• Best available rates and terms
• Rate changes (including Universal Life crediting rates, Whole Life dividend interest rates, Indexed UL cap rates, and Variable UL earned rates)
• Charge changes (including UL product charges, WL dividends, funding level changes, no-lapse guarantee performance changes, and carrier financial strength changes)
If a review reveals that a policy is no longer suitable for a client, many products allow the advisor to make in-force changes to improve the performance and viability of the existing policy. Proprietary products designed to address the specific needs of ultra-affluent and corporate clients often provide superior flexibility in this area. If an actual policy change is required, the Internal Revenue Code offers favorable tax treatment on most exchanges, allowing policyholders to shift from one permanent life policy to another while continuing to defer income taxation on accumulated gains. Note that if your client takes out a loan against the policy, this may impact the feasibility of an exchange.
As the pandemic and the economic crisis continue, permanent life insurance is proving its value as one of the most important tools for protecting client assets and helping to ensure clients’ financial well-being. For clients facing financial challenges, now is the time to explore how their existing policies can provide much-needed access to cash, as well as how they can maintain appropriate coverage long after the crisis of COVID-19. For all clients, including those whose financial lives have been unaffected, continuously monitoring the effectiveness and applicability of their life policies and recommending appropriate adjustments has never been more vital. A third-party expert with an integrated process can help by analyzing each policy with due diligence, providing the best possible recommendations, and helping to ensure that every policy you recommend is in compliance with the law.
Jeffrey D. Dattolo, CFP, CLU, ChFC, CLTC, AEP, NSSA, RICP, is a principle and director of advanced design at Madison & Main Advisors LLC, an independent planning firm based in Madison, NJ.