SCENARIO:
James, age 50, needs income protection for his family in the event of his untimely death. While he may only need income protection for the 20 years he expects to continue working, he also wants to leave a financial legacy for his family to help make their lives easier once he is gone. He wants the certainty of guaranteed life insurance coverage at premiums affordable enough to ensure he can still invest in his retirement. James’ financial professional* recommends PL Promise GUL, offering $1 million death benefit, a no-lapse2 guarantee and affordable premiums. Through Pacific Life’s streamlined underwriting process, James qualifies for Standard Nonsmoker rate class without requiring medical labs or exams.
*In order to sell life, insurance a financial professional must be a properly licensed and appointed life insurance producer.
1 PL Promise GUL Universal Life Insurance with No-Lapse Guarantee. Policy Form #P18PRUL and S18PRUL or ICC18 P18PRUL and ICC18 S18PRUL, based on
state of policy issue.
2 The Lifetime No-Lapse Guarantee Rider (form #R17LYFNL or ICC17 R17LYFNL, based on state of policy issue) is included in the policy. The Lifetime Duration No-Lapse guarantee, depending on how your client structures their policy, has a maximum duration of the insured’s lifetime, subject to certain limits. If your client’s net no-lapse guarantee value is zero, the no-lapse feature will no longer be in effect. If the no-lapse feature is no longer in effect, additional premiums would be required to resume the no-lapse guarantee. If policy performance is such that your client’s policy is being maintained solely by the no-lapse guarantee, your client’s policy will not build cash value.
APPROACH:
James chooses to purchase PL Promise GUL with a guarantee to age 90 and invests the difference in premiums, earning a net 3.75% interest annually (5% growth rate and a 25% tax on the gain.
At age 90, his accumulated savings will be $222,054.
If James lives past age 90, the catch-up premium, or the amount needed to keep the life insurance policy in place to age 100, is $54,443 annually. He can opt to be automatically billed a tiered premium in the future. Starting at age 90, Pacific Life will bill James $54,443 each year to extend his guarantee to age 100.
If James needs to extend the death benefit coverage beyond age 90, his accumulated savings used as life insurance premium payments will carry him another six years.
If James lives past age 94, he will need to dip into his additional savings to pay an incremental $54,443/year.
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