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Retirement Magic of ILIPPs & FLIPPs

Double Your Retirement Income

Published by Capital Strategies Press / Sponsored by PolicyChallege.com


ILIPPs & FLIPPs – The Retirement Wonder Tools

Compound stock & bond based returns tax free Provide tax free retirement income Boost qualified plan lifetime income by 10% to 15% Multiply the wealth transferred at your death Pay the taxes on retirement income from other sources Protect your retirement income from inflation Pay-up a retirement account for your spouse in the

event of your early death


ILIPP – stands for Indexed Life Insurance Private Pension

FLIPP – stands for Fixed Life Insurance Private Pension

Both concepts use the unique features of a life insurance policy to create a personal retirement solution.(The primary difference between a FLIPP and an ILIPP is the selection of the accumulation method.)


ILIPP –

$335 a Month After-Tax Cost Age 40 to 65: $100,500

$1,807 a Month Retirement Income Age 65 to 100: $758,940

Taxes Due: - 0 -

Indexed Life InsurancePrivate Pension

Sample ILIPP (Using Indexed Life Insurance for a male age 40 in average health and assume an annual compounded return of 7.3%, with a 5.9% variable loan rate.)

The structure of an ILIPP combines favorable tax treatment with interest rate leverage to generate impressive levels of retirement income.

**This is a sample illustration only, not a guarantee. The performance of an ILIPP is highly dependent on future economic conditions over a long period of time, as well as the age and health of the insured. Please see a NAIC compliant illustrations tailored to your specific situation.


Life Insurance has a Bad Rep in Some Circles

Too many people buy -High-Load, Low-Yield policies

ILIPPs and FLIPPs use - Low-Load, High-Yield

products

ILIPPs and FLIPPs are Over-Funded, which Lowers Costs, Magnifies Cash Growth and Triggers the Tax Shelter Inside the Policy


If Life Insurance Wasn't Such a Great Product -

- Rich People Would Not Buy So Much of It!

They even borrow from the bank to buy it – They call it 'Premium Financing'


The Rich Buy LifeInsurance BecauseThey Know:

It Protects Wealth It Transfers Wealth Is a Tax Shelter

It can do the same for you!


The Total Return on an ILIPP Depends on Your Longevity

Total Death Total Tax Free Distributions + Benefit + Cash CollectedDeath at Age 75 $203,840 $154,485 $358,325

Death at Age 85 $407,680 $126,235 $533,915

Death at Age 95 $611,520 $165,869 $777,389

** The above amounts were taken from a NAIC compliant life insurance illustration on an age 40 male in average health and assuming a constant annual return of 7.3% and a variable loan rate of 5.9% (The carrier's 30 year average annual crediting rate from 1982 to 2012 was 8.1%)

The above is merely a sample. Policy values will change with gender, age, health, carrier, policy type, interest rate assumption, policy loan assumption and other variables. Consumers interested in this concept should obtain NAIC illustrations from a life insurance agent licensed in their state of residence. Not all agents are expert at this concept - Choose your agent wisely!


Most people pay minimum premiums – this raises costs and stretches them out

$ $

$

ILIPPs & FLIPPs are Over-Funded, which – lowers costs and accelerates cash growth


ILIPPs & FLIPPs are Powerful Financial Tools that Deliver Unique Retirement Solutions –

Compound stock & bond based returns tax free Provide tax free retirement income Boost qualified plan lifetime income by 10% to 15% Multiply the wealth transferred at your death Pay the taxes on retirement income from other sources Protect your retirement income from inflation Pay-up a retirement account for your spouse in the event

of your early death

What is Your Priority?

Let's See How an ILIPP Can Energize Your Retirement Planning

Do you have a retirement plan?

What are you retirement assets?

How much do you save each month for retirement?

What are your retirement goals?


For additional information on this financial concept please visit PolicyChallenge.com

**Life insurance policies are purchased through licensed insurance agents. The purchaser must receive a NAIC compliant illustration on any and all policies considered. Not all agents are familiar with this concept. For best results choose your insurance agent wisely. - Please see the important notices on the following pages.

Links to Impartial Providers of Historical Asset Class Performance


Federal Reserve Board posts returns from a variety of fixed income asset classes, some of which extend as far back as the early 1900’s. Please visit: http://www.federalreserve.gov/releases/h15/data.htm

Ibbotson, owned by Morningstar, compiles an extensive list of asset returns and focuses on stock market based asset returns. http://corporate.morningstar.com/ib/asp/subject.aspx?xmlfile=1414.xml

Capital Strategies Press publishes an annual summary of indexed performance. Their numbers are independent of the projections made by the insurance carriers. http://CapitalStrategiesPress.com

Yahoo financial database: http://finance.yahoo.com/market-overview/

MarketLinking.com offers a public access database on a variety of market linked and indexed returns. Visit http://MarketLinking.com

Important Notes and Disclaimers (Please Read)


The performance comparisons used in this presentation make assumptions about future rates of return. These assumptions may or may not be valid. No one knows the future. Our only guide is the past and the future returns from various asset classes may not reflect their historical averages or ranges. The comparisons used herein are solely for the illustrative purposed.

Knowledge is power and when making financial decision knowledge is essential. Every consumer, whether making investment, savings or insurance decisions should carefully study the past performance of every asset class under consideration in order to make an informed decision about their expectations of the future performance of that asset class. There are a number of independent third party sources of asset returns. All consumers should consult one or more of these sources or other impartial third parties that maintain similar databases and/or analysis.

Meaningful financial planning requires unbiased information. Financial decisions about retirement funding, future retirement income, building a family nest egg, and purchasing insurance to provide financial protection for life’s unexpected events all require making assumptions about future performance. Unless these assumptions are based on expectations that have a reasonable probability of being close to future results, you are not planning, you are guessing.

Please discuss asset class returns with a competent financial professional before making a final decision about how to allocate your financial resources. This should be more than a cursory discussion. If the financial professional you have chosen to trust seems uniformed in any way on the subject of asset class performances, you should seriously consider replacing them and finding a more knowledgeable professional.

Please, please, please take the time to build your personal knowledge of the various financial products and the performance and liquidity characteristics of the asset classes available to you.

Important Notes and Disclaimers (continued)


The National Association of Insurance Commissioners (NAIC) has formulated guidelines for illustrations that must be presented to each potential purchaser of cash value life insurance. These multi-page illustrations are carrier, product and insured specific and contain substantial disclaimers, warnings and clarifications. The summary presented herein is taken from one set of annual yield assumptions and premium inputs. Alternate assumptions can produce radically different policy performance, including early lapse of the policy. The age and health status of the insured is likewise a key assumption that when changed, can lead to policy performance much less favorable to the policy owner. These types of life insurance policies can only be purchased through the services of a life insurance agent licensed in your state of residence. If you are interested in learning more about the retirement cash flow features of cash value life insurance, please confer with a licensed agent and have her/him prepare NAIC compliant illustrations using reasonable assumptions. We strongly advise that consumers never rely on the carrier’s highest historical return. A lower return assumption will make the outcome more likely. We also strongly advise that the interest rate spread assumed on any variable loan be reasonable in light of historical performance data. The spread is the difference between the assumed policy crediting rate and the rate charged on policy loans. Example: the policy yields an annual return of 8.3% and a loan charge of 5.5%, then the spread is 2.8%. A 2.8% spread is unreasonable and will create an internal compounding during the loan period that will inflate the available retirement funds substantially. Since a 2.8% spread has never been sustained during any past economic period, the results illustrated will be an illusion and will never occur. The variable loan rate of an indexed policy is tied to the commercial bond rate. Universal life insurance carriers invest policy cash values funds in the commercial bond market. If the insurance carrier charges the policy holder less than its bond earnings, the carrier will lose money. A history of commercial bond rates are published by the Federal Reserve and can be found on the Internet The spread is a critical element of all indexed universal life illustrations that employ the universal loan. If your agent glosses over the importance of the spread or seems fuzzy on its criticality, get a new agent, because you are not working with a true professional.

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