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Fee Based Insurance. A Revolutionary Planning Tool. Cost and Premiums are not the same. 30. Term / Premium. 20. 10. Death Benefit: Guaranteed Premium: Guaranteed Cash Value: Guaranteed. Whole Life. Death Benefit. Net Death Benefit. Premium. Cash Value.
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Fee Based Insurance A Revolutionary Planning Tool
Cost and Premiums are not the same
30 Term / Premium 20 10
Death Benefit:Guaranteed Premium:Guaranteed Cash Value:Guaranteed Whole Life Death Benefit Net Death Benefit Premium Cash Value
Death Benefit:Guaranteed Premium:Guaranteed Cash Value:Guaranteed Non-Guaranteed:Dividends = hypothetical projections Participating Whole Life Death Benefit Net Death Benefit 20% Premium Cash Value
Guarantees: Minimum Interest / Maximum Costs Non-Guaranteed: Current Interest & Current Charges = hypothetical projections Universal Life Death Benefit Net Death Benefit (Cost?) Premium ? Cash Value
Guarantees: Maximum Costs Non-Guaranteed: Everything else = creating hypothetical projections Variable Life Death Benefit Net Death Benefit (Cost?) ? Premium ? Cash Value
Participating Whole Life Variable Universal Life Whole Life Universal Life Death Benefit: The evolution of product development incorporated many changes to the three economic components of the policy. Some were obvious, others were not. Guaranteed Guaranteed + Hypothetical Dividends Maximum Costs Guaranteed Maximum Costs Guaranteed Premium: Guaranteed Guaranteed Flexible Flexible Cash Guaranteed + Hypothetical Dividends Value: Guaranteed Minimum Interest Rate Guaranteed (Current rates credited) No Guarantees (Market Performance)
Case Study:Male / Age 55 / N.S. / $1 Million Policy / Level Death Benefit / Variable U.L. (Designed premium strategy of $60,000 per year for four years.) Company A:$13,498,410 Company B:$17,877,813 Company C:$23,303,830 Case Study: Male / Age 55 / N.S. / $1 Million Policy / Level Death Benefit Compare future cash value accumulation at age 100: Comparing level premiums to cash value target: Company AA:$14,942 Company BB:$13,234 Company CC:$11,251
Full Disclosure Advantages with Low-Load Life Insurance 1) Minimum Required Premium for First Year Only to Purchase Coverage: Surrender ValueProjected Premium Commission Policy $10,032 $0 Low-Load Policy $3,595 $910 Case Study: Male / Age 55 / N.S. / $1 Million Policy / Level Death Benefit / Variable U.L. (All comparisons are based on premiums paid in the first year only.) 2) Comparing Like-Kind Minimum Required Premium: (The Minimum required premium of the commission policy is $10,032) Surrender ValueProjected Premium Commission Policy $10,032 $0 Low-Load Policy $10,032 $7,771
Full Disclosure Advantages with Low-Load Life Insurance Continued . . . The Target Premium of the Commission Policy is $26,000 3) Comparing Like-Kind Target Premium: Surrender ValueProjected Premium Commission Policy Case Study: Male / Age 55 / N.S. / $1 Million Policy / Level Death Benefit / Variable U.L. (All comparisons are based on premiums paid in the first year only.) $26,000 $7,298 $26,000 Low-Load Policy $24,777 4) “7-Pay” Maximum Non-MEC Premium: Surrender ValueProjected Premium Commission Policy $71,800 $51,246 $73,559 Low-Load Policy $71,800
Premium Projected Using the same sample case study, how will the different Policies function if no additional premiums are deposited(Continuation with Like-Kind Commission Target Premium): Commission Policy $26,000 2 Years Low-Load Policy $26,000 7.5 Years Commission Policy with Target Premiumto Match Low-Load Continuation: Premium Projected Commission Policy $70,000 7.5 Years Low-Load Policy $26,000 7.5 Years