How to nail Policy Design for Life Insurance

It's CRITICAL to design a life insurance policy correctly at the outset. But this is where lots of people get it wrong. Watch to find out how to optimize policy design for cash value life insurance.

Key Points:

Critical Importance of Policy Design: The video stresses the significance of designing an Indexed Universal Life (IUL) insurance policy correctly from the start. The biggest fees and costs associated with the policy are determined by its initial design, making it crucial to get right from the beginning to avoid financial inefficiency and unnecessary fees later on.

Common Design Mistakes: Two common errors in IUL policy design are highlighted: overly high initial death benefits relative to premiums, resulting in excessive fees, and the improper use of an increasing death benefit provision on already poorly designed policies.

Ideal Policy Design for Maximum Cash and Income: The video demonstrates the optimal policy design involves starting with a lower death benefit to minimize costs and fees, utilizing an increasing death benefit strategy correctly, and ensuring the policy is funded up to the maximum allowed under IRS guidelines for tax advantages. This approach maximizes cash value growth and future income potential.

Comparison of Policy Designs: Through illustrative examples, it's shown how a policy with a lower initial death benefit and correctly applied increasing death benefit can significantly outperform poorly designed policies in terms of tax-free income potential and remaining cash value, highlighting the importance of proper design over merely focusing on the death benefit amount.

Supplementing with Term Insurance: For those needing additional death benefit coverage, it's recommended to supplement an optimally designed IUL policy with affordable term insurance, which can be phased out as insurance needs decrease, rather than compromising the IUL policy's efficiency for cash accumulation and income generation.

Customization and Professional Guidance: Recognizing the complexity of IUL policies and the uniqueness of individual financial goals, the video encourages viewers to seek professional advice to ensure their policy is tailored to their specific needs and to avoid common pitfalls in policy design. The aim is to provide education and enable informed decision-making rather than pushing for a one-size-fits-all solution.

These points encapsulate the video's key message on the paramount importance of correct IUL policy design for achieving long-term financial goals, emphasizing the need for careful planning and expert advice to navigate the complexities of cash value life insurance.

[dondyer]

I think I know the answer to this… this is not a challenge.. you mentioned always fund the least amount insurance in the contract.. and if you need more insurance buy term insurance outside of the contract.. the questions you raised are valid considerations. But Say they needed the 2, 800, 000 insurance.. increase the $83, 333 contributions buy the amount term insurance they would have paid on the outside. What about illustrating $2, 800, 000 and reducing death benefit in the contract at age 65.. Based on contributions there will be a floor at that time. This has been a thought provoking valid discussion.

[officialtobinshort]

Great video. This is exactly how I structure for my clients and recommend term for the benefit to add on

[ALEXI]

please keep IUL videos coming, I think I want to specilaize in them

[daynevickers]

Society's opinion of the life insurance industry would be completely different (in other words, good versus 'evil') if every agent understood the ramifications of designing a life insurance policy incorrectly (i.e., to the maximum benefit the the agent -vs- the client). Thanks for transferring this knowledge to us all. Loved your easy to understand presentation.

[kimtrinh]

Thank you!! This was such a helpful video for me to make sure I'm purchasing a CORRECTLY designed policy! Feel so much more comfortable after watching your video.

[JeffreyMcIntosh]

Very well explained, been looking for a more in-depth VUL / IUL channel. IBC global does a great job with Whole Life, but nice to see some touching on IUL and VUL etc. Would love to see a video comparing WL vs VUL when and how.

[Sarah]

Great video! Can you explain on the LTC rider and whether it worth it? A big incentive for having a high death benefit is to obtain higher LTC payments if needed. Then how would be the best designed policy when also considering that need?

[avinandannan]

Is Securian/Minnesota Life Balanced Growth Accumulator II with the S&P PRISM index a good product to go with for setting up an IUL?

[WilliamHungOfficial]

How do you make your calculations for IUL? Do you have a template I can use?

[RanchLife-NEBRASKA]

Have you reviewed the New Allianz Accumulation Advantage IUL and compared it to the Allianz Life Pro+ Advantage IUL?

[ejbarraza]

Please do a review on the BGAII from Minnesota Life. I have seen insane performance!

[grumpus]

New to the channel and enjoy listening to the Indexed UL information. I haven't seen the first of these videos but will get to them soon.

One question I have when you mentioned buying a separate Term policy if you need more DB is:
Could a Term rider be inside the policy you're illustrating or does one have to buy a separate policy?

[untalanstkd]

How would you design a policy for a client who is interested in college planning and retirement? Thanks Matt!

[jacobguzman]

Is there a way for me to know what my minimum initial DB should look like? I wanna have an idea in mind when I receive an illustration from my agent.

[tommyspencer]

That annual premium at 83k. Is that meaning that some one took a lump sum of 83k to fund the iul or are they paying around 6k/month to fund it?

[johnathanodefey]

I live in iowa and I’m looking for the best company to start with

[scnager]

So essentially, if you are close to the MEC value, your death benefit is at an appropriate rate?

[ernestobanzon]

Do you accept questions from Canadians? Thnx

[Wavenomics]

Trynna find trustworthy individuals that actually know facts about and actually know how to properly structure an iUL…is a job in itself 😂 been doing research all day

[g.ajemian]

Do you think it is too late for a 62 year old to fund and Iul to help the path to a tax-free retirement. Thank you.