Flex Financed Plan

When Life changes, you need Flexibility.

Invest for a few years and then finance it through the bank/insurance company, which can then roll it over and over again and let the bank contribution and interest maximize your investment base. In few years you will be able to draw a substantial pension (tax free with policy loans). Alternatively lump sum for major purchases or college funding also available. Think of using other people’s money to Maximize your own fortune.

Tax Free Cash Accumulation Features of The Policy

Combining of the life insurance base guarantees and advanced crediting strategy we can now provide you with an upside growth crediting potential that is uncapped with a zero percent floor. Gains are credited annually and cannot decline due to market losses. When the underlying market index (i.e. S&P 500) has annual growth it is used, in part, to determine the amount of interest to credit to your policy, when the market index is negative your policy will basic 1% policy guarantee. Although, the policy will not decline with the market, the insurance fees and expenses would still be deducted from the policy cash value. Accumulation will advance without taxable income.

upside growth crediting potential

Excess Premium by OPM

Excess Premium Features

Interest credited based in part on changes of a stock market index like the S&P 500.

No Negative Returns,
(0% Floor (Due To Declines In An Index)
Policy Floor Prevents Negative Crediting Rates
Potential Growth Tax-Deferred
Potential Tax-free Withdrawals**
(Access to cash value using Tax-Free policy loans)

The zero percent floor helps to eliminate losses in the policy cash value due to market volatility.

Flex Financed Plan’s Unique Use of Leverage

To maximize the potential growth of your cash accumulation life insurance policy, you contribute $10,000 for 2 years (flexible depending on individual need) and the lender (Bank or Life insurance company) loans $10,000 into your policy each year with freedom to discontinue the loan at any time. At the end of the 2nd year, your contributions end*. However, the lender continues to pay premiums of $10,000 per year into your policy. With leverage you get approximately ten times more savings into your policy which can be potentially used for supplemental retirement income. Without having to make any loan guarantees, with no liability outside of the policy itself and the payments that you make into the plan. Financed payments are tax free and investment return is growing tax free.

Your Money

Bank/Insurance company Money

Your Contributions*

$10,000	years 1-2
$0	years 6-10
$20,000	Your Total Contributions

Leveraged Contributions

$10,000	years 3-10 (10 year plan)
$80,000	Total Leveraged Amount

Your Contributions Plus Leveraged Contributions $100,000

* The benefits and values shown above are based on market history, which is no guaranteed. The Actual results may be more or less favorable. This presentation is not binding unless accompanied by a complete insurance company illustration. Please see the full illustration for guaranteed values and other important coverage information. could result upon contract lapse or surrender. The loan terms are dependent on the lender and are not guaranteed for the full term of the plan.

Conventional Retirement Plans May fall short compare to inflation

Max-fortune Advisory’s unique financing plan and life insurance design combination gives you more protection and the potential to accumulate more cash value. By using bank/insurance company’s fund, you can leverage every dollar you contribute into the policy gives you the ability to use up to 50 additional dollars to acquire more than you could without leverage.

Flex Financed Plan Protecting You and Your Family

Your policy is designed to minimize the cost of insurance, while maximizing your potential tax deferred growth. Using the cash value of the policy through policy loans. The remaining cash value has the potential to continue to accrue and could be accessed through policy loans and withdrawals to supplement retirement income. The life insurance within the policy includes a death benefit with living benefit riders. These riders allow the death benefit to be used early to cover an unexpected qualifying illness.

Policy Cash Value

Death Benefit Features

A permanent life insurance policy with living benefit riders** that can provide benefits in the case of:

Critical Illness (Cancer, Heart Attack, Stroke, etc.)
Chronic Illness (daily living, Bathing, Eating, etc.)
Terminal Illness (Illness where death is expected within 12-
24 months. Term varies by state.)

*Past performance is not indicative of future index performance and historical interest rates should not be construed as interest rates to be paid in the future and is not guaranteed. Loans on policy reduce the policy’s cash value and death benefit and may result in a taxable event. If remaining policy values and scheduled premiums are insufficient, additional out of pocket payments or coverage adjustment might be needed. **Living benefits are provided as part of the base policy design, not available to all applicants. Additional fees related to ABR might negatively impact policy cash value. Payment of Accelerated Benefits will reduce the Cash Value and Death Benefit otherwise payable under the policy. Receipt of Accelerated Benefits may be a taxable event Please consult your personal tax advisor to determine the tax status of any benefits paid under this rider and with social service agencies concerning how receipt of such a payment will affect you. This is not a solicitation of any specific insurance policy.

Comparing Your Flex-Financed Plan

You Pay The Same $10,000 For 2 Times

With Other Plans:

After-tax Investment

Potential Annual Distributions* $4,749

Self-fund Policy*

Potential Annual Policy Distribution* $5800

Flex Financed Plan, Potential Annual Policy Distributions* After Lender loan is Paid $34,000 $23,800 Self-funded Policy $31,849

Assumptions:

Growth Rate of 6.0%
Income Tax Rate 37.0%
Long Term Capital Gains 20%
Avg State Income Tax Rate 5.5%

Total Death Benefit
& Living Benefits
$170,000

Total Potential Policy
Distributions or Other
Distributions (age 65 -90)

The Power of Leverage

Self-funded Policy

Flex financed

$10,000
$20,000

$20,000

$10,000
$20,000

$20,000

Stress Test Using Historical Interest Rates/Policy Performance:

1980s Stress Test Annual Supplemental Income:*

*The 1980 simulation assumes a gradual cap increases to 15%
Great Depression Annual Supplemental Income:

$34,000

$23,800

Flexed-Financed – More Money Working for You- More Protection for You and Your Family
– More Potential for Tax Advantaged Growth

*The Benefits and values shown above are not guaranteed. The assumptions on which they are based are subject to change by the insurer. Actual results may be more or less favorable. This presentation is not valid unless accompanied by a compete insurance company illustration. Please see the full illustration for guaranteed values and other important information. Hypothetical example these are sample projections only. The information above is for illustration and comparative purposes only

Why save in a life insurance Plan?

In its simplest form, life insurance is a promise between an insurance company and you, the policy owner. If you pay a certain amount of money (premium) to the insurance company, the insurance company will pay a certain amount of money (death benefit) to the person (beneficiary) you tell us to when the person whose life is being insured dies. Death benefit can be used to repay bank or insurance loan.

Permanent insurance can provide a death benefit and the potential to build policy cash value that you can access during your lifetime using policy loans and withdrawals. It also offers the flexibility to increase or decrease your death benefit as your needs change, as well as the potential to reduce or skip premium payments.

Frequently Asked Questions

Do I need to apply for the loan?

Loans are no required to start the Flex financed plan. After initial fixed premium has been paid, client can decide if policy loan or bank loan needs be used for additional premium. The policy is assigned to the bank and is the only collateral for the loan. Therefore, no additional fees or underwriting is required.

What happens after the bank/ insurance company is paid back?

Once the lender has been repaid, the assignment will be released. In the certain year, the bank loan is projected to be paid off by using a withdrawal and loans from the policy (underperformance could delay the repayment). Once the bank loan has been repaid you can adjustments to policy coverage freely.

How will I know how my policy is performing?

Max Fortune Advisory provides annual servicing and monitoring with the carriers and lenders until loan repayment. You will receive an annual review and policy statement from the plan administrator. The review will contain information about the policy performance and amount of interest credited to the policy. Policy issuer will also provide annual statement directly to you to ensure no coverage disruption.

Will the caps on the Indexed Universal Life (IUL) policy change?

The life carrier resets the cap on the IUL each policy anniversary and locks it in for the year. As interest rates rise or fall, the return on the insurer’s general account changes and this is passed on through to the policy. As rates rise the cap typically rises, as interest rates fall, it typically falls (life carriers are profit neutral on the cap). In general Flex Financed Plan employees the uncapped option to provide max return, which is not impacted by the Cap adjustment from the insurance company.

What are the requirements?

Commit to make 2-annual premium payments, complete a life insurance application (which may include medical underwriting) and sign all the necessary bank/insurance forms at the initiation of the loan.

Flex Financed Plan Client female 50

Illustration Explanation and Disclosures for Preceding Page

(A) Loan Interest Rate – Bank and Insurance company projected forecast used to calculate projected loan interest.

(B) Client Contributions – The amount participant is projected to contribute each year for 2 years (No additional fees).

(C) Bank Financing – Projected bank financing amount (dependent on client contribution total for first 2 years)

(D) Loan Repayment – The bank loan is projected to be paid off by using a withdrawal and loans from the policy or policy death
benefit base on client’s actual need, deferral is available.

(E) Cumulative Bank Loan – Accumulation of the financed premium plus interest can be paid off on a flexible schedule.

(F/G) Cash Accumulation/Surrender Values – Illustrated projected year-end policy cash accumulation/surrender value.
Actual value will fluctuate based on insurance costs and market index results. An index policy has a 0% floor due to a
decline in an index and interest is credited based in part on the change in the market index at end of policy anniversary.

(H) Cash Surrender Values After Bank Loan – Illustrated potential policy cash surrender value minus loan balance. Actual
cash surrender value will fluctuate based on insurance costs and market index results.

(I) Illustrated Year End Projected Death Benefit (Gross Amount*) – Illustrated Potential Death Benefit.

(J) Projected Net Illustrated Year-End Death Benefit Minus Bank Loan – The potential death benefit after loan is paid off.

(K) Potential Annual Policy Distributions* After Lender Loan is Paid – The projected annual policy distributions during
retirement, using policy loans.

PLAN PROPOSAL - LOAN RATES & INSURANCE PERFORMANCE RESULTS

The Flex Financed plan is dependent on the client making contributions for the first 2 years therefore not defaulting on the plan. Defaulting on the plan will result in bank loan exit and/or policy coverage adjustment. The loan terms are dependent on the lender and are not guaranteed for the full term of the plan. Financing life insurance premiums has certain inherent risks including interest rate fluctuations, financial market performance, credit availability, lender financial strength, lender funds availability, insurance company ratings and stability which can result in bank loan exiting and/or policy surrender. The client will only have access to the policy, the cash values, the death benefits or the living benefits above the bank lien until the loan is repaid and the assignment is released. This proposal is hypothetical and may not be used to project or predict insurance performance results in the future. Because these are projections, future policy performance and interest rates are not guaranteed and are subject to change by the insurer and/or lender. Underperformance could result in a lower death benefit, cash surrender value and lower annual income (results may be less favorable). MFA nor any of its affiliates represent the lenders or the insurance carriers. This document is not intended to give legal advice or tax advice. For tax and legal advice contact your personal tax and legal advisors. Illustrated projected bank loan payoff and income stream from policy loan and withdrawals will vary based on actual performance.

Initial:

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LIVING BENEFITS (ACCELERATED BENEFIT RIDERS)

Living Benefits are provided by the insurance carriers and all may not be available with all carriers or in all states. If you accelerate the benefit to access the living benefits, the amount accelerated is no longer available for the death benefit or for loans, and the amount of death benefit accelerated may be taxable. The loan must be paid off before you can accelerate the death benefit. Accelerated Benefit Riders are typically available at no additional cost. Please contact your insurance agent or the insurance carrier for more information in the Accelerated Benefit Riders available on your policy.

Initial:

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Client Signature_________________________________________________Date_______________________

Annual Review and Lending

Your Annual Review

As we approach the 1-year anniversary of your policy, your agent and Max Fortune Advisory team will coordinate a time with you to have your Annual Review. During your review, your team will go over:

Policy Performance Review

We will have an in-depth review of your policy’s performance over thelast year. This will include a report on how your specific policies have performed which may include the dividend returns of a Whole Life policy or the Index Returns of a Indexed Universal Life policy.

Premium Payment (maybe funded by Bank/insurance company)

Each year you will be responsible for paying your life insurance policy premium Failure to pay may cause the policy to lapse or have other adverse impact

Optimization

The final piece of the annual review is to ensure we have fully optimized the opportunities within your life insurance policy. The cash value in your life insurance policy is generally accessible to you to use for various needs.

Future Year Annual Reviews

We will continue to monitor the growth of your policy and have a formal check in with you annually to report your life insurance policy’s performance and all options accessible with your strategy to optimize its potential.

Take Comfort in back testing Your Strategy

No one foresees what will happen in the future but looking at the past uncovers patterns we can reference. Stress testing our designs through some of the harshest economic conditions to date allows us to implement a strategy to help protect against potentia future pitfalls and optimizes our chances for a more successful outcome.

Great Depression back testing (extreme underperformance) – represents the most occurrence of 0% returns in US stock market history. From 1930 to 1932, stock portfolios lost 70% of their value and did not recoup their losses until 1959. The Great Depression back testing has 9 years of zeros over a 12 year period and uses the current insurance product caps against the then Federal funds rate. Even in this scenario the loan does not default. Removing the negative losses and replacing them with 0%, dramatically changes the risk profile, which makes an IUL a great instrument for leverage.

1980’s High Interest loan back testing – represents the highest loan interest rates in the US history with rates as high as 16.8%.
High interest rates in most cases affect IUL caps positively, except when there is a sudden increase in interest rates like in the 1980’s.
Flex Financed Plan has simulated the 1980’s by using the high loan rates and lower insurance caps which simulates the delay in the cap rate. Although running these historical stress tests does not show what will happen in the future, it certainly gives us some level of comfort, in knowing that we have simulated the worst economic time periods this country has faced. It would take something worse than the Great Depression and the 1980’s High Interest conditions to undo the value of using leverage.

It is unlikely the next economic downturn will be the same. The Stress tests are designed to test for “Dooms Day” type scenarios to see how the plan resilience. They are not a guarantee that the design will survive any future under performance scenario. In the most extreme under-performance the client could be required to adjust the plan coverage to reduce cost, conceivably lose part or all their contributions.

Combining long time industry experience with conservative designs to create financial solutions that are focused on sustainability.