2. The “Up” Company in a “Down” Market
What’s Up?
Leveraging Guardian’s Financial Strength
Excellent ratings
Increasing dividends and WL policy values
2008 year to date financial results
Mutuals and other privately held companies
2
4. What’s Up?
Guardian’s Ratings 2008 vs. 2007
Rating Agency 2008 Rating (Category) 2007 Rating
S&P AA+ (Very Strong) AA
Moody’s Aa2 (Excellent) Aa2
Fitch AA+ (Very Strong) AA
A. M. Best A++ (Superior) A+
6
5. What’s Up?
Guardian’s 2008 9/30/08 Financial Results vs. Peers
Capital Ratio
14.7%
12.3% 12.3%
12.0%
Mass Mutual Northwestern Mutual New York Life
7
6. What’s Up?
Guardian’s 2008 9/30/08 Financial Results vs. Peers
Pre-Tax Operating Margin
5.9%
3.9%
2.1%
1.2%
Mass Mutual New York Life Northwestern Mutual
8
8. What’s Up?
Dividend Interest Rates
2008 2009
7.90%
7.60% 7.50%
7.25% 7.30%
6.79%
6.50%
6.14%
Mass Mutual Northwestern Mutual New York Life
11
9. What’s Up?
Guardian’s Commitment to Mutuality . . . Long Term Good News
“Looking for bright spots in this recession?”
"Comprehensive portfolio management software throws a lifeline to
investors overwhelmed by the task of tracking their assets."
Philadelphia Inquirer
Worth, May 2007
“Today is the cut-off date for qualifying financial institutions to apply to participate in the
Treasury Department’s recently created Capital Purchase Program . . . Given Guardian’s
substantial capitalization, more-than-adequate surplus and the strength of our investment
portfolio, the company was not in need of the funds this program would provide.”
Memo to Guardian employees from Dennis Manning, 11-14-08
“Home Sales Decline”; pending home sales fell 4% in November, from
86.9 to 82.3 . . .
National Association of Realtors
“With their survival on the line, publicly traded insurers are scrambling for cash by cutting
dividends and issuing new shares (diluting existing investors), begging regulators for a
relaxation of capital requirements, and lobbying Washington for a cut of the $700 billion Wall
Street bailout. Their mutually owned rivals haven’t asked for a dime. Their statutory surpluses
(the regulatory counterpart to book value) have held steady or even increased. Some are
announcing plans to pay out near-record dividends to policyholders.”
Business Week, 12-01-08
“Idling Indicators” home sales, service jobs “Economy hits hospitals;
survey shows tight credit, poor patients, and down stock market are
hurting them”
“Guardian has no holdings with the investment firm operated by
Bernard Madoff.”
Dennis Manning Letter to Policyholders, 12-18-08
“Alcoa to slash 13,500 jobs; 13% of the firm’s workforce affected by “Guardian has a well diversified portfolio that has high credit quality and
economic downturn . . .” ample liquidity and that has been designed to manage investment risk.”
Guardian featured by Forbes in Mutual Life Insurers article with
President & CEO, Dennis Manning
9
10. What’s Up?
Guardian’s Whole Life Policy Values
Comparison of 20th Year IRR on Cash Value—$500,000 Male, Pref. Plus NT *
Guardian Mass Northwestern
Age L99 Mutual Mutual Life
35 4.41% 3.94% 3.85% 3.13%
45 4.07% 3.65% 3.68% 2.87%
55 3.55% 3.35% 3.33% 2.16%
* Numbers for other companies derived from current company illustrations
12
11. What’s Up?
Whole Life “Up” Asset in a “Down” Market
Male, Age 35, Preferred Plus NT
Whole Life 99, Basic Face Amount $1,000,000
Dividend Option: Paid Up Additions
Policy Net After-Tax Cumulative Net Cash Increase in Net Death
Year Outlay Outlay Value Cash Value Benefit
1 12,230 12,230 0 0 1,000,000
5 12,230 61,150 32,430 12,256 1,010,984
10 12,230 122,300 116,582 20,669 1,068,652
15 12,230 183,450 240,191 27,747 1,201,228
20 12,230 244,600 406,146 37,106 1,369,849
13
12. What’s Up?
Write Your Clients a “Permission Slip” for Whole Life Protection*
Why Your Client Should Choose
Whole Life insurance
Guard against stock market volatility
Guaranteed, economical wealth replacement asset
Freedom to choose other investment options
Permission to stop worrying about living . . .
or living too long
* CPA Wealth Provider, January, 2007 For a Successful Financial Planning Practice; Permission Slip, by Edwin I. Grinberg
15
13. What’s Up?
Whole Life Policy Values
EPUA—A Good Place to Stash Your Cash
Additional IRR on
IRR on Paid-Up Death Benefit
Cash Pre-tax Death Benefit Pre-tax IRR on
Policy EPUA Cash Value* Assumes 30% IRR on Cash Guaranteed Assumes 30% Death Benefit
Year Payment of EPUA Tax Rate After-tax Plus Dividend** Tax Rate After-tax
1 $100 $98 -2.85% -2.00% $405 435.0% 304.5%
2 $100 $206 2.60% 1.82% $801 196.16% 137.32%
3 $25,000 $25,470 1.51% 1.06% $ 95,853 370.90% 259.63%
4 $100 $27,181 5.19% 3.64% $ 98,873 137.71% 96.4%
5 $100 $29,000 6.45% 4.52% $101,987 83.87% 58.71%
6 $100 $30,931 7.08% 4.96% $105,197 60.74% 42.52%
7 $100 $32,982 7.46% 5.22% $108,509 47.97% 33.58%
8 $100 $35,162 7.72% 5.40% $111,927 39.89% 27.92%
16
15. We Want Your UL Business!
Put Your Business with a Financially Sound Company
“Stop focusing only on cost and service and start worrying about solvency . . . Check such agencies as
Standard & Poor’s, Fitch Ratings, Moody’s, and A.M. Best to find the highest rated companies, and be alert
for downgrades. Then dig deeper. Find out about an insurer’s exposure to real estate and mortgages and
make sure its debt holding are investment-grade . . .
‘Everyone’s under the false assumption that it doesn’t matter what company you buy from,’ says Thomas
Archer, chairman of financial-services firm Archer Financial Group in New York. ‘It does.’”
Business Week, December 1, 2008
34
16. Sales Opportunities Immune to the Market
Concepts That Can Drive Your Sales in a Down Market!
Non-Qualified Deferred
Compensation Plans . . .
. . . more important
than ever
36
17. Sales Opportunities Immune to the Market
Concepts That Can Drive Your Sales in a Down Market!
Solution: Salary Reduction Deferred Compensation Plans
How it works:
Life Insurance Executive’s Family
Company and Heirs
4. Loans on cash value and/or
3.
Insurance withdrawals 3.
Insurance
Premiums Premiums
5. Policy death proceeds
Agreement Notice and Consent
Business Executive
6. Retirement benefits
38
18. Sales Opportunities Immune to the Market
Concepts That Can Drive Your Sales in a Down Market!
Creating a Dynasty Trust
Securing your
financial legacy…
…Planning your
family’s future
42
19. Sales Opportunities Immune to the Market
Concepts That Can Drive Your Sales in a Down Market!
Solution: Create a Dynasty Trust funded with life insurance
How it works:
2. Trust purchases
1. Create and fund trust insurance on you
and/or your spounse
You
(and your spouse) Dynasty Trust Guardian
4. Pay death
proceeds
3.
Allocate
GST Exemption 5. Distributors
IRS 1st Generation
Family Members
Family Members
of Successive
Generations
44
20. Sales Opportunities Immune to the Market
Concepts That Can Drive Your Sales in a Down Market!
Using a Partnership or LLC to Complete the Corporate Buy/Sell Plan
Ensuring Successful, Profitable Business Succession
48
