by: Mark D. Milbrod, CLU
Partner, Agent Support Group-June, 2018 ASG Insight




When talking to a client about their life insurance needs, have you ever considered an approach that contains a “Complete Life Insurance Portfolio?”

There are many different types of life insurance products and no one product can accomplish all of the planning needs for a particular client(s).  So it is best to know and understand all of the product offerings that are available.   By understanding all of the different products and combing the best of all worlds, multiple needs are addressed within this “Portfolio of Products.”

Here are some of the different types of products and the main objectives of each:

Whole Life (Limited Pay) – Whole Life products are typically used to provide a minimal amount of death benefit and build the most amount of cash for the purpose of withdrawing tax-free income at some point in the future.   The majority of the cash value is reliant on non-guaranteed dividend payments.  This is the most expensive way to purchase life insurance on a per/1,000 basis.  If all of the available premium dollars are used for Whole Life, you run the risk of being under insured.

Term Life – as you know, term insurance is used to provide a large amount of death benefit for the lowest amount of premium.  This is a great way of providing the needed amounts of death benefit to cover temporary, short term needs for things like income replacement, mortgage protection, etc.

Guaranteed Universal Life – a great hybrid approach to providing permanent protection with a cost somewhere between Term & Whole Life premiums.   There are typically very little or no cash values associated with these types of products.  The attraction is the guaranteed premium structures and permanency of the death benefit.  These are most widely used for Estate Planning purposes.

Current Assumption Universal Life or Indexed Universal Life – these plans also offer a hybrid approach to pricing for death benefits and provide permanent protection.  They are designed to build cash values and give a large degree of premium flexibility compared to Whole Life, which offers very limited premium flexibility.   Similar to Whole Life plans, these policies can also be used to build cash value and  provide tax free income.  The values are usually based on either a fixed interest rate (that can be guaranteed) or on a non-guaranteed market index, such as the S&P 500.

As evidenced above, there are so many different products to choose from to address a multitude of planning needs.  In addition to the base products listed, there are also a number of additional features and benefits that can be added to some of these products.   They include, but are not limited to, Long Term Care & Chronic Illness Riders,   Guaranteed Income Triggers, Longevity Protection and Uncapped LTC Benefits.  These additions can appeal to a wind range of needs that cannot be addressed by some of the individual products listed.

By using a combination of the different products, features and/or riders, you can make better use of premium dollars and provide an iron clad “Life Insurance Portfolio” that will address a wide range of needs.  This diverse approach will undoubtedly increase your creditability and differentiate you from potential competition.

Contact your ASG representative to see how you can combine the different product designs for your client’s needs.