Minnesota Life National Sales Director - PowerPoint Presentation

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Minnesota Life

National Sales Director

Louis Slagle

EVP Life Distribution

James Hahn

IUL Strategies

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Benefits of IUL

Flexible premium and death benefit Tax-free death benefitPotential for greater cash value growth than fixed products

Tax-deferred cash value growthCrediting floor to protect from negative creditingAgreements allow customization

2

Depending upon actual policy experience, the Owner may need to increase premium payments to keep the policy in force

.

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Minnesota Life Sales by Index

S&P 500 72.2% of IUL salesFixed account 14.2% of IUL salesMulti-Index 8.7% of IUL sales

Other 4.9% of IUL sales3

Source: Minnesota Life actuarial software

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Traditional Crediting Strategies

Annual Point-To-PointMulti-Year Point-To-Point (i.e. 3 Year)Monthly Point-To-Point

Monthly AverageDaily Average4

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Benefits of Cash Value

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Life Insurance in Retirement Program

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Annual Limits on Contributions

Tax-deferred Accumulation

Tax-preferred

Distribution

Income-ta

x-free Death Benefits

Subject to Healthcare

Surtax – 3.8%

Traditional IRA

1

Roth IRA

1

Qualified

Plan

Certificate of Deposit

Municipal

Bond

2

Individual

Owned Deferred Annuity

3, 4

Life Insurance5, 6

1 The ability to contribute or deduct contributions may be limited by adjusted gross income limits.2 The principal value of bonds will fluctuate with market conditions. Bonds redeemed prior to maturity may be worth more or less than their original cost. Bond interest paid by a municipality outside the state in which you reside could be subject to state and local income taxes. If you sell a municipal bond at a profit, you could incur capital gains taxes. In some cases, municipal bond interest could be subject to the federal alternative minimum tax.3 An annuity is a long-term, tax-deferred investment vehicle designed for retirement. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10 percent federal tax penalty. If the annuity will fund an IRA or other tax-qualified plan, the tax-deferral feature offers no additional value. Not FDIC/ NCUA insured. Not bank guaranteed. Not insured by any Federal Government Agency. There are charges and expenses associated with annuities, such as deferred sales charges for early withdrawals.4 Upon annuitization, a portion of principal is included in the annuity payout and is not subject to income taxes.5 Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods.6 Withdrawals and loans from a life insurance contract are subject to special tax rules if the policy is a Modified Endowment Contract (MEC). Other than contribution limits or tax treatment, several other factors should be considered before purchasing any of these products. These include investment objectives, costs and expenses, liquidity, safety, fluctuation of principal or return, credit rates, rider availability, surrender periods and other product/investment characteristics.

Contribution & Tax Characteristics of Assets

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Life Insurance Breakdown

8Initial annual distribution at age 65: $185,263Number of annual distributions: 20Total

contributions: $1,000,000Total gain: $1,870,085Total distributions: $3,705,259Death Benefit-Age 85: $395,596

Source

: Minnesota Life Illustration software, March 2016. These are hypothetical examples used for advisor education only. Illustration results assume that the currently illustrated non-guaranteed elements will remain unchanged for all years shown. This is not likely to

occur and actual results may be more or less favorable than those shown. Male, 45, preferred non-tobacco $1,039,525 initial death benefit. 7.29% illustrated rate.

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College Funding

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College Tuition is on the Rise

The College Board, Annual Survey of Colleges; NCES, Integrated Postsecondary Education Data System (IPEDS),

http://

trends.collegeboard.org/collegepricing/

figures-tables/average-rates-growth-published-charges-decade

, Accessed September 9, 2015.

10

From 2005-2015, public, in-state college tuition has increased an average of 3.5% annually – a total increase of approximately 42% over that same time period.

42%

3.5%

increase in the cost of public, in-state tuition since 2005

average annual increase in public, in-state tuition

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College Funding Vehicles

UGMA/UTMACoverdell Education Savings AccountSection 529 savings plansRoth IRAsLife insurance cash values

11

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Benefits of using Life Insurance

ControlPolicyowner remains in controlFlexibilityFunding flexibility – ability to contribute more

Assets can be used for non-college expenses Tax-deferredDistributions can be tax-free

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Benefits of using Life Insurance

Financial aidLife insurance is not considered in financial aid profilesSub-account optionsFunding flexibility

Assets can be used for non-college13

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Case Study: Two Examples

College cost calculator – $220,000 in 18 yearsOption 1: Tap accumulation value to pay tuitionOption 2: Repay student loan in lump sumGive student a fresh, clean start

14Source: https://bigfuture.collegeboard.org/pay-for-college/college-costs/college-costs-calculator

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Option 1:

$9,000 premium paid for 18 years

$55,000 switch at basis strategy with partial surrenders and loans for 4 years ($220,000)

A

ccumulation value after college: $175,463

Death benefit

after

college: $337,340

Male, Age 35, standard non-tobacco, 7% illustrated rate, $283,794 initial death benefit (increasing

). Hypothetical

example for illustrative purposes

only.

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$9,000 premium paid for 18 years

I

nterest deferred school loan

Pay off $220,000 loan in lump sum with a switch

at basis strategy

including

partial surrenders and

loans

Accumulation value after college: $199,653

Death benefit after college: $338,254

Option 2:

Male, Age 35, standard non-tobacco, 7% illustrated rate, $283,794 initial death

benefit (increasing

). Hypothetical example for illustrative purposes only.

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Business Strategies:

Retaining Top Talent

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Employer

Offer small businesses a solution that helps retain key employees without giving away ownership

Employee

Flexibility to access

cash prior to retirement

Tax-free incomeDeath

benefit

Long-term care

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Case Study

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Retaining Top Talent

Recent studies show that 75% of an organization’s top performers leave the company within three years1

Replacement costs ranging anywhere from 60% to 200% of annual salary1Employers must increasingly look for ways to provide additional value to incentivize their key employees

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1Source: http://benefitsdoneright.com

/ 2014

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Having a Different Conversation

Business Owner

Employee

Advisor

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In Summary:

Benefits for the Small BusinessRetain top talentDifferent conversationOffer a unique benefit to key employees

Tax deductionSimple options available21

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In Summary:

Benefits for the EmployeeTax-preferred income, in addition to other benefitsTax-free death benefitPotential for long-term

care protectionRewarding a loyal impactful employee22

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Business Succession Strategies

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Case Study

Male, 45Business owner

Help ensure long-term viability of business when he retires

At age 65, will purchase shares of minority partner and transition business to son

Looking for additional income and LTC coverage

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1

1

Hypothetical example for illustrative purposes only.

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Option 1:

$45,000 premium to age 65

Pre-determined buyout at age 65

Lump

sum

switch

at basis strategy

for buyout for

$

1,000,000 including

partial surrenders and

loans

Son has 100% ownership

Father has $68,019 income to age 100

Male, 45 standard non-tobacco, $965,052 initial death benefit (increasing), 7.0%

illustrated rate, BAS S&P 500® 2 Year

Uncapped Strategy,

Overloan

Protection

Agreement. Hypothetical example for illustrative purposes only.

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Option 2:

$45,000 premium to age 65

Pre-determined buyout at age 65

Lump

sum

switch

at basis strategy

for buyout for

$

1,000,000 including

partial surrenders and

loans

Son has 100% ownership

Father has $22,761 income to age 100

LTC Agreement providing $10,200/month

Male, 45 standard non-tobacco, $965,052 initial death benefit (increasing), 5.0%

illustrated rate, BAS S&P 500® 2 Year

Uncapped Strategy, Accelerated Death Benefit Agreement,

Overloan

Protection Agreement, Long Term Care Agreement $1,000,000 2

%. Hypothetical example for illustrative purposes only.

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Power of the Uncapped Strategy

CAGR

years

S&P500

12.5% 1 year

PTP cap

1

1 year BAS

2

2

year BAS

3

5

year BAS

4

20

7.84%

7.63%

8.07%

8.90%

6.03%

30

8.75%

7.75%8.26%9.37%9.56%

Historical results based on end of year, consistent with supplemental illustration methodology by Minnesota

Life, 1/16.

These values assume that the currently illustrated non-guaranteed elements will continue unchanged for all years shown. This is not likely to occur and actual results may be more or less favorable than those shown. Past performance does not guarantee future results.

Results show up to

1.81%

higher annual returns

1

Historical Compound Average return of S&P 500

®

(excluding dividends) with 100% Participation, assuming the current Growth Cap of

12.5%

applied throughout the applicable

period

2

Historical Compound Average return of S&P 500

®

(excluding dividends) with 105%

participation rate,

65% allocated to the indexed account, 35% applied to the fixed account with a declared rate of 3%, assuming the account is uncapped throughout the applicable

period

3

Historical

Compound Average return of S&P 500

®

(excluding dividends) with 110%

participation rate,

85% allocated to the indexed account, 15% applied to the fixed account with a declared rate of 3%, assuming the account is uncapped throughout the applicable

period

4

Historical

Compound Average return of S&P 500

®

(excluding dividends) with 125%

participation rate,

105% allocated to the indexed account, 0% applied to the fixed account with a declared rate of 3%, assuming the account is uncapped throughout the applicable period

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Insurance products described here are underwritten and issued by Minnesota Life Insurance Company. Annexus Enterprises, LLC serves as a distributor of these products and is

independently owned and operated. Annexus designs insurance solutions combining principal protection with index growth opportunities. Annexus uses patented technologies developed in partnership with Genesis Financial to help individuals face their financial future with confidence.

This information should not be considered as tax or legal advice. Clients should consult their tax or legal advisor regarding their own tax or legal situation.BGA Indexed Universal Life Insurance is designed first and foremost to provide life insurance protection. While the interest crediting options are attractive for cash value accumulation, this product should always be promoted to first meet the death benefit needs of families and businesses with cash accumulation as a secondary benefit. One cannot invest directly in an index. One can lose money in

these products

. Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender charges. Guarantees are based on the claims-paying ability of the issuing insurance company. Agreements are available for additional cost and may be subject to restrictions. Agreements may not be available in all states or may exist under a different name in various states

. Policy loans and withdrawals may create an adverse tax result in the event of lapse or policy surrender, and will reduce both the surrender value and death benefit. You/Clients should consult your/their tax advisor when considering taking a policy loan.

The underlying indices only recognize the changes in stock prices and do not include any dividend returns. While the policy and the Indexed Accounts do not actually participate in the stock market or the S&P

500

Index, and one cannot invest directly in an Index, the performance of the underlying index

may

exceed the indexed growth cap offered on Index Account A. Interest crediting within these accounts will vary based on the movement of the equities within the underlying index. If the index experiences growth less than or equal to 0%, no index credit will be applied to the account. Administrative and insurance charges are deducted every month, regardless of whether premium outlays are made.

The Policy is not sponsored, endorsed, sold or promoted by Standard & Poor’s (“S&P”) or its third party licensors. Neither S&P nor its third party licensors makes any representation or warranty, express or implied, to the owners of the Policy or any member of the public regarding the advisability of investing in securities generally or in the Policy particularly or the ability of the S&P

500

(the “Index”) to track general stock market performance. S&P’s and its third party licensor’s only relationship to Minnesota Life is the licensing of certain trademarks and trade names of S&P and the third party licensors and of the Index which is determined, composed and calculated by S&P or its third party licensors without regard to Minnesota Life or the Policy. S&P and its third party licensors have no obligation to take the needs of Minnesota Life or the owners of the Policies into consideration in determining, composing or calculating the Index. Neither S&P nor its third party licensors is responsible for and has not participated in the determination of the prices and amount of the Policy or the timing of the issuance or sale of the Policy or in the determination or calculation of the equation by which the Policy is to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Policy.

Neither

S&P,

its affiliates nor their third party licensors guarantee the adequacy, accuracy, timeliness or completeness of the index or any data included therein or any communications, including but not limited to, oral or written communications (including electronic communications) with respect thereto.

S&P,

its affiliates and their third party licensors shall not be subject to any damages or liability for any errors, omissions or delays therein.

S&P

makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the marks, the index or any data included therein. Without limiting any of the foregoing, in no event whatsoever shall S&P

,

its affiliates or their third party licensors be liable for any indirect, special, incidental, punitive or consequential damages, including but not limited to, loss of profits, trading losses, lost time or goodwill, even if they have been advised of the possibility of such damages, whether in contract, tort, strict liability or otherwise.Securian Financial Group, Inc.www.securian.com Insurance products offered by Minnesota Life Insurance Company 400 Robert Street North, St. Paul, MN 55101-2098© 2016 Securian Financial Group, Inc. All rights reserved.44079 04-2016 DOFU 04-201629