An Advisor called in to describe a case for one of his top clients who was a young business owner and doing well. We are looking into buy/sell, key man and other options, but personally he was also short on insurance protection and wanted to improve his retirement income prospects. Male age 39 and in good health.
Funding $3,000 monthly into a Indexed Universal Life program to age 50 and then solve for supplemental retirement income for ages 65-80. The initial death benefit was about $750,000 and growing to nearly $2,000,000 at retirement age. The hypothetical shows contributions of $396,000 and tax free income distributions of over $200,000 annual for 15 years or about $3,000,000. Policy might still have well over $1,000,000 tax free death benefit at life expectancy. If god forbid, he passed away at anytime, there would be a significant tax free death benefit available to his family to fund goals and/or to replace lost income.
Advisor had clients wishing to do something for their grandchildren. Case for a 5 year old with deposits of $300 monthly for 20 years (total $72,000). We looked at several options and settled on a variable life option with the Equitable. Cash value after year 20 years is projected to be about $145,000 with a death benefit of over $360,000. This gives their grandson a nice pool of funds that would be available tax free for any need and guarantee their insurability.
If they don’t touch it, at age 65 the projections show cash value of over $3,500,000 and a death benefit of over $4,000,000. At age 85 the projections show cash value of over $16,000,000 and a death benefit over $17,000,000. This could be generational wealth and a wonderful legacy. It’s amazing how time and compound interest works its magic.
If you are not discussing these types of cases with your clients, then who will?
Westland is here to help you protect your clients, their families, their businesses and their portfolio.