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What’s Happening in the Premium Financed IUL Market

October 12th, 2021 No comments

Categories: Life Insurance Tags:

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. 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…

Categories: Life Insurance Tags:

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…

Categories: Life Insurance, Questions & Answers Tags:

Premium Financing: Are the Numbers Real?

July 14th, 2021 No comments

Categories: BlogAnimate Tags:

Video: Do Dividends and Crediting Rates Mean Anything?

June 10th, 2021 No comments

Categories: BlogAnimate Tags:

Dear Mr. Client, We Need to Talk About Your Insurance

June 7th, 2021 No comments

An open letter to an indexed universal life policy owner.

Hello Mr. Client:

Thanks again for the recent phone call.  I’m glad your business associate suggested you speak with me.  I’ve received the information from your insurance company that I ordered, and I’m reviewing it now.  Based on our conversation, the bottom line is that I’m pretty confident this policy isn’t what you think it is.  It’s not that it can’t work but it’s likely not working and not doing for you what you understand it to be doing.

My recollection is that you have this policy for two basic purposes. First, you want a significant death benefit for your wife, and second, you’d like that premium to be accumulating cash value so you have access to it in the future. For full post, click here…

Categories: Life Insurance Tags:

How Many Ways Can You Write the ‘Same’ Life Insurance Policy?

June 1st, 2021 No comments
A policy can be highly customized, but make sure it’s built for the right party.

Recently, I was sent a life insurance proposal for evaluation that was mind boggling in its construction. Most of us understand that in financial transactions, we end up in a better place by reducing expenses and increasing crediting. This proposal did the opposite; it maximized expenses and minimized crediting. But it looked good, so the proposed policy owner was considering moving forward with it.

For full post, click here…

Categories: Life Insurance Tags:

The Sensitivity of Indexed Universal Life – Part 3

April 28th, 2021 No comments

The importance of conservative assumptions.

In two prior articles, I discussed the sensitivity indexed universal life (IUL) insurance. Now, I’ll turn to the practical aspects of what I covered previously.

Related: The Sensitivity of Indexed Universal Life – Part 1; The Sensitivity of Indexed Universal Life – Part 2 For full post, click here…

Categories: Life Insurance Tags: