AVIVA Wealth Transfer Planning PR03A042US For Agent Use Only 8/03 David McNamara, Senior Consultant, Advanced Markets Our event will begin shortly

AVIVA

Wealth Transfer Planning

PR03A042US For Agent Use Only 8/03

David McNamara, Senior Consultant, Advanced Markets

Our event will begin shortly

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Our Agenda

The Opportunity Case Studies Products Sales Tools Marketing Tools

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Wealth Transfer -The Opportunity

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Sales Opportunity Quiz How may people are there age 65 and over in the United States?

34 Million!

How much estate wealth is expected to transfer between generations over the next 20 years?

$10,000,000,000,000 (yes, that’s ten trillion dollars!)

Generally speaking, are people over 65 more concerned with growth of assets or capital preservation?

Capital preservation!

Q:

A:

Q:

A:

A:

Q:

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A World of Opportunity Changing demographics – an aging population

A predicted $10 trillion intergenerational wealth transfer

The appeal of “low risk” fixed products in the mature market

Helping clients give “The Ultimate Keepsake” – a matter of intent

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Wealth - By The Numbers People over age 55 currently control nearly two-thirds of all the

nation’s financial assets

They also own over 60% of all annuities Sixty percent of Americans are thinking about “the safest place”

when considering the best place for their money *(June, 2003 Roper Report)

*(Federal Reserve Report, August 2003)

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LIMRA SurveyA LIMRA survey said that over 85% of monies placed in Single Premium Annuities are not withdrawn during the annuitant’s lifetime!

WHY?

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Many widows and widowers: Change the registration on their mutual funds to read:

“Transfer on death to my children” Change the registration on their certificates of deposit (CDs)

“Payable on death to my children” Name their children as the beneficiaries of their annuities

WHY?

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They want to leave their

money to their loved ones when

they pass on

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Many Retirees: Have adequate income and other assets Have earmarked certain assets (CDs, annuities) for their heirs, mainly

children and grandchildren Will not change the spending habits

Prospects who fit this profile are ideal candidates for a “Single Premium Life Insurance” plan

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Annuities vs. Single Premium Life

Annuity LifeTax Timing of Distributions YES YESCompetitive Yield YES YESSafety of Principal YES YESLiquidity Provisions YES YESPasses to Heirs Probate Free YES YESCan be Annuitized YES YES

DEATH BENEFIT PASSES TO BENEFICIARIES INCOME TAX-FREE NO YES

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A Two Question Sales Process

DO YOU HAVE ANY ACCOUNTS OR ASSETS YOU SPECIFICALLY INTEND TO LEAVE TO...

...your family? ... a charity? …or a religious organization?

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A Two Question Sales Process

“If I could show you how to significantly increase the amount of money you intend to leave to your family immediately, income tax-free and you would still control the cash, and it is safe, would you be interested?”

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Candidate Profile - Single Premium Life

Single retiree between the ages of 60 and 80 in reasonably good health

Adequate retirement income Sufficient assets to maintain desired lifestyle Certain assets targeted for heirs, religious organizations or charities No need for complicated estate planning

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Case Study I Janet

Janet is healthy, age 62.

She has $55,000 sitting in several certificates of deposit, which are due to mature shortly.

Janet is also the proud grandparent of three children whom she adores.

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Case Study IA Better Alternative Use the $55,000 to fund a single premium UL policy, designating her

3 grandchildren as beneficiaries, thus purchasing $114,436 of guaranteed death benefit that will pass to her grandchildren income tax free1

She is not anticipating an estate tax problem. Janet owns the policy instead of placing the policy in a trust, therefore retaining control.

Based upon current interest rates, the death benefit grows to $129,613 by year 10 and $158,074 by year 20 (assuming no loan, withdrawal or surrender).

1Based upon female age 62 non-tobacco rates, and guaranteed interest of 3.00%.2 Based on a credit rate of 5.72%.

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Case Study II* Single Premium Survivor Life

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Case Study IIConsidering Alternatives You have learned that this couple has adequate income to continue in

their current lifestyle

You have also learned that they have “earmarked” a sum of $125,000 from their bank accounts to be split equally between their three children and a favorite charity

You have uncovered a “Wealth Transfer” sale

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Case Study IIThe Solution Purchase a Single Premium Survivorship Universal life policy with a

single premium of $125,000, generating a guaranteed death benefit of $223,935

Death benefit is payable only when both of the insureds have died A $125,000 annuity earning 6% interest would take over 10 years to

grow to $227,208, by which time the clients would be over 83 years old!

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Candidate Profile Single Premium Survivor Life

Married couple between the ages of 60 and 80 Have adequate retirement income

Have sufficient assets to maintain desired lifestyle until both have died

Have earmarked certain assets for heirs, religious organizations or charities

Have little need for complicated estate planning At least one person in good health

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Converting Existing Annuities

Revisit existing annuity clients to determine their intentions regarding the ultimate disposition of the proceeds from their annuity

“A Matter of Intent”

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The Approach: One statement followed by one question.

The Statement: “I have heard of an idea which is being taken advantage of by people like yourself who own annuities, and I would like to share it with you.”

The Question: “Do you think you will ever spend the money in the annuity during your lifetime or do you intend to leave it to your children, grandchildren, religious organization or charity?”

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Stepping Up to the Next LevelEstate Planning Techniques

Wealth Transfer market:

Discovering larger sales:

Variety of solutions:

A Double Opportunity

Average annual premiumsover $20,000

• Irrevocable Life Insurance Trusts (ILIT)

• Use of survivor life policies• Gifting strategies

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Prospecting in the Wealth Transfer market can uncover additional, larger sales

Estate taxes can significantly deplete the estate passing to heirs depending on the year of death….will heirs be forced to sell treasured assets to pay estate taxes?

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The Products

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Keepsake 201 Single premium universal life design Multiple Premium Options (Up to 5 Years) Guaranteed Return of Principal Guaranteed Initial Face Amount Pro rata reduction of guarantees with withdrawals 10% surrender charge free withdrawal years 1-5, 12% years 6-9 3% Minimum Guaranteed Rate

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Underwriting Made Easy Issue ages 40 to 85 Simplified issue for net amount of risk of $100,000 and under No blood/urine Main focus on APS as primary information source Standard through Table D Ratings up to P available Annuity fallback option right on the app!

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Why Keepsake 201?

Immediately INCREASES the Death Benefit Value to beneficiaries

A TAX-EFFICIENT way to transfer wealth to beneficiaries INCOME-TAX FREE Death Benefit to beneficiaries Life Insurance AVOIDS PROBATE* LIQUIDITY for the owner should the need arise

*Provided the estate is not named as beneficiary.

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Keepsake 201 provides leverage: A $150,000 legacy costs less!

$ 5 0 ,0 0 0B en efic ia ry A

$ 5 0 ,0 0 0B en efic ia ry B

$ 5 0 ,0 0 0B en efic ia ry C

$ 1 5 0 ,0 0 0B an k C D

Gains taxable every year

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Keepsake 201 provides leverage: A $150,000 legacy costs less!

$ 5 0 ,0 0 0B en efic ia ry A

$ 5 0 ,0 0 0B en efic ia ry B

$ 5 0 ,0 0 0B en efic ia ry C

$ 7 4 ,1 5 0K eep sake 2 0 1

Savings of over $75,000!

Income Tax Free Death Benefit!

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Can you help the client do something with $75,000?

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Treasure 201

Duplicate features of Keepsake 201 First year premium enhancement bonus of 4% Trade off with writing agent’s compensation

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Keepsake Survivorship 200® Same guarantees as Keepsake

201 Return of Premium Guarantee* Death Benefit Guarantee*

Covers two lives Liquidity will be enhanced to

match the Keepsake 201

*assuming no loans, withdrawals or change in face amounts

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Sales Tools

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Keepsake 201 & Insmark -- A Winning Combination

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Keepsake 201 vs. Annuity Insmark Presentations are Clear and Easy to Understand

Female Age 70, with a $100,000 premium deposit

Assume 4.5% Annuity Growth

27% Tax Bracket

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Repositioning Assets

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Marketing Tools

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Agent website: www.avivaedge.com Keepsake client CD Wealth transfer flyers Overview of wealth transfer concept Various case designs Wealth transfer planning tax basics Sample pre-approach letters Client point of sales track Ad mat sample of pre-approved ads for client seminar Sample seminar invitation Ultimate Keepsake Power Point presentations for client seminars Various product brochures Keepsake 201, Treasure 201 & Keepsake Survivorship 200 policy specs

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Our contact info:

Advanced Markets 800-225-8073 option 5

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Neither Aviva nor any of its employees is authorized to give legal, tax or accounting advice. Any information and/or sample documents provided by Aviva are for informational use only. Agents are advised that any information and/or sample documents provided by Aviva are generic in nature. Your state laws may vary. Agents are strongly advised to consult with individual client’s legal, tax and/or financial professional for specific advice or recommendations.

Documents

AVIVA Wealth Transfer Planning PR03A042US For Agent Use Only 8/03 David McNamara, Senior Consultant, Advanced Markets Our event will begin shortly