By Lisa "Lee" Morris
VP of Underwriting and Development,
Partners Advantage Insurance Services
An experienced financial professional knows all aspects of transferring wealth, replacing income, protecting assets and certainly providing supplemental retirement income all using life insurance products. IUL products have gained great traction in the marketplace as they address many of these aspects, but particularly retirement income. Although the main premise of life insurance is to replace a financial loss, why not accomplish even more by replacing a financial loss AND preparing for retirement.
Here is the key if you decide to use this strategy. Make sure that you do not enter through the exit door by calculating the retirement income first and then solving for the face amount. An applicant still has to financially qualify and justify the amount of total insurance for which they have applied. Many financial professionals will simply ask an applicant how much sounds like a good idea for your retirement needs and create illustrations based upon the applicant’s response. However, the correct approach is to determine the total amount that the applicant can qualify for coverage and THEN illustrate the amount of retirement income that the applicant will be able to withdraw as retirement income without collapsing the policy. By following this technique, you can adequately meet financial justification and participate in a much smoother ride to policy issue.
For financial professional use only. Not for use with consumers.
Partners Advantage Insurance Services and their representatives do not give tax or legal advice. The material in this article is provided for informational purposes only and should not be construed as tax or legal advice. Guarantees and benefits are based on the claims-paying ability of the issuing insurance company. Keep in mind that most life insurance policies require health underwriting and, in some cases, financial underwriting.