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PREMIER FINANCIAL ALLIANCEFINANCIAL PLANNING PRESENTATION
THREE ENEMIES OF YOUR MONEY “ T I P ”
HOW MONEY WORKS
TYPES OF MONEY
INSURANCE MARKET
THREATS TO YOUR FINANCIAL SECURITY
THE REVOLUTIONARY SOLUTION
THE SECRET OF MONEY
The Road To Financial Freedom
THREE ENEMIES OF YOUR MONEY
TAXES
INCOME TAXES
SALES TAXES
CAPITAL GAINS TAXES
ESTATE TAXES
THREE ENEMIES OF YOUR MONEY
INFLATION
THE SILENT KILLER OF YOUR MONEY
THREE ENEMIES OF YOUR MONEY
PROCASTINATION
HIGH COSTOFWAITING
HOW MONEY WORKS
Age 4%Money Doubles Every 18 Years
29 $10,000
47 $20,000
65 $40,000
* These hypothetical examples are for illustrative purposes only and do not represent any particular investment vehicle.
The Rule of 72 is a mathematical concept that approximates the number of years it would take to double the principal at a constant rate of return.
The performance of investments fluctuates over time, and as a result, the actual time it will take an investment to double in value cannot be predicted with any certainty.
Rule of 72Divide 72 by the interest rate to estimate the number of years it
takes for your money to double.
Age 8%Money Doubles Every 9 Years
29 $10,000
38 $20,000
47 $40,000
56 $80,000
65 $160,000
Age 12%Money Doubles Every 6 Years
29 $10,000
35 $20,000
41 $40,000
47 $80,000
53 $160,000
59 $320,000
65 $640,000
The person with the most “doubles” wins.
TYPES OF MONEY
FREE MONEY
• 401K, LOTTERY
TAX FREE MONEY
• ROTH IRA• LIFE INSURANCE
TAX DEFFERED
MONEY
• 401K• IRA
TAXABLE MONEY
• EVERYTHING ELSE
INSURANCE MARKETTEMPORARY LIFE INSURANCE
(RENTING)PERMANENT LIFE INSURANCE
(BUYING)
• EXPIRES AFTER CERTAIN TIMETERM LIFE
• EXPIRES AFTER CERTAIN TIME
RETURN OF PREMIUM
• RATE OF RETURN 3%-3.5%WHOLE LIFE
• RATE OF RETURN 4%-5%UNIVERSAL
LIFE
• TIED WITH STOCKSVARIABLE UNIVERSAL
LIFE
• RATE OF RETURN 2%-12%
• AVERAGE 7.3%-8.3%
EQUITY INDEX UNIVERSAL
LIFE
THREATS TO YOUR FINANCIAL SECURITY
PREMATURE DEATHHouseholds saying they own enough life insurance to replace their income for only 2.8 years.
ILLNESSEvery 40 seconds someone in the US suffers a stroke. Every minute an American will die from a coronary event1. .
DISABILITYOne in 5 working Americans suffers the effects of a disability for more than six months during his/her working career2.
LONG-TERM CAREThe U.S. Bureau of Census estimates that by 2060 as many as 24 million people will need long term care services.
OUTLIVING YOUR MONEYPeople are living longer and longer, but they are saving less and less. Most Americans retire in poverty. 73.8% of Americans 65 and older retire on a combined income of private pension and Social Security of $10,000 less a year3.
1. American Heart Association, American Stroke Association, Heart Disease and Stroke Statistics, 20082. Commissioners Group disability table and U.S. Bureau of Census3. Social Security Administration, 1996
ACCELERATED BENEFITS RIDERS
• ABR 1- Terminal Illness
• Resulting in death within two years
• (1 year in VT and PA)
• Lump-sum distribution (discounted from death benefit)
• Funds can be used for anything
• No additional cost
• No elimination period
ACCELERATED BENEFITS RIDERS
• ABR 2 - Chronically ill• Unable to perform 2 of 6 ADLs• Activities of Daily Living
• Bathing• Continence• Dressing• Eating• Toileting• Transferring
• Cognitive Impairment• Short-term or long-term memory impairment• Loss of orientation to people, places or time• Deductive or abstract reasoning impairment
Max. benefit calculated as 24% of the net death benefit (actual payment is discounted) in any calendar year• Funds can be used for anything• No additional cost• Policy must be I/F for 2 years
ACCELERATED BENEFITS RIDERS
• ABR 3 - Critical Illness
• Heart Attack
• Stroke
• Cancer
• End stage renal failure
• Major organ transplant
• ALS (Lou Gehrig’s disease)
• Blindness
• Lump-sum distribution (discounted from death benefit) after 30 days
• Funds can be used for anything
• No additional cost
Form series 8165(0703)
Life Event Story
WHAT THE WEALTHY KNOW THAT MANY PEOPLE DON’T
According to the Federal Reserve, the richest 10% Americans own over half of the tax-free investment gains built up in life insurance1.
Families in bottom half of net-worth percentiles own just 6.5% of these tax-free assets! 1. Federal Reserve, 2007
Has Life InsuranceHas Life Insurance
Top 10% own 55.1%
50th to 90th
percentile Own 38.4%
THE EQUITY INDEX CONCEPTWHOSE TIME HAS COME
UPSIDE POTENTIALWhen the stock market is up, an equity indexed product will return to you a portion of the stock market gain.
DOWNSIDE PROTECTIONHowever, during the years when the stock market is down, your equity indexed account will not lose any money.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010$70,000
$90,000
$110,000
$130,000
$150,000
$170,000
$120,909
$136,937
$99,228
$78,869
$95,952
$106,268
$117,033
$127,344
$145,542
$111,033
$100,770
$108,789
$100,000
$115,090
$125,080 $125,080
$125,155$134,091
$140,930
$145,749
$149,160
$156,857 $156,857
$156,867
$160,747
S&P500
09/1998-09/2010.
• The graph is based on actual S&P 500 data and actual credited rates for the period shown on one of our indexed annuity products. These results should not be an indication that Indexed Annuities will outperform the S&P 500. This simply demonstrates the effectiveness of Indexed Annuities in years when the S&P 500 was negative.
.
CASH VALUE
Upside growth potential- Interest credit is tied to the S&P 500 Index- S&P 500 Index – A dynamic index that consists of the 500 largest
companies in the US such as Exxon, Disney World, Walt Mart, Citigroup, Microsoft, McDonalds… etc.
Downside protection- Equity Index concept guarantees you could never lose your cash
value due to a decline in the index
Accessibility - Tax free access after the 1st year via loans