Questions – Guaranteed Universal Life
by Steve Goodman
CPA, MBA – President & Chief Executive Officer
Contact Steve today for more info.
Q. Are the guarantees affected by paying premiums before the due date, within 30 days after the due date, or after 30 days from the due date?
- You need to know how the timing of premium payments can affect the guarantees. To find out, obtain an annual enforce illustration to make sure the guarantees are being met.
Q. If the guarantees are affected due to the timing of the premium payments, what is needed to get back to the original guarantees?
You may need to pay a higher premium to get back to the original guarantees.
Q. What is the target commissionable premium?
- This is the portion of the premium upon which the agent is paid. The commission rate is typically between 80% and 115% of the target commissionable premium.
Q. Are there lower commission products, such as a term blend, that can reduce the commissionable premium? If so, how does that affect the policy?
- A few insurance companies offer lower commission products or allow you to lower the commission to reduce the premium. Ask questions to determine how this impacts the policy.
Q. What is the Internal Rate of Return (IRR) on the death benefit at age 80, 85, 90 and 95?
- The IRR on the death benefit of any guaranteed universal life insurance policy should be compared with the return that can be earned on investment outside of the policy. In other words, will the IRR be at least as high you could earn on another type of investment?
Q. Do products sold outside of New York differ from those sold in New York?
- There are guaranteed universal life products available outside of New York that is not available in New York. Sometimes, these products have lower premiums.
Q. Do some products offer a return of premium feature?
- There are a few guaranteed universal life products that offer the ability to get a refund of premiums in year 15, 20 or 25. This is beneficial if you decide to cancel the insurance. Even if the premium is slightly higher, it may be worth it.
CPA, MBA – President & Chief Executive Officer
About Steve Goodman
For more than 30 years, Steven has provided insightful solutions to the challenges of business succession, wealth preservation and charitable planning, focusing on the needs of owners of closely held businesses and high net worth individuals.
He's been featured in the New York Times and is an accomplished speaker and has presented over the years to many organizations and professional groups on efficient business succession, estate planning issues and tax strategies. Steven is a CPA who was vice president of the Trust and Investment Division of JP Morgan Chase and a supervisor for KPMG Peat Marwick, and holds an MBA from Fordham University.
