By: Jay Scheiner JD CLU, Executive Vice President, Agent Support Group
Be honest now – if you knew your client will be living to age 100 – would there be any need for him/her to purchase life insurance? And how about your own life; imagine that absent a car or plane crash, or being devoured by sharks, you’ll live to be at least 100. How would this affect your decision to purchase or maintain life insurance?
One of the criticisms I often hear about permanent life insurance is that, if your client lives long enough, the rate of return is poor. There’s some truth to this, but it doesn’t tell the whole story. Instead, the focus should be on what the rate of return of a permanent policy is if the insured dies 10-years prior to life expectancy – or at his/her life expectancy or 10-years beyond? For most quality policies purchased by reasonably healthy clients, the rates of return are competitive if a person lives to life expectancy or even a little longer – but age 100?
There is one very special, fully guaranteed permanent insurance product where the rate of return at death is equal to or higher than most other guaranteed investments even if the insured lives to age 100 – which is more than 10-years beyond joint life expectancy! With this product you can use both insurance and your assurance of longevity to help your clients create a veritable super-fund for their families. This plan is:
- Fully Guaranteed
- Has Zero Market Risk
- Creates Instant Tax-Free Liquidity Via Death Benefit
- Is The Ideal Wealth Transfer Vehicle
- Has High Tax-Free Equivalent Internal Rates of Return (IRR) – Even at Age 100
So… what is the “engine” that can create all of the above – especially creating a competitive IRR at 100? – it’s Survivorship Life Insurance on the most competitive GUL chassis. With this plan the insurance is on the couple with the death benefit paid at the second death, which is when many financial obligations come due. The insureds can own the contract themselves if they wish to maintain control — the death benefit is still paid income tax free. If an irrevocable trust or adult children can own the policy then the insurance is paid both income tax free and estate tax free.
Here is an example funding $20,000 per-year for 15-years assuming insureds qualify at the regular Preferred (second best) health class: