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But What If Your Client Doesn’t Need Income?

Presented By

Michael F. Kresl, MBA, CPA

National Sales Manager

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Taxes Are Funny!?!• The hardest thing to understand in the world is the income tax. – Albert Einstein

• “The difference between death and taxes is death doesn’t get worse every time Congress meets.”–Will Rogers

• “In 1790, the nation which had fought a revolution against taxation without representation later discovering that some of its citizens weren’t much happier about taxation with representation.”–Lyndon B. Johnson“

• I am proud to be paying taxes in the United States. The only thing is I could be just as proud for half of the money.”–Arthur Godfrey

• What is the difference between a taxidermist and a tax collector? The taxidermist takes only your skin. - Mark Twain

• The income tax has made liars out of more Americans than golf. - Will Rodgers

• But let me perfectly clear: if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime. – Barack Obama

• Be wary of strong drink. It can make you shoot at tax collectors... and miss.- Robert Heinlein

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The American National Insurance Company (ANICO)

GALVESTON, TEXAS - 1905

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The American National Insurance Company (ANICO)

– 109 years old, publicly traded (ANAT)

– A AM Best A- S &P COMDEX of 80

– Asset/Liability Ratio over 120%

– Has Paid Dividends in 100 Years

– No Corporate Debt Issued

– Buy & Hold Strategy in Bond Portfolio

– No CDOs, CMOs, CLOs, CBOs, NO TARP

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But what If Your Client Doesn’t Need Income?

Aside from Income Planning, Key Concerns for Clients in Their Retirement Years are:

• Reducing Current Income Taxes and Wealth “Transfer” Taxes;

• Protecting Their Estate in the Event of Catastrophic Medical Expenses;

• Protecting Their Estate From the Astronomical Costs of Long-Term-Care;

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But What If Your Client Doesn’t Need Income?

Many Clients Have Additional Financial Concerns Beyond Retirement Income Planning

• Beating Inflation with Investments while Minimizing Market Risk;

• Passing a Guaranteed Legacy on to their Families or Favorite Charities;

• Asset Protection from Lawsuits or Creditors;

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But What if Your Client Doesn’t Need Income?

What is Being Marketed Today as . . .

“The 770 Plan”

“The President’s Plan”

“The Bank on Your Self Plan”

. . . has been done in form or another for more than half a century!

And the current Products and Benefits are better than ever!

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But What If Your Client Doesn’t Need Income?

What if you could provide many of your clients with:

• Tax-Deferred Growth with Little or No Downside Market Risk;

• A Tax-Free Death Benefit that is typically several times their initial Premium Deposit to be used in creating a meaningful legacy and/or mitigate Estate Taxes and other “Transfer Costs;”

• Provide a Significant Tax-Free Cash Benefit which can be used in the event of serious medical issues and/or Long-Term Care;

• Tax Advantaged or in some cases Tax-Free Income;

You can do all that . . . and more!

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Annuity or CD Alternative

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Annuity or CD Alternative

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Chronic, Critical & Terminal Illness ABR Benefits

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Accelerated Benefit Riders

• ANICO Accelerated Benefit Riders (ABRs)

– Terminal Illness (12-24 months)

– Chronic Illness (2 of 6 ADLs)

– Critical Illness(16 illness triggers)

Living Benefits When You Need Them Most

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Accelerated Benefit Riders

• ABRs Automatically included on all ANICO life polices of $50,000 and above Including Term!

• Table 4 and better includes the ABRs!

• No Upfront Fees or Costs

• ABRs based on Death Benefit – Larger Potential Benefits

• Partial Acceleration Available – Can Keep a Death Benefit

• Benefit is paid to the Policy Owner NOT the Care Provider

• No requirement to take benefits monthly or to Annuitize

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Accelerated Benefit Riders (ABRs)For Chronic & Critical Illness

Chronic Illness Benefit

Insured is unable to perform 2 of 6 activities of daily living (ADLs) for a period of 90 days or requires constant supervision to protect from threats to health or safety due to a severe cognitive impairment

Covered Critical Illnesses include:

Heart Attack - Stroke - Invasive Cancer -End stage renal failure

Major organ transplant - ALS - Blindness - Paralysis

Arterial Aneurysms - Cent Nervous System Tumors - AIDS - Major Burns

Major Multi-System Trauma - Severe disease of any Organ - Loss of Limbs

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Typical ABR Offers

As a General Rule ABR offers will approximate the following Percentages of the Policy Death Benefit:

Slight Impairment Moderate Impairment Severe Impairment

10% - 35% 35% - 60% 60% - 85%

Terminal Illness 85% - 90%

This is an estimation for illustrative purposes only, actual benefits will vary depending on age of contract at claim time, type of insurance and other factors

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Key Plan Benefits

• Tax-Deferred Growth

• No Downside Market Risk With 14% Cap & 0 Floor

• Tax-Free Death Benefit

• Significant Tax-Free Cash for Health Emergencies (ABRs)

• Ability to Structure a Plan to Provide Tax-Free or Tax Advantaged Income

• Flexibility to Structure the Plan to Include Guarantees Suitable to the Client’s Needs & Objectives

• Enhanced Liability & Creditor Protection

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New! Strategy Plus FIA

• 7% “Rollup” Compounded over 10 Years

• 4% “Rollup” plus Index Credits Compounded

• Lowest cost LIRs - .60 (Fixed) .30 “Stacked”

• LIR Fee only taken out in years where gains exceed Fee or carried over

• Above Average Caps & Fixed Rate Option

• 9 Accumulation “Buckets” - 1, 3, and 5 Years

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* * * Disclaimer * * *

This presentation is for the educational use of Broker/Dealers, Registered Representatives and/or Insurance Agents only. The

examples, illustrations, generalized references to the tax code and related rules in this presentation are not intended to serve as, or

substitute in any way for professional tax, legal or investment advice in regard to any specific “real life” case. Although every attempt has been

made to assure that the representations, references to tax code and related rules are correct, Michael F. Kresl, CPA, the American National Insurance Company and its employees assume no responsibility as to

the correctness of the material in the presentation.

For Broker/Dealer or Agent Use Only

Not For Use with the General Public. © 2009 Michael F. Kresl, CPA

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Circular 230 DisclosurePursuant to the rules of professional conduct as set forth in Circular 230 and as promulgated by the U.S. Treasury, nothing contained in this communication was intended or written to be

used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the IRS, and it cannot be used by any taxpayer for such purpose. No one,

without express, written consent may use or refer to any tax advice in this communication in promoting, marketing, or recommending any transaction, arrangement or matter addressed

herein.

Although effort was taken to ensure the accuracy of the facts, illustrative examples, and references to the tax code included in these materials, Michael F. Kresl, CPA and The

American National Insurance Company assume no responsibility or liability for an individual or professional advisor’s reliance on these materials. These materials are provided for educational and informational purposes only and in no way are they intended to be

construed as financial, tax, legal, or other professional advice as it relates to any individual case. Individual readers must consult their own professional tax and legal advisors.