Life Goals Sample

Bob Sandersand

Meredith Sanders

Presented by:John Q. Advisor, CLU, ChFCFor Evaluation Purposes Only10735 David Taylor DriveSuite 350Charlotte, North Carolina 28262Phone: 1-800-438-6017Mobile Phone: (704) 549-1100Fax: (704) 549-5700E-mail: [email protected]

This analysis provides only broad, general guidelines, which may be helpful in shaping your thinkingabout your financial needs. It can serve as a guide for discussions with your professional advisors. Thequality of this analysis is dependent upon the accuracy of data provided by you. Calculations containedin this analysis are estimates only.

Actual results may vary substantially from the figures shown. All rates of return are hypothetical andare not a guarantee of future performance of any asset, including insurance or other financial products.All inflation rates are estimates provided by you.

This analysis contains very specific computations concerning the value of your assets today. Thesecomputations are based on assumptions you provided concerning the value of your assets today and therate at which the assets will appreciate. These assumptions must be carefully reviewed for theirreasonableness. These assumptions are only a "best guess". The actual values and rates of growth maybe significantly different from those illustrated. No guarantee can be made regarding values and taxeswhen actual appreciation rates and tax rates cannot be known at this time.

Any assumptions are for illustrative purposes and not to be considered as legal advice; only your legalcounsel should provide such advice. No legal or accounting advice is being rendered either by thisreport or through any other oral or written communications. Please discuss legal and accounting mattersdirectly with your counselors in each of those areas. Because your financial concerns and goals maychange in the future, periodically monitoring actual results and making appropriate adjustments areessential components of your program. Annual updating allows a year of estimated values to bereplaced with actual results and can be very helpful in your determining whether your analyses are onyour desired course. Strategies may be proposed, including the acquisition of insurance and otherfinancial products. When this occurs, additional information about the specific product (including aprospectus, if required) will be provided for your review.

IMPORTANT: The projections or other information generated by this investment analysis tool (LifeGoals) regarding the likelihood of various investment outcomes are hypothetical in nature, do notreflect actual investment results and are not guarantees of future results.

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, thisnotice is to inform you that any U.S. federal tax advice contained in this presentation is not intended orwritten to be used, and cannot be used, for the purpose of (i) avoiding penalties under the InternalRevenue Code or (ii) promoting, marketing or recommending to another party any transaction or matteraddressed in this presentation.

Disclosure

Version 1.00.00 c. 1.0.0.0Presented by: John Q. Advisor, CLU, ChFCFor Evaluation Purposes Only

August 30, 20072 of 32

There are many potential financial goals in your life. This presentation considers the information youhave shared—your assets, your wishes, and your thoughts about the future—to determine your progresstoward the following fundamental financial goals:

Survivor Needs Goal

If something were to happen to you or your spouse, would your family haveenough to live comfortably?

Monthly Savings Goal for Retirement

Will your current annual savings be enough for a financially secure retirement?

Monthly Savings Goal for Education

Are you saving enough each year to ensure a quality education for your children?

Disability Income Needs Goal

If you or your spouse loses the ability to earn an income as a result of an accidentor illness, how would you maintain your lifestyle?

Getting StartedConfirm your information to ensure an accurate presentation specific to your situation.1.Analyze your current progress towards each of your goals.2.Prioritize which goals require immediate action and consider solutions.3.

Defining Your Financial Goals

Presented by: John Q. Advisor, CLU, ChFCFor Evaluation Purposes Only

August 30, 20073 of 32

Bob Sanders, Male Born: Feb. 10, 1967Meredith Sanders, Female Born: Apr. 15, 1967

Bob and Meredith are married.•Include Social Security in analysis.•

1612 Windy Gap DriveCharlotte, North Carolina 28232Home Phone: 704 545-8754Business Phone: 704 330-7550Email Address:[email protected]

Dependents: Robbie Born: Feb. 01, 1997Sarah Born: Aug. 12, 2001

Personal Information

Bob's Current Salary: $75,000Meredith's Current Salary: $62,000

Earnings

Total Assets: $15,000Total Monthly Savings: $200Average Growth Rate: 6%

Assets

Total Mortgage Balance: $180,000Total Other Debts: $0

Debts

Total Retirement Assets: $28,500Total Monthly Contributions: $600Growth Rate: 5.77%

401k Bob $15,000 $200 $100 6.00%401k Meredith $10,000 $200 $100 5.00%IRA Meredith $3,500 $0 $0 7.00%

Description OwnerCurrentAmount

MonthlySavings

CompanyMatch

GrowthRate

Retirement Assets

Survivor Income Needs: 70% of current household income while the children are at home.Survivor Income Needs: 60% of current household income for remaining years.

Group Policy Meredith $50,000 $0

Current Life Insurance Policies:

Description Insured Death Benefit Premium

Survivor Goal

Bob retires at 65, Meredith retires at 65.Bob starts Social Security benefits at 67, Meredith starts Social Security benefits at 67.Retirement Income Needs: 80% of current household income for life.

Retirement Goal

Confirmation of Facts


August 30, 20074 of 32

Robbie: Provide 100% of the total cost of Clemson University ($27,014 this year) for 4 yearsSarah: Provide 100% of the total cost of The University of North Carolina at Chapel Hill ($27,527this year) for 4 yearsCurrent Savings Amount: $0Current Monthly Savings: $0Growth Rate: 5.00%

Education Goal

Replace 60% of Bob's salary.Replace 60% of Meredith's salary.

Disability Income Goal

Confirmation of Facts


August 30, 20075 of 32

Financial goals are best achieved through preparation that starts today. This presentation charts yourcurrent progress toward each of your financial goals and what is needed to achieve 100% of thosegoals.

Bob's Survivor Needs Goal

0% 100%

3%

You currently have 3% of the amountneeded to meet your goal.

Additional Amount Neededto Meet 100% of Goal $1,460,121

Goal: Provide immediate cash and continuing incomeneeds for your survivors in the event of your deathtoday.Considers: Total available assets of $43,500

Meredith's Survivor Needs Goal

0% 100%

7%

You currently have 7% of the amountneeded to meet your goal.

Additional Amount Neededto Meet 100% of Goal $1,197,176

Goal: Provide immediate cash and continuing incomeneeds for your survivors in the event of your deathtoday.Considers: Total available assets of $93,500

Retirement Savings Goal

0% 100%

48%

You are currently saving 48% of the monthlysavings amount needed to meet your goal.

Additional Monthly Savings Neededto Meet 100% of Goal $3,497

Goal: Provide 80% of your current lifestyle, adjustedfor inflation, for 23 years of retirement starting whenBob retires at age 65.Considers: Existing retirement income. Assets andsavings assume your average rate of return of 5.85%

Education Savings Goal

0% 100%

0%

You currently have no fundsavailable for this goal.

Additional Monthly Savings Neededto Meet 100% of Goal $1,954

Goal: Provide funds needed to meet estimated expensesof education objectives.Considers: Current balance of $0 and monthly savingsof $0.00 assume a 5.00% rate of return

Bob's Disability Needs Goal

0% 100%

0%


Additional Disability Income Neededto Meet 100% of Goal $45,000

Goal: Provide 60% of current salary in the event youbecome disabled today.

Summary of Your Financial Goals


August 30, 20076 of 32

Meredith's Disability Needs Goal

0% 100%

0%


Additional Disability Income Neededto Meet 100% of Goal $37,200

Goal: Provide 60% of current salary in the event youbecome disabled today.

Summary of Your Financial Goals


August 30, 20077 of 32

Objective

In the event of Bob's death today, provide funds for:Immediate Cash Needs—to fund final expenses, debts, or emergency funds•Continuing Income Needs—to help support your family’s ongoing lifestyle•

Immediate Cash Needs Due at Bob's Death1%

39%

7%

53%

Final Expenses $5,000Present Debts $180,000Emergency Fund $34,250Education Needs $243,390Total Immediate Cash Needs $462,640

Continuing Income Needs for Meredith$360,000

270,000

180,000

90,000

050 60 70 80

Social Security Salary & Other IncomeAdd'l Income Needed

Total Survivor Income Needed $2,749,249Total Survivor Income Sources $1,708,268Total Continuing Income Needs $1,040,981

Total Survivor Needs $1,503,621

Assets Available to Fund Survivor Needs

35%

31%

34% Bob's Retirement Assets $15,000Meredith's Retirement Assets $13,500Bob's Life Insurance $0Other Assets $15,000Total Available Assets $43,500

Remaining Survivor Needs1,2 $1,460,121

0% 100%

3%

Survivor Needs Goal Progress

Survivor Needs GoalAssumes Bob Dies Today

1Remaining Survivor Needs equals ‘Total Survivor Needs’ (Immediate Cash Needs + Continuing Income Needs) minus‘Assets Available to Fund Survivor Needs’.

2Additional amount needed to fund Total Immediate Cash Needs Portion ONLY = $419,140 assuming Total Available Assetsare only used for these needs.


August 30, 20078 of 32

Immediate Cash Needs Due at Bob's Death $462,640Final Expenses—Money to pay doctor bills, hospital stays, and funeral arrangements $5,000Present Debts—Pay off the existing debts listed below to protect the family from creditors

Mortgage Balance $180,000•$180,000

Emergency Fund—3 months household income to protect against a family emergency $34,250Education Needs— A college fund to protect your children's future $243,390

Robbie: Providing $27,014 a year starting at age 18 for 4 years would require $118,244 today.•Sarah: Providing $27,527 a year starting at age 18 for 4 years would require $125,146 today.•

Continuing Income Needs for Meredith $1,040,981Survivor Income Needed

Period Based onMeredith's Age

CurrentHousehold

Income

Percent ofHousehold

Income

AnnualNeed

Today

AnnualAmount at

Start of Period

Lump SumValueToday

40 - 51 $137,000 70% $95,900 $95,900 $1,037,57652 - 88 $137,000 60% $82,200 $117,198 $1,711,673

Total Amount Needed Today to Fund Survivor Income Needs $2,749,249

Survivor Income Sources

Income Source1

Annual Amountwhen Income

Source BeginsAnnual

IncreaseLump Sum

Value TodayEmployment $62,000 3% $1,242,439Social Security2 $27,665 3% $465,829

Total Amount Today of All Survivor Income Sources $1,708,268

Assumed Years of DeathThis presentation assumes Bob dies immediately and Meredith dies at age 88.•

Income Needs AssumptionMeredith will require 70% of current household income while the children are at home. When theyoungest child turns 18, Meredith will require 60% of current household income.

•

Interest Rate AssumptionsEducation costs are assumed to increase at a 6% annual inflation rate.•All other living expenses are assumed to increase at a 3% annual inflation rate.•All lump sum values in today's dollars are assumed to grow at 5% annually.•

Social Security AssumptionsBob and Meredith's Social Security benefit amounts based on their current salaries. SocialSecurity survivor benefit ends when youngest child turns 16, however children's benefits are paiduntil age 18. Social Security retirement benefit begins at Meredith's age 67. No Social Securitybenefits will be paid if there are years after the youngest child turns 18, but before Meredith's age67.

•

Assumptions & Notes

Survivor Needs Goal DetailsAssumes Bob Dies Today

1See Confirmation of Facts for income details.

2See Assumptions & Notes section for details.


August 30, 20079 of 32

2008 40 $95,900 $62,000 $27,665 $0 $6,235 $0 $6,2352009 41 98,777 63,860 28,495 0 6,422 0 12,6582010 42 101,740 65,776 29,349 0 6,615 0 19,2732011 43 104,793 67,749 30,230 0 6,814 0 26,0872012 44 107,936 69,782 31,137 0 7,018 0 33,105

2013 45 111,174 71,875 32,071 0 7,229 0 40,3332014 46 114,510 74,031 33,033 0 7,445 0 47,7782015 47 117,945 76,252 34,024 0 7,669 0 55,4472016 48 121,483 78,540 17,522 0 25,421 0 80,8682017 49 125,128 80,896 18,048 0 26,184 0 107,052

2018 50 128,882 83,323 18,589 0 26,969 0 134,0212019 51 132,748 85,822 19,147 0 27,778 0 161,8002020 52 117,198 88,397 0 0 28,800 0 190,6002021 53 120,713 91,049 0 0 29,664 0 220,2652022 54 124,335 93,781 0 0 30,554 0 250,819

2023 55 128,065 96,594 0 0 31,471 0 282,2902024 56 131,907 99,492 0 0 32,415 0 314,7052025 57 135,864 102,477 0 0 33,388 0 348,0922026 58 139,940 105,551 0 0 34,389 0 382,4812027 59 144,138 108,717 0 0 35,421 0 417,902

2028 60 148,462 111,979 0 0 36,483 0 454,3862029 61 152,916 115,338 0 0 37,578 0 491,9642030 62 157,504 118,798 0 0 38,705 0 530,6692031 63 162,229 122,362 0 0 39,866 0 570,5352032 64 167,096 126,033 0 0 41,062 0 611,598

2033 65 172,109 0 35,471 0 136,637 0 748,2352034 66 177,272 0 38,155 0 139,117 0 887,3522035 67 182,590 0 40,967 0 141,623 0 1,028,9752036 68 188,068 0 42,196 0 145,871 0 1,174,8462037 69 193,710 0 43,462 0 150,247 0 1,325,093

2038 70 199,521 0 44,766 0 154,755 0 1,479,8482039 71 205,507 0 46,109 0 159,397 0 1,639,2462040 72 211,672 0 47,492 0 164,179 0 1,803,4252041 73 218,022 0 48,917 0 169,105 0 1,972,5302042 74 224,563 0 50,385 0 174,178 0 2,146,707

2043 75 231,299 0 51,896 0 179,403 0 2,326,1112044 76 238,238 0 53,453 0 184,785 0 2,510,8962045 77 245,386 0 55,057 0 190,329 0 2,701,2252046 78 252,747 0 56,708 0 196,039 0 2,897,2642047 79 260,330 0 58,410 0 201,920 0 3,099,184

Income Assets

YearMeredith's

Age

AnnualIncomeNeeded

Salary& OtherIncome

EstimatedSocial

SecurityWithdrawalsFrom Assets

AnnualShortfall

AssetBalance

CumulativeShortfall



August 30, 200710 of 32

2048 80 268,140 0 60,162 0 207,977 0 3,307,1612049 81 276,184 0 61,967 0 214,217 0 3,521,3782050 82 284,469 0 63,826 0 220,643 0 3,742,0212051 83 293,003 0 65,741 0 227,263 0 3,969,2842052 84 301,793 0 67,713 0 234,081 0 4,203,364

2053 85 310,847 0 69,744 0 241,103 0 4,444,4672054 86 320,173 0 71,837 0 248,336 0 4,692,8032055 87 329,778 0 73,992 0 255,786 0 4,948,589

Income Assets

YearMeredith's

Age

AnnualIncomeNeeded

Salary& OtherIncome

EstimatedSocial


AnnualShortfall

AssetBalance

CumulativeShortfall



August 30, 200711 of 32

ObjectiveIn the event of your death today, provide funds for:

Immediate Cash Needs—to fund final expenses, debts, or education expenses•Continuing Income Needs—to help support your family’s ongoing lifestyle•

Proposed New Life Insurance $1,500,0001

Remaining Survivor NeedsWith No New Life Insurance

$360,000

270,000

180,000

90,000

045 50 55 60 65 70 75 80 85

Remaining Survivor NeedsWith New Life Insurance

$360,000

270,000

180,000

90,000

045 50 55 60 65 70 75 80 85

Withdrawals from Assets and Life InsuranceSocial Security

Salary & Other IncomeAdditional Survivor Need

Summary of Survivor Needs

Remaining Survivor Needs $1,460,121

less Proposed New Life Insurance Proceeds $1,500,000

Your survivor needs appear to be funded.

0% 100%

100%


Survivor Needs RecommendationAssumes Bob Dies Today

1Life insurance policy premiums are not illustrated in this presentation.


August 30, 200712 of 32

Objective

In the event of Meredith's death today, provide funds for:Immediate Cash Needs—to fund final expenses, debts, or emergency funds•Continuing Income Needs—to help support your family’s ongoing lifestyle•

Immediate Cash Needs Due at Meredith's Death1%

39%

7%

53%

Final Expenses $5,000Present Debts $180,000Emergency Fund $34,250Education Needs $243,390Total Immediate Cash Needs $462,640

Continuing Income Needs for Bob$360,000

270,000

180,000

90,000

050 60 70 80

Social Security Salary & Other IncomeAdd'l Income Needed

Total Survivor Income Needed $2,749,249Total Survivor Income Sources $1,921,213Total Continuing Income Needs $828,036

Total Survivor Needs $1,290,676

Assets Available to Fund Survivor Needs16%

14%

54%

16%

Bob's Retirement Assets $15,000Meredith's Retirement Assets $13,500Meredith's Life Insurance $50,000Other Assets $15,000Total Available Assets $93,500

Remaining Survivor Needs1,2 $1,197,176

0% 100%

7%


Survivor Needs GoalAssumes Meredith Dies Today

1Remaining Survivor Needs equals ‘Total Survivor Needs’ (Immediate Cash Needs + Continuing Income Needs) minus‘Assets Available to Fund Survivor Needs’.

2Additional amount needed to fund Total Immediate Cash Needs Portion ONLY = $369,140 assuming Total Available Assetsare only used for these needs.


August 30, 200713 of 32

ObjectiveIn the event of your death today, provide funds for:

Immediate Cash Needs—to fund final expenses, debts, or education expenses•Continuing Income Needs—to help support your family’s ongoing lifestyle•

Proposed New Life Insurance $800,0001

Remaining Survivor NeedsWith No New Life Insurance

$360,000

270,000

180,000

90,000

045 50 55 60 65 70 75 80 85

Remaining Survivor NeedsWith New Life Insurance

$360,000

270,000

180,000

90,000

045 50 55 60 65 70 75 80 85

Withdrawals from Assets and Life InsuranceSocial Security

Salary & Other IncomeAdditional Survivor Need

Summary of Survivor Needs

Remaining Survivor Needs $1,197,176

less Proposed New Life Insurance Proceeds $800,000

Survivor Needs Left Unfunded $397,176

0% 100%

69%


Survivor Needs RecommendationAssumes Meredith Dies Today

1Life insurance policy premiums are not illustrated in this presentation.


August 30, 200714 of 32

Social Security provides benefits when you die, become disabled, or retire. Mostworkers are covered by Social Security, exceptions include railroad employees,some state and local government employees, and federal workers hired prior to1984. Benefits are based on earnings and the length of time employed. Spousesand children of eligible workers may also receive benefits based on the worker'srecord.

Qualifications differ for each kind of benefit, as does the size of the benefit payable. Monthly benefitsincrease each January based on changes in the cost of living during the preceding year. You and youremployer each contribute 6.2% of earnings up to the maximum taxable amount for Social Security and1.45% of all earnings for Medicare. Self-employed workers pay both employee and employer amounts.

Calculations of benefits are based on the Primary Insurance Amount (PIA) which is based on yourAverage Indexed Monthly Earnings (AIME) over your employment history. Both the PIA and theAIME are calculated by formulas published each year by the Social Security Administration. You mayget an estimate of your benefits by filling out a Request for Earnings and Benefit Estimate Statementfrom the Social Security Administration. In return you receive a report which shows your earningshistory, AIME and estimated retirement, disability and survivor benefits.

Family members of an eligible worker may receive monthly benefits based on the earnings record ofthe deceased individual. Benefits are paid to children under 18 and spouses who are retired, disabled orcaring for children under 16. In addition, a one-time death benefit of $255 is payable.

Monthly survivor benefits are limited to a Maximum Family Benefit, approximately 150%-188% of thecalculated PIA. Each child's benefit is equal to 75% of the PIA; a spouse caring for a child under age 16receives an equal benefit. If there are no children under age 16, the spouse can receive a monthlybenefit if disabled and over age 50 or retired and age 60 or more. The benefit is adjusted if the spouse isless than the normal retirement age.

Survivor Benefits

If you become fully disabled, you and your family may qualify for disability benefits. To be eligible,you must be disabled for more than 6 months and unable to perform any meaningful employment.Benefits start after a five-month waiting period and continue as long as you are fully disabled. Familymembers of an eligible worker may also receive monthly benefits. Benefits are paid to children under18 and spouses who are retired, disabled or caring for children under 16. The maximum family benefitis 150% of the disabled individual's benefit.

Disability Benefits

Retired workers who are age 62 or older receive retirement benefits based on earnings history. Inaddition, spouse is eligible for retirement benefits based on the workers record, if that benefit exceedsthe spouse's own retirement benefit. Normal retirement age (NRA) is based on the year of birth. Forpersons born before 1938, NRA is age 65; NRA gradually increases to 67 for individuals born after1960. If you retire before your normal retirement age, your benefits will be reduced by a percentage foreach month prior to NRA. If you retire later than your normal retirement age, benefits will be increasedby a percentage up to 8% of the PIA per year.

Retirement Benefits

Social Security Benefits


August 30, 200715 of 32

Life insurance is an important part of your wealth management strategy. The main purpose of buying alife insurance policy is to protect your loved ones after your death. With appropriate life insurancecoverage, your beneficiaries may not have to worry about expenses associated with your death, and youincrease the possibility for them to maintain their lifestyle.

The market offers a wide variety of life insurance products designed to provide solutions for differentneeds. Given the different characteristics of each one of the policies available, it is very important foryou to spend some time understanding the type of protection offered by each policy and their costs.

Term Life Insurance—Term insurance is used to provide death benefit protection for a setperiod of time at an affordable premium.

•

Whole Life Insurance—Whole life insurance policies provide permanent death benefitprotection for a fixed premium and remain in force as long as premium payments are made.Whole life policies accumulate guaranteed cash values and often pay dividends as well. Thesepolicies are better suited for protecting your long-term goals.

•

Universal Life Insurance—Universal Life policies are also known as “Flexible Premium”policies. These flexible policies have an adjustable benefit and accumulate account value.Universal life insurance is used to provide death benefit protection with flexibility to adjust toyour future insurance needs.

•

The most widely used policy types are:

In addition to the different types of insurance policies, there is also two different policycategories—Fixed and Variable.

Fixed policies—offer a predetermined death benefit and rate of return on policy values that areguaranteed through the policy contract.

•

Variable policies—are designed to provide death benefit protection but may NOT offer theguarantees that fixed policies do. The rate of return on your policy values, as well as the deathbenefit, may fluctuate up and down depending on your investment choices and performance.Variable policies are subject to market risk and therefore require the delivery of a prospectus.

•

Keep in mind that in order to obtain more detailed information on how a specific life insurance policyworks, the premiums associated and any additional information, you must carefully review the policydetails and prospectus.

Types of Life Insurance Policies


August 30, 200716 of 32

Life insurance is a fundamental tool designed to provide liquidity after your death. The proceedsgenerated from a life insurance policy can be used to pay for many of the expenses associated with yourdeath, so that your heirs and your business partners (if applicable) are more equipped to handlefinancial burdens during that difficult time.

Income Replacement—Life insurance can replace your income in the event of your untimelydeath. Upon your death, your beneficiary would receive the death benefit proceeds and could helpyour surviving spouse and children maintain the lifestyle you created for them.

•

Education Funding—In the event of your premature death, life insurance can help supplementyour children’s education funds through the death proceeds of the policy and provide for them atyour death what you would have provided during your lifetime.

•

Protect Your Family

Funeral Expenses— There are many costs associated with funerals. These costs may include butare not limited to cemetery plots, caskets, funeral home facilities, limousines, transportation, andgrave markers. Through life insurance, you may be able to take care of these expenses before yourdeath and avoid placing financial burdens on your family members.

•

Medical Expenses—Illness or accidents often result in large medical bills that need to be paidafter your death. Use life insurance to help protect your family from unnecessary financial strains.

•

Final Expenses

Mortgage Protection—A mortgage is often the largest debt and largest monthly payment for thesurviving heirs, but a necessary one. Most people are not willing to give up their home, butsometimes they are forced to for financial reasons. Insurance can help pay remaining mortgages.

•

Other Loans—All individual loans must be settled at death, often using cash assets intended forother purposes. Life insurance can help provide cash to eliminate these debts at your death.

•

Consumer Debt—The balances of all individual credit cards are due at the time of death and anyjointly owned cards can no longer be used. Life insurance can help provide cash to eliminate thesedebts at your death.

•

Debts

Charitable Institutions—Life insurance proceeds can be donated to a designated charity upondeath. To some, this gives the lifetime satisfaction of knowing that you are helping others andallows you to enjoy potential tax benefits.

•

Charitable Contributions

Probate Fees—Probate is the legal process of ensuring that all assets are transferred to the properheirs and in accordance with all legal documents. Probate fees are the expenses required to handlethe legal concerns associated with death, and they can be expensive. Life insurance can helpoffset these expenses and keep them from eroding away your estate and your heirs’ inheritance.

•

Administrative Fees—These are usually the fees for various professional services that may berequired to settle the estate, such as legal and accounting services. Administrative fees are oftencombined with probate fees.

•

Estate Expenses

Common Uses for Life Insurance

Life Insurance Uses


August 30, 200717 of 32

Property Taxes—All property taxes must be paid for the year of death.•

Income Taxes—State and federal income taxes must be paid for a portion of the year in whichdeath occurred. Also, income taxes are due on earnings from assets between death and thedistribution of those assets.

•

Estate Taxes—For larger estates, estate taxes are due in cash within nine months of death andcan be as high as 55%. Unless Congress changes the present law, estate taxes are reduced eachyear through 2009, are not in effect in 2010, and return to the 2001 rates in 2011 and thereafter.

•

Taxes

Protecting Business Interests—Business partners or co-owners that are concerned about thecontinuation of their business in the event of their partner’s premature death can use lifeinsurance to help protect their interests in the business. Typically, each business partner or thebusiness itself, purchases life insurance and upon death, the proceeds are used to buy the businessand continue operation.

•

Business

Common Uses for Life Insurance

Life Insurance Uses


August 30, 200718 of 32

Occasionally, unexpected and unplanned situations requiring cash may occur. Therefore, it is importantthat you are financially prepared for these small emergencies. Keep in mind that a small emergency canhave a big effect on your cash flow. Therefore, it is important to get advice to put in place a strategy forthe unexpected.

The goal of an Emergency Fund is to have enough cash reserves to cover an unexpected need. Whenthe amount of cash reserves is not sufficient, assets must be sold or funds will need to be borrowed.

Emergency funds can often protect financial strategies put in place, and assist in reaching long-termfinancial objectives. Emergency funds should be kept in cash or any other form of liquid assets that canquickly provide the resources needed after a short-term financial crisis.

Married couples: three months of combined salary PLUS 5% of total investments•

Single individuals: six months salary PLUS 5% of total investments.•

The standard recommendations by financial advisors are:

The example below for married couples, illustrates an annual income of $96,000 and investments thattotal $80,000. In this example, you will need approximately $24,000 (3 months of $96,000 annually) tocover the salary portion and $4,000 (5% of $80,000) to cover the investments portion, totaling $28,000for emergency funds.

Emergency Funds

Annual salaryInvestmentsEmergency funds needed

$96,000$80,000$28,000

Emergency Funds Required

$0.00

$5,000.00

$10,000.00

$15,000.00

$20,000.00

$25,000.00

$30,000.00

3 months salary 5% of investments Emergency funds

Emergency Funds


August 30, 200719 of 32

Objective

Bob retires at age 65, Meredith retires at age 65•Retirement lasts for 23 years•Provide retirement lifestyle (80% of $137,000 current household income, adjusted for inflation)•

Retirement Results

$600,000

400,000

200,000

070 75 80 85

Withdrawals from AssetsSocial Security

Other IncomeAdditional Retirement Need

Shortfall Occurs at Bob's Age 69

Total Value of Shortfall at Retirement $2,254,019

Additional Monthly Savings Required Until Retirement

…assuming 4% $4,510 per monthassuming your average rate of return of 5.85% $3,497 per month

…assuming 6% $3,424 per month…assuming 8% $2,569 per month

An Alternative Savings Strategy

Consider thinking of your savings requirement as a percentage of your current salary. This mayallow you to have a more affordable savings requirement today, but still achieve your long-termretirement savings goal since your monthly savings amount will increase as your salary increases.

AssumedRate of Return

Monthly Savings(as a Percent of Salary)

This Year’s AdditionalMonthly Savings Amount

4% 27.65% $3,1575.85% 21.62% $2,469

6% 21.18% $2,4198% 16.02% $1,829

0% 100%

48%

Retirement Savings Goal Progress

Retirement Savings Goal


August 30, 200720 of 32

Amount Needed to Fund Retirement Lifestyle at Retirement $4,306,497Retirement PeriodBased onBob's Age

HouseholdIncome

Today

% of HouseholdIncome Needed

During Retirement

Annual NeedStarting atRetirement

Lump SumNeeded at

Retirement65 - 87 $137,000 80% $229,478 $4,306,497

Less the Value of Retirement Income Sources at Retirement $1,184,018Retirement Income SourcesIncome SourceDuringRetirement

IncomeRecipient

AnnualIncrease

Age WhenIncome

Received

Annual AmountWhen Income

Source Begins

Lump Sum Valueat Retirement ofIncome Source

Social Security1 BobMeredith

3%3%

6767

$74,834 $1,184,018

Total Value of Assets Needed at Retirement $3,122,479

Less the Value of Existing Retirement Assets at Retirement $868,458

Retirement Plan Current ValueMonthly

Contributions Rate of ReturnValue at

RetirementBob $15,000 $300 5.77% $317,165Meredith $13,500 $300 5.77% $311,068Total Value of Retirement Plans at Retirement $628,233

Current ValueMonthlySavings Rate of Return

Value atRetirement

Other Assets $15,000 $200 6.00% $240,225Total Value of Other Assets at Retirement $240,225

Retirement Asset Shortfall at Retirement $2,254,019

Years IllustratedThis presentation continues until Bob reaches age 88.•

Income Needs AssumptionBob and Meredith require 80% of current household income during retirement.•

Assumptions & Notes

Retirement Savings Goal Details

1See Assumptions & Notes section for details.


August 30, 200721 of 32

Interest Rate AssumptionsAll income needs are assumed to increase at a 3% annual general inflation rate.•Income sources and asset balances increase annually based on the rate listed on the Confirmationof Facts page.

•

All lump sum values at retirement are assumed to grow at 5% annually.•All interest rates compounded annually with all monthly contributions for the year added at theend of the year.

•

Percent of Salary based on total household income of $137,000 this year and a 3% annualinflation rate. This Year's Inflation Adjusted Monthly Savings Amount assumes future yearcontribution amounts will increase at 3%.

•

Social Security AssumptionsBob's and Meredith's Social Security benefit amounts based on their current salaries and their agewhen the benefit begins.

•

Assumptions & Notes (Continued)



August 30, 200722 of 32

2008 40/40 $109,600 $137,000 $0 $0 $0 $43,500 $02009 41/41 112,888 141,110 0 0 0 55,644 02010 42/42 116,275 145,343 0 0 0 68,785 02011 43/43 119,763 149,704 0 0 0 82,989 02012 44/44 123,356 154,195 0 0 0 98,327 0

2013 45/45 127,056 158,821 0 0 0 114,874 02014 46/46 130,868 163,585 0 0 0 132,710 02015 47/47 134,794 168,493 0 0 0 151,921 02016 48/48 138,838 173,548 0 0 0 172,596 02017 49/49 143,003 178,754 0 0 0 194,831 0

2018 50/50 147,293 184,117 0 0 0 218,727 02019 51/51 151,712 189,640 0 0 0 244,394 02020 52/52 156,263 195,329 0 0 0 271,944 02021 53/53 160,951 201,189 0 0 0 301,500 02022 54/54 165,780 207,225 0 0 0 333,190 0

2023 55/55 170,753 213,442 0 0 0 367,151 02024 56/56 175,876 219,845 0 0 0 403,530 02025 57/57 181,152 226,440 0 0 0 442,478 02026 58/58 186,587 233,233 0 0 0 484,161 02027 59/59 192,184 240,230 0 0 0 528,751 0

2028 60/60 197,950 247,437 0 0 0 576,432 02029 61/61 203,888 254,860 0 0 0 627,399 02030 62/62 210,005 262,506 0 0 0 681,859 02031 63/63 216,305 270,381 0 0 0 740,032 02032 64/64 222,794 278,493 0 0 0 802,149 0

2033 65/65 229,478 0 0 229,478 0 670,930 02034 66/66 236,362 0 0 236,362 0 456,296 02035 67/67 243,453 0 74,834 168,619 0 302,060 02036 68/68 250,757 0 77,079 173,678 0 134,801 02037 69/69 258,280 0 79,391 134,801 44,087 0 44,087

2038 70/70 266,028 0 81,773 0 184,255 0 228,3422039 71/71 274,009 0 84,226 0 189,783 0 418,1252040 72/72 282,229 0 86,753 0 195,476 0 613,6012041 73/73 290,696 0 89,355 0 201,340 0 814,9422042 74/74 299,417 0 92,036 0 207,381 0 1,022,322

2043 75/75 308,399 0 94,797 0 213,602 0 1,235,9242044 76/76 317,651 0 97,641 0 220,010 0 1,455,9352045 77/77 327,181 0 100,570 0 226,610 0 1,682,5452046 78/78 336,996 0 103,587 0 233,409 0 1,915,9542047 79/79 347,106 0 106,695 0 240,411 0 2,156,365

Income Assets

Year

Bob/Meredith's

Ages

AnnualIncomeNeeded

Salary& OtherIncome

EstimatedSocial


AnnualShortfall

AssetBalance

CumulativeShortfall



August 30, 200723 of 32

2048 80/80 357,519 0 109,896 0 247,623 0 2,403,9882049 81/81 368,245 0 113,193 0 255,052 0 2,659,0402050 82/82 379,292 0 116,589 0 262,704 0 2,921,7442051 83/83 390,671 0 120,086 0 270,585 0 3,192,3292052 84/84 402,391 0 123,689 0 278,702 0 3,471,031

2053 85/85 414,463 0 127,400 0 287,063 0 3,758,0952054 86/86 426,897 0 131,222 0 295,675 0 4,053,7702055 87/87 439,704 0 135,158 0 304,546 0 4,358,315

Income Assets

Year

Bob/Meredith's

Ages

AnnualIncomeNeeded

Salary& OtherIncome

EstimatedSocial


AnnualShortfall

AssetBalance

CumulativeShortfall



August 30, 200724 of 32

ObjectiveRobbie: Provide 100% of the total cost of Clemson University ($27,014 this year) for 4 yearsSarah: Provide 100% of the total cost of The University of North Carolina at Chapel Hill ($27,527this year) for 4 years

Robbie $27,014 100% $27,014 10 18 4 $118,244Sarah $27,527 100% $27,527 6 18 4 $125,146

NameAnnual

AmountFunding

Goal

AnnualFundingAmount

CurrentAge

Startat Age

Numberof Years

FundsNeeded

Today

Your Current Education SavingsCurrent Amount: $0 assuming a 5.00% rate of returnMonthly Contributions: $0.00

Education Funding Details

$90,000

60,000

30,000

2016 2021

Education Assets Education Shortfall

Total Value Today of Education Funding Needs $243,390

Education Funds Needed Today $243,390

Monthly Education Savings Required $1,954

An Alternative Savings StrategyConsider thinking of your savings requirement as a percentage of your current salary. This mayallow you to have a more affordable savings requirement today, but still achieve your long-termeducation savings goal since your monthly savings amount will increase as your salary increases.

Monthly Savings Required (as a Percent of Salary) 13.5%

This Year’s Additional Monthly Savings Amount $1,542

0% 100%

0%

Education Savings Goal Progress

Education Savings Goal


August 30, 200725 of 32

Objective

Provide for 60% of your current salary ($75,000) if you become disabled today.•

Your Disability StatisticsBob, before your age 65, a long-term disability is 2.82 times more likely to occur than death!1

Assuming your

salary increases at…

Cost of Disability (in Terms of Lost Salary)

2 Year 3 Year 5 Year 15 Year To Age 67

0% $150,000 $225,000 $375,000 $1,125,000 $2,025,0002% $151,500 $229,500 $390,300 $1,296,975 $2,650,8004% $153,000 $234,150 $406,200 $1,501,800 $3,531,300

If You Become Disabled Today100%

75%

25%

50%

0%

Current Annual Salary $75,000Percent of Salary Needed During Disability 60%

Annual Income Needed $45,000

less Annual Disability Income Benefit $0

Additional Annual Income Needed $45,000

Just being eligible for Social Security benefits is not enough. In order to qualify for Social Securitydisability benefits, you must NOT be able to perform ANY substantial employment. If you qualify,benefits begin after a full five-month waiting period and continue as long as you remain disabled. Youshould carefully consider the likelihood of receiving Social Security disability benefits whendetermining your disability needs.

Not Everyone Qualifies for Social Security Disability Benefits

Additional Annual Income Needed(Assuming potential annual Social Security Disability Benefits of $27,660)

$17,340

0% 100%

0%

Disability Needs Goal Progress

Disability Needs GoalAssumes Bob Becomes Disabled Today

1Based on a disability expected to last more than 2 years following a 60 day elimination period (see “Assumptions & Notes”section).


August 30, 200726 of 32

Your First Year of Disability

1 $3,750 $0 $0 $3,7502 3,750 0 0 3,7503 3,750 0 0 3,7504 3,750 0 0 3,7505 3,750 0 0 3,7506 3,750 0 2,305 1,4457 3,750 0 2,305 1,4458 3,750 0 2,305 1,4459 3,750 0 2,305 1,445

10 3,750 0 2,305 1,44511 3,750 0 2,305 1,44512 3,750 0 2,305 1,445

Beginning ofMonth

MonthlyIncome Need

Monthly DisabilityPolicy Benefit

Potential SocialSecurity Benefit

AdditionalIncome Needed

Additional Income Needs in Year 1 (With Social Security)Additional Income Needs in Year 1 (With NO Social Security)

$28,862$45,000

Assumed DisabilityThis presentation assumes Bob becomes disabled immediately.•

Income Needs AssumptionBob will require 60% of current household income during disability.•

Disability versus Death ProbabilityThe probabilities of dying before age 65 are based on the 1990-1995 U.S. Basic Male and FemaleTables (Age Nearest Birthday) developed by the Society of Actuaries. The probabilities ofbecoming disabled before age 65 are based on the 1985 Commissioner's Individual Disability ATables for occupation class 1 (white collar) and a 60-day elimination period. Disability isassumed to last at least two years or longer.

•

Social Security AssumptionsBob's Social Security benefit amount is based on his current salary.•

Assumptions & Notes

Disability Needs Goal DetailsAssumes Bob Becomes Disabled Today


August 30, 200727 of 32

2008 40 $45,000 $16,138 $0 $28,862 $45,000 602009 41 46,350 28,495 0 17,855 46,350 602010 42 47,740 29,349 0 18,391 47,740 602011 43 49,173 30,230 0 18,943 49,173 602012 44 50,648 31,137 0 19,511 50,648 60

2013 45 52,167 32,071 0 20,096 52,167 602014 46 53,732 33,033 0 20,699 53,732 602015 47 55,344 34,024 0 21,320 55,344 602016 48 57,005 35,045 0 21,960 57,005 602017 49 58,715 36,096 0 22,619 58,715 60

2018 50 60,476 37,179 0 23,297 60,476 602019 51 62,291 38,294 0 23,996 62,291 602020 52 64,159 26,295 0 37,864 64,159 602021 53 66,084 27,084 0 39,000 66,084 602022 54 68,067 27,897 0 40,170 68,067 60

2023 55 70,109 28,734 0 41,375 70,109 602024 56 72,212 29,596 0 42,616 72,212 602025 57 74,378 30,484 0 43,895 74,378 602026 58 76,609 31,398 0 45,211 76,609 602027 59 78,908 32,340 0 46,568 78,908 60

2028 60 81,275 33,310 0 47,965 81,275 602029 61 83,713 34,310 0 49,404 83,713 602030 62 86,225 35,339 0 50,886 86,225 602031 63 88,811 36,399 0 52,412 88,811 602032 64 91,476 37,491 0 53,985 91,476 60

2033 65 94,220 38,616 0 55,604 94,220 602034 66 97,047 39,774 0 57,272 97,047 60

Income Shortfall

YearBob's

Age

AnnualIncomeNeeded

EstimatedSocial

Security

DisabilityPolicy

BenefitAnnual

Shortfall

AnnualShortfall

No SSShortfall

(% of Salary)

Disability Needs Goal DetailsAssumes Bob Becomes Disabled Today


August 30, 200728 of 32

Objective

Provide for 60% of your current salary ($75,000) if you become disabled today.•

Proposed New Disability Policies

Proposed DI Policy Individual $500.00 $3,000 90 Days Age 65 0%Description Type

MonthlyPremium

MonthlyBenefit

EliminationPeriod

BenefitPeriod COLA

Annual Disability IncomeWith No New Disability Insurance

100%

75%

25%

50%

0%

Annual Disability IncomeWith New Disability Insurance

100%

75%

25%

50%

0%

Disability Income Shortfall Current Salary

Summary of Disability Income Needs

Additional Annual Income Needed $0

less Proposed New Annual Disability Income $36,000

Annual Disability Income Needs Left Unfunded $9,000

0% 100%

80%

Disability Needs Goal Progress

Disability Needs RecommendationAssumes Bob Becomes Disabled Today


August 30, 200729 of 32

This is a "blank slate" page advisors can use to customize the presentation for their clients.

Important Information


August 30, 200730 of 32

Procrastination and inaction are two of the biggest reasons why goals are never achieved. Startachieving your goals today! And don't forget to review your progress each year.

Get a Complete Illustration or Sales InformationBefore purchasing any new insurance or making any other investment, review a complete,company-provided illustration, prospectus, or other sales materials.

1.

It’s Not All About Money!Your survivors need to know your wishes and thoughts for their future. An easy to understanddocument stating your wishes should accompany any legal documents you keep safe for yourloved ones. In fact, a copy of this presentation may serve this purpose when stored with yourimportant papers.

2.

Review Your WillAt your death, will your remaining property be distributed according to your desired plans? If youdon't have a will, the state will make many of these decisions for you. Will your executor still beable to serve? Have you named the trustees and/or guardians to look after your dependents andtheir assets? Is your will consistent with your other plans, especially your estate planning?

3.

Achieve Your Survivor Needs Goals

Choose Funding OptionDetermine which retirement funding option(s) are appropriate for you based on the available taxincentives and the flexibility of each option.

1.

Start Saving NowSet up a systematic savings program to ensure your retirement funding goals are achieved.

2.

Determine Your InvestmentsWork with your advisor to determine the most suitable investment options for you based on yourfeelings regarding potential investment risk and returns.

3.

Achieve Your Retirement Goals

Choose Funding OptionDetermine which education funding option(s) are appropriate for you based on the available taxincentives and the flexibility of each option.

1.

Start Saving NowSet up a systematic savings program to ensure your education funding goals are achieved.

2.

Determine Your InvestmentsWork with your advisor to determine the most suitable investment options for you based on yourfeelings regarding potential investment risk and returns.

3.

Achieve Your Education Goals

Consider Your OptionsReview all current government or employer funded disability income sources for potentialbenefits, problems and tax implications.

1.

Get a Complete Illustration or Sales InformationBefore purchasing any new insurance or making any other investment, review a complete,company-provided illustration, prospectus, or other sales materials.

2.

Achieve Your Disability Needs Goals

Action Items


August 30, 200731 of 32

Assumed Years of DeathThis presentation assumes Meredith dies immediately and Bob dies at age 88.•

Income Needs AssumptionBob will require 70% of current household income while the children are at home. When theyoungest child turns 18, Bob will require 60% of current household income.

•

Interest Rate AssumptionsEducation costs are assumed to increase at a 6% annual inflation rate.•All other living expenses are assumed to increase at a 3% annual inflation rate.•All lump sum values in today's dollars are assumed to grow at 5% annually.•

Social Security AssumptionsBob and Meredith's Social Security benefit amounts based on their current salaries. SocialSecurity survivor benefit ends when youngest child turns 16, however children's benefits are paiduntil age 18. Social Security retirement benefit begins at Bob's age 67. No Social Securitybenefits will be paid if there are years after the youngest child turns 18, but before Bob's age 67.

•

Meredith Survivor Needs Goal Assumptions & Notes

Education costs inflation rate: 6%•Education savings rate of return: 5.00%•Current and additional savings begin today and continue until the start of the last dependent’sfinal year of education.

•

All interest rates compounded annually with all monthly contributions for the year added at theend of the year.

•

Percent of Salary based on total household income of $137,000 this year and a 3% annualinflation rate. This Year's Additional Monthly Savings Amount assumes future year contributionamounts will increase at 3%.

•

Education Savings Goal Assumptions & Notes

Assumed DisabilityThis presentation assumes Meredith becomes disabled immediately.•

Income Needs AssumptionMeredith will require 60% of current household income during disability.•

Disability versus Death ProbabilityThe probabilities of dying before age 65 are based on the 1990-1995 U.S. Basic Male and FemaleTables (Age Nearest Birthday) developed by the Society of Actuaries. The probabilities ofbecoming disabled before age 65 are based on the 1985 Commissioner's Individual Disability ATables for occupation class 1 (white collar) and a 60-day elimination period. Disability isassumed to last at least two years or longer.

•

Social Security AssumptionsMeredith's Social Security benefit amount is based on her current salary.•

Meredith Disability Needs Goal Assumptions & Notes

Assumptions


August 30, 200732 of 32

Documents

Life Goals Sample