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ING Indexed Universal LifeGlobal Plus (ING IUL-Global Plus)

Issued by Security Life of Denver Insurance Company

S.O.L.A.R. Insurance Arrangement for Qualified Plan Rescue

Male, Age 50, Preferred Non Tobacco Initial Death Benefit: $600,000 Death benefit increased to $2,100,000 over 11 years Premium: $22,830.24 years 1 through 10 $117,024.68 years 11 through 15 Tax Bracket: 35% ING IUL-Global Plus, 8.2% Illustrated Rate: 100% of funds in the Indexed Strategy Current IRA: $500,000 Annuitized: under IRC 72(t)/(q) Annuitization Method Used: Single Life Expectancy Table Used Distributions: $22,830.24 years 1 through 10 $115,289.60 years 11 through 15 Growth: 6% Growth assumed on IRA Funds

Self Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangements : A flexible tool for changing times
In todays environment of increasing national deficits and a struggling economy, many people believe that income tax rates are likely to go up in the future. Do you have clients with savings in qualified retirement plans such as 401(k) plans or traditional IRAs? Are your clients concerned about the potential impact increasing income tax rates would have on distributions from these retirement plans? If so, your clients may be interested in paying income taxes now and creating a potential source of tax-free retirement income.

LIFE INSURANCE
For agent use only. Not for public distribution.

Your future. Made easier.

Reposition tax-exposed retirement income

A Self-Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangement from the ING Life Companies can help provide your clients with a potential source of tax-free retirement income while also providing valuable death benefit protection for their loved ones. Your clients can reposition their tax-exposed retirement income in three steps:

1 #2 #3
#

Take distributions from a qualified retirement plan and use the money to pay premiums on an ING Indexed Universal Life Global Plus (ING IUL-Global Plus) insurance policy. Using Select Loans, borrow money from the ING IUL-Global Plus policy to pay the income taxes owed on the distributions from the clients qualified retirement plans. Upon reaching retirement age (or earlier if needed), use the ING IUL-Global Plus policys cash accumulation values as a source of potentially tax-free income.

Step 1
#

The first step is to take distributions from a qualified retirement plan. Unfortunately, distributions from these plans prior to age 59 will be subject to a 10% penalty unless the distribution falls within a permissible exception. One such exception is to use a series of substantially equal periodic payments as defined in Internal Revenue Code 72(t).

Three methods to avoid the 10% early distribution tax penalty Required Distributions
Life Expectancy Method Year
2011 2012 2013 2014 2015
2020

Amortization Method Account Balance at 6 %

509,477.30 519,523.24 530,171.94 541,459.55 553,424.43

Annuitization Method Annual Distribution

22,830.24 22,830.24 22,830.24 22,830.24 22,830.24 22,830.24

Age
50 51 52 53 54
59

Annual Distribution
10,752.69 11,397.85 12,054.63 12,777.91 13,544.58

Account Balance Annual Distribution at 6 %

518,602.15 537,636.56 557,116.84 576,999.27 597,261.97 19,361.04 19,361.04 19,361.04 19,361.04 19,361.04 19,361.04

Account Balance at 6 %
505,799.95 511,947.89 518,464.71 525,372.53 532,694.83

18,033.34

703,444.52

624,918.36

576,447.89

There are three methods for calculating a series of distributions under 72(t). In this example, the Annuitization Method allows for a higher level of annual distributions. Once the client is past age 59 he can move the funds out at an increased rate without penalties.
For agent use only. Not for public distribution.

Step #2
Year
1 2 3 4 5 51 52 53 54 55

Once the client has used these gross distributions to pay premiums for an ING IULGlobal Plus policy, he can pay the taxes due using Select Loans which results in a Net Annual Outlay of zero.
Total Policy Premium
22,830 22,830 22,830 22,830 22,830 ___________

End of Year Age

Employer Bonus to Executive

22,830 22,830 22,830 22,830 22,830 ___________

Tax on Bonus
7,991 7,991 7,991 7,991 7,991 ___________

Policy Value Distributed

7,991 7,991 7,991 7,991 7,991 ___________

Net Annual Outlay

0 0 0 0 0 ___________ 0

Net Surrender Value

415 8,093 14,728 20,452 30,951

Net Death Benefit

591,530 732,552 873,035 1,012,947 1,152,254

114,151

114,151

39,953

39,953

ING IUL- Global Plus has the option to use Select Loans. This hypothetical illustration assumes the Select Loans are used to pay the tax on the bonuses during the premium paying years. Select Loans are policy loans in which an amount equal to the loan or loan interest due remains in the Fixed Strategy and/or Indexed Strategy as elected by the policy owner. The interest rate charged on the Loan Amount for a Select Loan is fixed at 6.00% per year, regardless of the index credits earned and/or the credited interest rates. In addition, the ING IUL- Global Plus policy allows for the loan option to be changed from Select Loans to Traditional Loans once during the lifetime of the policy. Here, we assume a switch to a Traditional Loans at retirement. Traditional Loans are policy loans in which an amount equal to the loan or loan interest due is added to the Policy Loan Account (and therefore does not remain in the Fixed Strategy and/or Indexed Strategy) and is credited and charged with an annual interest rate (declared by the insurance company). The use of Traditional Loans provide the potential for more predictable results than Select Loans. The use of Select Loans to pay income taxes on bonuses during the premium paying years results in a zero Net Annual Outlay to the employee. Select Loans have the risk that policy performance may be lower than projected if the amount credited to the account value in the Indexed Strategy is less than the 6% interest charged on the policy loan. Detailed additional information about policy loans is located in the policy form and any personal policy illustration.

Step 3
#

At retirement age (or sooner) the client can begin taking distributions from the ING IULGlobal Plus insurance policy. For example, assuming our hypothetical illustration, the client has the potential for distributions of $44,647 for 25 years beginning at age 65.*
Year End of Year Age
66
90

Total Policy Premium

0

Employer Bonus to Executive

0

Tax on Bonus

Policy Value Distributed

44,647

Net Annual Net Surrender Outlay Value

-44,647 536,752
181,634

Net Death Benefit

1,652,435
388,848

16
40

0 0 0 44,647 -44,647 ___________ ___________ ___________ ___________ ___________

813,426

813,426

284,699

1,400,874

-1,116,175

But unlike a qualified retirement plan, there are no required distributions from a S.O.L.A.R. Insurance Arrangement. So, for example, if the client prefers to wait until age 75 before beginning to take distributions, he has the potential for distributions of $94,629 for 25 years.*
End of Year Age
76
95

Year

Total Policy Premium

0

Employer Bonus to Executive

0

Tax on Bonus

Policy Value Distributed

94,629

Net Annual Net Surrender Outlay Value

-94,629 1,126,501
474,433

Net Death Benefit

1,870,429
755,964

26
45

0 0 0 94,629 -94,629 ___________ ___________ ___________ ___________ ___________

813,426

813,426

284,699

2,177,279

-1,892,580

Or the client can simply leave all of the accumulated cash values in the ING IUL-Global Plus policy and retain it for its valuable death benefits. With a S.O.L.A.R. Insurance Arrangement, the client is in control and can choose how best to use the life insurance policy to meet his goals.
*Assumes an 8.2% crediting rate, 100% election to the indexed strategy and current charges. Results are significantly lower using a 1% rate and guaranteed maximum charges and the policy will lapse in year 1. In addition, none of the illustrated policy loans and partial withdrawals will be available.

For agent use only. Not for public distribution.

Do you have questions about this or any other Advances Sales techniques? Call 1-866-ING-SELL (1-866-464-7355) and press option 4 to speak to a member of the ING Advanced Sales Team.

Not FDIC/NCUA Insured Not A Deposit Of A Bank Not Bank Guaranteed

A portion of the policys surrender value may be available as a source of supplemental retirement income through policy loans and withdrawals. Income tax free policy distributions may be achieved by policy loans or withdrawing to the cost basis (usually premiums paid). This assumes the policy qualifies as life insurance, is not a modified endowment contract and is not lapsed or surrendered with an outstanding loan. Policy loans and withdrawals may reduce or eliminate index credits, generate an income tax liability, reduce available surrender value and reduce the death benefit, or cause the policy to lapse. Additionally, loans may limit the ability to make elections to the Indexed Strategy; if a loan results in amounts being deducted from a block prior to its block maturity date, no elections from the Fixed Strategy to the Indexed Strategy will be processed in the 36 months following the loan

May Lose Value Not Insured By Any Federal Government Agency

These materials are not intended to and cannot be used to avoid tax penalties; and they were prepared to support the promotion or marketing of the matter addressed in this document. Each taxpayer should seek advice from an independent tax advisor. 2011 ING North America Insurance Corporation cn67384052013

ING IUL-Global Plus, policy form series #1182-12/10 with an equity indexed feature, varies by state and may not be available in every state. It is issued by Security Life of Denver Insurance Company, a member of the ING family of companies. Not available in New York. The index cap and index participation rate are subject to change for new index blocks. All guarantees are based on the financial strength and claims paying ability of Security Life of Denver Insurance Company which is solely responsible for the obligations under its own policies. The ING Life Companies and their agents and representatives do not give tax or legal advice. This information is general in nature and not comprehensive; the applicable laws change frequently and the strategies suggested may not be suitable for everyone. Each taxpayer should seek advice from his or her tax and legal advisors regarding their individual situation.

160177 06/08/2011

For agent use only. Not for public distribution.