Input on Cash Value Life

[DFW]

I would like to know from some of the more experienced life agents on the forum when a LIRP doesn't make sense for a prospect/client regarding the following issues.... (WL or IUL)

1. Deferral Time/Age- How long do you believe the strategy needs to bake? Seems to me that you probably need 15+ years for this to make sense. So, am I correct in assuming that if client is over about 55 probably not the best fit because of COI at the higher ages?

2. Underwriting Class- If the underwriting comes back standard or below do you think this strategy still makes sense?

It seems to me that if you have a prospect 25-55, in good health, this has the potential to be a great strategy but if they are over 55 and/or not in good health then maybe not such a great strategy. I appreciate any feedback.

 

[DHK]

#1 - COI is relative to the face amount of coverage in force. The lower the face amount, the lower the actual costs of insurance. A proper strategy is still dependent upon the time frame for when you plan to take the funds out, say age 70 or so.

Also, sometimes an appropriate strategy might be to take a taxable retirement income source, and convert it to a tax-free retirement income source.

https://www.youtube.com/watch?v=H2u8rjqzUBo

So, depending on the source of funding the policy, can determine if it can make sense or not.

#2 - The underwriting class expenses are also relative to the face amount. It may not be the ultimate $1 million max-funded policy... but maybe $100k would be better than a sharp stick in the eye.

If it's a UL, you can reduce the death benefit over time as well.

 

[pfg1]

I don't think you can categorize when its a good fit for the client, and when its not... based on general parameters. I have clients that are in their 60's, and it a GREAT strategy for them. Flip side, a young health person that has zilch... well, its definitely something that would work and at some point they probably should set up, but maybe not the right fit at that time.

Every situation is different, it can and will work all across the spectrum, if designed to fit that specific clients needs.