Download Life Insurance in a Goals-Based Framework

GLOBAL INVESTMENT COMMITTEE
JUNE 2016
Retirement
LISA SHALETT
Head of Investment & Portfolio Strategies
Morgan Stanley Wealth Management
DANIEL HUNT, CFA
Senior Asset Allocation Strategist
Morgan Stanley Wealth Management
JOE LAETSCH
Market Strategist
Morgan Stanley Wealth Management
Life Insurance in a
Goals-Based Framework
While most people think of life insurance as a way to
provide for dependents and pay for final expenses upon death,
it can also play an important role in your portfolio during
your lifetime. Especially in a world of low expected returns
on risk assets, many life insurance policies have features that
can help individuals meet their financial goals. Some of the
most common uses of life insurance are protection, wealth
accumulation and wealth transfer.
An investor’s decision to purchase insurance remains
closely related to their goals, especially retirement goals. To
put some context around these decisions, we therefore draw
on the insights furnished by our analytical framework for
retirement (see Introducing the Morgan Stanley Wealth
Management Retirement Framework, November 2015). Core
to our approach is the concept of an individual’s “funding
ratio,” which is a measure of retirement preparedness. The
funding ratio—the ratio of the present value of current and
future savings to the present value of the income needs those
savings have to fund—can help us to understand how
different types of insurance might play a role.
Please refer to important information, disclosures and qualifications at the end of this material.
RETIREMENT
standard savings vehicles like brokerage
accounts, e.g., a tax exemption on
contributions and deferred taxes on gains
such as through 401(k)s and Individual
Retirement Accounts. However, these
vehicles are subject to contribution caps
that can limit their usefulness for more
affluent investors, and in certain
circumstances can actually be less tax
efficient. Life insurance, in particular cash
value life insurance rather, also confers tax
benefits on investments held in the policy,
and therefore can also be used to aid a
client’s wealth accumulation objectives
(see Exhibit 3, page 3). This is because
monies contributed to a cash value policy
can be accessed during the life of the
insured up to the cash surrender value
(though, of course, this will affect the cash
value and death benefit of the policy2).
The portion that is the premiums paid
typically does not create tax liability when
withdrawn. The insured can also borrow
against the cash value of a permanent
policy, often on a tax-free basis. This
means that in addition to providing a death
benefit to a beneficiary, cash value life
insurance can be employed to fund normal
retirement expenses, or as a legacy plan
that also functions as a backstop against
emergency retirement expenses.
The wealth-accumulation benefit of
some cash value life insurance policies
may include a guaranteed minimum
interest crediting rate. In many cases, the
insurance policy to protect against this
type of risk, consider Exhibit 2 (see page
3). The analysis depicts what happens to
an individual’s financial position under
four scenarios. In the first two, the investor
has elected not to purchase long-term care
insurance and thus the funding ratio is
more than 100%. But if that investor needs
long-term care and has to pay for it out of
pocket, the funding ratio drops by more
than a third to a seriously deficient 67%.
Simply put, the present value of your
assets to your liabilities is only about twothirds of what it should be. By purchasing
the insurance, the funding ratio drops to
99% in the case that it’s not needed and
importantly, 96% if it is. The effect of the
protection is to trade a somewhat reduced
level of funding, from 105% to 99%, for a
significant reduction in the impact of these
contingent expenses.1
Protection
The traditional use of insurance is to
protect one’s finances against unforeseen
events that can have detrimental effects on
a family’s ability to meet financial
obligations. For example, when an
investor is a breadwinner, whether by her
wages or in retirement through a
traditional pension or an individual
annuity, the risk of her passing away
prematurely is a liability for the entire
family. A life insurance policy can hedge
this risk. The benefit it pays upon her
death to her beneficiaries ideally is an
amount that offsets the financial loss to
them of such an event. “Term insurance,”
which provides life coverage for a certain
period of time, is a cost-effective way to
protect surviving beneficiaries, although
other more expensive forms of life
insurance combine protective benefits with
other features that can further other client
objectives.
Two other types of risks can impede an
investor’s ability to meet their goals. One
is not being able to work for an extended
period of time due to illness or accident; to
“hedge” that risk, there’s disability
insurance. The risk of needing long-term
care during retirement due to a medical
condition can similarly be hedged with
long-term care insurance (Exhibit 1).
To illustrate the implications associated
with a decision of whether to purchase an
Wealth Accumulation
While the primary function of insurance
is to provide protection against unknown
events, the special features of some
insurance policies can broaden their uses.
Foremost among these features is the
ability to grow what might otherwise be
taxable investments on a tax-deferred basis
and potentially, in an intergenerational
context, even in a tax-exempt way. Of
course, many types of retirement savings
accounts confer tax benefits relative to
Exhibit 1: Types of Protective Insurance
Policy Type
Who
Rationale
Term Insurance provides coverage for a
certain period of time (a specified “term” of
years) at a guaranteed premium rate
This is most appropriate for people who need
insurance for a limited period of time and are
more focused on liability management (income
replacement and debt coverage) than wealth
accumulation
Can help protect dependents or beneficiaries
from potential loss of wages and large
responsibilities such as mortgages and college
education in the event of the insured’s death.
Also frequently used to cover outstanding debt
Long-Term Care Insurance helps provide for
the cost of long-term care such as home care
and assisted living for someone with a chronic
disease or disability
This is most appropriate for people who are
concerned with protecting savings from the
future cost of medical care or nursing facilities
Can help protect retirement savings from
unexpected and often high medical expenses
Disability Insurance helps protect income in
This is most appropriate for people who want to
the event of becoming unable to work due to an protect against the possibility of lost wages and
injury or disability
do not have the ability to sustain a prolonged
loss of income
Can help protect retirement savings and offset
lost wages if one becomes unable to work
Source: Morgan Stanley Wealth Management GIC
Please refer to important information, disclosures and qualifications at the end of this material.
June 2016
2
potential for policy lapse, with associated
tax consequences. We highlight the
following in depth: liquidity risk, credit
risk, health risk and expense.
Liquidity risk stems from an investment
that cannot be bought or sold quickly
without substantial, in some cases
prohibitive, transaction costs. While many
permanent life insurance policies allow
clients to access their policy’s cash value
through policy loans, a life insurance
policy cannot be liquidated in the same
way as stocks, bonds and mutual funds.
This means a client may not be able to
access this cash to satisfy an immediate
need. Accordingly, investors should
consider their liquidity profile, and
generally incorporate life insurance as part
of a strategy that includes liquid savings.
Another risk associated with life
insurance is credit risk, or the risk that the
selected insurance carrier becomes
insolvent. As policies are subject to the
claims-paying abilities of their issuers,
there’s some risk claims may not be paid.
The exposure of life insurance to credit
risk can, however, be mitigated through
diversification of coverage across different
insurance companies. This is effectively
the same as mitigating the potential for
losses in any one investment in a portfolio
by holding smaller concentrations of a
greater number of investments. On that
basis, depending on the level of
concentration and the size of the policies,
it sometimes makes sense for investors to
consider holding insurance policies with
more than one company. 5
Another drawback to consider is the
health of the insured. The cost of the
client’s death benefit is a function of the
insurance company’s evaluation of that
individual’s risk of early mortality. To
conduct that evaluation, an insurance
company will examine the insured’s health
Exhibit 2: Protection Reduces Risk to Retirement Plans
120%
100
105%
99%
80
60
96%
67%
40
20
0
No Contingent
Contingent
Expenses
Expenses
Without Insurance
No Contingent
Contingent
Expenses
Expenses
With Insurance
Note: For the assumptions used in these calculations, see footnote 1 on page 7.
Source: US Department of Health and Human Services, FactSet, Morgan Stanley Wealth
Management GIC
guaranteed rate can be more attractive than
those available in the fixed income market
on an after-tax basis. It is locked in for the
duration of the policy which is typically
substantially longer than the tenor of most
bonds. These potentially higher rates can
help a client meet their growth hurdles
without using riskier portfolio strategies.
What’s more, guaranteed rates reduce
downside risk exposure, which is
especially desirable when the individual is
close to or in retirement.
Wealth Transfer
These same features also mean that, in
certain circumstances, life insurance can
also be used as a vehicle to transfer wealth
to other generations on a tax-efficient basis
(see Exhibit 4, see page 4). Guaranteed
universal life, variable universal life,
indexed universal life and whole life
insurance can be used for this purpose, as
with these policies the death benefit is
generally passed to the beneficiary free of
income taxes (see Exhibit 5, see page 4).
In some cases, the death benefit may be
guaranteed. Combined with estate
planning or, if the beneficiary is a
charitable organization, the tax advantages
of these policies for use in intergenerational wealth transfer can be magnified.
As shown in Exhibit 4, one such
strategy is to use life insurance in conjunction with an irrevocable life insurance
trust. In this situation, the grantor
contributes cash to the irrevocable life
insurance trust. The trust purchases a
policy from a life insurance carrier using
the cash contributed to pay the premiums.
When the insured passes away, the death
benefit passes to the trust and, in turn, onto
the beneficiaries of the trust free of both
income and estate taxes. Of course, all
estate planning strategies have drawbacks,
and need to be considered in consultation
with qualified professionals.4
Drawbacks
Life insurance comes with several
drawbacks that potential buyers should
consider, including limitations and
conditions on access to cash values and the
Exhibit 3: Benefits of Cash Value Life Insurance
• Cash value of account grows tax deferred
• Withdrawals or loans against the life insurance policy can generally be taken free of income tax
2
• Unlike traditional retirement vehicles in which contribution amounts are capped (401(k)s and IRAs), insurance products allow clients to contribute
3
additional dollars into a tax-advantaged structure with greater flexibility up to certain limits
• Death benefit can pass to heirs income tax-free upon death
Source: Morgan Stanley Wealth Management GIC
Please refer to important information, disclosures and qualifications at the end of this material.
June 2016
3
an investment-only strategy.
Exhibit 4: Life Insurance Can Enhance Estate Planning
Solving for Your
Retirement Needs
Grantor
Premiums
Weighing both its advantages and
drawbacks, there are many instances
where insurance can play an important role
within a retirement plan be it to provide
protection, assist with wealth
accumulation or transfer wealth to the next
generation. As with traditional investments
and types of annuities that we have
analyzed in the past, the applicability of
different types of insurance to any
particular investor and the nature of the
goals most pertinent to them will vary by
investor. Morgan Stanley Wealth
Management’s Retirement Framework
outlines analytical tools we can employ to
help us diagnose investor needs and the
applicability of various insurance solutions
in a more transparent way than does
complex planning analysis. Specifically,
an individual’s funding ratio can help us
identify which types of insurance policies
Death
Benefit
Premiums
Life
Insurance
Carrier
Irrevocable Life
Insurance Trust
Death
Benefit
Beneficiaries
Source: Morgan Stanley Wealth Management GIC
history as well as the insured’s family
history. Underwriters will also look at the
insured’s occupation, hobbies, driving
record and other relevant factors. The
insurance company then determines, based
on the risk they assess, the price at which
it can offer the insurance. In cases of poor
health or high risk factors, the price can be
very high, even prohibitively so. This is
part of the reason why it makes sense to
evaluate the need for life insurance at a
younger age. Clients can often obtain
insurance even if they have health impairments; however, there are associated costs.
Finally, while life insurance expenses
pay for its many features, these costs can
be significant relative to traditional
investment vehicles, particularly in a
permanent or variable universal life
insurance policy. In certain situations, the
tax efficiency benefits can outweigh the
additional costs, but when returns are
lower, expenses can reduce the potential
upside or magnify the downside relative to
Exhibit 5: Types of Life Insurance Best Suited for Wealth Accumulation and Transfer
As with any financial or insurance product, life insurance comes with benefits and drawbacks. This table communicates the rationale for these policy
types for different types of individuals in the context of wealth accumulation and transfer. For a discussion of associated drawbacks, see the
drawbacks section on page 3.
Policy Type
Who
Rationale
Guaranteed Universal Life Insurance is a form
of permanent insurance with the flexibility to
choose a designated guaranteed premium and
death benefit, and the age to which the death
benefit will be guaranteed, whether it’s 100, 105,
115 or 120
This is most appropriate for people who want life
insurance’s protective and wealth transfer
properties with reduced uncertainty about their
insurance coverage
Guaranteed value as long as you maintain
contract terms and premium payments, ability to
grow at a guaranteed minimum rate tax deferred
or in some cases tax exempt
Variable Universal Life Insurance is a form of
permanent insurance designed for cash
accumulation tied to market performance.
Multiple investment options are available to suit
the client’s risk tolerance
This is most appropriate for people who want life
insurance’s protective properties but also want
to be able to build and access the cash value
and have a higher risk tolerance
Ability to grow what might otherwise be taxable
investments tax deferred or in some cases tax
exempt, ability to access cash value via loans or
withdrawals, cash accumulation tied to market
performance
Indexed Universal Life Insurance is a form of
permanent insurance that allows the owner to
allocate cash value amounts between fixed rate
and indexed subaccounts, such as the S&P 500.
Indexed account returns are typically capped
and the downside limited
This is most appropriate for people who want life
insurance’s protective properties but also to be
able to build and access the cash value and
have a lower risk tolerance
Ability to grow fixed rate and indexed
subaccounts that might otherwise be taxable,
tax deferred or in some cases tax exempt, ability
to access cash value via loans or withdrawals
Whole Life Insurance is a form of permanent
insurance designed to last a lifetime. The
premiums, death benefit and cash value are all
guaranteed by the insurance carrier
This is most appropriate for people who want life
insurance’s protective and accumulation
properties with minimal uncertainty about their
insurance coverage
Guaranteed death benefit and cash value, ability
to grow what might otherwise be taxable
investments tax deferred and or in some cases
tax exempt, ability to access cash value via
loans or withdrawals
Source: Morgan Stanley Wealth Management GIC
Please refer to important information, disclosures and qualifications at the end of this material.
June 2016
4
Exhibit 6: The Funding Ratio Illuminates Progress and Potential Solutions
With a 97% Funding Ratio …
$2.5 Million
2.0
Present Value of Needed Income
Present Value of Current and
Planned Savings
$2.2
$2.1
… an Investor Is on Track to Meet Retirement Goals
Age
55
60
65
70
75
On Track
(%)
77+
88+
96+
98+
99+
73 – 88
82 – 96
86 – 98
88 – 99
0 – 73
0 – 82
0 - 86
0 – 88
1.5
1.0
0.5
At Risk (%) 60.4 – 77
Off Track
(%)
0 - 60
0.0
Note: On Track means an investor is likely to achieve his goals; At Risk implies a material risk that an investor may not achieve his goals; Off Track
means it is unlikely an investor will meet his goals without modifying savings or spending plans.
Source: Morgan Stanley Wealth Management GIC
might make sense to a specific investor,
and even give an estimate of how much
coverage may apply.
To see how that works, go back to the
funding ratio, a measure of a person’s
retirement preparedness that can be used to
track the progress of an investor toward
their goals in real time. It is based, not on
return forecasts and a complex statistical
framework, but on the objective criteria of
prevailing interest rates and actuarial
estimates of the present day “cost” of
retirement liabilities. In the example
illustrated in Exhibit 6, the extent to which
a funding ratio resembles an individual’s
balance sheet is laid bare: their
accumulated and planned savings—plus
resources like Social Security and pension
benefits—relative to their spending plans.
A funding ratio can tell us whether an
investor is on track to fulfilling their
objectives. It can also be used to help
assess the need for as well as the
appropriate size of a suitable insurance
policy in the context of specified risks,
wealth transfer objectives or to determine
investment strategy. For example, a
marginally funded investor would likely
be able to afford insurance associated with
disability, long-term care and early
mortality, but would not likely be able to
manage if those unforeseen expenses
occurred. For such an investor, protective
insurance would be very appealing given
the potential for increased retirement
spending plans, reduced retirement savings
and increased risk of outliving their
resources. By contrast, such protection
might be much less appealing for very
underfunded or very overfunded investors.
An investor who is quite underfunded is
unable to lower the risk of high contingent
expenses without increasing other risks to
their retirement while a quite overfunded
investor can “self insure” those risks and
use the funds for other purposes. One such
use of funds for well-funded investors is to
further wealth accumulation and transfer
through enhanced tax efficiency. In the
case of wealth transfer, a funding ratio can
very quickly help an investor identify the
surplus funds available for gifting.
While a funding ratio helps to
understand the potential usefulness of
insurance for an investor, a more detailed
examination and analysis is often needed.
What is clear is that there are multiple sets
of circumstances under which investors
benefit from using insurance. That makes
sense both intuitively and with respect to
established practice. Moreover, our
framework supports it. In the following
pages, we provide more detail about the
various types of insurance in this report.
Please refer to important information, disclosures and qualifications at the end of this material.
The Bottom Line
While the primary rationale for life
insurance is the death benefit, its other
attractive features make it useful beyond
the need to protect loved ones. In an age
when investors are required to take the
risks associated with preparing for
retirement during an extended period of
financial repression and potentially lower
returns, the tax advantages and
competitive guaranteed appreciation of
many life insurance products represent an
opportunity many investors should
consider. Furthermore, during this period
of high tax rates amid a massive transfer of
wealth from the baby boomer generation
to younger generations, the need to
consider smarter strategies for more
efficient wealth transfer is as great as it has
ever been. Using life insurance as part of
an overall investment strategy can help
improve the likelihood an investor will be
able to meet their objectives while also
potentially allaying concerns with respect
to market and life contingencies. The
funding ratio, together with more detailed
financial planning, can help investors and
their Financial Advisors understand how
and where those potential advantages can
be accessed given their circumstances. 
June 2016
5
Insurance for Protection
Policy Type
Description
Term Life
Term insurance provides coverage for a certain period of time, or a specified “term” of years.
Once the policyholder stops making the payments, the insurance coverage ends. While term
insurance is inexpensive at younger ages, costs rise dramatically at older ages—particularly
after 65. Many term products are convertible to permanent products. Because term insurance
does not build internal cash value, it is usually not a good choice for long-term estate planning.
This type of insurance is most appropriate for clients who:
• Are between the ages of 25 and 55
• Have families that depend upon a wage earner’s income to fulfill their financial goals
• Have a large need and low cash flow
• Need insurance for a limited period of time—usually 10 to 30 years
• More focused on liability coverage than cash accumulation
Long-Term Care Insurance
Long-term care insurance covers services provided to anyone with a chronic disease, disability
or sudden illness who requires assistance with activities of daily living such as eating, bathing,
dressing or moving from a bed to a chair. It also includes the supervision of persons with
severe cognitive impairments, such as Alzheimer’s disease or other mental illnesses that can
limit a person’s ability to think or reason. This type of insurance is most appropriate for clients
who:
•
Are between the ages of 45 and 75
•
Are concerned about future medical expenses or nursing facility expenses
•
Would like to protect savings from major medical expenses
Disability Insurance
Disability insurance provides income to help pay life’s expenses even though you can't work
due to a disability. A disabling illness or injury can stop income, impose additional costs and
prevent saving for the future. This type of insurance is most appropriate for clients who:
• Are between the ages of 25 and 60
• Are professionals or business owners
• Do not have resources that are adequate to sustain a prolonged loss of income
Source: Morgan Stanley Wealth Management GIC
Please refer to important information, disclosures and qualifications at the end of this material.
June 2016
6
Life Insurance for Accumulation and Wealth Transfer
Policy Type
Description
Guaranteed Universal Life
Guaranteed universal life insurance is a specific type of life insurance that provides the
policyholder a guaranteed death benefit. This means that even if there is insufficient cash value
within the contract to support the death benefit, it will still remain in force due to the coverage
protection guarantee. The stipulation to this is that premium minimums must be met and paid on
time. These policies may be appropriate for clients who:
•
Are over age 25
•
Have a high and stable cash flow
•
Are focused on wealth transfer strategies
•
Have estate or business planning needs
•
Have children or other dependents who rely on their income to maintain their lifestyle
•
Have a conservative or moderate risk tolerance
Variable Universal Life
Variable universal life is a form of permanent insurance that allows the policy owner to invest
the policy's cash value in a number of variable portfolios (also known as subaccounts). While
these portfolios provide the opportunity to potentially improve the return on the policy's cash
value, the value of these subaccounts is subject to investment risk, including the possible loss
of premiums paid into the policy causing the policy to lapse. These policies are most
appropriate for clients who:
• Are between the ages of 25 and 75
• Have a high and stable cash flow
• Believe that long-term equity markets are likely to outperform bonds
• Want to protect their family and also accumulate assets
• Have an estate or business planning objective
• Have a higher risk tolerance
Indexed Universal Life
Indexed universal life is similar to variable universal life in that it is also a form of permanent
insurance linked to market performance and provides access to the policy’s cash value. Where
it differs is that in place of investing in subaccounts, the policy provides access to account value
growth potential through a fixed interest account as well as an optional indexed account linked
to the performance of an index, such as the S&P 500. There is normally a return floor of 0% and
a cap which limits both the downside and upside potential of the policy; therefore, there is less
upside potential and less downside risk than in a variable universal life policy. These policies
are most appropriate for clients who:
• Are between the ages of 25 and 75
• Have a high and stable cash flow
• Believe that long-term equity markets are likely to outperform bonds
• Want to protect their family and also accumulate assets
• Have an estate or business planning objective
• Have a moderate to high risk tolerance
Whole Life Insurance
Whole life is a form of permanent insurance that builds cash value tax deferred. Clients can
access their cash value via tax-free loans or through withdrawals (taxes will apply if the amount
of the withdrawal or loan exceeds the basis). In whole life, the premiums, death benefit and
cash value are all guaranteed by the insurance carrier. Accordingly, premiums may be higher
than other forms of permanent insurance. These polices are most appropriate for clients who:
• Are over age 55
• Are risk-averse, conservative investors
• Have a high and stable cash flow
• Have a long-term estate planning need
• Want to limit uncertainty about their insurance coverage
Source: Morgan Stanley Wealth Management GIC
Please refer to important information, disclosures and qualifications at the end of this material.
June 2016
7
Footnotes
1
Assumptions used in calculation are:
age: 65; marital status, single; working
status, retired; nontaxable assets,
$300,000; taxable assets, $600,000; Roth
IRA assets, $25,000; annual Social
Security, $25,000; annual other income,
$10,000; annual savings, $0; annual
expenses, $75,000; average annual longterm care insurance premiums, $2,207;
average annual semiprivate room longterm care expenses, $74,820. In scenarios
that contingent expenses occur, they begin
at 85 and last for five years and the
inflation rate is 2%. In case where there
are contingent expenses with long-term
care insurance, client pays 10%
deductible. Discount rate is 2.7%.
2
Any withdrawal or unpaid loan balance
and loan interest from a life insurance
policy will reduce the policy’s cash value
and death benefit. A policy lapse or
surrender while loans are outstanding may
result in the recognition of taxable income.
There may be penalties and fees
associated with the use of loans and
withdrawals.
If the policy is a Modified Endowment
Contract (MEC), distributions, including
withdrawals, loans, unpaid loan interest
and surrenders are subject to Federal
income tax to the extent of the gain in the
policy and if taken before age 59½ may be
subject to an additional 10% tax penalty.
3
Contributions cannot exceed limits
defined in Sec. 7702 of the IRC. Also, note
that if contributions exceed, the 7-pay test
as defined in Sec 7702A of the IRC, policy
will become a MEC.
4
An irrevocable life insurance trust (ILIT)
is, by definition, irrevocable, meaning that
once in place it cannot be reversed or
amended, even if circumstances change,
and the insured cannot be deemed as
having incidents of ownership in order to
not be subject to estate taxes. ILITs are
complex legal instruments and there are
legal fees and other costs associated not
only with establishing the trust but also
managing and maintaining it.
5
Multiple insurance policies require
multiple premium payments and additional
expenses versus a single policy.
Index Definitions
S&P 500 INDEX This capitalizationweighted index includes a representative
sample of 500 leading companies in
leading industries in the US economy.
Please refer to important information, disclosures and qualifications at the end of this material.
June 2016
8
Risk Considerations
Variable Life Insurance
Morgan Stanley Smith Barney LLC offers insurance products in conjunction with its licensed insurance agency affiliates.
Variable life insurance is sold by prospectus only. The prospectus contains the investment objectives, risks, fees, charges and expenses,
and other information regarding the variable life insurance contract and the underlying investment options, which should be considered
carefully before investing. Prospectuses for both the variable life insurance contract and the underlying investment options are available
from your Financial Advisor. Please read the prospectuses carefully before you invest.
All guarantees are backed by the claims-paying ability of the issuing company and do not apply to the underlying portfolio option.
Hypothetical Performance
General: Hypothetical performance should not be considered a guarantee of future performance or a guarantee of achieving overall financial
objectives. Asset allocation and diversification do not assure a profit or protect against loss in declining financial markets.
Hypothetical performance results have inherent limitations. The performance shown here is simulated performance, not investment results from an
actual portfolio or actual trading. There can be large differences between hypothetical and actual performance results achieved by a particular asset
allocation.
Despite the limitations of hypothetical performance, these hypothetical performance results may allow clients and Financial Advisors to obtain a
sense of the risk/return trade-off of using insurance as part of a retirement plan.
Investing in the market entails the risk of market volatility. The value of all types of securities may increase or decrease over varying time periods.
This analysis does not purport to recommend or implement an investment strategy. Financial forecasts, rates of return, risk, inflation, and other
assumptions may be used as the basis for illustrations in this analysis. They should not be considered a guarantee of future performance or a
guarantee of achieving overall financial objectives. No analysis has the ability to accurately predict the future, eliminate risk or guarantee investment
results. As investment returns, inflation, taxes, and other economic conditions vary from the assumptions used in this analysis, your actual results will
vary (perhaps significantly) from those presented in this analysis.
Disclosures
Morgan Stanley Wealth Management is the trade name of Morgan Stanley Smith Barney LLC, a registered broker-dealer in the United States. This
material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or
other financial instrument or to participate in any trading strategy. Past performance is not necessarily a guide to future performance.
The author(s) (if any authors are noted) principally responsible for the preparation of this material receive compensation based upon various factors,
including quality and accuracy of their work, firm revenues (including trading and capital markets revenues), client feedback and competitive factors.
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material.
This material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any
security/instrument, or to participate in any trading strategy. Any such offer would be made only after a prospective investor had completed its own
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including, where applicable, a review of any offering circular or memorandum describing such security or instrument. That information would contain
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specified date, and may be stale thereafter. We have no obligation to tell you when information herein may change. We make no representation or
warranty with respect to the accuracy or completeness of this material. Morgan Stanley Wealth Management has no obligation to provide updated
information on the securities/instruments mentioned herein.
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