Golden Handcuffs- Best Carrier(s)?

I am working with an employer that wants company owned life insurance and a payoff for the executive of 1mm life insurance and a cash bonus of 1mm at age 65. (employee is 44)
They have a quote from Pac Life. What other carriers are out there that are in this market competitively? (They want 4 more policies)
Thanks!
 
Check out ohio nationals prestige max whole life. It is paid up at 65 as well and has a preferred loan provision that makes accessing the cash much more attractive.
 
Pac Life is a good one. NA has an excellent IUL.

But LFG is also very strong, especially for advanced planning cases. They have one of the best advanced planning departments around.

They also have fully administered product solutions for these cases if the situation is appropriate for it.
Principle has the same thing, except no IUL, just UL.


I would recommend staying away from WL for multiple reasons.
 
And those reasons are??

1.
First and foremost is a lack of flexibility (especially one of the products mentioned).

I have seen multiple times, very large WL COLI policies lapse because of a single bad year for a business.


Not only that, but with the UL you can design it to meet many different contribution needs.

Some companies might want to do increasing contributions. This is easy to design with UL and still max out the CV.
But it is not possible to do with WL and still max out the CV by overfunding.

A $30k per year bonus is great now.... but in 12 years not so much...

The OP is going the DB route over the DC route, so increasing contributions are not an issue for his case.


Then there is flexibility in the DB as well.


2.
OverLoan Protection.
This is a huge liability issue for an agent on these cases!! (or for a business that just plans to transfer ownership of the policy to the employee)

As hopefully all agents realize, if a life policy lapses due to excessive loans (or if it is cashed out/cancelled), the whole loan amount becomes taxable to the Policy Owner.

There is only 1 WL on the market that has Overloan Protection (that I am aware of) (Penn)

Most every IUL & accumulation focused UL has OverLoan Protection


This adds flexibility too, since triggering the OverLoan Rider can actually be an option for a business. Especially if they are not concerned with recapturing their Contributions.


3.
Ability to use GPT testing.
This flows a greater amount of yearly gains into the CV vs. the DB. Especially after the funding period. Not only is this important during the accumulation period. But it is important during and after the distribution period to ensure that the policy sustains itself (since it can be a valuable asset even after the benefit payout).


Many companies offer a lifetime income feature on UL policies. (LFG calls it the "assured distribution rider")
But this feature is only available if you use GPT... the reason is because of what I stated above about the internal cash flow of the policy.

You also can switch to opt1 once the Contributions end... which obviously keeps down the COI and increases the CV.


So in short it is about the extreme flexibility. But it is more than just premium flexibility (as most agents think).



It is also important to note that almost every fully administered COLI platform offered by carriers is a UL/IUL platform. Especially among the big hitters on the NQDC arena. Obviously there are reasons for that.... which are listed above.
 
Last edited:
Back
Top