Super Saver

1. Super Saver Solution to Address Your Financial Needs

2. Agenda • Need for investing • Asset Allocation • Financial Concepts of - Cost Averaging Effect - Cost of Delay • ALICO/AIG Background • Frequently used terms • Features and Benefits of Super Saver • Investment Strategies • Sales Aids • Summary

3. Need for Investing for achieving your financial dreams

4. Need for Investing • Financial Goal • Retirement • Education of children • Marriage of children • General Savings • Time Scale

5. Principles of Investing Why people invest (reasons and objectives) • Wealth Creation • Wealth Accumulation • Wealth Protection Wealth C. A. P.

6. Current Investment Trend – Middle East Market predominantly invests in ‘Safe’ investments

7. Investing in ‘Safe’ Investments ? • Inflationary Risks – No ‘Real Growth’ • Your money is not really working for you • Not enough money for your Dreams

8. Ending wealth Avg. return $4 $3.97 14.8% Small company stocks Large company stocks Government bonds Treasury bills Inflation $2.86 11.1% $2.16 8.0% $2 4.2% $1.51 2.4% $1.26 $1 2003 1993 1994 1995 1996 1997 1998 1999 2001 2002 2000 Ten Years Market Performance

9. Stock Market Performance • Between 2000 and 2002, US Stock Market fell for consecutive years • Other consecutive falls - 1929 - 1932, 1939 - 1941 and 1973 – 1974 • Always followed by a steep upswing

10. Principles of Investing • Deciding Factors • Risk • Return

11. Risk Tolerance Spectrum Asset Class High Risk High Return Small Company Stocks International Stocks Large Company Stocks Corporate Bonds Government Bonds Cash Equivalents Low Risk Low Return

12. Risk - Return Trade off Impacting Factors • Personal Traits • Income • Exposure to Debt • Saving Capabilities • Threshold / Tolerance • Time Horizon • Age • Time Span till the financial objective • Other Selected date (as per objective)

13. Risk Reduction • Diversification - Asset Allocation • Volatility over a Span - Cost Averaging

14. Reduction of Risk Over time

15. Cost Averaging Effect • Payment of a specified sum of money at regular intervals to purchase units or shares as part of a savings plan. • By saving regularly into a unit-linked investment, investors can benefit from stock market fluctuations. • No need to try and time the markets.

16. Regular Savings - The Benefits of Averaging Example 1 : $1,000 per annum invested over a 10 year period 340 340 340 360 350 380 420 470 540 Unit Price ($) 670 1000 End of Years

17. Regular Savings - The Benefits of Averaging Example 2 : $1,000 per annum invested over a 10 year period Unit Price ($) 1000 1000 1430 1430 2000 2000 5000 2860 2860 4000 4000 End of Years

18. Regular Savings - The Benefits of Averaging Example 1 Example 2

19. What is Cost of Delay? • The difference (or the loss), in term of fund values, for delaying commencing savings.

20. The Cost of Delay - US$600 per month at an assumed growth rate of 6% p.a. - Assumed retirement age 55. Fund Value (in thousand) Age commencing pension

21. The Cost of Delay - To achieve $1 million at retirement age 55. - Assumed growth rate of 6% p.a. Fund Value (in thousand) AgePremium Required 35 $2,061 pm x 20 years 40 $3,352 pm x 15 years 45 $6,024 pm x 10 years 50 $14,370 pm x 5 years Age commencing pension Calculation are based on Future Gold

22. Super Saver It’s a new & exciting plan with the VUL benefit brought to you by National bank of Dubai in co-ordination with ALICO Designed to be a market leader in the field of “ Savings & Investments” Fulfill the financial objectives and make dreams a reality

23. Effective Investing with Super Saver • Identify Financial Goals • Set Time Frame • Apply Your Risk Tolerance • Diversify / Suitable Asset Allocation • Contribute Regularly • Take Advantage of Cost Averaging • Stay Focused on Your Goal

24. American International Group(AIG) • The World’s Leading International Insurance and Financial Services Organization • Over 130 Countries • 2004 Assets - USD 800 billions • 2004 Revenues - USD 98.61 billions • In excess of $1.3 Trillion in-force Life Insurance • Listed on NYSE, London, Paris, Switzerland and Tokyo

25. Among the largest International Life Insurance Companies in the world • Leading insurer in more than 50 Countries • High Ratings from Principal Rating Services (AA+)

26. Frequently used terms • Premiums – Contribution • Account Value : Value of the units in the funds • Premium mode – Annual, Semi annual, Qtly, monthly or single premium • Single premium – Investing only 1 premium as lump sum • Policy Lapse – Policy ceases its coverage benefits

27. Frequently used terms • Riders – Supplementary insurance contracts that can be attached to Super Saver plan • Premium Term – No. of years the premium needs to be paid according to the plan • Maturity – Policy anniversary when the benefit is paid out • Target Premium – Regular contribution (before rider premiums) chosen by policy holder subject to the minimum limit • Target Premium + Rider Premium = Planned Premium

28. Frequently used terms • Excess / Dump – in’s : Any amount invested in the plan above the target premium • Surrender : Exit from the plan before the plan maturity • Cash Surrender Value : Account Value – Surrender charges – Processing fees – any outstanding loans • Underwriting – An integral process in a policy issue which access the risk of an application and classifies the issue of the policy or rejects the application

29. Features and Benefits

30. Super Saver - Benefits • Wealth Creation and Accumulation • Educational fee planning • Retirement planning • Wedding planning • Mortgage down payment • General savings • Rainy days…. • Goals Protection

31. Super Saver – Features • Eligibility : Age between 1 month and 85 years • Maturity at age 100 • No medical underwriting for Super Saver (savings) • Payment Term – 1 to 20 years • Minimum Premium –US$200pm, depending on term • Payment Mode – monthly, quarterly, semi-annual or annual • Both regular and single premiums

32. Minimum premium and term

33. Super Saver – Features Tailor made plan – client chooses the premium payment term, decides the contribution into the plan Flexibility in taking benefits as and when needed • Partial withdrawal – US$25 processing fee • Policy Loan – loan amount in GRA, 1 loan per year, interest rate applies (currently 8% flat) • Available after 1st year. • Minimum amount US$500, up to 80% of net surrender values Premium holidays allowed, with no back payment; no interest charges • Clawback of commission for 3 years – Surrender; reducing premiums

34. Super Saver – Features One Stop Shop Concept • Access to a maximum of 15 different investment funds at any one time, with as low as US$200pm, vs buying direct • Consolidated valuation statements • One contact for different fund management groups and different transactions • A multiple of 10% allocation in each fund Fund Switching facility • Between funds and different fund mgt groups • Maximize and capture any gains made, market change or opportunity • Change according to client’s life stages and needs • 4 transfers per annum – free of $25 processing fee, US$25 per each additional transfer • 2% spread for all transfers except investing in GRA • Maximum of 25% of the amount can be transferred out of GRA in a policy year

35. Super Saver – Features and Benefits Redirection of Future Premium • Existing investment intact – not forced to realize any loss, if any • Capitalize future market potential and opportunities Free accidental death benefit – 50% of account value, subject to a maximum of US$200k (GCC Residents/Nationals) Free accidental death benefit – 10% of account value, subject to a maximum of US$5k (Non GCC residents/Nationals) Access to expert investment group simply, quickly and at low cost • 3 investment strategies to suit different risk profiles and objectives – Aggressive, Balanced and Conservative

36. Super Saver – Features and Benefits Pension/ Annuity Option Choice of using the lump sum account value at the chosen pension age to provide an annuity/pension guaranteed for the next 20 years or for life thereafter if the insured is alive Benefits Helps to plan for good retired life at the desired time in life and to financially secure the beneficiary with a regular income upto 20 years

37. Investment Strategies

38. Investment Strategy - Aggressive • Vanguard Global Stock Index fund • Vanguard Europe Stock Index fund • Vanguard US Stock Index fund • Templeton Global Smaller Companies Fund • Templeton China Fund • Franklin India fund

39. Investment Strategy - Conservative • Vanguard US Government Bond Index fund • ALICO Guaranteed Return Account

40. Years to Maturity, Withdrawal or Surrender 1-3 Years 4-6 Years 7-10 Years 10 + Years Asset Allocation & Time Frame Conservative Strategy 90% 60% 10% 0% Aggressive Strategy 10% 40% 90% 100% Suggested yield 3% 5% 7% 9%

41. Super Saver - Features and Benefits Goals Protection – optional insurance cover to protect the financial goals • Level Term Life Insurance (LTR) – Death Benefit • Monthly Income to family for a specified period of time (IBR) - death • Recovery Benefit Plan (RBP) - Health • Waiver of premium till maturity of plan in case of death or permanent total disability of insured (WP - Disability, WP on death) - Disability • Spouse pension fixed for 20 years after death of the insured (SPR)

42. Features, Explanations & Benefits

43. Features, Explanations & Benefits

44. Features, Explanations & Benefits

45. Summary • Financial Planning Concept • Dollar Cost Averaging • Cost of Delay • Features and Benefits of Super Saver • Competitive product features and benefits • A good vehicle for financial planning • One stop shop for investment and insurance needs • Investment Strategies • Local and regional support from ALICO • Experienced in bancassurance

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