by: Mark D. Milbrod, CLU, CLTC-July 2019
When it comes to Life Insurance sales, one of the most dynamic products still available is a good old fashioned Whole Life Insurance policy. But as it turns out, unless you are captive to one of the few major mutual companies, very few advisors are still selling it on a regular basis.
In general, I am a fan of permanent cash value life insurance and Whole Life is still on the top of the list. When it comes to fixed products, Whole Life offers something that no other product can offer, a Guaranteed Cash Value (GCV) that in most cases, can equal the sum of premiums paid by policy year 10. Once you hit that threshold, your increase in GCV usually increases by at least the premium that you pay annually. Top that with dividends and you have an amazing financial vehicle that is truly unique. The guarantees are an amazing foundation that is un-rivaled in the financial world.
There are obvious other attributes to a Whole Life plan:
- Strong Death Benefit
- Tax-Deferred Cash Build-up
- Potential Tax-Free Access to Cash Value
- Acts as a Life Long “Bank”
- Competitive IRR’s
Even though I am a big fan of Whole Life, I also am a fan of other types of permanent cash value life insurance plans, namely Indexed Universal Life (IUL). Similar to a properly designed investment portfolio, I strongly feel that a Life Insurance portfolio should be diversified as well.
Through the strong guaranteed cash value of the Whole Life product, that great foundation is the start of a well-designed life insurance portfolio. Once you add the layers of an IUL and the upside potential of the underlying index options, you have the best of both worlds.
We are working on a number of cases currently that we are using the diversification approach. This concept has been widely accepted and is proving to be a differentiator with many advisors that are implementing it.
To summarize, Whole Life provides the strongest foundation of any product when it comes to guarantees. These guarantees act as a buffer against an IUL chassis and allow ultimate flexibility when designing a plan. When putting together a total program for any client looking to accumulate cash for a supplemental retirement, diversification is the key.
So don’t forget about The Whole Life Foundation.