Case Study – Policy Review
- Male / Age 40 / Good health
- Desire to stop paying premiums at age 65
- Concerned with decreasing dividends since initial purchase of whole life policy
- Does not need cash value – looking to maximize death benefit to include lifetime guarantees
Current policy
- Participating Whole Life
- Death Benefit: $4,569,332
- Premium: $47,051 – full pay
- Surrender Value: $432,000
Assess and identify products to meet the client’s desire to increase the death benefit with a guarantee for life.Â
New Opportunity client:
- 1035 & $47,050 to age 65 to PRU VUL Protector with Opt I DB CVAT $8,677,488 guaranteed for life.
- 1035 & $47,050 for Life to PRU VUL Protector with Opt I DB CVAT $9,591,321 guaranteed for Life – if he wanted to continue premium payments this is an option for increase guaranteed DB and future growth
Exchange the current value of the policy into a variable universal life policy:
- Lifetime no-lapse guarantee
- Pay same premium of $47,050 for life
- The level guaranteed death benefit is $9,591,321
- Based on a hypothetical Annual Gross Return of 7.00%, the net death benefit at age 80 is $10,232,776 and $17,467,080 by age 90.
- $4.1M additional death benefit
- Death Benefit is based on guarantees not the dividend performance
- Premiums are invested in market for long term growth potential with underlying DB guarantees for LIFE
- Cash Value growth can increase death benefit, $17.5M at age 90 (assumes 7.0% Gross return )