Sam Kaufman, Principal-Agent Support Group-NYC
There is a new generation of GUL. Yes, you don’t need to get your eyes examined, GUL is back and it’s back stronger and better than ever. The new GUL products include a new Guaranteed Return of Premium benefit that may be exercised after year 20 that provides a guaranteed option to surrender the policy and receive up to 100% of the premiums paid.
By now, you probably think I am smoking something or have had one too many. I can assure you that is not the case and urge you to get on this high speed train and get out to your clients as soon as possible. Last week I met a prospective client that had purchased a GUL policy in 2011 from a AAA carrier. The policy was a typical GUL having no cash value accumulation in the later years and the client was paying a monthly premium of nearly 15,000. I showed the client that for 2,000 more a month he could have an option to surrender the policy and receive over 4,000,000 guaranteed in twenty years. Yes, for 500,000 in cumulative additional premium over 20 years, the client could have a guaranteed option to receive 4,000,000. The IRR is off the charts.
The new GUL products combined with the Guaranteed Return of Premium feature provide many planning strategies. The same client had a 10,000,000 policy with a single exit strategy – death. He was age 65 today. By splitting the policy into two new GUL with return of premium we were able to offer a midterm exit strategy at age 85 of surrendering one-half for a guaranteed 2,000,000. That left a remaining policy with a death benefit of 5,000,000 and provided the beneficiaries, the client’s children, with 2,000,000 when the client reached age 85. The client believed he had longevity as his Father had just passed away recently at age 98 and his Mother was still living.
The new generation of GUL provides many strategies for younger people, that prior GUL products did not address. Take a 45 year old person and create a guaranteed retirement strategy. A 4,000 annual premium would provide a male age 45 over a 525,000 death benefit and at age 65 a guaranteed option to surrender the policy for 80,000 or at age 70 for 100,000. Compare this to a 20 or 25 year level term plan and you will be hard pressed to find a better net after tax IRR.
Use the same strategy for a key person age 45 in an employer owned policy. Target the deferred benefit. For example, Mr. Employer would like to provide a valued employee age 45 100,000 at age 65. What better way than a Guaranteed Refund of Premium option that provides both the keyperson death benefit and the retirement benefit all in one package.
The sales opportunities that await you with this new generation of GUL with the Guaranteed Return of Premium Rider are endless. Give the design team at ASG a call and get on board this high speed train before you’re left standing at the station.