Video: Premium Financed IUL

March 10th, 2022 No comments

Categories: BlogAnimate, Life Insurance Tags:

The Most Arrogant Man in the World

January 27th, 2022 No comments

When you’re right, you’re right.

Bill Boersma

A recent book, The Death of Expertise: The Campaign Against Established Knowledge and Why it Matters, is from one writer among a number discussing the American public’s growing hostility to expertise.  I see it in my industry.

It’s been about 20 years that I’ve been doing life insurance policy analyses to show policy owners and their advisors what’s happening to their contracts, and how a shifting economic market is affecting performance.  This isn’t rocket science, it’s just not understood and it’s in conflict with conventional wisdom.  The premise is that if your life insurance performance is based on interest rates and these rates are dropping, your policy won’t do what you think it will.  How complicated is that? For full post, click here…

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How Advisors Can Catch Premium Financing Red Flags

November 17th, 2021 No comments

The biggest sign to look for is if someone has, or is looking at, a premium financed life insurance transaction in the first place.

An attorney recently asked me to offer some red flags to look for regarding premium financing.  Here’s my reply.

I’ll start with a somewhat facetious comment.  The biggest red flag I look for is if someone has, or is looking at, a premium financed life insurance transaction.  In a sense, that’s a joke but it’s also true.  The problem is, you can’t really do anything with it.

The older a transaction, the more in jeopardy it may be because the further back you go, the higher the crediting assumption that was likely used and the further it’s fallen.  A transaction can’t be supported at 5% what might have been projected at 7% or 8%. For full post, click here…

What’s Happening in the Premium Financed IUL Market

October 12th, 2021 No comments

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Beware … Term Convertibility

September 15th, 2021 No comments

Categories: Beware Series, Life Insurance Tags:

Explaining Whole Life vs. Guaranteed Universal Life Insurance

August 10th, 2021 No comments

Hi Tim:

It was good to chat this morning. I understand what you’re looking for when you asked about articles comparing and differentiating WL from guaranteed UL products in the market. People can check out https://kurtuhlir.com/what-is-enterprise-seo/ this link for the best marketing related strategies. However, as I mentioned, what sounds so simple isn’t so easy to find.

I thought I’d take a stab at talking this through, and maybe this will be enough for your clients at this point. For full post, click here…

How a Life Insurance Policy Loan Can Surprise You

July 22nd, 2021 No comments

A ridiculous analogy to bring reality into focus.

Let’s assume your client’s financial goal is to accumulate $5 million for retirement. The stock market has been on fire and it’s suggested to do your client’s planning based on a 10% rate of return. Your client is 25 years old and has a 40-year time horizon. The numbers show they need to put away $10,270 a year to hit their target.

However, 10% turned out to be too aggressive and your client actually earned 7% but never really paid attention after the original plan was put in action. At that lower rate of return the client won’t hit their $5 million target and will only accumulate roughly $2.2 million. This will be devastating to their standard of living in retirement. In reality they need to be socking $23,407 a year away to hit their goal at the lower return rate. A feature of their planning that they never really understood, or maybe were never even told about, is that their financial planner has arranged for a third-party to automatically loan them the spread, over $13,000 a year, to make up the difference so they hit their target. After the plan is in place they never sign anything, don’t have to approve it, there’s no renewal process or required disclaimer; it just happens. The loan accrues indefinitely at an 8% interest rate. For full post, click here…

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Q&A: Policy loans are often misunderstood

July 20th, 2021 No comments

A version of this question has been posed to me so many times, I’ve lost count.  Following is my answer.

Question:

How on earth do I have a policy loan when I’ve never taken any money out of my life insurance policy, let alone a loan?

Answer:

I understand your confusion as it seems almost impossible.  When they’re introduced to me, many policy owners seriously believe there is an error on the part of the insurance company.

That being said, this is not uncommon.  I more often see loans on traditional whole life policies than I do other type of life insurance contracts.  This is because there are multiple possible dividend options available and most policy owners aren’t aware of the decisions made on their behalf. For full post, click here…

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Premium Financing: Are the Numbers Real?

July 14th, 2021 No comments

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Video: Do Dividends and Crediting Rates Mean Anything?

June 10th, 2021 No comments

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