Cliff’s Notes – January 2019
This is an actual case an ISG Advisor just did and I wanted to share the Sweet Spot we found, in order for him to not only land this great case, but to almost double his commissions too!
There is a very narrow window in which this works, but I’m sure many of you know someone that this will appeal to. The market is for healthy males between the ages of 67 and 70, looking for 15 – 20 years of life insurance coverage.
The competition was quoting 20 year term on this guy, so we had to get creative for our ISG Advisor. Sure, we could have quoted the same old 20 year term and looked like everyone else, but we took it a step further.
I went and met with the customer and the ISG advisor, to learn a little more about what his goals were for his life insurance. Turns out to be a $25,000,000 life insurance need, and his concern was mainly for the next 15 – 20 years. I mentioned to him, and he firmly agreed, that things do tend to change in the future and it’s best to be prepared for those changes. He informed me that he didn’t want to spend over $400,000 in life insurance premiums, and he would like it, if the plan we recommended had “options”, should his needs change in the future.
We structured a S&P Indexed Universal Life plan for him, and assumed a 5.6% crediting rate on the contract. The best 20 year term in the market had an annual premium of $353,065. So, I plugged that same premium into the IUL plan and it guaranteed his coverage for 18 years, and under current assumptions, it went for 22 years. Good plan, but we wanted it to be a GREAT plan.
Remember, he gave us a budget of $400,000 or less and he wanted options. We plugged in $375,000 of annual premium and the IUL contract was guaranteed for 20 years and projected to last for 24! In addition, if his needs changed and he no longer needed the coverage, policy years 15 – 20 he had around $2,400,000 of surrender values, wherein he could surrender the contract and recoup some of the premiums he had paid in. Or, if his needs changed, and he needed the coverage longer for 24 years, he simply had to continue paying premiums in order to keep the coverage going! You can’t do that with term insurance on a 67 year old!
Now, here’s the best part for the advisor on this case. If he’d sold the 20 year term, he’d make commissions on $353,065 first year, and no renewals.
On this IUL plan, the TARGET premium was $695,500! This particular company has 24 month rolling targets. What that means is that the advisor makes first year commission on the $375,000 being paid in this year, AND when the client pays his premium next year, he gets first year commissions AGAIN on $320,500! Then, he also get renewal commissions thereafter!
That’s what I call a Win / Win for everyone!
Call the ISG Sales Team if you have a prospect that may fit this scenario or if you have questions about it.
Go out and make it a Great Day!