- 15,041
A 7702 plan?
Its like, umm...., a Super-Roth, right?!? Best thing since sliced bread, wish I was selling a 7702 plan.
On a serious note, never knew that was the section that defined it all. You learn something new every day.
Question on Whole Life/Roth IRA Combo Product
- Thread starter bigpremium
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- whole life
Its like, umm...., a Super-Roth, right?!? Best thing since sliced bread, wish I was selling a 7702 plan.
On a serious note, never knew that was the section that defined it all. You learn something new every day.
- 300
Let me guess...
You are starting off with how their benefits work and then you show them how a Roth Ira works. You show the tax savings and investment returns. Once they agree to doing $50 biweekly or some other amount you show them how you put "guarantees" on their investments. If they die thier family gets the money. If the become disabled it will keep contributing. If they live they will have so much money!
First year money goes completely towards the whole life policy. The 2nd year the money gets split between the whole life and the annuity.
This sound about right?
You are starting off with how their benefits work and then you show them how a Roth Ira works. You show the tax savings and investment returns. Once they agree to doing $50 biweekly or some other amount you show them how you put "guarantees" on their investments. If they die thier family gets the money. If the become disabled it will keep contributing. If they live they will have so much money!
First year money goes completely towards the whole life policy. The 2nd year the money gets split between the whole life and the annuity.
This sound about right?
- 11,277
Whole life insurance CSV can be taxed LIKE a Roth IRA. However, it is NOT a Roth IRA.
The advantage with WL is that you can put in AS MUCH AS YOU WANT... with NO income limits each year. The Roth IRA has a maximum annual contribution with income limits.
Do you have specific company produced literature on this concept?
If not, you had better figure out what it is that you think you're doing.
I would NOT use "IRA" and "Life Insurance" in the same sentence. It could open up a lot of troubles for you down the line - like misrepresenting what you're REALLY selling.
The advantage with WL is that you can put in AS MUCH AS YOU WANT... with NO income limits each year. The Roth IRA has a maximum annual contribution with income limits.
Do you have specific company produced literature on this concept?
If not, you had better figure out what it is that you think you're doing.
I would NOT use "IRA" and "Life Insurance" in the same sentence. It could open up a lot of troubles for you down the line - like misrepresenting what you're REALLY selling.
- 1,271
A self-directed IRA cannot be funded with life insurance.
A life insurance cannot have a deferred annuity rider (it could have an annuitization option).
This sounds like a way to get in the door and sell life insurance, but I think you better make sure your E&O policy is paid. The first smart agent who follows you is going to explain what is going on and likely make you look a bit silly. There is nothing wrong with selling both, but the question is if the client needs life insurance and he goes toes up how are you going to explain that one... also, how will you explain the fact that most of his "retirement money" is worth nothing at the end of the first few years? Maybe you have thought all this through, but I would like to see the illustrations you are using.
- 11,277
Life insurance cash surrender values can be 1035'd to a NON-qualified annuity as well... but it wouldn't be a Roth and all gains would be taxed LIFO.
(I wouldn't want to give up the permanent death benefit though!)
- Thread starter
- #17
bigpremium
New Member
- 5
Yes that's correct. We are informing them that there is no Roth IRA unless they convert it to one after the 13th month. But yes, that is what our IMO has taught us. Is there something wrong with this? If so, is there a way to sell it legitimately?
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We explain to them that the death benefit as well as the premium will be cut in half at age 65 and that if they want more coverage before hand we can get them more Term insurance or they can boost their work insurance. That being said, if you guys feel this is unethical I may need to find another market. I definitely was not aware of the negative side of this type of sale.
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- 300
It is how you percieve it. I did it for 6 months and then decided I didn't want to do it anymore. I always had mixed feelings about it.
On the one hand postal employees are not taking any responsibilty for their future and haven't a clue as to whats going on. So for those people you are helping them or at least getting them to do something.
On the other hand. Would you buy a non-med whole life policy and put money into an annuity or would you buy a term policy and put money into a Roth IRA with Mutual Funds?
Is your IMO out of michigan?
Is your commission 40%?
50% advanced?
On the one hand postal employees are not taking any responsibilty for their future and haven't a clue as to whats going on. So for those people you are helping them or at least getting them to do something.
On the other hand. Would you buy a non-med whole life policy and put money into an annuity or would you buy a term policy and put money into a Roth IRA with Mutual Funds?
Is your IMO out of michigan?
Is your commission 40%?
50% advanced?
- Thread starter
- #19
bigpremium
New Member
- 5
My IMO is from the mid-west. Haven't actually asked them what state.
Commission is 50% and half advanced. That's why I was wondering if their were any carriers/IMO's that offered higher.
I guess the product is all in how you pitch it. I'm going to be sure now that I am clear that with them that they need to convert their life policy to a Roth IRA and that they are not actually funding a Roth IRA initially.
