Wonder how to read that confusing illustration? Want clients to understand the benefit of the policy? Watch this video to learn more! visit: www.LISacademy.com for more details
I understand that you've a clear purpose for referencing withdrawals from permanent policies. I hopein the future to view other videos where you express the value of loans as opposed to withdrawals, and what that can mean to the client. Very good video.
I can see how this type of presentation would be helpful, especially if you throw a few life examples into it. Hey Mr. Prospect, suppose your baby daughter needs college help. Well, by year 18 you've built up somewhere between $100k and $150k in Cash Value that you can tap $40k to help her out.
Yes. kingkhon is right. People’s sole purpose once they have already been approached and showed valid interest in life insurance is that they want you to fail. Huh??
My question is when you do the withdrawals, the illustrations say the client still needs to put premiums in at age 71? Is that an error? The client stops paying premiums at age 65. If they were to do withdrawals, they would have to keep paying premiums?
So you are still contributing the $6,240 annually while withdrawing the $17,000? So all you are doing is withdrawing your premium money tax free. The net is $10,760 that you are actually withdrawing, and that comes from the $218,400 you already paid in the first 35 years. I know you are using this video to teach agents, but I personally am trying to learn how to understand the illustration as a consumer. So at age 100 you paid in $405,600 (6,240x65 years) and withdrew $510,000($17,000x30 years retirement) all while leaving a death benefit of $301,000. Basically (based on this illustration) pay in 405,600; use $510,00 tax free for yourself (a net of roughly $100,000) and leave behind $301,000 to your heirs tax free. So that's basically $811,000 worth of benefits for $405,600. Double what you pay in but when you take into account inflation and the fact this is based on the non gurenteed side I don't know if this really figures that well. Maybe I'm wrong about all this but as an uneducated consumer that is how I understood this presentation. Not putting this down but just pointing out concerns I would personally have.
just1294 Its typically effective to illustrate premiums stopping at target retirement age, letting the cash value accumulate for 5-10 more years while the client is living on other retirement savings, and then showing withdrawals from the policy later on to help supplement their other savings. Then you're showing pure withdrawals without any premiums. The illustration used in this example is not a limited pay policy with those capabilities, but was likely chosen because any agent should have a regular guaranteed whole life policy in their arsenal so it casts a wider net.
The money is secured and will probably Appreciate at a greater rate then inflation. Also you’re forgetting you have the death benefit so if you die two years into the policy your heirs are entitled to 500k then and there. It’s not as much of an investment vehicle as it is a hedge. Hopefully you’re using other vehicles in addition to receive a faster and great rate of return.
The dividend or interest rate is all smoke and mirrors. The man is paying $30,000, over the first 5 years, but less than $15,000. goes to cash value. The insurance does have a steep COST.
I'll agree halfway, Raj. Insurance does have a COST, but not always a STEEP cost as you say. Also, if a client were to pass away 1 year or 5 years into the life of the policy, would the family complain about that so-called STEEP cost? In my experience, anyone who has life insurance and something happens to their health has ever said that they have TOO much life insurance or that the cost was TOO high...