Originally Posted by ltcadviser
I was asked about the North American Rapid Builder IUL survivorship policy by a couple in their mid to later 60s as a single premium investment to leave $ to their beneficiaries. I admit I have never been attracted to any indexed insurance products, however I would be open to understanding the pros/cons of this policy compared to other options?
Gives an enhanced DB. Can turn $100k into $200k.
Allows them to keep access to the money if need be. Access be via Loans. They have a "wash" loan option that is zero load on the policy.
For a properly designed single premium policy, it will be Guaranteed for around 15-20 years. Even at very low assumptions (such as Indexed based returns at 4% for the life of the contract), it will be guaranteed.
Not a whole lot if they plan to gift this to loved ones. Using an indexed product means there is not a lifetime guarantee.... but that is also assuming the stock market returns 0% every single year.... so it is not a realistic assumption.
You might could find a product other than NA that gives a higher DB, but it would be at a cost of the CV return.
A negative that is specific to this product/carrier, is that UW gets very tight with NA on older clients. LFG is MUCH more friendly with the 60+ crowd.
Single Premium Life Insurance is one of the most efficient ways possible to pass money on to heirs. Especially if you still want access to the funds in case of an emergency.
And when doing a lump sum, most all of the fears about index returns vanish... because it will not lapse even down to very low index return levels.