Accumulation-Based IUL’s for Your High Net-Worth Clientele

09-12-2017

September has seen the introduction of several new accumulation-based IUL’s.  BUA is here to help you tap this highly lucrative market, commonly referred to as LIRP (Life Insurance in Retirement Planning).

LIRP is for clients in pre-retirement who believe they may have less of a need for death benefit protection and a greater need for income once retired.  LIRP offers the ability to potentially accumulate cash value and allow clients to access their life insurance cash values through loans and withdrawals so they can supplement their retirement income.

Client Profile:

  • Under Age 55
  • High Net Worth or High Income Earner
  • Retirement assets are well-funded
  • Small business owners of privately owned or family-held businesses work well (not required)
  • Looking to save more money for retirement.

Prospecting Questions:

  • Have you maxed out your qualified savings programs like 401(k) and IRA’s?
  • Are you looking for ways to generate additional retirement income?
  • Do you need life insurance?

Case Study:  Jake is a 40 year old father of three who is currently in good health.  He currently contributes to his employer-sponsored retirement savings up to the 4 percent his company matches.  He is also contributing to his Roth IRA up to the maximum contribution amount.  He wants to live a comfortable retirement and possibly even retire early, so he is saving as much as he can now and is looking for opportunities to maximize his retirement income potential.  He also has a need for life insurance coverage to protect his children and spouse in case something should happen to him.  Jake has earmarked $500/month that he would like to contribute.

Solution:  To accomplish his goals, Jake’s advisor looks at a combination of temporary and permanent life insurance solutions.  He chooses to:

  • Purchase an $800,000 20 year term plan for $50.27.  This plan will expire after the kids are out of the house.
  • Contribute the remaining $450 towards at $200,000 Accumulation IUL with an increasing death benefit, and funding it for 20 years.

The Results:

  • By the time Chris is 65, he has put in $5400 in premiums for 20 years (ages 40-60) into the IUL.  Total premium = $108,000
  • From age 65-84, his projected distribution amount is $19,159 for 20 years, all of which will be tax-free (as long as the policy stays in force).  Total Income = $383,180.  When combined with the other retirement accounts, Jake will be able to reach his stated goal of a comfortable retirement. 

BUA has multiple products that fit this highly competitive market.  We can help you plan for the “Jake” in your book of business.  Keep in mind, he may have a different name! 

Call your Brokerage Sales Manager today to discuss, or click below for further information and to see sample illustrations for this type of sale.

CLICK HERE to view sample illustrations of this concept from a few of our carriers!