium back. No
  questions asked.

11
Scenario 2 1035 Exchange

• Jeffrey, age 70, non-smoker in good health.
  Financially secure with a comfortable retirement
  portfolio and income stream. Has an investment
  portfolio with limited cash reserves. Jeffrey
  does have an existing life insurance policy with
  a cash value of 113,438. He no longer needs
  this policy, has new policy in his ILIT. He does
  have a concern to protect his portfolio,
  lifestyle, and income for his younger wife Anne,
  who is 60.
• Here is Jeffreys MoneyGuard Reserve Plan.
• Total LTC benefit of 404,064, 67,344 a year,
  5,612 per month.
• If he does not need the LTC benefits and passes
  away, his wife Anne will receive and tax free
  death benefit of 134,688. If Jeffrey uses part
  of the death benefit for LTC. Any used portion
  will pass income tax-free to his family.

12
Scenario 3 Gloria and Steve

• Gloria, a 62 year old grandmother and Steve a 65
  year old grandfather who has a 7 million dollar
  portfolio.
• They plan to self insure for long-term care and
  would like to stay in their home for as long as
  possible. They have 500,000 of their portfolio
  designated to cover the initial costs.
• If each repositions 200,000 single premium into
  MoneyGuard Reserve. They will have a plan will
  that will give them greater benefit for LTC.
• Here is their new long-term care plan.
• Gloria will have a total long-term care benefit
  of 1,085,172, with a monthly benefit of 15,072.
  Steve will have a total long-term care benefit
  of 858,486 with a monthly benefit of 11,924.
• If Steve dies without using his benefit, Gloria
  will receive an income tax-free death benefit of
  286,162 and Steve would receive and income
  tax-free benefit of 361,725 if Gloria passes
  away never using her long term care benefit.

13
Long-term care triggers

• 90-day lifetime deductible period
• Difficulties with 2 of 6 activities of daily
  living (ADLs)
• Bathing
• Continence
• Dressing
• Eating
• Toileting
• Transferring
• Cognitive impairment
• Need for care can be certified by personal
  physician

13
14
MoneyGuard Benefits

• Home Health Care
• Nursing Home Care
• Assisted Living
• Adult Daycare
• Hospice and Respite Care Benefits
• Annual Care Coordinator Benefit
• 30 Day Bed Reservation

15
New Underwriting Process

• No APS or Exam Required
• 2 Week Underwriting Process
• 4 Steps
• 1) 8 Question Pre Qualifying Tool
• 2) 1 Page Application, MoneyGuard Ticket
• 3) 45 Minute Personnel Health Interview
• Part A Medical and part B non-medical
• 4) Underwriting Decision and Policy Delivery

16
MoneyGuard Reserve

• MoneyGuard Reserve is a universal life insurance
  policy with a rider that accelerates the
  specified amount of death benefit to pay for
  covered long-term care expenses. An Extension of
  Benefits Rider (EOBR) is available to continue
  long-term care benefit payments after the entire
  death benefit has been paid. The Return of
  Premium Rider (ROPR) is included at issue (single
  premium only). The cost for these riders will be
  deducted from the policy account value.
  Guarantees are backed by the claims-paying
  ability of the issuer and are subject to policy
  terms and conditions. This policy has exclusions
  and/or limitations. Two-year suicide and
  contestability provisions apply (one-year in some
  states). Long-term care reimbursements are
  income-tax-free under IRC Section 104(a)(3).
  Beneficiaries receive income-tax-free death
  benefits under IRC Section 101(a)(1).
• This material was prepared to support the
  promotion and marketing of a universal life
  insurance product. The Lincoln Financial Group
  affiliates, its distributors, or their respective
  employees, representatives, and/or insurance
  agents do not provide tax, accounting, or legal
  advice. Any tax statements contained herein were
  not intended or written to be used, and cannot be
  used for the purpose of avoiding U.S. federal,
  state, or local tax penalties. Consult your own
  independent advisor as to any tax, accounting, or
  legal statements made herein.
• MoneyGuard? Reserve is issued on Policy Form
  LN850 (8/05), Return of Premium Rider on Form
  LR850 (8/05), Convalescent Care Benefits Rider on
  Form LR851 (8/05), and Extension of Benefits
  Rider (EOBR) on Form LR852 (8/05), and state
  variations by The Lincoln National Life Insurance
  Company, Fort Wayne, IN. Products and features
  are subject to state availability. Not for use in
  MA and NY.

16