Creating an efficient whole life policy

Dec 25, 2018

  1. Tahoe Ray
    Offline

    Tahoe Ray Guru

    Posts:
    2,796
    Likes Received:
    492
    State:
    Nevada
    You could find an insurance agent who represents Guardian, Mass, Penn, and all of the other great WL carriers who also understand maximizing policies for cash values and have that person evaluate your best options.

    You don't get any discounts/favoritism for calling the carriers direct. (You're still working with an agent)
     
  2. pfg1
    Online

    pfg1 Guru

    Posts:
    1,494
    Likes Received:
    286
    State:
    Virginia
    Dividends will go up and down. We are in a declining environment right now overall, at some point we will likely be back in a rising. I wouldn't overly concern yourself with that, a solid company with a good design will give you a nice product. Penn still has one of the higher div's still on the market, though they did go down slightly this year. Many carriers have gone down over the past decade. That illustration pic, I assume you have a 1035?
     
    pfg1, Dec 29, 2018
    #22
  3. Allen Trent
    Offline

    Allen Trent Guru

    Posts:
    445
    Likes Received:
    324
    Penn has a good dividend. And no, I have never seen a carrier lower a dividend to policies after they are sold as tactic to lure a customer in.. they apply the dividend to a class of policies sold at a given block of time. those blocks generally change as the carriers are forced many times to create new blocks when the Government requires mortality tables to be modified. Currently, the entire industry is having to reprice all new term, WL, UL, IUL, etc to be compliant with regulations that require more recent mortality tables to be used. That will cause some rates to get better & others to get worse & some products will sunset and not be offered going forward by some carriers.

    Also, don't be mistaken. A dividend rate of 6% doesn't mean that the dividend itself grew your policy CV by 6% in a pure interest rate/investment calculation. I hear many agents in our industry state a dividend rate declared by a carrier as if it is 6%. in your illustration for instance, it projects in year 6 a 13,700 dividend on a $480,000 Cash Value. that means the dividend was about 2.9% of your Cash Value before the dividend. In addition to the projected dividend, you cash value projects to earn interest on the cash value. Yr 6 projected total increase in CV is $40,107. 12,577 is from th premium you will pay, 13,698 from the projected dividend, 13,832 from the project cash value interest.

    Last item I note on your illustration is the large up front deposit in year 1. Is that money coming from current cash/checking account money or is it being brought over from an old life policy as a 1035 exchange into the life policy? if it is coming over from cash, make sure it doesn't cause the policy to be a Modified Endowment Contract for violating the amount of money you can place in a policy & retain the tax beneficial status of life insurance for lifetime withdrawals or loans.

    https://topwholelife.com/whole-life-insurance-dividend-rate-history/
     
    Last edited: Dec 29, 2018
  4. Lloyds of Lubbock
    Offline

    Lloyds of Lubbock Super Genius

    Posts:
    140
    Likes Received:
    65
    State:
    Florida
    If you are not using an agent who runs your illustrations?
     
  5. jboussea
    Offline

    jboussea Guru

    Posts:
    594
    Likes Received:
    52
    Allen Trent, Is top your website?
     
  6. Allen Trent
    Offline

    Allen Trent Guru

    Posts:
    445
    Likes Received:
    324
    no. I have no idea whose it is. I had stumbled on it in the past when on Google looking at WL dividend info.

    But it does beg the question I guess of whose website it is & how accurate it is.
     
  7. Allen Trent
    Offline

    Allen Trent Guru

    Posts:
    445
    Likes Received:
    324
    most UL & IUL carriers Cust Service desks will run inforce re-projections for customers. Especially considering such a large % of agents that sold some policies are either no longer in the business or some agents wont return phone calls on how to service inforce policies.
     
  8. Lloyds of Lubbock
    Offline

    Lloyds of Lubbock Super Genius

    Posts:
    140
    Likes Received:
    65
    State:
    Florida
    Yes but this is a new business illustration.
    Penn does not deal direct.
    I doubt a support desk would send an illustration to a consumer
     
  9. walthamny
    Offline

    walthamny Guru

    Posts:
    472
    Likes Received:
    79
    State:
    Massachusetts
    I dont think there is a whole life product out there that can be offered direct to the consumer bypassing the agent or the broker. May be in the FE market but too much liability for the insurance company and how would state insurance regulators allow that.
     
Loading...