Transcript Innovation in Life Insurance!

Innovation in Life Insurance!
Life & Accident Assurance Co.
Vernon U. Lawrence
Let’s Preface the Presentation
Catch the highpoints
Don’t worry about getting confused, Screw U
may have sophisticated and unconventional
definitions to terms you may have heard before.
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Savings
Dividends
Death Benefits
Lapse (not what you take around the pool)
Tax Premiums (not necessarily what our ins. costs)
Advantaged
LETS BEGIN THE JOURNEY TO DISCOVER V.U.L.!
Variable Universal Life Insurance
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Not your Parent’s Whole Life or Universal Life
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Among the most flexible products on the market
today. It is permanent insurance that provides
guaranteed lifetime protection, combining the
adjustable premium and adjustable coverage of
universal life with the incredible growth potential
of variable investments.
Variable Universal Life Insurance
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Your clients control nearly every aspect of
the policy, including when and how much
they pay in premiums, the amount of the
death benefit, how to allocate their money
with in the policy.
Guarantees are subject to the claims paying ability of Screw U Life and Accident Assurance Co.
Although there is premium flexibility, there are premium minimum requirements.
Cost of Insurance are not guaranteed now or in the future as Screw U Life and Accident
Assurance Co. is a Mutual Society and capital deficiencies may be assessed proportionately to
policyholders.
Variable Universal Life Insurance
How does this innovative exciting program
work?
 There is no fixed, required premium that must
be paid on a VUL policy. Instead, clients must
simply pay in enough money to cover the
insurance company’s expenses and the cost of
the “term” or “pure” insurance, known as the
mortality cost. Generally, however, they’ll
instruct the company to send them a notice for
planned premiums. They may skip, pay or
increase the planned premium depending on the
performance of the variable savings account.
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Variable Universal Life Insurance
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Each time you make a payment Screw U
deducts its sales and administrative
expenses related to your contract. The
remainder is credited to the Variable
Savings account. Then Screw U deducts
our monthly cost for insuring a client’s life.
Client’s need to be vigilant in monitoring your variable savings balance to
ensure that there is sufficient balance to pay monthly expenses or the
policy may lapse.
Variable Universal Life Insurance
Tax Deferred Savings / Tax Free
Withdrawals
 If clients pay in more than is required to
keep the policy in force, the excess is
deposited into the variable savings and
not the insurance companies general fund.
 Unlike outdated cash value policies a VUL’s
savings fund is controlled by the policy
owner.
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Variable Universal Life Insurance
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Since the policyowner controls the assets
in a separate account, they have the
options of investing the savings into stock
funds, bond funds and money market
funds. Screw U will allow clients to
allocate to as many subaccount funds as
they wish!
Of course with variable options come greater volatility and possible loss of value and
affect the need to pay in additional premiums.
The policyowner may only reallocate funds to different subaccount options once a
year.
Variable Universal Life Insurance
You can change your death benefit!
 Your client’s situation changes and so can
their death benefit (with in the guidelines
that regulations and Screw U allow).
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Death benefits of course can only ever be lowered. Once lowered underwriting is
required to increase coverage……the client may be dying for heaven’s sake!
Variable Universal Life Insurance
Our innovative VUL offers the ability to get
an enhanced Death Benefit.
 Option 1 or A offers a level benefit. If a
client’s variable savings grows, the amount
they are charged for insurance is reduced
accordingly.
 Ex. $200,000 policy has $50,000 in
savings, they pay for $150,000 of ins.
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Variable Universal Life Insurance
Enhanced death benefit option 2 or B
 The value of a client’s variable savings
fund is added to the face amount of
coverage. They GET BOTH!
 Previous ex. $200,000 policy with $50,000
in savings would = $250,000 death
benefit
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There is additional cost for this incredible benefit!!!
Variable Universal Life Insurance
Incredible Personal Banking System
available!
 Clients can use part of their savings as
collateral to secure from Screw U a tax
free loan. Savings is moved into a fixed
account, guaranteed to earn 4% (where
can you get that today?) and will only
incur interest of 6%! Where can client’s
get a loan for a net 2% cost?
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Current loan rates of 6% are illustrated, however, Screw U reserves the right to
change applicable loan rates to not more than 8% without prior notice.
Variable Universal Life Insurance
Accessing funds through partial
withdrawals
 Subject to our rules, clients can make
withdrawals from their savings without a
loan.
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This of course voids every single policy hypothetical and illustration as it is not
encouraged, due to not being able to predict withdrawals at the time of application.
Also, may be taxable if the contract qualifies as a Modified Endowment Contract or
the withdrawal exceeds premiums paid.
Variable Universal Life Insurance
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Screw U will collect a sales charge on
every premium payment. This charge is
usually used to pay income to agents and
is not sufficient for Screw U to be able to
pay all of the costs incurred in the
acquisition of the policy.
Screw U will recover these costs from ongoing profits we earn on the policy.
If clients cancel their policies before we recover all of these costs, we will impose a
surrender charge to recover these costs. Of course the mutual fund managers will
have costs of their own.
Variable Universal Life Insurance
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Doesn’t it make sense?
– Incredible combination of term insurance and
tax advantage savings into mutual fund
investments
– Flexibility not offered in Term itself or normal
Whole Life products
– Incredible Compensation. Higher premiums =
Higher Compensation for you.
Variable Universal Life Insurance
Thank you for your attention
Vernon U. Lawrence
Available to present at your next Primerica
Function!