Whether your client has estate planning needs, business protection needs, or supplementary retirement needs, cash value life insurance offers great competitive advantages versus alternative financial assets. These advantages fall into three major categories: 1) Tax advantages 2) Financial and actuarial advantages and 3) Legal and contractual advantages. These inherent advantages make cash value life insurance a financial asset that should be an important component of virtually every asset portfolio mix.
What about term life insurance? Certainly term insurance has a place in many planning scenarios where protection needs might terminate after a fixed period of time. However, because of its actuarial design, term insurance cannot offer the major advantages offered by cash value permanent insurance. Term insurance ends after a fixed number of years and only pays a death benefit if the insured dies while the policy is still in force. And term insurance is designed to terminate before the usual life expectancy of most individuals. This can create a problem if your client still has certain asset protection or asset accumulation needs that will continue for the remainder of their lives.
Cash value life insurance can be designed to pay a death benefit whether your client lives to their life expectancy or not. Of course, permanent life insurance differs from carrier to carrier. Policies come in different flavors depending on your client’s fact situation and risk profile. These policy types include no-lapse Universal Life (UL); Current Assumption Universal Life (CAUL); Indexed Universal Life (IUL); and Traditional Whole Life (WL). Most of these permanent types of policies offer a unique combination of features and benefits that place them in a class by themselves.