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Securing Your Future Since 1919 schwartzbrothers

April 17,2013 FOR AGENT USE ONLY. Howard Sharfman President 500 West Madison Street, Suite 2700 Chicago, IL 60661 O: 312.683.7152 F: 312.759.4452 C: 312.927.6343 hsharfman@schwartzbrothers.com. Securing Your Future Since 1919 www.schwartzbrothers.com. Case study.

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Securing Your Future Since 1919 schwartzbrothers

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  1. April 17,2013 FOR AGENT USE ONLY Howard Sharfman President 500 West Madison Street, Suite 2700 Chicago, IL 60661 O:312.683.7152 F:312.759.4452 C: 312.927.6343 hsharfman@schwartzbrothers.com Securing Your Future Since 1919 www.schwartzbrothers.com

  2. Case study • Case study one – managing a WL portfolio and IUL • Case study two – insurance as an asset class • Case study three – insurance protecting a concentrated position

  3. Case Study One

  4. Client One • Client 56M - UHNW – PR/NS • Capacity issues with Placement • Managing large WL portfolio for 10+ years • Concerned with Interest Dividend rate declines • Wants to maintain high CV • Interest in and has had good experience with Structured Notes • Long Term Player

  5. Case Study Two

  6. Client Two • Large Private equity fund manager • Age 55 • Has never purchased life insurance • $1B+ net Worth • Gifted $5mm to IDGT • Loaned $45mm to IDGT • Trust purchased carried interest units in fund • Trust purchased $50mm of GUL/UL – asset allocation of $10mm of premium

  7. WHY? • Leverage • Non correlated asset Predictable • IRR at age 85 = 6.14% @ 90= 5.00% • Arbitrage between DB IRR and AFR • Asset allocation to tax free, estate tax free product • Exit through liquidity of carried interest Next Steps Similar transaction on life of wife

  8. Case Study Three

  9. Client Three - Concentrated stock • Client 40’s with new found wealth from IPO • IPO at $15 moved to $40/share in 3 weeks • Reallocate shares to Life insurance as a stabilizing factor in portfolio • Selling $5mm of shares provides $4mm after tax • Allocating $4mm to SUL provides $65mm of Death Benefit (16.2 x Premium) • Share price would have to be $389/ share to equal life insurance value

  10. Questions? Thank you! Howard Sharfman hsharfman@schwartzbrothers.com

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