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Cash Value Life Insurance is complex, so it's hard to know how to find the best policy. Watch to learn how we evaluate different companies to get the best value.
Key Points:
Cap Integrity and Policy Pricing:
The video emphasizes the importance of cap integrity in evaluating cash value life insurance policies. Cap rates, which are adjusted annually based on the insurer's options budget and overall portfolio performance, play a crucial role. Companies that have been in the market longer tend to price their products for stability, maintaining cap rates close to their initial offerings. In contrast, newer companies or those seeking to quickly gain market share may initially offer higher cap rates unsustainably to attract customers.
Focus on Long-Term Policies:
A key differentiator between annuity products and Indexed Universal Life (IUL) policies is the approach to premiums. IULs, allowing for multiple premiums over many years, afford insurers more flexibility in investment and potentially higher cap rates compared to single premium annuities, which must be priced based on current rates. Companies focusing on single premium policies might see a negative impact on their long-term products' cap rates due to the immediate investment of large sums at potentially low interest rates.
Bonuses and Fees:
The video discusses bonuses included in policy illustrations, highlighting the importance of understanding whether these bonuses are guaranteed and if any associated fees might change over time. Policies might advertise attractive bonuses with the caveat that they are not guaranteed or come with variable fees, impacting the policy's long-term value.
Sweep Dates and Company Volume:
The frequency of premium "sweeps" into investment accounts can indicate a company's volume of business. Companies doing more business typically offer daily sweeps, ensuring premiums are invested promptly. Less frequent sweeps might suggest lower volume and potentially higher costs due to reliance on investment banks for index purchasing.
Company Ratings:
High comdex scores reflect strong financial stability and cash positions of insurance companies, suggesting better long-term viability and product integrity. The video recommends sticking with companies that have comdex scores in the 80s or above for more reliable investment options.
These points highlight the complexity behind choosing a cash value life insurance policy and the importance of looking beyond simple illustrations to understand the policy's long-term viability and the insurer's stability.
00:00 Intro
01:17 Caps
03:58 Long Term Oriented Companies
04:29 Short Term Oriented Companies
06:01 Will It Stay the Same?
07:54 IUL vs Indexed Annuities
09:36 Single Premium vs Multiple Premium
12:55 Bonuses
14:38 Bonus Fees
16:37 Sweep Dates
18:04 Credit Rating
19:16 Outro
7 авг 2024
