Buy Term and Invest the Difference...NOT!!!

[Tahoe Ray]

I don't know. $300 month @ 130%+ commission and 4%+ Renewals - that's a lot of money - to me anyway . . .

A properly structured IUL is going to pay you about 30% on target.

You're also not getting 130% on any company worthwhile.

So, 3600/yr may equal 1200 in target, of which you're likely to net 90%-100%.

1k in commissions for a product that you have to constantly review is not attractive to me.

Some will say that you can work referrals and family from these sales, and that is correct.

I prefer to work in high margin volume as opposed to smaller time-intensive concepts.

To each their own.

 

[Life Hawk]

Foresters for the Term was my thinking.

Why don't you research some Term ROP - let them build in their own cash - round it off with simple cancer/heart ROP and show them how to save every dime they put in.

Simple design concept... simple savings concept... low maintenance

win - win - win

 

[myinsurebiz]

Why don't you research some Term ROP - let them build in their own cash - round it off with simple cancer/heart ROP and show them how to save every dime they put in.

Simple design concept... simple savings concept... low maintenance

win - win - win

I am going to focus on totally understanding the FLX Term and FLX IUL from Ameritas and also the Foresters products. FU or SI - will leave that up to the client.

Going to check in to that simple Annuity you spoke of too - the minimum guaranteed interest is 3x that of any local bank. They can always convert to a better performing Annuity when they save $5k or so . . .

 

[Panbolio]

I don't know. $300 month @ 130%+ commission and 4%+ Renewals - that's a lot of money - to me anyway . . .

Is that 300 target premium for the young couple or total premium? If that is their total monthly premium then target may be 100 per month and you are earning 4% on the excess.

If someone is paying you 130% of target then the product you are selling will not be competitive in this space. It can work for a quick hit but not a long term business plan as there are some real killers in this space that know their business very well.

Number two, I think you will find that the real money in this space is not the young couple but the person who has accumulated a big pile of cash and you are turning a taxable bucket of money into a tax free (potentially) bucket of money.

Last month I did a policy for a client who had a million sitting in cash. We developed a seven pay of 140 k per year. At a six percent net he should have a nice income stream after letting the policy bake a few years.

The trick is to get as much cash as possible into the policy without becoming a MEC. Don't worry about the commissions. Worry about the structure. Be conservative. Under promise and over deliver. There are many things that can go wrong. Try your best to stay on the right side of this. Seek help from your IMO/ FMO.

 

[myinsurebiz]

Is that 300 target premium for the young couple or total premium? If that is their total monthly premium then target may be 100 per month and you are earning 4% on the excess.

I'm not really focusing on the CV part at the moment. Just want to get them $million$ 25-30 year Term w/ Living Benefits and then as much DB in the IUL as they can get for what's left over within their budget. I am learning more about designing a IUL for growth, cash and distribution - but lots to learn . . . But yes - 130% on base and 3.5% excess over.

Number two, I think you will find that the real money in this space is not the young couple but the person who has accumulated a big pile of cash and you are turning a taxable bucket of money into a tax free (potentially) bucket of money.

Just gonna carve out our niche. But the above would be sweet once i learn not to phuck the client up . . .

Last month I did a policy for a client who had a million sitting in cash. We developed a seven pay of 140 k per year. At a six percent net he should have a nice income stream after letting the policy bake a few years.

Where did the million go to pay out the 7 pay? Or should say - what did it go in? Or - did client just comitt to paying the $140k each year?

There are many things that can go wrong. Try your best to stay on the right side of this.

It seems they can and yes, always on the "right" side - especially the "clients" side . . .

 

[Panbolio]

Gotcha.

I do investments and have control of the clients total funds (Ira, brokerage and cash deposits). We fund the policy from the brokerage account.

All the best to you and your efforts.

 

[myinsurebiz]

Panbolio said: ↑
Last month I did a policy for a client who had a million sitting in cash. We developed a seven pay of 140 k per year. At a six percent net he should have a nice income stream after letting the policy bake a few years.

How?

 

[Panbolio]

From the cash value. The death benefit of the policy is not the primary focus...it comes along for the ride and is important but not the number one reason my client wants to own the policy. You are Max funding the policy meaning the max amount of cash and the least amount of death benefit to stay under the MEC. Which also means the target premium in this case was about 60 k and not the 140. You would be paid primarily off the 60k. The rest is just a minuscule amount on the excess.

Cash is later taken from the policy (many years later) in the form of an income stream that can come out income tax free. The client is 49 and we are planning on taking it out at 67.

Being independent a person does not have to run their production through the broker dealer like I do. Meaning A) my commission is less (65% of target premium) B) Plus i then have to give the bulk of it to my broker dealer.

So 60k x .65 = 39k x my payout (40%) = 15,600. The rest my employer keeps. Meaning that Guys and girls on this forum could have sold many MANY FE plans and made more money in the same amount of time and never once have to have several meetings with the client's CPA and attorney in the process.

Not that great for a years worth of work. But I am captive on the investments and insurance. If I was an independent who did not have to run fixed business through a broker dealer then the 39 k would have been mine.

I know our conversation is getting off base of the thread's purpose but I would suggest you find a repeatable niche in the insurance world and work the dog out of it. Drill down and avoid the temptation of spreading too wide. You will make more money. It is my biggest regret.

 

[myinsurebiz]

From the cash value. The death benefit of the policy is not the primary focus...it comes along for the ride and is important but not the number one reason my client wants to own the policy. You are Max funding the policy meaning the max amount of cash and the least amount of death benefit to stay under the MEC. Which also means the target premium in this case was about 60 k and not the 140. You would be paid primarily off the 60k. The rest is just a minuscule amount on the excess.

So 60k x .65 = 39k x my payout (40%) = 15,600. The rest my employer keeps.

If I was an independent who did not have to run fixed business through a broker dealer then the 39 k would have been mine.

If independent - that $60k would have been $78k @ a 130% commission - maybe?

 

[Panbolio]

If independent - that $60k would have been $78k @ a 130% commission - maybe?

Not saying no but I have never seen a policy designed to accumulate cash value that rich.