What is the difference between BOLI and a regular High cash value policy

[Allen Trent]

Beautiful! You hit the nail right on the top. Now, you know why the insurance companies aggressively promote IULs because they have the highest lapse rate. Industry needs more agents who speak the truth and do good for the clients. Moral hazard? Good one, Trenty!

I love IUL so much, I just suggested to a person making $50k per year that they take out a $200k HELOC on their home, take an in service distribution from their 401k, stop all 401k contributions, donate plasma & any other optional organs, empty kids 529 plans & put it all into an IUL with the maximum face so that I get paid the absolute maximum commission I can extract out of the client............................cause that is how I roll & IUL is my prescription for all client problems they have or I can make them believe they have.

BTW--yes STOLI has moral hazard problems & one of the main reason regulators came down on carriers & investment companies packaging them

 

[DHK]

The secondary market wasn't referencing STOLI but the life settlement and viatical settlement markets - which would help guarantee a payout when the contract owner can no longer sustain payments - which would mean the depletion of more reserves and the remaining amount at risk for those contracts.

 

[Lloyds of Lubbock]

A BOLI policy will often have a cash value of 105% of premium in year one.
They generally are single premium policies.
Many companies allocate a certain amount of premium and when hit, pull the product from the market.
The banks are allowed to invest a potion of their Tier 1? capital in Life Insurance.
They are almost always kept until death as that death benefit is used fund benefits for retired employees.
When I was a wholesaler my company would open up 55 million for sale, in a few days it was accounted for.

 

[Lloyds of Lubbock]

Alan
I hope that recommendation was to someone under 59 1/2!
It is worth the penalty to buy an IUL!

 

[Allen Trent]

Alan
I hope that recommendation was to someone under 59 1/2!
It is worth the penalty to buy an IUL!

Definitely under 59 1/2, their child was 17 & needing to pull all the funds out in 18 months for college planning to qualify for a $500 per year financial aid