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Today we are going to get into a bit more detail as to why the proper design of a cash value life insurance policy is so crucial. And we are going to give you some examples that there are numerous ways to design life insurance.
If everyone would just listen to us, they'd have more money, a policy that performs better and achieves all those things in the most efficient way possible. Not to mention, you'll have better hair, your spouse will love you more and your kids will think you're the greatest.
No not really but that would be cool if we could pull that off.
Back to the issue at hand. You can easily get the short end of the stick if you work with someone (an agent) who either:
A) Doesn't know what they're doing and sets up your policy incorrectly or
B) Knows how to design it correctly but chooses not to because it decreases the amount of commission they're going to make.
Which is worse? You will have to decide that one for yourself.
Primary Benefits
When you really boil down the primary benefits of cash value life insurance, you're left with two things:
- Cash
- Legacy
Yes, of course there are lots of other benefits but these are the two major ones that people tend to remember about the policy that they bought.
The cash surrender value has a tremendous yield and liquidity. With legacy–you are leaving behind an inheritance to those people or organizations that you care about. And let's not forget the second part of legacy which is to provide an income that can sustain your family after you're gone.
Unfortunately many agents/financial advisors/salespeople pay a lot of lip service to all the wonderful benefits associated with whole life insurance and universal life insurance. But they can't or don't deliver on all the hype they used to sell the product.
So what happens?
Some years down the road people come to us with a policy they bought at some point in the past. They remember some of the benefits they were pitched (cash surrender value in particular). However, they now have several years worth of annual statements and perhaps an in-force illustration that leave them more than a little disappointed.
It's a real let down because they were so excited about the possibilities.
Listen at the 4:18 mark hear a specific example of how correct structure and/or design can work for you and how used incorrectly can work against you.
Enjoy and stay tuned for one more episode this week.
