LIFE INSURANCE SUMMARY & ANALYSIS

Prepared For: Florida Bar Member Prepared By: The Florida Bar Member Benefit Insurance Program Prepared On: February 2, 2010

OVERVIEW
About The Florida Bar Member Benefit Insurance and Retirement Programs
As a member of The Florida Bar, you are part of a large group with buying power. Our mission is to maximize this potential by providing members, their families, and employees with competitive insurance products, employee benefit plans, and services not usually obtainable by individuals or small groups. This Life Insurance Summary is a free service offered to Florida Bar Members to help you stay informed about your life insurance policies and offer unbiased solutions to meeting your life insurance goals. This summary can be prepared for your family members and clients as well.

Who is BPC Financial?

Since 1987, BPC Financial has administered The Florida Bar Member Benefits Insurance & Retirement Programs. We constantly strive to increase and improve the programs that are available to The Florida Bar Members. BPC Financial, headquartered in Jacksonville, FL, is a full-service insurance and financial services organization specializing in the design, marketing, and administration of professional affinity group and association member benefit programs.

Life Insurance Summary & Analysis Report

Through BPC Financial, The Florida Bar Member Benefit Insurance and Retirement Programs has prepared this life insurance policy review for you. To produce a life insurance policy review, you and/or your financial adviser provided BPC Financial with data and personal information. The information provided might include, for example, copies of your existing policies, point of sale illustrations, annual reports, point-in-time ledgers, projections and sales literature or proposals. In preparing this report, BPC Financial may also rely on information obtained from third parties, including your insurance carriers. BPC Financial recommends that you review this report with an insurance agent or financial advisor to assist you in analyzing your individual circumstances and identifying factors which may be important to you. In providing a life insurance policy review, the goal of BPC Financial and The Florida Bar Member Benefit Insurance and Retirement Programs is to help you better understand your current situation and to provide you with information that can help you to decide what course of action makes the most sense for you at this time. You can contact our office directly to discuss the details of this summary at 1-800-2828626 extension 3231.

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OVERVIEW (CONT.)
Why do a Life Insurance Review?
A life insurance policy owner should review his or her coverage on a regular basis for numerous reasons. Often there are legitimate planning issues such as changes in financial or personal situations for making changes in life insurance coverage. In addition, improvements in available life insurance coverage offer the real possibility that clients can improve their coverage without any additional expenses.

Reasons for reviewing life insurance coverage include the following: Advancing age and deteriorating health can prevent the insured from taking advantage of more cost effective products if a review is needlessly delayed Life insurance, if not owned properly, can increase estate taxes in larger estates Many life contracts do not meet current needs due to life or career changes Improved product offerings may increase coverage. Many new products have features that were not available in the past (i.e. secondary guarantees in Universal Life Products, Long-Term Care Riders, etc.) Beneficiary designations may be out of date. Older life insurance contracts may use higher mortality rates than current policies More lenient underwriting provides the opportunity for lower insurance costs Coverage may not remain in force to maturity, based on reasonable projections Outstanding policy loans may cause a policy to lapse Existing Term policies may be approaching a premium increase or may be beyond their conversion point.

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POLICY SUMMARY
Insured Data Name Gender DOB Current Age Policy Data Insurance Carrier Policy Number Policy Type Policy Face Amount Issue Date Issued Risk Classification Issue Age Ownership Beneficiary Itsa Wonderful Life #0012345 Universal Life $500,000 6/1/90 Preferred Nonsmoker 40 Valued Client, Insured Betterhalf Client, Spouse Bar Member Male 6/1/50 59

Universal Life Insurance policies typically offer the following features: Premium payments, minus any sales charges, are credited with interest on a monthly basis. The cost of insurance, together with all other policy fees, is deducted on a monthly basis from the policy cash value. Ability to increase or decrease premium payments within limits, and even skip payments without losing coverage, so long as the cash value is adequate to cover insurance costs. Ability to take withdrawals from and/or borrow against the cash value. Withdrawals and/or loans can be used to pay future premiums. Withdrawals constitute a partial surrender, which will reduce the death benefit and cash value. Provides a guaranteed minimum interest crediting rate. The current interest rate is determined by the insurance company. Current profitability, financial benchmarks and prevailing economic conditions are some of the factors utilized by the insurance companies when determining this rate. Some policies offer no-lapse guarantee provisions that extend death benefit coverage even when there is no policy value.

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POLICY SUMMARY
Policy Values Data Modal Premium / Mode Annualized Premium Current Premium Payment Cost Basis Gross Case Value Loan Balance Surrender Charge Net Cash Value Death Benefit Option Initial Death Benefit Current Death Benefit Date of policy values $1,000 / month $12,000 $0 $120,000 $250,000 $0 $20,000 $230,000 Level $500,000 $500,000 1/1/10

$500,000 $500,000 $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0

$250,000

$230,000

$120,000

$0 Cost Basis Gross Cash Value Loan Net Cash Value Initial Death Benefit Current Death Benefit

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POLICY PERFORMANCE SUMMARY

How long will policy last based on current assumptions? How long will policy last based on guaranteed assumptions? Does policy include a no lapse guarantee provision? Current interest crediting rate Guaranteed interest crediting rate Age 95 Age 80 No 4.5% 3%

Net Amount at Risk

$600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 20 Death Benefit 25 Cash Value 30 Loan Balance 35

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POLICY PERFORMANCE SUMMARY

Based on stated objective of making no additional premium payments, your current policy has the following guaranteed and projected values:

Policy Year 20 25 30 35

Cummulative Premium $120,000 $120,000 $120,000 $120,000

Current Value $250,000 $290,000 $320,000 $170,000

Guaranteed Value $200,000 $150,000 $75,000 $0

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OBSERVATIONS
Upon evaluation of the information provided on this policy, the following observations can be made: As a personally owned policy, the death benefit will be includable in clients taxable estate. Depending on size of the estate it may be worthwhile to consider changing ownership and beneficiary arrangement. Additional premium payments are required to extend coverage to age 100 based on current assumptions. The amount of death benefit available may not be suitable given clients current financial situation. Cash value is high relative to the death benefit.

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ALTERNATIVES
The alternatives presented below represent potentially viable solutions. Each alternative will be presented along with potential advantages and disadvantages.

1) Maintain the policy without changes.

Advantages:
The client does not have to qualify for a new policy. The policy will carry to age 95 based on a 4.5% gross rate of return and current charges.

Disadvantages:
Policy will lapse prior to maturity based on guaranteed assumptions The policy will remain in force to age 79 based on a 5.41% gross rate of return and guaranteed charges. Additional premiums may be needed to prevent the policy from lapsing based on guaranteed assumptions. The insured would have the opportunity to qualify for a better risk class, with potentially lower mortality expenses and a guaranteed death benefit by applying for a new policy.

2) Purchase new insurance to replace the current policy.

Advantages:
The client will obtain a guaranteed premium and death benefit. No cost is required to explore this option. May result in either a lower premium or higher death benefit. Purchasing new insurance offers the potential for improved cash value growth.

Disadvantages:
A surrender of the existing policy would incur a charge. The client must qualify for new insurance by meeting the proper financial and medical underwriting requirements. A new surrender charge period will begin with the new policy.

3) Increase annual premium to keep policy in-force to maturity.

Advantages:
The client will obtain a guaranteed premium and death benefit. The client does not have to qualify for a new policy.

Disadvantages:
Client incurs a substantial increase in total premium outlay.

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