Life Insurance Loan Repayment Illustrations

[Larry Tew]

Are any of you aware of any company whose illustration system allows you to show loan repayments beginning in the SAME year as the loan? Usually you can't show a loan repayment until the year AFTER the loan.

 

[Brokers Alliance]

Carrier software programs that have "distribution" tables generally allow same year policy loans and repayments. It appears it has to be custom input and a not solve scenario. Two that come to mind are Lincoln Benefit Life and ING.

A side bar: I did notice that I couldn't illustrate a "monthly" repayment, only annual.

 

[coachd]

Larry,
None of the companies I have seen do this well. I understand that the one company I use does not show it right away due to how they calculate the % payment. I am not sure if that is why, but hAve been told.

 

[BNTRS]

This has always been an annoying illustration sticking point for me especially showing college planning ideas. My work around has been using the pay interest due option and scaling back the repayment I specify. Not perfect, but it works a little better.

 

[Larry Tew]

The work-around for me is to reduce the loan by the first year repayment. For example, I want to show a 30,000 loan with monthly repayments of 570 per month (6,840 per year) for 60 months (5 years).

Instead of running the illustration with a 30,000 loan I run it with a 23,160 loan amount with repayments of 6,840 for 4 years starting the year after the loan.

The numbers work, but it would be better to be able to show the correct loan amount on the loan / cash flow illustration.