Life Insurance

Universal Life Beats Term!

Presented by Brian Leising For those who attended the Financial Brokerage 2015 Sales Summit (and those who couldn’t make it), two of the most popular sales ideas proved that Universal Life Insurance could cost your clients less money than Term Life Insurance!  Here are two scenarios from Prudential and Protective Life: Prudential UL Beats Term– This works for clients who have ample cash flow.  The example is attached.  A male age 63 could purchase a 20 year term for $9715/year, paying a total of $194,300 over 20 years.  You could save him $33,132 by selling an 8-pay UL for $20,146/year (total outlay $161,168).  If the annual premium is too high, you could drop it down to a 12-pay for $14,410.  This saves the client $21,380 for a total outlay of $172,920.  In all scenarios, the client has $1,000,000 of death benefit for 20 years.  With the UL, he saves money and has the option to continue coverage by resuming premium payments.  He would be too old to convert to a permanent plan at age 83.  By the way, the commissionable target premium on the UL is $19,910 versus the $9715 for the 20 year term.  Do you want to overpay for term with no options or save money and maintain your options with a UL? Protective Renting (term) vs. Owning (UL) – Owning usually costs less than renting over time and life insurance is no exception.  Our example was a 45 year old male preferred non-smoker purchasing a $250,000 lump-sum death benefit with an Income Provider Rider paying an additional $60,000/year for 10 years.  If he purchases a 20 year term at age 45 and a 30 year guarantee UL at age 65 his total outlay will be $404,494 by age 95.  If he instead purchased a UL with an age 95 guarantee, he would only pay $221,400.50 over the same time period.  That’s a 54% savings!!!  What could your clients do with an extra $183,093.50? Pru UL beats term Protective UL beats term
  Term Universal Life
Age 45 annual premium $938.21 $4428.01
Age 65 annual premium $12,857.60 $4428.01
Age 95 total paid $404,494 $221,400.50
 
Long Term Care and Disability Insurance

Providing LTC Coverage for an Uninsurable Spouse

Presented by Tim Dreher Long Term Care awareness month is November and I wanted to expand on my last blog where I wrote about adding an insurable spouse/partner to take advantage of the substantial discounts that the carriers provide. In most cases the combined premium when adding the spouse/partner at minimum benefits, is less than if the one applied for coverage by themselves. So what can be done in a situation where a spouse/partner is uninsurable? This can be a challenge to even the most seasoned producer. Many times the prospect will abruptly end the conversation when it is determined that there is an uninsurable spouse/partner.

It is important to point out to the prospect that what we see frequently happen, is the healthy spouse/partner becomes the care giver for that uninsurable spouse/partner. Many times that can happen much sooner than what anyone anticipated. As a result of being that caregiver, the health of the insurable spouse/partner declines rapidly due to the stresses of being that caregiver. It has been reported that up to 60% of caregivers were unprepared for the physical demands of being that caregiver.1 There is probably not a better argument for the healthy spouse/partner to consider and purchase LTCi.

Mutual of Omaha’s MutualCare LTCi policy has a very unique rider, called the Security Benefit Rider that can be added to an LTC policy to provide a solution for just such a situation. If the insured spouse/partner requires long term care services after the policy is in effect, the Rider can be activated to provide additional funds to help pay for the cost of providing care for the uninsurable spouse/partner. Up to 60% of the insured’s monthly reimbursement benefit is made available to help pay for approved care for the uninsured spouse/partner. There is no medical underwriting required for this Rider, and the additional benefits paid out for the approved care do not reduce the insured’s policy limits. It is a separate benefit for an uninsurable spouse. Unfortunately, there will be times when a producer will find themselves in a situation where couples/partners apply for coverage and one is declined. When this happens, we often will hear “If we both can’t get it, than we don’t want it”. You might want to consider this rider, as it might just be the answer to saving the sale. This unique feature when understood, can be a great relief for uninsurable spouses/partners. Talk with one of the LTCi marketing specialists at Financial Brokerage about more details on how this rider works.
  1. Transamerica LTC study 2015