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Selling to the Female Market

Selling to the Female Market. Claire Durand, CFP ® , CLU, ChFC. Managing Consultant, Advanced Marketing. Best Untapped Market. Financial Power of Women. The number of wealthy women in the U.S. is growing twice as fast as the number of wealthy men 1.

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Selling to the Female Market

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  1. Selling to the Female Market • Claire Durand, CFP®, CLU, ChFC • Managing Consultant, Advanced Marketing

  2. Best Untapped Market Financial Power of Women • The number of wealthy women in the U.S. is growing twice as fast as the number of wealthy men1 • Women control or influence 67% of household investment decisions2 • 2 Warner, Fara. (2006) . The Power of the Purse: How Smart Businesses Are Adapting to the World’s Most Important Consumer –Women. 1 Fry, Richard and Cohn, D’Vera. (Jan 2010). New Economics of Marriage: The Rise of Wives. Pew Research Center.

  3. Best Untapped Market Women when compared to men • Less likely to own life insurance • Are underinsured • Believe more strongly in the value of life insurance Only 20-25% of producers intentionally market to women Source: Ahmed, Nilufer R. (2005). Women and Life Insurance: Results From the 2004 U.S. Ownership Study. LIMRA.

  4. Best Untapped Market Women when compared to men • Tend to view wealth as protection and place less emphasis on accumulation • Maintaining income stream to support loved ones is a top financial priority • More conservative Source: James O. Mitchel, Ph.D., CEBS. Financial Styles of Affluent Women LIMRA, 2010

  5. Typical Fact Finding Focused on the buyer • How much insurance do you need or want? • How much do you want to leave your loved ones when you die? • How much can you afford? • What lump sum is right for you?

  6. Effective Fact Finding: 3 Questions FOCUS ON LOVED ONES 3 • Would you like a lump sum set aside for college expenses, for your kids, retirement for your spouse or a wedding for your daughter? 2 1 If you die tomorrow, how much is needed to satisfy outstanding debt and any other final expenses? • What is the monthly income stream required for your spouse to continue to run the household?

  7. A Strategy for Every Segment Mass Affluent Females • TransTermSM policy • Income Protection Option (IPO) High Net Worth Females • TransACE® policy • Spousal Support Trust established by wife

  8. TransTermSMOverview Guarantees and Control • Guaranteed universal life product with cost effective term-like premiums • Flexibility to transition to lifetime coverage if future needs change • Five separate initial level premium options: 10, 15, 20, 25 & 30 year durations

  9. TransTermSM Why will this appeal to women? • Guarantees • Flexibility • Control

  10. Guaranteed Income Strategy Income Protection Option (IPO) Initial Lump Sum Final Lump Sum Guaranteed Monthly Income Stream • Available at no additional cost • May include multiple beneficiaries • Can be modified prior to the death of the insured • A portion of each monthly payment and a portion of the final lump sum are reportable as interest income $10,000 min. 5 – 25 years / $100 min. $10,000 min.

  11. Guaranteed Income Strategy Income Protection Option (IPO) 3 • Would you like a lump sum set aside for college expenses, for your kids, retirement for your spouse or a wedding for your daughter? 2 1 If you die tomorrow, how much is needed to satisfy outstanding debt and any other final expenses? • What is the monthly income stream required for your spouse to continue to run the household? Guaranteed Monthly Income Stream Initial Lump Sum Final Lump Sum

  12. Seizing Opportunities –Insurance Security for the Family • Julia, 43, married to Danny, 45 • 3 children ages 12, 15 and 19 • Julia is a management professional and Danny is an elementary school teacher

  13. Seizing Opportunities –Insurance Security for the Family Concerns • Will her family have enough to cover living expenses if something happens to her? • How can she help to ensure financial security of her spouse and kids into the future?

  14. Security for Julia’s Family TransTermSM 30 policy on Julia* with the IPO $4,500 *Standard Nonsmoker initial premiums level for 30 years.

  15. Security + Flexibilityfor Julia’s Family TransTermSM 30 policy on Julia* with the IPO $4,500 0 $1,500 $1,500 $1,500 *Standard Nonsmoker - initial premiums level for 30 years.

  16. Illustrating IPO on TransWare® $100,000 $4,500 15 $125,000 Annual Premium : $2,084* Face Amount : $835,309 Total IPO Payments: $1,035,000 *Female, Age 43, Standard Nonsmoker, TransTerm 30

  17. Income Protection Option • Affordable • Simple • Gives Control to Policy Owner • Death benefit payout options • Flexible

  18. IPO Talking Points Producer Presents Benefits to Client • “Let’s build a Family Protection Plan.” • “With all the economic uncertainty, we can create a guaranteed income stream for your family.” • “What could your loved ones do with an extra $500/mo? $1000? $2000?”

  19. A Strategy for Every Segment Mass Affluent Females • TransTermSM policy • Income Protection Option (IPO) High Net Worth Females • TransACE® policy • Spousal Support Trust established by wife

  20. Two-Year Tax Window • Estate Tax • Gift Tax • Exemption in 2010: $1 Million • Exemption in 2011–2012: $5 Million • Tax Rate for 2010–2012: 35%

  21. Gifting During the Two-Year Window • Gifting Dilemma “If we give away some of our wealth now, what happens if we need it later?”

  22. TransACE® with Surrender Flexibility Endorsement OR OR *Less any refunds, partial surrenders, and any outstanding policy loans. **Less any outstanding loans, and any partial surrenders that did not reduce the face amount.

  23. The Best of Both Worlds • Spousal Support Trust (SST) • Provides access to cash value and estate tax-free death benefit • Uninsured spouse may receive lifetime distributions for health, education, maintenance and support • Maximizes benefits of Surrender Flexibility Endorsement

  24. Legacy Opt Out Plan • Ellen, 58, married to Thomas, 59 • 2 children ages 30 & 35 • Ellen is an executive for an insurance company and John is a psychologist • $10 Million insurance need

  25. Legacy Opt Out Plan • Spousal Support Trust owns TransACE® policy on Ellen’s life • Trust corpus is available for distributions to Thomas • Trustee can surrender policy for enhanced values • If policy kept in force, trust can provide estate liquidity at Ellen’s death (loan money or buy assets)

  26. Legacy Opt Out with TransACE® Enhanced Surrender Value Female Age 58, Preferred, Non-Smoker, $10M Annual Premium: $122,984 *Endorsement is exercised only if the policy is fully surrendered in the applicable years and time frame.

  27. Endorsement Guidelines • ACE (no-lapse) provision must be current or endorsement will terminate • Policy must be funded for lifetime guarantees for the endorsement to be applicable • Termination of endorsement is irrevocable

  28. Surrender Flexibility Endorsement • Automatically added to each policy at no cost • No limitations to age, face amount or risk class* *Must meet funding requirements

  29. Why Women are the Ideal Clients • Increasing affluence, believe in life insurance and are underserved • Attracted to IPO with its protection emphasis over accumulation • Can be driver in legacy planning in an uncertain economic and tax environment

  30. Fact Finding with Women Clients • What are your concerns for the future financial security of your loved ones? • What amount will your spouse/family/loved ones need to continue to pay for household expenses? • How much would you provide loved ones as a buffer for emergencies or medical bills? • How much confidence do you have that your children will have access to future opportunities for success?

  31. Next Steps Take a look at your book of business for opportunities within the women’s market: • Married couples in which the wife works outside the home • Business owners or professionals • Network through friends and acquaintances for women who are working full time

  32. Contact Us Contact your General Agencyor the Transamerica AdvancedMarketing Department at(866) 545-9058 Option 2

  33. 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. TransTermSM 30 (Policy Form No. ICC10-430) is a non-participating, flexible premium universal life insurance policy issued by Transamerica Life Insurance Company, Cedar Rapids, IA 52499. Higher premiums may be necessary to maintain coverage starting in year 31 for TransTerm 30, and payment at any time of premiums that are insufficient to continue coverage may result in termination of coverage. Policy form and number may vary and this policy may not be available in all jurisdictions. TransACE® is a non-participating, flexible premium universal life insurance policy issued by Transamerica Life Insurance Company, Cedar Rapids, IA 52499. Policy Form #1-12611107 (CVAT), Group Certificate #2-72336107 (CVAT) for certificates issued under a group policy issued to the Rhode Island National Consumer Protection Trust. Policy form and number may vary, and this policy may not be available in all jurisdictions. Transamerica Life Insurance Company (“Transamerica”), and its representatives do not give tax or legal advice. The material in this presentation 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 September 2011. OLA 2121 0911

  34. Selling to the Female Market • Managing Consultant, Advanced Marketing • Claire Durand, CFP®, CLU, ChFC

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