Page 35 - MetalForming January 2010

DieProtection for
Lean
Error-proofing concepts for toolmakers and die designers
Manufacturing By Drew Stevens
This new book from the Precision Metalforming Association is written by long-time die-sensor expert Drew Stevens, who shows readers step by step how to develop modern sensing technologies for the pressroom and apply them to a lean- manufacturing environment. “Slow stamping-press speeds and frequent die crashes are not acceptable,” writes Stevens, “and the manufacturers that choose to shift their thinking to new technologies will prevail in the world metalforming market.”
To learn how to protect investments by applying sensors in your metalforming operation and support your lean- manufacturing directives, order a copy of Stevens’ book today.
Call Marlene at 216-901-8800 x127 Online at www.pma.org and visit our Online Store
Two huge advantages become obvi- ous: 1) the death benefit is always king, and 2) in the long-run, use every oppor- tunity (notice the huge higher amount in “cash value” after 20 years compared to “taxable investment”) to get into an income-tax-free environment. Neither the “cash value increases” nor the “death benefit” is subject to income tax.
Note: PPLI premiums a) start from a low of $1 million (for example, $250,000 per year paid over four years) b) to a more typical $5 to $10 million or more (paid in the early years) or c) a large ($5 million or more) paid as a single premium at inception. Yes, $50 to $100 million polices can be arranged.
Now let’s look at a three-step exam- ple (courtesy of Donald D. Cameron, CLU, a long-time PPLI guru) that uses PPLI to create an effective private retire- ment plan.
Facts: A 50-year old male, non- smoker, with cash value compounding at a 10 percent annual rate (after invest- ment management fees).
Step No. 1—Pays a $1 million pre- mium for a PPLI for 5 years...total pre- mium of $5 million.
Results: Step No. 2—After 15 years (age 65) receives $1.2 million per year for life.
Step 3—After 50 years (age 100) $9.9 million is payable as a death benefit. (Payments in Steps 2 and 3 are income tax-free.)
Let’s take a look at some other advantages of PPLI:
1) Liquidity. When needed, you can borrow a portion of the “cash value,” which can be paid back at any time or out of the “death benefit.”
2) Asset protection. Your invest- ments are placed in separate accounts, avoiding any risk of insurance compa- ny illiquidity.
3) Risk minimization. Insurance is a risk-shifting strategy in the event of a
premature death, always supplementing the tax-free investment results (at any age).
4) Estate tax free. The PPLI arrange- ment can be set up so the ultimate death benefit is not subject to estate taxes.
5) Investment flexibility. You can, with the help of the insurance com- pany, select from a large number of hedge funds. Or, work with a third- party advisor (whom you select). You can even switch advisors or have more than one. Also permissible—invest in a private equity deal (maybe one of your own companies or someone else’s) that you think has great upside potential.
6) Low investment cost. Traditional agent’s commissions are eliminated, let- ting more funds “work” inside your policy... True “no-load” insurance. Typ- ically, PPLI is placed with an offshore insurance company, further reducing policy costs. Also, there are no surren- der charges or other insurance compa- ny penalties.
7) What if your health or age pre- vents you from getting insurance, including PPLI? You can purchase a private placement deferred variable annuity (PPDVA), similar to a PPLI except that the income is deferred until the policy owner takes a distri- bution (taxable at ordinary income tax rates).
If you have a large investment port- folio, whether CDs, municipal bonds, hedge funds, stocks or bonds, or any of the other endless parade of investment vehicles, then PPLI is something you should look at. Your investment wealth is sure to compound at an accelerated pace because you won’t lose one cent in income taxes.
You’re sure to have questions. Just call me (847-674-5295) to discuss how a PPLI or PPDVA can be designed just for you. MF
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