MULTIPLE POLICIES ARE BETTER!
We get requests from representatives and clients often with multiple goals that conflict with each other. You as the adviser realize it’s a lot to ask for one contract to provide a Guaranteed Life Insurance Benefit, Chronic care, an income Stream, Multiple difficult beneficiaries or trusts, etc.
One policy simply cannot satisfy nor accomplish all the clients goals. The Swiss army knife (IUL) doesn’t work so well accomplishing all these things simultaneously.
However using multiple life insurance policies to create a customized solution may be an effective way to achieve your client’s financial goals as long as you can illustrate them together in a compliant illustration. These simultaneous goals can include:
- Leaving a guaranteed death benefit
- Having a Large Death benefit for a period of time (term insurance)
- Have a meaningful chronic care or long term care benefit
- Get tax free retirement income
- Have a paid up death benefit
- Having one policy paid up earlier than another to match cash flows in real life.
One policy doesn’t solve all the wants and desires all at the same time. But two can be much better than one.
We have 2 examples of the flexibility in the system of illustrating.
Below is one policy with protection IUL w/ chronic care which pays 2% of face ($500,000) or 10% upon qualifying for the benefit. We have a second contract paid up in 15-years that spits out substantial tax free income at age 65 to age 90 (25 years), keeping death benefit constant while holding onto the chronic care rider providing utmost flexibility.
Notice the substantial tax free income while the “death benefit” stays relatively substantial and actually grows near the end of life. Both “surrender value IRR” and “death benefit IRR” remains high and is completely tax free. All at the same time, there’s a good death benefit and protection against needing extended care.