End-of-Year Tax Strategies

1. End-of-Year Tax Strategies

2. James Hahn Vice President, Sales

3. End-of-Year Tax Strategies Victor Sanchez, MBA, CLU Assistant Vice President

4. 2011 Tax Rates??? 2011? UNCERTAINTY.

5. What a Difference a Year May Make *Congress and President are near compromise on preserving Bush tax cuts for two years. Income Taxes* Current tax brackets of 10%, 15%, 25%, 28%, 33%, and 35% in 2010 Returns to pre-Bush tax rates brackets of 15%, 28%, 31%, 36%, and 39.6% in 2011 Capital gains taxed at 15% in 2010, increases to 20% in 2011

6. Qualified Plans There is still time to implement a qualified plan • Must be implemented by 12/31/2010 • Documents must be signed • Funding by 2011 tax-filing deadline

7. Charitable Gifts Charitable gifts can be made before the year ends • Gifts of cash, life insurance or stock • Significant tax savings • Lead to discussion of other planning options

8. What a Difference a Year May Make * Congress and President are near compromise on preserving Bush tax cuts for two years. If Bush tax changes are allowed to lapse* Estate Tax – jumps from 0% in 2010, to 55% in 2011 Exemption – returns to pre-Bush amount of $1 million (or $2 million for couples) Gift Tax – top rate jumps from 35% in 2010, to 55% in 2011

9. Prepare for the Unexpected TransACE Survivor® • Guarantees • Flexibility • Control

10. Design for Flexibility 2010 2011 2012 2013 2014 2015 2016

11. Design for flexibility TransACE Survivor® Estate Protection Rider

12. TransACE Survivor® Male / Female age 68, Preferred Nonsmokers* WithEstate Protection Rider *Based on a 10 Pay Lifetime Guarantee Scenario

13. Design for flexibility TransACE Survivor® Honeymoon Provision

14. TransACE Survivor® Male / Female age 68, Preferred Nonsmokers* Honeymoon Provision Waives surrender charges for a full surrender during the first 5 years *10 Pay Lifetime Guarantee Scenario with an Annual Premium of $164,567. Values shown are based on guaranteed interest and charges

15. Design for flexibility TransACE Survivor® Surrender Penalty Deferral Endorsement

16. TransACE Survivor® Male / Female age 68, Preferred Nonsmokers* Reduce Death Benefit Design for flexibility. Policy guaranteed for life

17. Design for flexibility TransACE Survivor® Enhanced Surrender Value Endorsement

18. TransACE Survivor® Male / Female age 68, Preferred Nonsmokers* Enhanced Surrender Value Endorsement 90% of premiums at the 10th anniversary 100% of premiums at the 15th anniversary *10 Pay Lifetime Guarantee Scenario with an Annual Premium of $164,567

19. Enhanced Surrender Value Endorsement No caps on face amount No restrictions on age or underwriting status. TransACE Survivor allows for one uninsurable with a 12-month life expectancy. Available at no additional cost

20. Does the Estate Tax Matter? Estate Planning Legacy Planning

21. Potential Prospects for Legacy Planning • Age: 45+ • Net worth: at least $2 Million • Children from a previous marriage • Family member with special needs • Family business or privately held company • Charitable inclination

22. Control A Trust Alternative For clients who: • Don’t want to deal with trust documents • Can’t find a suitable trustee • Won’t have an estate tax liability

23. Income Protection Option Initial Lump Sum Guaranteed Monthly Income Stream Back-End Lump Sum $10,000 min. 5 – 25 years $10,000 min.

24. Year End Highlights TransSecurity Underwriting Enhancements Foreign Nationals Cash Balance Plans Premium Finance

25. 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. TransACE Survivor® is a nonparticipating, flexible-premium universal life insurance policy issued by Transamerica Life Insurance Company, Cedar Rapids, IA 52499. Policy Form No. 1-12111108 (CVAT), Group Certificate No. 2-72136108 (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 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 December 2010.

26. End-of-Year Tax Strategies OLA 2055 L 1210