Carbyne Allocation™ Model

Client Information

Enter client information:

Age (20 - 70)

Current AAA Corporate Bond Yield (%)

Advisory Fee (%)

Target Fixed Income Allocation (%)

Effective Tax Rate (%)

Carbyne Funding Years (up to 7)

Health

Run Stress Test

Net Income

A portion net income will be directed to your Carbyne Allocation™ based on your Target Fixed Income Allocation.

Base Income ($)

Bonus Income ($)

Estimated Monthly Expenses ($)

Total Income: $120,000.00

Taxes: $30,000.00

Annual Expenses: $60,000.00

Annual Free Cash Flow: $30,000.00

								Annual Carbyne Allocation™ from Income:
								$6,000.00
							

Current Portfolio

The remaining portion of the Carbyne Allocation™ is funded by reallocating current fixed income and cash assets.

Equities ($)

Fixed Income ($)

Cash ($)

Alternatives ($)

Other ($)

Total Assets: $400,000.00

Total Contribution to Carbyne Allocation™: $150,000.00

								Annual Carbyne Allocation™ from Current Portfolio:
								$30,000.00
							

Proposed Carbyne Allocation™

Your Carbyne Allocation™ starts with a 5-year annual funding committment from existing savings and cash flow. This 5-year committment will fund a life insurance policy at it's maximum non-MEC level, which allows for maximized growth potential while retaining tax-preferred distributions.

Annual Carbyne Allocation™ From Income: $6,000.00

Annual Carbyne Allocation™ From Portfolio: $30,000.00

								Total Annual Carbyne Allocation™:
								$36,000.00
							

Carbyne Allocation™ Projection

The Carbyne Allocation™ offers substantially more growth potential than typical fixed assets and provides substantial death benefit protection. This projection model shows how repositioning your current Fixed Income assets and allocating a portion of cash flow over the next 5-years can results in substantially more value.

Carbyne Allocation™ Advantage

Attained Age	Current Allocation	Carbyne Allocation™	Carbyne Allocation™ Advantage
Attained Age	Current Allocation	Carbyne Allocation™	80	######	######	######
90	######	######	######
100	######	######	######

Age	Year	Current Allocation					Carbyne Allocation™									Performance Difference
Age	Year	Investable Assets Beginning of Year	New Savings	Investment Return	Taxes and Fees	Investable Assets End of Year	Investable Assets Beginning of Year	New Savings	Investment Return	Taxes and Fees	Insurance Premium Allocation	Investable Assets End of Year	Life Insurance Cash Value	Investable Assets plus Insurance Cash Value	Death Benefit	Liquidity Difference	Difference to Heirs

Carbyne Allocation™ Explained

Put simply, Carbyne Allocation™ is an asset repositioning strategy to balance asset growth potential, performance risk, tax and actuarial arbitrage. With Carbyne Allocation™, low-yield, tax inefficient fixed income assets are replaced with a properly constructed (see product assumptions) cash value life insurance. The life insurance policy is funded near IRS limits to maximize tax-advantaged inside build-up and minimize insurance costs. The result is a higher yielding asset, with significant tax-advantages that results in increased wealth accumulation.

Carrier Selection

For Carbyne Allocation™ to be succesful, the underlying life insurance policy must perform for many decades to come. That means that selecting the right carrier is critical. To select the right partner, we look for carriers that:

Are highly rated
Have ownership structures that prioritize policy holders such as mutual carriers or mutual holding companies
Have demonstrated commitment to the market
Have a history of treating clients well

Product Selection

Carbyne can be effective using other cash value life insurance products, such as Whole Life (WL) or Variable Universal Life (VUL). The use of Indexed Universal Life (IUL) is preferred because it offers a protective floor on annual indexed credits, thereby reducing the risk of policy underperformance. Carbyne Allocation™ is most effective for products that:

Have upside return potential
Do not add excessive risk to the clients portfolio
Offer additional benefits, such as long term care or critical illness riders to provide added protection.

Product Design

The Indexed Universal Life policy is designed to maximize cash value accumulation. The Carbyne Allocation™ does this by:

Funding the policy for a limited time period of 1 to 7 years.
Using an increasing death benefit in early years and level death benefit after the premium payment stop.
Funding at or near the maximum level permitted by the Guideline Premium Test.

Product Assumptions

This demonstration is based on a generic Indexed Universal Life (IUL) product. It is not based on any particular carrier's product, but is similar to many products on the market. The product you select will have different costs and benefits. This demonstration assumes a 6.50% annual S&P 500® index credit and current charges, this is consistent with historical returns for indexed account with an 10.5% cap and 0% floor.

Stress Test

The stress test scenario assumes the policy receives a 0% credit once every 7 years. 5 years This is actually a double stress test accounting for zeros more than once. The model assumed 6.50% return already accounts for zeros occurring because it reflects historical average returns

Disclosures