Valued Client example I Financed

Universal Life (UL) vs. Various Financial Alternatives For: Valued Client Example I

Presented By: Daniel P. Wachs CFP, ChFC, CLU 1431 Opus Place #630 Downers Grove, Illinois 60515 Phone: 630-445-1399 Email: dwachs@perpetualwm.com

Various Financial Alternatives vs. TBD Presented By: Daniel Wachs

Insured: Valued Client Example I

Comparison of Values Annuity Yield 7.50%

Equity Account Growth 7.50%

TDRP Yield 7.50%

Income Tax Rate 38.60%

TBD Interest Rate 7.50%

Initial Death Benefit 13,442,183

After Tax Values of Identical Allocation to Various Financial Alternatives

Male Yr Age

(1)

(2a)

Life Insurance Premium

After Tax Cash Flow from Annuity

(2b)

(3a)

Annuity

After Tax Cash Flow from Equity Account

(3b)

(4a)

Equity Account

After Tax Cash Flow from TDRP

(4b) Year End After Tax Value of TDRP if Distributed

TBD (5a)

(5b)

(5c)

After Tax Policy Loan Proceeds

Year End Cash Value*

Death Benefit

1 2 3 4 5 6 7 8 9 10

43 44 45 46 47 48 49 50 51 52

68,996 73,924 78,853 83,781 88,709 93,637 98,566 103,494 108,422 113,350

0 0 0 0 0 0 0 0 0 0

72,173 152,917 242,732 342,156 451,766 572,184 704,078 848,166 1,005,218 1,176,066

0 0 0 0 0 0 0 0 0 0

73,595 156,977 250,505 354,609 469,780 596,558 735,531 887,326 1,052,610 1,232,092

0 0 0 0 0 0 0 0 0 0

74,171 159,202 255,908 365,166 487,916 625,170 778,015 947,622 1,135,248 1,342,243

0 0 0 0 0 0 0 0 0 0

96,336 631,040 1,201,772 1,811,491 2,463,749 2,638,836 2,827,181 3,029,705 3,247,737 3,482,970

13,442,183 13,442,183 13,442,183 13,442,183 13,442,183 13,442,183 13,442,183 13,442,183 13,442,183 13,442,183

11 12 13 14 15 16 17 18 19 20

53 54 55 56 57 58 59 60 61 62

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

1,237,877 1,304,322 1,375,752 1,452,539 1,535,085 1,623,821 1,719,213 1,821,759 1,931,997 2,050,502

0 0 0 0 0 0 0 0 0 0

1,300,359 1,371,340 1,445,489 1,523,179 1,604,733 1,690,447 1,780,604 1,875,478 1,975,347 2,080,494

0 0 0 0 0 0 0 0 0 0

1,442,912 1,551,130 1,667,464 1,792,524 1,926,964 2,071,486 2,226,848 2,393,861 2,573,401 2,766,406

0 0 0 0 0 0 0 0 0 0

1,185,827 1,328,080 1,483,234 1,652,318 1,836,496 2,036,749 2,254,587 2,491,596 2,749,524 3,030,210

10,854,835 10,725,468 10,589,632 10,447,004 10,297,245 10,139,998 9,974,889 9,801,524 9,619,492 9,428,357

21 22 23 24 25 26 27 28 29 30

63 64 65 66 67 68 69 70 71 72

0 0 0 0 0 0 0 0 0 0

0 0 540,000 540,000 540,000 540,000 393,432 0 0 0

2,177,895 2,314,842 1,881,560 1,415,782 916,112 393,432 0 0 0 0

0 0 540,000 540,000 540,000 540,000 267,395 0 0 0

2,191,211 2,307,803 1,839,131 1,345,513 825,629 278,086 0 0 0 0

0 0 540,000 540,000 540,000 540,000 540,000 540,000 540,000 202,820

2,973,887 3,196,929 2,856,198 2,489,912 2,096,155 1,672,867 1,217,832 728,669 202,820 0

0 0 540,000 540,000 540,000 540,000 540,000 540,000 540,000 540,000

3,335,621 3,667,980 3,462,755 3,261,335 3,065,615 2,877,893 2,701,362 2,539,557 2,392,136 2,259,691

9,227,666 9,016,940 8,228,678 7,401,002 6,531,943 5,619,431 4,661,294 4,388,530 4,112,740 3,823,026

911,732

2,553,432

2,427,395

3,982,820

4,320,000

See the accompanying reports for year-by-year details: Details of the: Equity Account; Portfolio Turnover Annuity Details Tax Deductible Retirement Plan (TDRP) Details Note: Annuity values do not reflect surrender charges or market rate adjustments, if any.

*This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.

Date: 11/08/2017

Annuity is assessed: Income tax each year. Column (2b) values are after tax.

Page 1 of 5

Various Financial Alternatives vs. TBD Presented By: Daniel Wachs

Insured: Valued Client Example I

Comparison of Values Annuity Yield 7.50%

Equity Account Growth 7.50%

TDRP Yield 7.50%

Income Tax Rate 38.60%

TBD Interest Rate 7.50%

Initial Death Benefit 13,442,183

After Tax Values of Identical Allocation to Various Financial Alternatives

Male Yr Age

(1)

(2a)

Life Insurance Premium

After Tax Cash Flow from Annuity

(2b)

(3a)

Annuity

After Tax Cash Flow from Equity Account

(3b)

(4a)

Equity Account

After Tax Cash Flow from TDRP

TBD

(4b) Year End After Tax Value of TDRP if Distributed

(5a)

(5b)

(5c)

After Tax Policy Loan Proceeds

Year End Cash Value*

Death Benefit

31 32 33 34 35 36 37 38 39 40

73 74 75 76 77 78 79 80 81 82

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

540,000 540,000 540,000 540,000 540,000 540,000 540,000 540,000 540,000 540,000

2,145,228 2,052,292 1,985,071 1,942,304 1,926,885 1,941,937 1,991,029 2,077,697 2,205,655 2,379,003

3,518,834 3,199,747 2,865,520 2,888,024 2,942,615 3,032,739 3,162,321 3,335,260 3,555,649 3,828,000

41 42 43 44 45 46 47 48 49 50

83 84 85 86 87 88 89 90 91 92

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

540,000 540,000 540,000 540,000 540,000 540,000 540,000 540,000 540,000 540,000

2,601,489 2,876,486 3,207,034 3,596,520 4,047,631 4,562,375 5,142,279 5,786,975 6,550,807 7,460,043

4,156,463 4,544,804 4,996,454 5,515,219 6,104,178 6,765,718 7,501,729 8,312,126 8,713,593 9,197,698

51 52 53 54 55 56 57

93 94 95 96 97 98 99

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

540,000 540,000 540,000 540,000 540,000 540,000 540,000

8,551,111 9,871,994 11,465,211 13,263,091 15,285,241 17,552,952 20,089,338

9,793,171 10,538,678 11,465,211 13,263,091 15,285,241 17,552,952 20,089,338

911,732

2,553,432

2,427,395

3,982,820

18,900,000

See the accompanying reports for year-by-year details: Details of the: Equity Account; Portfolio Turnover Annuity Details Tax Deductible Retirement Plan (TDRP) Details Note: Annuity values do not reflect surrender charges or market rate adjustments, if any.

*This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.

Date: 11/08/2017

Annuity is assessed: Income tax each year. Column (2b) values are after tax.

Page 2 of 5

Various Financial Alternatives vs. TBD Presented By: Daniel Wachs

Insured: Valued Client Example I

Matching Values at Age 99 (Year 57)

Annuity Yield 7.50%

Equity Account Growth 7.50%

TDRP Yield 7.50%

Income Tax Rate 38.60%

TBD Interest Rate 7.50%

Initial Death Benefit 13,442,183

Yield/Growth Required by Various Investments to Match TBD Policy Values over 57 years

Investment

Yield/Growth

Annuity Annuity

13.11% 13.11%

Cash Value $20,089,338 Death Benefit $20,089,338

Equity Account Equity Account

15.26% 15.26%

Cash Value $20,089,338 Death Benefit $20,089,338

TDRP TDRP

11.12% 11.12%

Cash Value $20,089,338 Death Benefit $20,089,338

Annuity

Equity Account $20,089,338

$20,089,338 1310.52% Required To Match CV

TBD

$20,089,338 13.11% Required To Match DB

1525.63% Required To Match CV

TDRP

$20,089,338 15.26% Required To Match DB

$20,089,338 1112.18% Required To Match CV

Income Tax Considerations 1. Annuity: Interest is tax deferred.

(Values assume tax is assessed in year shown only) 2. Equity Account: Capital gains tax calculations are taxed based on a ratio of asset value to remaining cost basis in any given year.

3. TDRP: Interest is tax deferred.

4. TBD: a. Death Benefit including cash value component is income tax free. b. Loans are income tax free as long as the policy is kept in force. c. Withdrawals and other non-loan policy cash flow up to cost basis (not in violation of IRC Section 7702) are income tax free as a return of premium. d. Cash values shown assume most favorable combination of b and/or c.

This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.

Date: 11/08/2017

Page 3 of 5

$20,089,338 11.12% Required To Match DB

Various Financial Alternatives vs. TBD Presented By: Daniel Wachs

Insured: Valued Client Example I

Flow Chart

Various Financial Alternatives

Annuity

Equity Account

TBD

TDRP

TBD

Net

Net

Payment

Payment

After Tax

Living

After Tax

Living

Death

Cash Flow

Values

Cash Flow

Values

Benefit

Comparative Analysis

Date: 11/08/2017

Page 4 of 5

Various Financial Alternatives vs. TBD Presented By: Daniel Wachs

Insured: Valued Client Example I

A Look at Year 57

Various Financial Alternatives

TBD

Cumulative Payments

911,732

911,732

Cumulative After Tax Cash Flow 18,900,000 2,553,432

2,427,395

3,982,820

AN

EQ

TD

20,089,338 EQ Value

0

0

Cash Value

20,089,338

0 Death Benefit AN Value

TD Value

AN - Annuity EQ - Equity Account TD - Tax Deductible Retirement Plan (TDRP)

Date: 11/08/2017

Page 5 of 5