Class 1 The Wfg Wealth Crusade

THE WFG WEALTH THE WFG WEALTH CRUSADECRUSADE

(for broker/dealer use only, not for use with the public) (for broker/dealer use only, not for use with the public)

• We will give you the “BEST” products in our industry to sell to your clients.

• We DON’T sell PRESSURE, TRICKS, or GIMMICKS.

• We make our clients feel COMFORTABLE. We DON’T sell on the first interview and we DON’T talk down to people and make them feel INFERIOR.

THE WORLD FINANCIAL THE WORLD FINANCIAL GROUP “PROMISE” TO GROUP “PROMISE” TO

YOUYOU

• We give you a COMPANY with a PHILOSOPHY, WE SELL what we believe in owning in our OWN LIFE.

• We DON’T sell just policies. If we can’t save you money on what you have now or give you more value for your dollar, we don’t deserve your business.


YOUYOU

• We will give you a POSITIVE, ENTHUSIASTIC, and EXCITING COMPANY. Most American companies are worried, hurting, and downsizing. World Financial Group is SUCCESSFUL, HAPPY and BREAKING ALL PREVIUOS RECORDS.

• We will give you the BEST PART- TIME OPPORTNITY in America. It is possible to make a LOT OF MONEY doing a GREAT JOB

for people.


YOUYOU

• You will feel GOOD about the job you do for people.

• You will never be required to give up the security of you full time job.

• We will give you HOPE and OPPORTUNITY again. Give you the chance to DREAM again.

• We will give you a chance to OWN YOUR OWN BUSINESS- The American Dream.

• We will NEVER DENY you advancement if you QUALIFY.


YOUYOU

• We will always let you EARN MORE and BUILD IT BIGGER- if you want to.

• We will give you an opportunity to PASS UP and MAKE MORE than those ABOVE YOU and those who have been HERE LONGER than you.

• We will give you a company that is CONTROVERSIAL. Any NEW IDEA meets resistance.

• We will give you a chance to be a member of a NATIONAL CHAMPIONSHIP TEAM.

We are at the top of our industry.


YOUYOU

• We will give you a chance to FEEL GOOD about yourself; to become somebody.

• We will give you a chance to become a MARKETING DIRECTOR- to be your OWN BOSS.

• We will give you a chance to IMPROVE YOUR LIFE FINANCIALLY. A chance to become TOTALLY FINANCIALLY INDEPENDENT.

• FINALLY- We will give you a chance TO TAKE CHARGE OF YOUR LIFE AGAIN.


YOUYOU

WHY THE WFG VUL WHY THE WFG VUL CRUSADE?CRUSADE?

Why Variable Universal Life is the Why Variable Universal Life is the Most Powerful Financial Tool for Most Powerful Financial Tool for

Most of Your Clients?Most of Your Clients?

The Neglect of Middle The Neglect of Middle America by Securities America by Securities DealersDealersFrom: Merrill Lynch District Director From: Merrill Lynch District Director To: SalespeopleTo: SalespeopleSubject: Middle America & Charity WorkSubject: Middle America & Charity Work“…“…we must put limits on the amount of we must put limits on the amount of charity workcharity work that that

we do or we will not have the time to service and grow we do or we will not have the time to service and grow our base of customers willing and able to pay for quality our base of customers willing and able to pay for quality advice… If there are FCs [Financial Counselors] that advice… If there are FCs [Financial Counselors] that really enjoy servicing small accounts, please let me know, really enjoy servicing small accounts, please let me know, and I will get you a nice salaried job in the Investor and I will get you a nice salaried job in the Investor Services Group where you can deal with Services Group where you can deal with poor peoplepoor people to to your hearts content.” your hearts content.” excerpt from Merrill Lynch excerpt from Merrill Lynch internal documentinternal document

The Neglect of Middle The Neglect of Middle America by Securities America by Securities DealersDealers

The Wall Street JournalThe Wall Street Journal, 10/5/1999, 10/5/1999““...Consider a recent e-mail to brokers from the director of ...Consider a recent e-mail to brokers from the director of

Merrill’s profitable Long Island District, the firm’s secondMerrill’s profitable Long Island District, the firm’s second

largest district in terms of production: largest district in terms of production:

If we are going to be Financial Consultants to If we are going to be Financial Consultants to thethe

wealthy and successfulwealthy and successful individuals and individuals and businesses,businesses,

then we don’t have time to provide personalthen we don’t have time to provide personal

services to services to the poorthe poor.”.”

IS TERM OR FIXED RATE IS TERM OR FIXED RATE PERMANENT INSURANCE PERMANENT INSURANCE THE SOLUTION?THE SOLUTION?

Term InsuranceTerm Insurance Except for temporary Except for temporary

insurance needs, since it insurance needs, since it offers offers no cash valueno cash value accumulationaccumulation and since and since it is so expensive that it it is so expensive that it is is seldom in force when seldom in force when people actually diepeople actually die, it is , it is more a part of the more a part of the problem than a solution.problem than a solution.

Fixed Rate Permanent Fixed Rate Permanent InsuranceInsurance

While providing a death While providing a death benefit for a lifetime, it benefit for a lifetime, it fulfills its insurance fulfills its insurance purpose, but the purpose, but the impotent returnsimpotent returns even even with tax-deferral barely with tax-deferral barely keeps pace with inflation keeps pace with inflation and makes it a poor and makes it a poor “investment” at best.“investment” at best.

BOTTOM LINEBOTTOM LINE

The traditional insurance industry, while The traditional insurance industry, while lavishly profiting on the backs of middle lavishly profiting on the backs of middle Americans are and always have been Americans are and always have been more a part of the public’s financial more a part of the public’s financial problems by not offering win/win problems by not offering win/win financial solutions.financial solutions.

User-unfriendly IRS User-unfriendly IRS Qualified PlansQualified Plans

• When Do You Want to Pay Taxes?When Do You Want to Pay Taxes?• Are You Getting a Employer Match?Are You Getting a Employer Match?• Is Your Money Available -591/2?Is Your Money Available -591/2?

• IRS Penalties for Early Withdrawal? 10%+IRS Penalties for Early Withdrawal? 10%+

• IRS Penalties for Late Withdrawal? 55%+IRS Penalties for Late Withdrawal? 55%+

• Fully Taxable at Retirement?Fully Taxable at Retirement?• No longer any “lower” tax rates at No longer any “lower” tax rates at

retirement.retirement.

20

Historical Performance of Investment Markets1925-2001

©2002 Ibbotson Assoc iates, Inc.Note: This chart does not reflect past or future performance of any spec ific product (Data 1925-2001). This chart is f or il lus trative purposes only and is not i ndicat ive of any investment. The dataassumes reinvestment of all i ncome and does not account for t axes or t ransact ion costs. The average return represents a compound annual return. Government bonds and Treasury bills areguaranteed by the full faith and credit of the United S tates government as to the t imely paym ent of princ ipal and i nterest . B onds in a portfol io are t ypically intended to prov ide i ncome and/ordiversif ication. U.S. government bonds may be exempt from state taxes and income is taxed as ordinary income in the year received. With government bonds, the investor is a creditor of thegovernment. Stocks are not guaranteed and have been more volatile than the other asset c lasses. Large company stocks prov ide ownershi p in corporations that intend to prov ide growth and/orcurrent income. S mal l company s tocks provi de ownership in corporat ions that intend to seek high levels of growth. Small company s tocks are more volatile than large company s tocks and aresubject to s ignificant price fluctuat ions, business risks, and are thinly traded. Capital gains and div idends received may be taxed i n the year recei ved. Underlying data is from the S tocks, Bonds,Bill s, and Inf lation® (SB BI®) Yearbook, by Roger G. Ibbotson and Rex S inquefield updated annually . A n investment cannot be made direct ly in an index. Past performance is no guarantee offuture results .Source: S mal l Company S tocks – represented by the f ifth capitalization quintile of stocks on the New York Stock E xchange (NYSE ) for 1926-1981 and the performance of the Dimensional FundAdvisors, Inc. (DFA) U.S . Micro Cap Portfolio thereaf ter; Large Company Stocks – Standard & Poor’s (S&P ) 500®, whi ch is an unmanaged group of securities and considered to berepresentative of the s tock market in general; Government B onds – 20-year U.S. Government B ond; Treasury B ills – 30-day U.S . Treasury Bil l; I nf lation – Consumer Price Index.

For Training Purposes Only

The Rule of 72At 4% Money Doubles every

18 years.At 6% Money Doubles every



6 years.

You can compare the advantage of long-term investing to saving by using The Rule of 72; divide 72 by an annual rate of return to figure out approximately how many years itwill take for your money to double. However, mos t inves tments generate fluctuating returns, so the period in which an inves tment can double cannot be determined withcertainty.The Rule of 72 illus trates that the higher your rate of return, the more effect compounding has on your original inves tment, and the further ahead you are after a numberof years. P lease keep in mind that seeking a higher rate of return is often subject to higher inves tment risk.

Power of Compounding

Your Age Amount

29 $10,000

47 $20,000

65 $40,000

Your Age Amount

29 $10,000

41 $20,000

53 $40,000

65 $80,000

Your Age Amount

29 $10,000

38 $20,000

47 $40,000

56 $80,000

65 $160,000

Your Age Amount

29 $10,000

35 $20,000

41 $40,000

47 $80,000

53 $160,000

59 $320,000

65 $640,000

IRS TAX LAW - VULIRS TAX LAW - VUL

1. 1. EarningsEarnings from insurance are Tax Deferred while from insurance are Tax Deferred while accumulating;accumulating; Theodore H. Cohn, 39 tc 1055 (1963); IRC Sec 72.Theodore H. Cohn, 39 tc 1055 (1963); IRC Sec 72.

2. 2. Income TaxesIncome Taxes of all types are deferred. of all types are deferred. IRC SecIRC Sec

7702A(b).7702A(b).

3. Cash accumulations may be3. Cash accumulations may be liquidated liquidated income income taxtax free. free. IRC Sec 7702.IRC Sec 7702.

4. Life Insurance pays a 4. Life Insurance pays a death benefit income taxdeath benefit income tax freefree. . IRC Sec 101; Reg 1.101-1IRC Sec 101; Reg 1.101-1

Source: Western Reserve FFB brochure ag07000-1/98Source: Western Reserve FFB brochure ag07000-1/98

IRS TAX LAW - VUL IRS TAX LAW - VUL cont’dcont’d

5. 5. Tax-free switchesTax-free switches in the sub-accounts of a in the sub-accounts of a VUL policy.VUL policy.

6. Availability of a 6. Availability of a Fixed Rate accountFixed Rate account with a with a minimum guarantee if market conditionsminimum guarantee if market conditions change.change.

Source: Western Reserve FFB brochure ag07000-1/98Source: Western Reserve FFB brochure ag07000-1/98

VARIABLE UNIVERSAL VARIABLE UNIVERSAL LIFE- LIFE- Insurance That’s Also Insurance That’s Also

An Investment!An Investment!

• Combination Of Combination Of Life InsuranceLife Insurance Protection Protection And And Investment Investment Opportunities!Opportunities!

• The Best Of Both WorldsThe Best Of Both Worlds– Professional Money Management AndProfessional Money Management And

– The Tax Advantages Of Life InsuranceThe Tax Advantages Of Life Insurance

BANK BANK A A ? OR ? OR BANK BANK BB??• INS. CO KEEPS ALL $$INS. CO KEEPS ALL $$

$ FIRST 2-5 YRS$ FIRST 2-5 YRS

• 2-4 % RETURN2-4 % RETURN

• BORROW YOUR OWN BORROW YOUR OWN $ AT 8%$ AT 8%

• LOSE IT ALL WHEN LOSE IT ALL WHEN YOU DIEYOU DIE

• IMMEDIATE $ IN IMMEDIATE $ IN ACCOUNTACCOUNT

• 8-12% HISTORY8-12% HISTORY• WASH LOAN 0%WASH LOAN 0%• KEEP WHEN YOU KEEP WHEN YOU

DIE TAX FREEDIE TAX FREE

THE WAR!!!THE WAR!!!

• 1979 FTC REPORT-”THE AVERAGE 1979 FTC REPORT-”THE AVERAGE WHOLE LIFE POLICY RETURNED A WHOLE LIFE POLICY RETURNED A 1.2% RETURN OVER THE LAST 21 1.2% RETURN OVER THE LAST 21 YEARS…THIS IS A SHAM AND A YEARS…THIS IS A SHAM AND A SCAM PUT TO THE AMERICAN SCAM PUT TO THE AMERICAN PEOPLE”PEOPLE”

THE WARTHE WAR

• 1993 UNITED STATES SENATE 1993 UNITED STATES SENATE REPORT(CHAIRMAN METZENBAUM)REPORT(CHAIRMAN METZENBAUM)

• ““TODAYS HEARING IS ABOUT HOW TODAYS HEARING IS ABOUT HOW LIFE INSURANCE COMPANIES AND LIFE INSURANCE COMPANIES AND THEIR AGENTS INTENTIONALLY THEIR AGENTS INTENTIONALLY MISLEAD AMERICAN CONSUMERS MISLEAD AMERICAN CONSUMERS ABOUT HOW MUCH THEIR POLICIES ABOUT HOW MUCH THEIR POLICIES COST AND WHAT THEY WILL BE COST AND WHAT THEY WILL BE WORTH WHEN THEY NEED THEM WORTH WHEN THEY NEED THEM MOST”MOST”

THE WAR THE WAR

• MONEY MAGAZINE SEPTEMBER1994MONEY MAGAZINE SEPTEMBER1994

• ““A WHOPPING A WHOPPING 97.5%97.5% OF ALL TERM OF ALL TERM POLICIES DON’T PAY ANY DEATH POLICIES DON’T PAY ANY DEATH BENEFIT…POLICIES ARE DESIGNED BENEFIT…POLICIES ARE DESIGNED TO BE TOO EXPENSIVE TO KEEP TO BE TOO EXPENSIVE TO KEEP WHEN YOU ARE LIKELY TO DIE…WHEN YOU ARE LIKELY TO DIE…POSSIBLY THE WORST FORM OF POSSIBLY THE WORST FORM OF PROTECTION IN ALL THE WORLD”PROTECTION IN ALL THE WORLD”

“ THE WAR IS ON.”• First it was the cola wars.

• Then it was the burger wars.

• Competition is what makes the free enterprise Competition is what makes the free enterprise system go. At World Financial Group we system go. At World Financial Group we welcome competition. We became No. 1 because welcome competition. We became No. 1 because we were not afraid to compete and because we we were not afraid to compete and because we delivered for the American consumer.delivered for the American consumer.– We accept the challenge of any company that We accept the challenge of any company that

wants to see if they are good enough to knock us wants to see if they are good enough to knock us off the topoff the top..

“ THE WAR IS ON.”

• We are confident that everything is in place for us We are confident that everything is in place for us to dominate our industry for the next 20 to 25 to dominate our industry for the next 20 to 25 years.years.

• Bring ‘em on!• Now it is the insurance War.• To the competition: Beware!• You are not going to beat us with cheap talk and

slick public relations campaigns. You are going to have to beat us in the marketplace doing

what is right for the consumer.


• We believe that VUL ( Variable Universal Life) is the best concept available today for most middle Americans.

• Who is the Number 1 producer of the VUL?

• We are.

• Who is committed to serving families 100% of the time?

• We are.


• Who is the leading advocate of a grass roots education in America?

• We are.

• Who is the company doing the job for the consumer?

• We are.

• THE WAR IS ON AND WE TAKE NO THE WAR IS ON AND WE TAKE NO PRISONERS!PRISONERS!

The Multiple Needs of The Multiple Needs of FamiliesFamilies• Life Insurance Life Insurance

ProtectionProtection• Cash AccumulationCash Accumulation

– Emergency FundEmergency Fund

– College FundCollege Fund

– Retirement FundRetirement Fund

– ??

This program could be your This program could be your only savings program as itonly savings program as it has the liquidity to supporthas the liquidity to support savings for any and allsavings for any and all savings needs, such assavings needs, such as college education, second orcollege education, second or primary home, boat,primary home, boat, retirement, emergency fundretirement, emergency fund uninsured medical expenses,uninsured medical expenses, and so on.and so on. William H. Donogue, William H. Donogue,

Mutual Fund SuperstarsMutual Fund Superstars

VUL WORKSVUL WORKS

Hypothetical Illustration*Hypothetical Illustration*

Male age 35, married with two young childrenMale age 35, married with two young children

Income: $50,000 year ($85,000 household) Income: $50,000 year ($85,000 household)

Needs: Income Protection, emergency savingsNeeds: Income Protection, emergency savings college savings and retirement.college savings and retirement.

Budget: $500 mo. Budget: $500 mo. (7% of household income)(7% of household income)

**Zurich Kemper Life Investor policy form L-8521 @ 12%Zurich Kemper Life Investor policy form L-8521 @ 12%

VUL WORKSVUL WORKS

If he DiesIf he Dies• Has $500,000 death Has $500,000 death

benefit.benefit.

• The death benefit would The death benefit would replace his $50,000 yr replace his $50,000 yr income ($500,000@10% income ($500,000@10% yr).yr).

• Total Investment if he Total Investment if he lives to 65: $180,000lives to 65: $180,000

($500 mo 30 years).($500 mo 30 years).

If he Lives to a95If he Lives to a95• After 10 yrs., He takes After 10 yrs., He takes

$10,000 each of 6 yrs for $10,000 each of 6 yrs for College. ($60,000)College. ($60,000)

• From the 2nd year he From the 2nd year he has a growing savings has a growing savings for any purpose.for any purpose.

• At 66 he takes 60,000 yr. At 66 he takes 60,000 yr. retirement to age 95.retirement to age 95.

• He receives over He receives over $3,000,000 all tax free.$3,000,000 all tax free.

Financial Leaders & VUL Financial Leaders & VUL

William E. DonoghueWilliam E. DonoghueA nationally renowned investment A nationally renowned investment

guru from outside the insurance guru from outside the insurance industry champions the cause of industry champions the cause of

variable life!variable life!

author of author of

Mutual Fund Mutual Fund

SuperstarsSuperstars

...invest the bulk of your ...invest the bulk of your savings in a variable savings in a variable life insurance policy.life insurance policy.

……[with VUL] you can [with VUL] you can build a nearly perfect build a nearly perfect and liquid tax shelter and liquid tax shelter for the rest of your for the rest of your life.life.

Financial Leaders & VULFinancial Leaders & VUL

Harry S. Dent, Jr.Harry S. Dent, Jr.Noted futurist and demographer.Noted futurist and demographer.

Author of Author of

The Great Boom AheadThe Great Boom Ahead

The Roaring 2000sThe Roaring 2000s

The Roaring 2000s The Roaring 2000s Investor*Investor*

This [VUL] is obviously This [VUL] is obviously the ultimate tax-the ultimate tax-deferral strategydeferral strategy..

* * p.210p.210

Variable Universal Life- Variable Universal Life-

The Best of All WorldsThe Best of All Worlds **p.209p.209

Financial Leaders & VULFinancial Leaders & VUL

Robert G. AllenRobert G. Allen

Author ofAuthor of

Nothing Down and Nothing Down and Creating WealthCreating Wealth

andand

Multiple Streams of Multiple Streams of Income*Income*

……I believe that variableI believe that variable

insurance is the one ofinsurance is the one of

the most powerfulthe most powerful

investment vehicles I haveinvestment vehicles I have ever seen. ever seen.

It’s like having all theIt’s like having all the

advantages of the bestadvantages of the best

retirement plan with veryretirement plan with very

view of its limitations. view of its limitations. **p.286p.286

Effects of “Target Premium” payment:

Hypothetical Gross Rate of Return of 12%(a)

Effects of “Guideline Annual Premium” payment:

(maximum you can pay

without becoming

MEC)

Hypothetical Gross Rate of Return of 12%(a)

INVESTOR 1$100,000 in a single investment earning 6% per year grows to:

$429,187

INVESTOR 2$100,000 in five investments; three yield poor results, but portfolio grows to:

$624,422

$429,187

$100,000

-$20,000

$624,422

$340,001

$216,694

$67,727

$20,000

Investment is Compounded for 25 Years

The hypothetical rates of returns shown are assumed on a $100,000 investment compounded for 25 years. These figures are for illustrative purposes only and do not represent the past or future performance of any actual investments. There’s no assurance that a diversified portfolio will achieve a better return than a

non-diversified portfolio, many investors who use diversification seek to avoid volatility.

12%

10%

5%

0%

Lose

$100,000($20,000 in

five investments)

VUL Sub-AccountsVUL Sub-Accounts Diversification Example:Diversification Example:

SUMMARYSUMMARY

Why WFG’s VUL Crusade?Why WFG’s VUL Crusade?

1. Because of the 1. Because of the Desperate NeedDesperate Need for Real for Real Financial Solutions.Financial Solutions.

2. Because of the 2. Because of the Neglect of Middle Neglect of Middle

AmericaAmerica by Most Securities Broker/Dealers.by Most Securities Broker/Dealers.

3. Because of the 3. Because of the Impotent ReturnsImpotent Returns Offered Offered by the Traditional Life Insurance Industry. by the Traditional Life Insurance Industry.

SUMMARYSUMMARY

4. Because of the 4. Because of the Incomplete SolutionsIncomplete Solutions from from the Traditional Investment Industry.the Traditional Investment Industry.

5. Because of the General Ignorance About5. Because of the General Ignorance About the the User-unfriendly IRS Qualified Plans.User-unfriendly IRS Qualified Plans.

6. Because it 6. Because it Attacks Inflation & TaxationAttacks Inflation & Taxation Simultaneously.Simultaneously.

7. Because No Other Financial Product 7. Because No Other Financial Product OffersOffersSo Many Significant So Many Significant IRS Tax IRS Tax AdvantagesAdvantages..

SUMMARYSUMMARY

8. Because No Other Product Offers8. Because No Other Product Offers Solutions for the Solutions for the Multiple NeedsMultiple Needs ofof FamiliesFamilies..

9. Because VUL 9. Because VUL Works.Works.

10. Because World Famous 10. Because World Famous FinancialFinancial Thinkers Recommend and Use VULThinkers Recommend and Use VUL..

NOW TWO QUESTIONSNOW TWO QUESTIONS

ACTIONACTION

• AS A WFG ASSOCIATE, HAVE YOU AS A WFG ASSOCIATE, HAVE YOU COMPLETED COMPLETED YOURYOUR FLS? FLS? (If not write down (If not write down the date you will and give to your Marketing Director.)the date you will and give to your Marketing Director.)

• CAN YOU WRITE DOWN THE NAMES CAN YOU WRITE DOWN THE NAMES OF OF 10 PEOPLE10 PEOPLE YOU KNOW AND YOU KNOW AND CARE ABOUT THAT WE CAN HELP? CARE ABOUT THAT WE CAN HELP? (If we don’t, chances are no one else will. Give to (If we don’t, chances are no one else will. Give to Marketing Director)Marketing Director)

WHY THE WFG MORTGAGE WHY THE WFG MORTGAGE CRUSADE?CRUSADE?

Why is the Power Option Loan one Why is the Power Option Loan one of the Most Powerful Financial of the Most Powerful Financial Tool for Most of Your Clients?Tool for Most of Your Clients?

Business

Class 1 The Wfg Wealth Crusade