Valued Client example II Finance

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

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 II

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 9,138,071

After Tax Values of Identical Allocation to Various Financial Alternatives

Female 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

41 42 43 44 45 46 47 48 49 50

36,818 39,447 42,077 44,707 47,337 49,967 52,597 55,226 57,856 60,486

0 0 0 0 0 0 0 0 0 0

38,513 81,599 129,526 182,580 241,071 305,328 375,710 452,597 536,403 627,572

0 0 0 0 0 0 0 0 0 0

39,271 83,765 133,673 189,225 250,683 318,335 392,494 473,494 561,693 657,467

0 0 0 0 0 0 0 0 0 0

39,579 84,954 136,559 194,861 260,362 333,604 415,165 505,671 605,791 716,248

0 0 0 0 0 0 0 0 0 0

31,017 317,184 622,737 948,980 1,297,614 1,392,248 1,493,311 1,601,548 1,717,856 1,843,230

9,138,071 9,138,071 9,138,071 9,138,071 9,138,071 9,138,071 9,138,071 9,138,071 9,138,071 9,138,071

11 12 13 14 15 16 17 18 19 20

51 52 53 54 55 56 57 58 59 60

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

660,555 696,012 734,128 775,102 819,150 866,502 917,405 972,126 1,030,951 1,094,187

0 0 0 0 0 0 0 0 0 0

693,896 731,773 771,340 812,797 856,316 902,055 950,164 1,000,790 1,054,082 1,110,191

0 0 0 0 0 0 0 0 0 0

769,967 827,714 889,793 956,527 1,028,267 1,105,387 1,188,291 1,277,413 1,373,220 1,476,211

0 0 0 0 0 0 0 0 0 0

618,257 693,132 774,947 864,271 961,718 1,067,864 1,183,457 1,309,277 1,446,173 1,594,997

7,757,411 7,688,378 7,615,894 7,539,785 7,459,871 7,375,960 7,287,855 7,195,344 7,098,208 6,996,215

21 22 23 24 25 26 27 28 29 30

61 62 63 64 65 66 67 68 69 70

0 0 0 0 0 0 0 0 0 0

0 0 0 0 335,000 335,000 335,000 335,000 202,008 0

1,162,167 1,235,244 1,313,803 1,398,254 1,128,913 839,372 528,115 202,008 0 0

0 0 0 0 335,000 335,000 335,000 335,000 88,155 0

1,169,272 1,231,488 1,297,009 1,366,011 1,071,755 761,843 435,444 91,680 0 0

0 0 0 0 335,000 335,000 335,000 335,000 335,000 335,000

1,586,927 1,705,947 1,833,893 1,971,435 1,759,167 1,530,980 1,285,678 1,021,978 738,501 433,764

0 0 0 0 335,000 335,000 335,000 335,000 335,000 335,000

1,756,673 1,932,193 2,122,614 2,329,160 2,201,501 2,075,423 1,952,176 1,832,938 1,719,157 1,612,634

6,889,122 6,776,674 6,658,605 6,534,631 6,052,709 5,546,691 5,015,372 4,457,487 3,871,708 3,256,640

486,518

1,542,008

1,428,155

2,010,000

2,010,000

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 II

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 9,138,071

After Tax Values of Identical Allocation to Various Financial Alternatives

Female 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

71 72 73 74 75 76 77 78 79 80

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

335,000 106,171 0 0 0 0 0 0 0 0

106,171 0 0 0 0 0 0 0 0 0

335,000 335,000 335,000 335,000 335,000 335,000 335,000 335,000 335,000 335,000

1,515,586 1,430,709 1,358,477 1,299,120 1,255,033 1,225,943 1,213,750 1,220,447 1,248,176 1,299,244

2,610,818 2,380,677 2,193,304 1,996,609 1,790,285 1,800,953 1,831,423 1,883,892 1,960,716 2,064,431

41 42 43 44 45 46 47 48 49 50

81 82 83 84 85 86 87 88 89 90

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

335,000 335,000 335,000 335,000 335,000 335,000 335,000 335,000 335,000 335,000

1,375,959 1,480,716 1,616,134 1,784,990 1,990,016 2,234,126 2,520,272 2,851,265 3,229,797 3,658,278

2,197,581 2,362,804 2,562,984 2,801,172 3,080,383 3,403,829 3,774,771 4,196,325 4,671,495 5,202,999

51 52 53 54 55 56 57

91 92 93 94 95 96 97

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

335,000 335,000 335,000 335,000 335,000 335,000 335,000

4,164,141 4,761,392 5,467,710 6,304,597 7,291,142 8,403,750 9,654,478

5,488,695 5,826,702 6,229,827 6,713,861 7,291,142 8,403,750 9,654,478

486,518

1,542,008

1,428,155

2,451,171

11,055,000

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 II

Matching Values at Age 97 (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 9,138,071

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

Investment

Yield/Growth

Annuity Annuity

12.71% 12.71%

Cash Value $9,654,478 Death Benefit $9,654,478

Equity Account Equity Account

14.92% 14.92%

Cash Value $9,654,478 Death Benefit $9,654,478

TDRP TDRP

10.86% 10.86%

Cash Value $9,654,478 Death Benefit $9,654,478

Annuity

TBD

Equity Account

$9,654,478

$9,654,478

1271.15% Required To Match CV

12.71% Required To Match DB

$9,654,478

$9,654,478

1491.65% Required To Match CV

14.92% Required To Match DB

TDRP

$9,654,478

$9,654,478

1086.49% Required To Match CV

10.86% Required To Match DB

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

Various Financial Alternatives vs. TBD Presented By: Daniel Wachs

Insured: Valued Client Example II

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 II

A Look at Year 57

Various Financial Alternatives

TBD

Cumulative Payments

486,518

486,518

Cumulative After Tax Cash Flow 11,055,000 1,542,008

1,428,155

2,451,171

AN

EQ

TD

9,654,478 EQ Value

0

0

Cash Value

9,654,478

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