If you are asking about ROP term. Cincinnati Life.
yes. cinci life is a good choice.
Their term plus product gives you the option of a reduced paid up permanent DB, or it has a "cash value" thats equal to premium payments.
Either one of these are avialable upon surrender starting after year 5. The customer does not have to keep the policy until the end of the term to get the ROP or the RPUDB, its a nice product for the right client.
It sounds like an excellent concept, but you would have to analyze the numbers to see the value of the benefit. I don't have the RPU values, so maybe someone out there could help me with these examples.
Let's assume that we have a 45 year old male non-smoker, in preferred (not plus) health who needs $1,000,000 of life insurance for 20 more years (to age 65) at which point he wants to retire.
Question: Should he buy a 20 year term policy or a 30 year ROP policy and take a paid up policy in the 20th year or a 20 year ROP policy.
Cost of 20 year term: $1,335 (Ohio National)
Cost of 30 year ROP term: $4,025 (Cincinnati Life)
Invest the difference ($2,690) for 20 years at 5%: $93,395
Question:
How much is the paid up value of the 30 year ROP in the 20th year?
Note: A 65 year old in preferred health can purchase a single pay, no lapse UL policy of $325,000 for a premium of: $89,644
Here's another option:
Our same 45 year old client buys $675,000 of 20 year term for a premium of: $955.75
Take the difference between $4,025 and $956: $3,069 and buy a 20 pay no lapse UL with a face amount of $325,000. That would cost 3,045.90 from Aviva.
The advantage of the second option is that our client would not have to establish any insurability at age 65 as in the first option.
So what is the RPU value in the 20th year on the Cincinnati policy.
And what is the RPU value in the 20 year on a 20 year ROP product from Cincinnati for the same case? (NOTE: premium for that example is virtually the same as the 30 year ROP $3,975)
It sounds like an excellent concept, but you would have to analyze the numbers to see the value of the benefit. I don't have the RPU values, so maybe someone out there could help me with these examples.
Let's assume that we have a 45 year old male non-smoker, in preferred (not plus) health who needs $1,000,000 of life insurance for 20 more years (to age 65) at which point he wants to retire.
Question: Should he buy a 20 year term policy or a 30 year ROP policy and take a paid up policy in the 20th year or a 20 year ROP policy.
Cost of 20 year term: $1,335 (Ohio National)
Cost of 30 year ROP term: $4,025 (Cincinnati Life)
Invest the difference ($2,690) for 20 years at 5%: $93,395
Question:
How much is the paid up value of the 30 year ROP in the 20th year?
Note: A 65 year old in preferred health can purchase a single pay, no lapse UL policy of $325,000 for a premium of: $89,644
Here's another option:
Our same 45 year old client buys $675,000 of 20 year term for a premium of: $955.75
Take the difference between $4,025 and $956: $3,069 and buy a 20 pay no lapse UL with a face amount of $325,000. That would cost 3,045.90 from Aviva.
The advantage of the second option is that our client would not have to establish any insurability at age 65 as in the first option.
So what is the RPU value in the 20th year on the Cincinnati policy.
And what is the RPU value in the 20 year on a 20 year ROP product from Cincinnati for the same case? (NOTE: premium for that example is virtually the same as the 30 year ROP $3,975)
"It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change." Charles Darwin
Given those numbers, and as you can see from my example, I think the buyer would be mch better off with a mix of 20 pay no lapse UL and a 20 year term.
Same premium and more paid up insurance at the end of 20 years.
One thing looks peculiar to me from the numbers above.
The 20 year ROP has almost double the cash of the 30 year ROP in the 20th years, but the paid up insurance benefit is only about half again as much. Why? Shouldn't it also be double?
It seems that any state could require either RPU or ETI be offered with cash surrender values. A unique Florida statute requires RPU (although I'm not sure whether it's enforced). Most companies probably prefer only ETI.
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I thought this WAS a real job!
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