Foreign Nationals Planning: Making it Simple for Producers

1. TIP-OFF TO SALES • Foreign Nationals Planning: Making it Simple for Producers James Hahn Vice President, Sales

2. 2010 Transamerica Producer Road Shows

3. TIP-OFF TO SALES • Foreign Nationals Planning: Making it Simple for Producers Andrea Valdez-Brandon, J.D. CLU Advanced Marketing Consultant Vicki Garrett Senior Underwriting Consultant, International Underwriting

4. Importance of Estate Planning for Foreign Individuals • Expanding global economy • Need for planning • Impact of U.S. transfer taxes

5. Defining the Market Source: U.S. Census Bureau, 2005-2007 American Community Survey *The foreign-born population includes anyone who was not a U.S. citizen or a U.S. national at birth.This includes respondents who indicated they were a U.S. citizen by naturalization or not a U.S. citizen. (U.S. Census Bureau, American Community Survey 2007 Subject Definitions).

6. Planning Opportunities A survey of recent immigrants to the U.S. with net worth of $10 million or more found: Source: “Clueless,” Trusts and Estates, December 2003

7. U.S. Transfer Tax: Basis of Application • Citizenship • Worldwide assets subject to transfer tax • Residency • Non-U.S. Citizen with U.S. Home: non-citizenliving in U.S. permanently • Worldwide assets subject to transfer tax • Non-U.S. Citizen (aka, Foreign National): non-citizen who does not live in U.S. • Only assets in U.S. subject to transfer tax

8. U.S. Tax Treaties with Foreign Countries • U.S. income, gift, and estate tax treaties with somecountries may preempt general U.S. estate and gifttax rules • Some countries with which the U.S. has gift tax treaties: Australia, Austria, Denmark, France, Germany, Japan, United Kingdom • Some countries with which the U.S. has estate tax treaties: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, Norway, South Africa, Switzerland, United Kingdom

9. Estate Tax Case Study U.S. citizenJohn Davis Non-U.S. citizenJudy Sevilla-Davis No Deduction No Deduction Unlimited Marital Deduction Unlimited Marital Deduction

10. Estate Tax Case Study What are Judy’s options if John dies in 2011 and the couple has no estate plan? U.S. citizenJohn Davis Non-U.S. citizenJudy Sevilla-Davis QDOT Unlimited Marital Deduction Unlimited Marital Deduction

11. Estate Tax Case Study • Nanette Rousseau • Non-Resident Alien • Unmarried • $14,000,000 in U.S. based Commercial real estate • What can Nanette do to minimize • exposure to U.S. estate and gift tax?

12. Estate Tax Case Study Nanette's Estate Nanette's Estate Non-U.S. citizenNanette Rousseau CommercialReal Estate Property Corporation Beneficiary 1 Beneficiary 2 Beneficiary 2

13. Nonresident Aliens: U. S. Gift and Estate Tax Rules * A gift of a life insurance policy on oneself may be subject to the IRC §2035 look back rule, and therefore may be subject to estate taxes if included within the decedent’s estate.

14. Foreign National Underwriting FAQs Vicki Garrett Senior Underwriting Consultant, International Underwriting

15. Basic Rules Policy must be signed in the U.S. by the owner and the insured No solicitation or sale may take place outside of the U.S. Premiums must be paid in U.S. dollars Policy delivery needs to take place in the U.S. Medical underwriting generally takes place in the U.S.

16. Underwriting An exam may be done outside of the U.S. only on a case by case basis Prior approval must be obtained from the Director Approval e-mail needs to be submitted with the Application

17. Attending Physician’s Statement All documents must be completed in English Some medical records may be translated in-house: Spanish, Portuguese, French and Chinese Other languages will require a translation service

18. Premium payments Payments should be made from a U.S. bank Many foreign banks will have a U.S. affiliate

19. Maximum Coverage Amount No Jumbo limit for foreign nationals Difficult to obtain support for amounts of $20 million and above

20. Auto Bind Capabilities *Including England, Scotland and Wales, but excluding Northern Ireland • Countries eligible for auto bind risk (for U.S. or Canadian Citizens up to $35,000,000 of death benefit): • Andorra, Argentina, Australia, Austria, Barbados, Belgium, Bermuda, Brazil, British Virgin Islands, Chile, Denmark, Finland, France, Germany, Hong Kong, Greece, Ireland, Italy, Liechtenstein, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, Taiwan • United Kingdom* • All other countries and Non-U.S./Non-Canadian citizens require reinsurance support.

21. Maximum Retention Maximum retention = $5 million First $1 million is retained and reinsurance support sought for anything over $1 million If reinsurance support is not obtained, we may fully retain up to $5 million on a case by case basis

22. Underwriting Documents Signed application Copies of visa/green card Foreign Nationals & Foreign Travel Application Supplement

23. Underwriting Guidelines for Mexican Nationals • Premium notices must be mailed to a U.S. address • Best class is standard for Mexican nationals living in • Border towns • Monterrey • State of Michoacán • Transamerica can offer best class to Mexican citizens residing outside of those areas • Payments must be made outside of Mexico • No solicitation can be done in Mexico

24. Underwriting Guidelines for Mexican Nationals: Border Towns Tijuana, Nogales, Ciudad Juarez, Nuevo Laredo, Reynosa, Monterrey, Matamoros and the State of Michoacán All other border towns will be considered on a case by case basis

25. Non-insurable Foreign Nationals No published list available Inquiries can be sent to International@Transamerica.comand a response will be sent back within 24 hours

26. Underwriting Standards Normal age and amount requirements apply Copy of Visa Travel & Residency Questionnaire

27. U.S. Citizens and Foreign Travel Travel is less than 183 days annually Appropriate action will be taken for future travel to countries listed as declinable or rated destinations States with legislation that does not allow us to rate or decline for travel: California, Colorado, Connecticut, Florida, Georgia, Illinois, Massachusetts, Minnesota, Missouri, New Jersey, Tennessee, Virginia, Washington (state)

28. Tools and Resources

29. Save the Date: September 14 Next Tip-Off: Why Insurance Professionals Should Sell Qualified Plans

30. This material was not intended or written to be used, and cannot be used, to avoid penalties imposed under the Internal Revenue Code. This material was written to support the promotion or marketing of the products, services, and/or concepts addressed in this material. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely solely on their own independent advisors regarding their particular situation and the concepts presented here. Transamerica Insurance & Investment Group (“Transamerica”) and its representatives do not give tax or legal advice. This material is provided for informational purposes only and should not be construed as tax or legal advice. Clients and other interested parties must be urged to consult with and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here. Discussions of the various planning strategies and issues are based on our understanding of the applicable federal tax laws in effect at the time of presentation. However, tax laws are subject to interpretation and change, and there is no guarantee that the relevant tax authorities will accept Transamerica’s interpretations. Additionally, this material does not consider the impact of applicable state laws upon clients and prospects. Although care is taken in preparing this material and presenting it accurately, Transamerica disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it. This information is current as of July 2010. Transamerica Financial Life Insurance Company is authorized to conduct business in New York.Transamerica Life Insurance Company is authorized to conduct business in all other states. OL 2055H 0810

31. TIP-OFF TO SALES • Foreign Nationals Planning: Making it Simple for Producers Andrea Valdez-Brandon, J.D. CLU Advanced Marketing Consultant Vicki Garrett Senior Underwriting Consultant, International Underwriting