Accelerated benefit riders may be available at an additional cost and may be subject to underwriting requirements. Payment of accelerated benefits will reduce cash value and death benefit. Policy fees and
expenses will also reduce cash value. Policy loans will reduce available cash values and death benefit. Additional premium may be required to keep the policy in force. In the event of a lapse, outstanding
policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. Withdrawals are generally income tax-free, unless the withdrawal amount exceeds the amount of premium paid. The
client will not have access to the policy, the cash values, the death benefits or the living benefits until the loan is repaid and the assignment is released.
Features and Benets Provided by the Life Insurance Policy
Death Benet Protection
A cash value life insurance policy with
accelerated benet riders can provide
benets in the case of:
Death
(Generally paid to beneficiaries income tax
f
ree)
Chronic Illness
(Assistance with daily living, bathing, eating,
dre
ssing, transferring, etc.)
Terminal Illness
(Illness where death is expected within 12-24
months. T
erm varies by state.)
Li
fe insurance requires qualification through
heal
th and financial
Cash Value Accumulation
Build Your Policy’s Cash Value Based On The
Grow
th Of A Market Index
(Interest credited based on market index or a fixed rate)
Cash Value and Indexed Interest Earned Are
Nev
er At Risk to Market Loss
(Due to declines in an index)
Tax Deferred Growth Potential
Access to Cash Value
(Policy loans and withdrawals can be used to supple ment
re
tirement income or other financial needs)
ANNUAL PREMIUM SCHEDULE
1 2 3 4 5 6 7 8 9 10
Example: Standard Male, Age 45, Non-Smoker
Before and After Kai-Zen
Total Cash Accumulation
Potential
for Supplemental
Retirement Income
Kai-Zen is a strategy that helps you maintain your current lifestyle with an index life insurance policy that
provides death benefit protection and living benefits in the event of a chronic illness, premature death, or to
potentially supplement your retirement savings. Protecting your ability to earn is critical to insuring that you will
be able to save for retirement. Due to limitations, traditional retirement plans are typically insuicient for high
income earners. If you want the potential to maintain your lifestyle in retirement, you need a proactive strategy
that puts more money toward helping to protect your future without putting a drain on your current finances.
Kai-Zen is one of the ONLY strategies that uses leverage to help you acquire more of the insurance benefits you
need to financially protect you and your family. Kai-Zen’s unique fusion of financing and life insurance oers you
more death benefit and helps supplement retirement more than you could without leverage.
How the Kai-Zen Strategy Works
A life insurance policy is jointly funded by the executive and bank
financing. The bank financing provides approximately 60-75% of
the total premiums to the policy.
Now executives can realize benefits far beyond what their
annual contributions alone could aord them.
The Use of Leverage
This concept is not much dierent than using a bank mortgage
to leverage assets to purchase a home. Money is borrowed to
buy more house (or with Kai-Zen, more benefits) than one could
purchase with assets on hand. The amount funded into the policy
has the potential for market growth without the risk of market
losses due to declines in an index and uses the policy’s cash
value as the sole collateral for the loan.
Years 1-5
During the first 5 years, the participant contributes their
portion and the lender finances the additional premiums into
the insurance policy.
Years 6-10
After year 5, the participant’s obligation is projected to be complete
and the lender makes the remaining premium payments.
Years 11-15
During this time, the policy has the potential to accumulate more
value and the lender’s note is projected to be satisfied approximately
by the end of the 15th year.
Years 16 and beyond
Potential policy cash value accumulation is projected for distributions
for lifestyle needs such as supplemental retirement income.
The most unique and compelling aspect of the Kai-Zen strategy
is that the executive’s contributions are leveraged up to 3:1.
What is Kai-Zen?
®
Hypothetical example, not indicative of a particular product. Actual results may be more or less favorable. The initial premium going into the policy does NOT include the $1500.00 of trust fees and expenses that will be added each year to the client trust. Those additional
payments are being escrowed into the trust account to cover the 15 years of service until loan repayment. Riders are supplemental benefits that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance. The Kai-Zen
Strategy is dependent on the client making contributions for the first 5 years therefore not defaulting on the policy, which could result in policy lapse and surrender charges. The client will not have access to the policy, the cash values, the death benefits or the living
benefits until the loan is repaid and the assignment is released. The lender has the right to discontinue funding new premiums, exit the market, or to demand loan repayment based on the terms and conditions signed by the Master Trust. See the Master Trust documents
for additional information. Refer to life insurance carrier’s product brochure and illustration for complete insurance policy details.
Self-funded Without Kai-Zen Strategy
Death
Benet
Total Cash Accumulation
for Supplemental
Retirement Income
Age 65-85
With Kai-Zen Strategy
Bank
Leverage
Age 65-85
Death
Benet
®
Executive contributions
(to their trust)
Bank Leverage
