Discover Living Benefits

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• Discover Living Benefits
• Within a Life Policy

Finally, a concept that recognizes the
importance of paying a benefit when the insured
needs it most.
For Agent Use Only Not For Use With The Public
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LifeVentures Producers Group

• 25 MGAs/wholesalers in New York
• Currently the sole marketer of this concept to
  independent distributors
• Strong compensation
• Trademarked nameLife for the LivingTM
• More supported products and concepts to follow
• LifeVentures website www.LifeVenturesCorp.com
• Veris Settlement Partners

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Market Overview

• US population is under-insured
• Decline in agent population means fewer are
  afforded the opportunity to purchase individual
  life insurance
• Excessive reliance on group term
• Many people tend to value living benefits over
  death benefits only
• Need for living benefits
• Population aging
• Concern of out-living assets
• Choices and greater flexibility
• Financial independence later in life and not
  becoming a burden on children or other relatives
• Protection of retirement income and assets from
  potentially devastating LTC costs
• A ready source of funds

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Source Population Division, US Census Bureau
(August 14, 2008)
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Market Overview

• Financing long-term care is a looming national
  crisis
• Need for long-term care will explode as
  population ages
• Public programs are inadequate
• LTC insurance is available but cost can be
  unaffordable
• Use it or lose it

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Market Overview

• 40 of all Americans who reach age 65 may need
  long-term care at some point in their remaining
  lives1
• By 2020, about 157 million Americans will be
  afflicted by a chronic illness2
• Chances of needing homeowners insurance for
  serious damage 1 in 1,2003
• Chances of needing some form of long-term care 1
  in 24
• Accidents, strokes and other illnesses cause
  adults age 18 to 64 to make up 40 of people
  needing long-term care5
• A private room in a nursing home now averages
  more than 74,000 a year6
• Health insurance plans dont cover certain costs
  associated with long-term illnesses
• Medicaid only pays when an individual has spent
  down or liquidated a substantial amount of their
  assets
• How does your client plan on paying for uninsured
  medical costs?

1. National Clearinghouse for Long-Term Care
   Information, U.S. Dept. of Health and Human
   Services (2007)
2. U.S. Department of Health and Human Services,
   2003
3. Table A-1 and Federal Reserve Flow of Accounts,
   Table B-100
4. According to Centers for Medicare and Medicaid
   Services (CMS) at http//cms.hhs.gov
5. U.S. Department of Health and Human Services,
   National Clearinghouse for Long Term Care
   Information (January 8, 2007)
6. The MetLife Market Survey of Nursing Home and
   Health Care Costs (Sept. 2006)

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The Concept

• What if there was an innovative way to have
  meaningful living benefits within a competitive
  Universal Life insurance policy, which provides

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The Concept

• Combination of life insurance and accelerated
  benefits for chronic illness in one product
• Policy to cover the total lifetime of insureds
• Protects against early death
• Provides a tax-free annual benefit on chronic
  illness certification on a cash basis
• Ability to use annual benefit for any need
• Ability for paid-up policy on amounts not
  accelerated
• Retains pro-rata share of existing CSV
• Me policy for the insured
• Use it or use it.

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Policy Benefits

• Two Competitive Products
• Current Assumption UL-Assured Plus Protector
• Indexed UL-Ultra Select
• Underwritten by National Life Insurance Company
• Death Benefit flexibility
• Access to cash value through policy loans and
  withdrawals
• Premium flexibility
• Accelerated Benefit Rider for Chronic Illness
  available on all policies up to 2 million.
  Additional policy issued above 2 million.

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Policy Benefits

• At Chronic Illness Trigger
• Annual benefit available up to annual IRS limits
  (102,200 annually/280 day in 2009, 290/day in
  2010, 300 day in 2011, indexed annually)
• Cash benefitNo restrictions as to the use
• Income-tax free living benefits
• No additional cost for the rider
• Ability for paid-up policy on Death Benefit not
  accelerated
• No waiting period, no 90-day elimination period

Payment of Accelerated Benefits will reduce the
cash value and death benefit otherwise payable
under the policy. Receipt of Accelerated Benefits
may be taxable and may affect eligibility for
public assistance programs such as medical
assistance (Medicaid), Aid to Families with
Dependent Children, and Supplemental Security
Income. Prior to applying for accelerated
benefits, policy owners should seek assistance
from a qualified tax and consult with the
appropriate social services agencies concerning
how receipt will affect the eligibility of the
recipient and/or the recipients spouse or
dependents. This product is life insurance
policy with a rider that accelerates the death
benefit on account of chronic illness and is not
a healthinsurance policy providing long term
care insurance subject to the minimum
requirements of New York Law, does not qualify
for the New York State Long-Term Care
Partnership Program, and Is not a Medicare
supplement policy.
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Accelerated Benefit

• Options
• No restrictions on the use of benefits received
• Can be used for any expense including
• Uncovered medical expenses or deductibles
• Cover expenses for home health or friends to
  assist with your care
• Replace income or help with everyday expenses
• Home modifications
• Cover expenses for medical procedures or drug
  therapies
• Travel or entertainment
• Savings, replenish retirement assets or reduce
  debt
• Make gifts to loved ones

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Policy Specs

• Issue ages 0-85, five underwriting classes
• Two Preferred NS classes
• Table III to Standard Program
• Two smoker classes (Preferred and Standard)
• Minimum face amount 250,000
• Maximum face amount with rider 2,000,000
• Additional policy issued on policies greater than
  2 million
• Available on all table ratings
• Mortality vs. Morbidity underwriting
• Currently New York only for new issued policies
• Other riders (Accelerated Benefits for Terminal
  Illness, Over Loan Protection)

Riders are optional and may require additional
premium.
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National Life Products

• Assured Plus Protector
• Current Assumption UL
• Very competitive premiums
• Builds strong CSVs
• Extends Death Benefit to age 120
• Minimum Annual Interest Rate 3.0
• Living Benefits
• Ultra Select
• Indexed UL
• Indexed strategies
• Fixed Term Strategy
• Four Point-to-Point Strategies
• Minimum Annual Interest Rate 2.5
• Section 79/Qualified Plans
• Enhanced Policy Protector
• Living Benefits

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National Life

• National Life Insurance Company
• Owned under a mutual holding company
• 160-year-old company
• Innovative products
• Strong sales results
• Has never increased COIs on in-force policies
• Ratings
• A (Excellent) AM Best. Third highest out of 15
  rankings
• A (Strong) Standard Poors. Fifth highest out
  of 17 rankings
• A2 (Good) Moodys. Sixth highest out of 21
  rankings

Ratings are subject to change.
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Product Positioning

• Two competitive UL products. These products
  should be the foundation of any individuals life
  insurance planning
• Premium Options-Minimally Funded, Endow, Limited
  Pay, 1035x
• No additional cost Accelerated Benefits Rider for
  Chronic Illness-Available up to 2 million of
  Death Benefit
• Flexibility of rider
• Determine the annual benefit (0 to annual IRS
  limits)
• Paid-up policy
• At initial trigger (yes/no)
• In any year thereafter if still cannot perform 2
  of the 6 ADLs
• CSV reduced by annual reduction of Death
  Benefit
• Can use CSV to fund future premiums
• Can take tax-free withdrawal up to basis
• Cash benefit
• Can be written in a Trust (Estate Tax Planning)

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Universal Life Insurance With Living Benefits
Policy values can also be accessed through
policy loans and withdrawals. Policy loans and
withdrawals or the receipt of accelerated
benefits will reduce the policys cash value and
death benefit and may result in a taxable event.
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Generic Illustration 1
This illustration of benefits is hypothetical
and will not reflect your clients issue age,
underwriting class, or face amount. Benefits and
values are not guaranteed. Actual results may be
more or less than illustrated.
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Generic Illustration 2
This illustration of benefits is hypothetical
and will not reflect your clients issue age,
underwriting class, or face amount. Benefits and
values are not guaranteed. Actual results may be
more or less than illustrated.
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Duration of Benefit
Life Expectancy (at time of first benefit payment) Assumed number of total payments Remaining Death Benefit after total payments
3 years 4 1,524,056
4 years 5 1,374,775
5 years 6 1,212,643
6 years 7 1,037,097
7 years 8 847,661
8 years 9 643,624
9 years 10 424,383
10 years 11 189,303
Male attained age 75 nontobacco insured 2,000,000 DB 100,000 annual benefit. Policy not paid up, although it is assumed the policy has a substantial surrender value. Male attained age 75 nontobacco insured 2,000,000 DB 100,000 annual benefit. Policy not paid up, although it is assumed the policy has a substantial surrender value. Male attained age 75 nontobacco insured 2,000,000 DB 100,000 annual benefit. Policy not paid up, although it is assumed the policy has a substantial surrender value.
This illustration of benefits is hypothetical
and will not reflect your clients issue age,
underwriting class, or face amount. Benefits and
values are not guaranteed. Actual results may be
more or less than illustrated.
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National LifesUnderwriting Programs

• Table III to Standard
• Rider on all policies regardless of the rating
  class up to 2 million
• Mortality vs. Morbidity underwriting
• TERMout
• Preferred or Standard Term policy
• 0-5 years from issue up to 1.5 million
• 6-7 years from issue up to 1.0 million
• Converted to National Lifes universal life
  products
• Extensive list of companies on approval list
• Two options
• No underwriting-Wait two years for Chronic
  Illness Accelerated Rider
• Full application, minimal underwriting-Rider on
  at issue
• Regulation 60 required
• Maximum issue age 65
• JUMPin
• Preferred or Standard UL policy within last 3
  years
• Or 5 years if had physical exam in last 24 months
• Replacement of current contract not required
• Minimal underwriting, extensive list of companies
  on approved list

These are not guaranteed issue programs.
Additional medical requirements may be needed.
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Potential Sales Opportunities

• Foundation of any individuals life insurance
  planning
• Permanent life insurance need
• Current assumption UL/Indexed UL products
• Provide Living Benefits option
• TERMout and JUMPin programs
• Strong CSVs
• Consumer Profile
• Insurance capacity and healthy
• Have not planned for LTC
• No need to self-insure for unreimbursed medical
  costs
• Wealth transfer/charitable giving at death
• Use It or Use It
• Other
• Suitable buy/sell product
• Qualified Plans/Section 79
• Profit sharing plans
• ILIT-Estate tax planning

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• Discover Living Benefits
• Within a Life Policy