For Financial Producer use only. Not to be reproduced or shown to clients.
T H E N E W P RO D U C T F RO N T IE R
No-Load
Indexed UL
Long-Term Care – UNIVERSITY | MARCH 9-11 / 2
Sam Rocke
SVP, PROTECTION
TODAY’S CO-PRESENTER
Sam Rocke is driven to provide the best possible results
for individuals, families, and businesses as they acquire
insurance coverage. As leader of the life insurance sales
support teams at Ash Brokerage, his teams help advisors
navigate product recommendations, objectively evaluate
existing coverage, and craft planning recommendations
for their clients.
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 2
Thomas Losher
Life Insurance Specialist,
Ash Brokerage
TODAY’S CO-PRESENTER
Thomas is a recent Indiana University graduate from The
Kelley School of Business. He is an Advanced Markets Analyst
on the Advanced Markets team.
Thomas is focused on providing retirement efficiency
strategies to the advisors he works with.
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 3
4
I. Indexed Universal Life Insurance
II. Why Use Indexed UL?
III. Introduction of a New IUL
TODAY’S AGENDA
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 4
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 5
Life Insurance as a Tax Diversification Tool
Taxable
Cash and Equivalents
Stocks/Bonds
Non-Qualified Mutual Funds / ETFs
Tax-Deferred
IRA/401k (IRS Limits)
Tax-Free
Roth IRA/401k (IRS Limits)
Life Insurance
I. Indexed Universal Life Insurance
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 6
Indexed Universal
Life Insurance
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 7
Defining IUL
Fixed Indexed Universal Life
• No investment directly in index
• Carrier invests general account interest to acquire options
• Highly dependent on general account yield
Credits have a Floor and Cap
• Floor is typically 0%-1%
• Cap is set by the carrier, typically 9-12%
Less Overall Volatility than VUL, more than Whole Life
Indexed Universal
Life Insurance
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 8
IUL Mechanics
0%-12%
Credited Interest
0%
Credited Interest
$100,000 in Index
5% interest from
general account
S&P Options
$5,000 Invested
Options Expire
Worthless
Options are
“In the Money”
Positive MarketNegative Market
Indexed Universal
Life Insurance
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 9
Example of How IUL Credits Interest
-50.00%
-40.00%
-30.00%
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
S&P 500 Point to Point
II. Why Use Indexed UL?
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 10
Why Indexed UL?
Advantages of Indexed UL
Flexible Product Chassis – Universal Life Offers:
• Easy withdrawal to cost basis
• Death benefit reductions to manage net amount at risk
• Overloan Protection Riders
Upside Market Exposure:
• Market gains up to cap
• Uncapped strategies available
Downside Protection:
• 0% floor means no “recovery” of market losses
• Beware of asset charges
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 11
Why Indexed UL?
Why Indexing?
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 12
If you invested $100,000 on Jan 1, 2000 …
“Hedged” 12% Cap
Low: $100,000
High: $351,118
EOY 2019: $351,118
Actual Plus Dividend
Low: $62,392
High: $324,133
EOY 2019: $324,133
-40.00%
-30.00%
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
"Hedged"
Actual Plus Dividend
Why Indexed UL?
Growth of $100,000 – Year-by-Year
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 13
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
"Hedged"
Actual Plus Dividend
2009
-$72,401
2018
-$66,991
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 14
But …
Why Indexed UL?
Common Concerns of Indexed UL
Lack of Transparency
High Fees
Confusing
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 15
III. Introducing a New IUL
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 16
Introducing a
New IUL
The New Indexed UL Product
No Premium Loads or Commissions
No “Per Thousand” Charge
No M&E
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 17
Introducing a
New IUL
It’s This Simple
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 18
Client Premium
Cost of
Insurance & $60
Policy Fee
-
No Premium Loads
No Commissions
Index Credits
+
No Bonuses
No Multipliers, etc.
Account Value
=
Introducing a
New IUL
How Does it Look?
• Male, age 45
• $50,000 Annual Savings
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 19
• ~$1.5M in Net Death Benefit
• 6% Index Return
5.5% NET
IRR
Introducing a
New IUL
Expenses are Key
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 20
Introducing a
New IUL
But, How to Derive Revenue
Fees charged based on the assets in the policy
No commissions or fees come FROM the policy
Data feeds to be sent by Ash Brokerage
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 21
Introducing a
New IUL
Applications
High Income, High Saver
Underperforming Policy Review
Asset Protection
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 22
Case Study – Underperforming Whole Life
No-Load Indexed UL, The New Product Frontier | LIFE INSURANCE / 23
(800) 589-3000
www.ashbrokerage.comFor Financial Producer use only. Not to be reproduced or shown to clients.
Questions
(800) 589-3000
www.ashbrokerage.comFor Financial Producer use only. Not to be reproduced or shown to clients.
Thank you for attending
TH E N E W P RODUCT F RONTIE R
No-Load
Indexed UL
