Policy Reviews After the GUL Downturn

Life insurance is not for your clients, it is for their next generation. This might have been a true statement three years ago, before the introduction of actuarial guideline 38 (AG38) and when guaranteed universal life products were cheap, provided “guaranteed” protection for life, and carried

little to no cash value inside of the policy. Arguably, the only value of a GUL contract to the insured was the amount that it could bring in the secondary market, and even then, this is a market tainted with hidden fees, and a bad reputation for taking advantage of their prospective clients. Whit that said, it did not change the fact that most advisors and brokerage agencies were all about guaranteed universal life. It was easy, required little skill to sell and when used in a life insurance policy review process, could provide longer guarantees and lower premium payments to the client making it an easy decision to replace that policy purchased in the 80’s, 90’s or early 2000’s that was under-performing and requiring additional premium. Yes, over the first decade of the new century and for a few years following 2010 permanent life insurance for the first time could be sold on a spreadsheet and the cheapest cost with the highest commission was the way to go. The art of storytelling and the value behind the products we sell became obsolete. The focus was solely on price and for most, life was good. Brokerage agencies and their advisors sold more life insurance then in years past and replacements, 1035 exchanges and policy reviews became a larger source of annual revenue for both the advisor and BGA.

Read the entire Whitepaper here | Get the entire Policy Review e-Kit here

Happy New Year!

Like most people, you probably want many more new years? Our government says you probably will, and they are never wrong. According to the Social Security Administration, the new average life expectancy for a male, age 65, is 84.3 years. For a 65 year-old female, it is 86.6 years. This positive information allows us to think of so many opportunities such as, new avocations, travel, a second career, and volunteer work for our favorite organization.

Here's some additional good news: According to the experts, it only takes about $166,000 in savings to provide $1,000 per month over 20 years (assuming a 6% return and 2% inflation). If the average American can live on $60,000 per year they need to have only $800k - $1M of liquidity to live 20-30 years past age 65. And even more good news: There is still Social Security to hope for.

Now some troubling statistics: The average 401k plan contains $74,600. The average American over age 55 has about $155,000 in savings and pensions. All of this money lasts only 4 years if they stop working at age 65. And by the way, if the average American doesn't die immediately but suffers from a critical illness, the average cost associated with that illness is about $200,000.

Just in case you haven’t noticed, there is a dramatic gap between what Americans have and what they will need.

Your industry has decided to focus on this problem and give you a chance to not only make a difference, but to also build a very successful practice. Emphasis is once again being placed on cash accumulation. Flexibility is being built into products for access in the event of chronic or critical illness. There are even products that will allow access to the death benefit to supplement retirement.

These solutions will require more education and knowledge, and MVP stands ready to support you with classes, webinars, and written materials. All studies show that the average American wants an advisor to help them provide solutions. MVP looks forward to being your partner in 2015, and we challenge you to challenge us to be that resource.

Thank you for your business and for making MVP one of the most highly respected life brokerage leaders in our industry.