Premium Offset - What if I don't want to pay anymore?

In this video we review options available to whole life insurance policy holders in the case that they do not want to OR cannot pay into a life insurance policy. This could be for any reason, including timing or just out of convenience... but could also be because "life happens" and funds that someone thought might be available, are not.

The options to help avoid lapse and / or can help with performance in some cases are:

1) premium offset - Uses the annual dividend to pay the annual policy premium

2) Reduced paid up (RPU) - Premium is reduced to $0 & the policy is “paid up.” Dividends grow DB & CV, no more contributions

3) Automatic premium loan - Uses existing CV to pay the premium, increasing loan balance & collateralizing the DB

Premium offset & reduced paid up are In force options that must be requested. Automatic premium loan is automatic if structured to policy when put in force and will self activate at the end of the premium payment grace period if there is enough cash value available.

Premium offset - Does not occur automatically, it must be requested by the policy owner when sufficient policy value have accumulated to support it. Can be used effectively when funding for less than 7-years with a high cash value design because the IRS 7-pay (MEC) rules require premiums to be paid for at least 7 years

RPU - Premium is reduced to $0 and the policy is “paid up” for as much as the cash surrender value will purchase as a net single premium. The policy continues to earn dividends & Death Benefit and Cash Value grow as the dividend is credited

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