Wouldn't you be better off with a rapid builder iul from North american ... Maximum non mec ...
Better off meaning what?
The WL can be set up max non mec also, but has guarantees. Just my personal preference....I prefer WL.
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Wouldn't you be better off with a rapid builder iul from North american ... Maximum non mec ...
Wouldn't you be better off with a rapid builder iul from North american ... Maximum non mec ...
The key is getting the design right so that its non mec. IDK on IUL, me personally I would use WL.
For a single premium I almost always would use IUL. Especially if they want early access to Cash Value.
Use NA Rapid Builder or Midland ECV (same product / carrier essentially, just different contracting).
It will be guaranteed not to lapse all the way down to a 3.5%ish index return (depending on age and health rating).
They will have 100+% of their premium in CV end year 1.
I haven't found a single premium solution that even comes close to touching the product at all.
To answer the MEC question; you can design it not to MEC but it will not perform as well then. A single premium is meant to be a MEC. It will be taxed just like an annuity would be. Sure you lose the tax-free benefit of a non-MEC... but the MEC will outperform the non-MEC big time. So the performance will make up for the lose in tax benefits. The DB will still be income tax free though.
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Absolutely. Best single premium product on the market hands down. If you want early cash value nothing matches it.
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If you dont MEC a single premium policy it is going to perform at a subpar level. The extra performance usually beats any tax benefits of the non-MEC. You could be talking about a rate of return difference of 2% - 3%.
300,000 dump in, borrow out 240,000 for land purchase. Paying 15k-20k per year in after that.
But SC....he's not talking about a single premium. He's talking about annual premium with a lump sum dump in (to be able to borrow from). If designed properly it will perform fine as non-mec, not quite as good as a straight annual premium from a irr standpoint ...but pretty darn well.
80% of Premium is way too much to borrow that early. He would need a premium of at least $350k bare minimum. But I would recommend at least $400k - $450k in premium to borrow that much that early.
Life insurance is not designed to pay into and then take almost all of it right back out in the first year or two.
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It is still the same initial situation as a single premium. You will have to needlessly increase the DB to accommodate that much premium in one year. That will decrease the performance by a good bit comparatively.
And at that large of a loan that early, it would be wise to have part of the $15k-$20k per year go to paying back the loan and not go into new Premiums.
Also, with that large of a % of Premium coming out as a Loan. They will need the most performance possible to keep the policy from lapsing.
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If they were not taking so much out so soon, I would agree that it would be more of a debate of MEC design vs. Non-Mec. But that much that soon needs the most performance possible in my experience.
Why is 80% way too much to borrow?
The key is the policy is being built for max access to cash early, not max irr.
I have done these before (not that large) but the ratio's were similar, just lower amounts.