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Introduction

Introduction. (Licensed agent) is a Licensed insurance agent in the state(s) of PA Licensed to sell insurance and annuities Affiliated with Midland National .

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Introduction

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  1. Introduction • (Licensed agent) is a Licensed insurance agent in the state(s) of PA • Licensed to sell insurance and annuities • Affiliated with Midland National Securities offered by Registered Representatives with JW Cole Financial, Inc, (JWC) Member FINRA/SIPC, Investment Advisory Services provided by Investment Advisory Representatives through Jonathan Roberts Advisory Group (JRAG). Neither Sequinox nor Midland is affiliated with JWC or JRAG.

  2. Disclosures There will be an opportunity to schedule an appointment for an individual consultation at the end of this seminar which may result in a recommendation of specific Financial products that may help you achieve your financial goals. There is no obligation to schedule an appointment or purchase a product. During the course of this presentation or in follow-up appointments, you may hear more about the following types of products. If so, please keep the following points in mind. Variable Annuities: These are long-term investment vehicles designed for retirement purposes. Qualified and non-qualified annuities: owners of non-qualified annuities are not required to take mandatory distributions due to age. Owners of qualified annuities are subject to the minimum Required distributions at age 70 1/2. Indexed Annuities only guarantee principal against market downturns since a customer can loose principal due to the fees and charges of the product itself, particularly if they surrender in the early years. Life Insurance: in exchange for the death-benefit coverage provided, all life insurance products include various costs, such as the cost of insurance, surrender charges, monthly expense charges, And premium loads (where applicable). Costs vary according to the product selected.

  3. Why Save for Retirement? • 30% of Americans have less than $1,000 of savings. • More than half of workers (56%) report total value of household savings is less than $25,000.* • The average American spends 20 years in retirement.** *Employee Benefit Research Organization-March 2011. **Department of Labor “10 Ways to Prepare for Retirement” – June 2011. www.dol.gov

  4. Women Need a Plan • Women are more likely to work in part-time jobs that don't qualify for a retirement plan. • Working women are more likely than mento interrupt their careers to take care of family members. • Of the 62 million wage and salaried women (age 21 to 64) working in the United States,just 45% participated in a retirement plan. • On average, a female at age 65 can expect to live another 19 years, 3 years longer than aman the same age. Source: US Department of Labor www.dol.gov/ebsa 6/1/2011.

  5. Facts to Consider • The “official” National Debt is in excess of $16,015,769,788,215 (www.treasurydirect.gov8/31/12) • 2012 budget proposal: • $2.47 T Revenue- $3.80T Expenses • Equals $1.33T deficit spending • Social Security & Medicare Expense

  6. How Big is a Trillion?

  7. How Big is a Trillion? $1,000,000,000,000 • Distance between Seattle and Minneapolis Source: U.S. national debt is the elephant in the room, Vancouver Sun, www.canada.com, November 7, 2008.

  8. What Year Was It One Trillion Seconds Ago? • 86,400 seconds = 1 day • 31,536,000 seconds = 1 year • 1,000,000,000,000 seconds = 31,688 years

  9. Another Way of Thinking About This? You could spend $31.5 million a year for 32,000 years just to spend $1 trillion

  10. Why Is This Significant? • There are at least three possible answers to address the debt: • Spend less • Artificially devalue the dollar • Tax more What Do You Think the Answer Is?

  11. One more way of thinking about this… • 2011 Budget Proposal: • $2,460,000,000,000 Revenue - $3,800,000,000,000 Expenses • Equals $1,340,000,000,000 Deficit • 14,000,000,000,000 Debt • 2011 revised budget lessened by 360,000,000,000 • Family of 4: • 24,600 in income • Spent 38,000 • Added 13,400 to Credit Cards • Budgeted to reduce expenses by 360 FOR AGENT/REGISTERED REPRESENTATIVE USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES. 12 FOR AGENT/REGISTERED REPRESENTATIVE USE ONLY. NOT TO BE USED FOR CONSUMER SOLICITATION PURPOSES.

  12. Can they Tax us More? Source: truthandpolitics.org, referencing IRS Statistics of Income Bulletin Pub 1136

  13. Taxable Money vs. Tax-advantaged Money Taxable Money(when received) Tax-advantaged Money(when received) Wages Tax-qualified plans Roth IRA Life Insurance Non-Qualified Investments Income Capital Gains The information we are providing in the next few slides is for educational purposes only and is not to be construed as tax advice. You should always consult with and rely on your own tax advisor. Please note that these “tax advantaged” products all have terms and conditions associated with receiving the funds tax advantaged or generally free from current income taxes. In addition, each product is designed for a specific purpose and may not be suitable for all clients. Policy loans will reduce available cash values and death benefits and may cause the policy to lapse, or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. Tax laws are subject to change and your clients should consult their tax professional.

  14. The Smart Money List 1. Free Money Tax-advantaged Money 3. Tax-deferred Money 4. Taxable Money Gift taxes or inheritance taxes may apply, to “free” money and matching 401k contributions are taxable when withdrawn and a 10% penalty may apply if withdrawn prior to age 59 ½.

  15. Tax-deferred Strategy vs. Tax-advantaged Strategy Tax- deferred Strategy Tax- advantaged Strategy Gains Gains Tax-deferred Contributions After-tax Contributions (using before-tax dollars) (using after-tax dollars)

  16. Tax-deferred Strategy vs. Tax-advantaged Strategy Tax- deferred Strategy Tax- advantaged Strategy No tax on distribution if done properly including 3.8% surtax and 0.9% Medicare tax Gains Gains 100% taxed as income at distribution Tax-deferred Contributions After-tax Contributions Taxed prior to contributions Would you rather pay taxes… On this? Or this?

  17. Roth IRA • Pros • Tax Deferred Growth • Tax Free Distribution • No RMD • No 3.8% Surtax • No 0.9% Medicare Tax • Income Tax free to spouse andChildren • Cons • Contribution limits • Contribution subject to 3.8% surtax and 0.9% Medicare tax • Income limits • Included in Estate Tax Calculation

  18. 20 Life Insurance • Cons • Cost of Insurance • Medically underwritten • Premiums may be subject to 3.8% surtax and 0.9% Medicare tax • Potential premium load and surrender charges • Pros • Tax Deferred Growth • Tax Free Distribution • No RMD • No 3.8% Surtax on distribution • No 0.9% Medicare Tax on distribution • Income Tax free to spouse and Children • No Contribution limits • No Income limit • Leveraged Death Benefit • Leveraged Chronic Illness Rider • May avoid estate tax

  19. Characteristics of Term & Permanent Life Insurance Please note: there are scenarios in which the premium can remain level. Also, premiums could increase if it is necessary to support the death benefit. For example, if the contract is overloaned a premium increase could be needed to keep the contract inforce. Information provided here is general and educational in nature, and is not intended to be, and should not be construed as legal, tax, and/or investment advice. Laws of specific states of laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and subject to change. *Surrender charges may apply at withdrawals. Please consult your tax professional and/or attorney for specific tax and/or legal information as it pertains to your individual situation.

  20. Characteristics of Term & Permanent Life Insurance Premium for Term Life Insurance vs.Permanent Life Insurance Premium Permanent Term Time This example is shown for illustrative purposes only.

  21. How It Works With Universal Life Insurance Universal LifeInsurancePolicy • Cost of Death Benefit and other potential policy charges: • Surrender charges • Monthly deductions • Loan interest Premium $ $potential cash value X Minus fee, or load Minimum Premium Company Requires Max Premium IRS Allows

  22. Legacy For Your Loved Ones Are you and your family sufficiently protected? Life insurance can help meet all, or a portion of these needs: • Help pay for final expenses • Chronic Illness Rider • Income replacement • College expenses • Mortgage and other debts • Estate tax coverage • With life insurance, you have the confidence that your loved ones willhave financial options available. • You also may have a way to potentially accumulate cash value on a taxdeferred basis that may be accessible down the road.

  23. Key Considerations • The main purpose of life insurance is to provide death benefit protection for the beneficiaries • There is a medical and financial underwriting process • Types of life insurance available • Amount of coverage needed • Policy illustration • Policy benefits, assumptions, fees, guarantees, surrender and withdrawal charge • Loans and withdrawals may affect the tax status of a policy For most policies, withdrawals are free from federal income tax to the extent of the investment in the contract and policy loans are also tax-free so long as the policy does not terminate before the death of the insured. However, if the policy is a Modified Endowment Contract (MEC) , a withdrawal or policy loan may be taxable upon receipt. Further, unpaid loan interest on a MEC may also be taxable. A MEC is a contract received in exchange for a MEC or for which premium paid during a seven-year testing period exceed prescribed premium limits (7-pay premiums). Policy Loans and withdrawals will reduce the death benefit and cash value of the policy and may cause the policy to lapse or affect guarantees against lapse. In the event of lapse, outstanding policy loans in excess of cost basis will be subject to tax. Midland National and its agents do not provide tax or legal advice. You should consult with and rely on your own tax advisor before making the decision to take a policy loan.

  24. Taxable Money vs. Tax-advantaged Money Tax-advantaged Money(when received) Taxable Money(when received) Wages Tax-qualified plans Roth IRA Life Insurance Non-Qualified Investments Income Capital Gains The information we are providing in the next few slides is for educational purposes only and is not to be construed as tax advice. You should always consult with and rely on your own tax advisor. Please note that these “tax advantaged” products all have terms and conditions associated with receiving the funds tax advantaged or generally free from current income taxes. In addition, each product is designed for a specific purpose and may not be suitable for all clients. Policy loans will reduce available cash values and death benefits and may cause the policy to lapse, or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. Tax laws are subject to change and your clients should consult their tax professional.

  25. Next Steps • Complete your needs analysis • Determine which option is right for you • Taxable Money • Tax-advantaged Money • Both

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