Advantages of No‐Load / Low-Load Insurance

No-Load and Low-Load Life Insurance. There is some confusion about the difference between no-load and low-load. Actually, they are the same. The first product design was a universal life policy, labeled as no-load. Then came the introduction of variable life, labeled as low-load due to the securities/investment components. Different label, same concept.

NO-LOAD/LOW-LOAD UNIVERSAL LIFE & VARIABLE UNIVERSAL LIFE INSURANCE BENEFITS:

1. Full Disclosure.
2. Cost efficient death benefit.
3. High liquidity beginning in the first year for asset accumulation.
4. No surrender charges.
5. Increases client control of policy due to high liquidity.
6. Expanded planning capabilities.
7. Real tax advantages.
8. Allows for the development of "Unique" strategies.
9. Sustains advantages in "Full Cycle" planning.
10. Creates planning opportunities for corporate clients.
11. Fee-Engagement activity (fees may be tax deductible for the client).

The design of the no-load/low-load life insurance product has created much more than a very cost effective policy. Flexibility is increased to benefit both the client and the advisor.

Such expanded flexibility not only gives the client maximum control of the policy, but also allows the planner maximum design capabilities, whether the objective be death benefit efficiency or asset accumulation. This design capacity allows for strategies that fully realize the clients objectives, and concepts that have not been seen in the market.

For example, for a 40 year old non-smoking male, the minimum first year premium required with a commission policy would have a range of $3,800 to $4,600 (general average), whereas the minimum for a no-load/low-load policy would have a range of $480 to $750 (general average).

Another example would be a no-load/low-load survivorship (last-to-die) policy on a male age 65 and a female age 62, both non-smokers, death benefit of $2 million: minimum first year annual premium requirement is $369.

One example in the business planning area is that of split-dollar. Although many corporations have instituted this strategy for their executives (or company owners),few are aware, including their advisors,that the executive/owner is personally liable for the obligation that is represented by the spread between the cumulative corporate outlay of premiums and the surrender value of the contract. The use of a properly designed no-load/low-load life product can eliminate this liability by providing first year cash value liquidity that exceeds the premium paid.

Also, in the corporate environment, there would be no "hit" to earnings with COLI, key person, buy and sell, split dollar, etc.

Contact the Network at (888) 954-0931 for more insight on this dynamic planning tool.