Conversion Limitations Life Insurance Review

Transcription

1 Conversion Limitations Life Insurance Review Prepared for : Archibald Haddock InforcePRO Financial InforcePRO Financial Demo 301 Brazos Street Austin Texas karan@jacoxhilton.com

2 Policy Summary Policy Number: TEST74 Policy Payment Frequency: A Policy Expiration: 24 December 2048 Owner Name: Archibald Haddock Enhanced Term Portion: $0.00 Cash Value: $0.00 Policy Premium: $10, Coverage Summary Issue Date: 23 May 2014 Product Name: Ultra-C Yr Modal Premium: $10, Benefit Amount: $2,000, Conversion Expiration Date: Health Status: Full Name: Gender: City: State: Level Period Expiration: 24 December 2023 Regular Non Smoker Archibald Haddock M Smallville Arkansas 23 May 2029 Date Of Birth: 24 December 1953

3 Definitions Term Insurance Your term insurance, much like your car insurance, renews at the end of every term. Sometimes it expires at the end of the level term period. When your Term Policy is purchased, if there are renewals after the level term period, they are predetermined and your future cost is presented to you. Term insurance is relatively inexpensive when it is first purchased, however with each successive renewal, the policy cost increases significantly. Term insurance expires at a pre-determined date. Permanent Insurance Permanent insurance typically lasts for much longer than term insurance does. With the right product selection and premium payments, this product can be made to never expire. *Approximation meant to portray a concept rather than client specific values. Rewriting vs. Converting There are two ways that you can take out a new policy to take advantage of savings : rewriting and converting. Rewriting means canceling your current plan and purchasing a new one. This means you must go through medical exams again to receive approval for coverage. "Converting" means changing your term coverage amount or a portion of your term coverage amount into permanent insurance. There is no medical approval required for conversions.

4 Term Rewrite (Short Term Savings) Your first option is to replace your current policy with one similar to it to extend the age till which your premiums stay level. If you choose to rewrite, you would pay a total premium of $21, annually. In addition, your premiums will stay level for another 15 years. It is important to keep in mind that this is not the best long-term option in terms of costs. Although the premiums are significantly lower initially, the premiums will increase exponentially every year after the level premium period. Lowest Carrier Quote Second Lowest Quote Total Coverage $2,000, $2,000, Product Name Select-a-Term - 20 Year Term Essential 20 (<250K PruXpress ONLY) Annual Premium $21, $23, Age At Which Level Premium Ends (Current Policy) Age At Which Level Premium Ends (New Policy) Expected Life Till Age (First Insured)

5 Conversion Options Limitation You currently have the option to convert to the following products - Provider Universal Life, Guarantee Advantage UL. However, after 23-May-2019, your conversion options will get limited to - AG Extend IUL:AGL. Thus, if you plan to do a conversion at a future date, it is important to know that the products available for conversion will be limited.

6 Full Conversion If you are ready to fully convert, then your premium, versus current, will increase today while you may experience significant savings over your lifetime. Current Carrier Quote Lowest Carrier Quote Second Lowest Quote Third Lowest Quote Benefit Amount (Current Medical Underwriting Required? $2,000, $2,000, $2,000, $2,000, No Yes Yes Yes Product Name Provider Universal Life PruLife Universal Protector (2013) Lincoln LifeGuarantee UL 2013 Protection UL 13 Modal Premium (Current Cash Value Year 10 (Current Cash Value Year 20 (Current Cash Value Year 30 (Current Coverage Lapse Age (Guaranteed Coverage Lapse Age (Current Expected Life Till Age (First Insured) $49, $23, $43, $45, $0.00 $64, $0.00 $216, $0.00 $169, $0.00 $344, $0.00 $0.00 $0.00 $631, NA

7 Cost Of Waiting For Conversion This section illustrates the potential cost of waiting to convert. If, in fact, converting to a permanent policy is a possibility, it is important to be aware of the increase in cost. With that information, you can then decide on whether it is in your best interest to wait to convert or not. Conversion Cost in 5 Years Cost of Conversion Expiration Benefit Amount (Current $2,000, $2,000, Product Name Provider Universal Life Provider Universal Life Future Conversion Premium (Current Today's Conversion Premium (Current $63, $72, $49, $49, Cash Value Year 10 (Current $0.00 $0.00 Cash Value Year 20 (Current $0.00 $0.00 Cash Value Year 30 (Current $0.00 $0.00 The future prices mentioned above are for illustration purposes only. The prices may change and the product illustrated above may not even be available. The future prices also assume your current health status which may not hold true.

8 Conversion Options Product Name Modal Premium Cash Value 10 Years (Current) Cash Value 20 Years (Current) Cash Value 30 Years (Current) Cash Value 10 Years (Guaranteed) Cash Value 20 Years (Guaranteed) Cash Value 30 Years (Guaranteed) Provider Universal Life Guarantee Advantage UL $49, $0.00 $0.00 $0.00 NA NA NA $0.00 $357, $624, $0.00 NA NA $0.00

9 Additional Disclosures & Assumptions 1. We believe we have determined accurate renewals. However, we strongly advise you to double check with the carrier before taking any financial decision. 2. The discount rates used for every savings value is mentioned in the tables in each of the sections. 3. All new quotes presented in this report assume the same health status for all insured(s) as in the policy under review. 4. No substandard rating was found on this policy. Thus, that hasn't been factored into any of the calculations. 5. Impact of paid riders is not factored in this report.

10 Needs Review 1. Overall Why did you buy the protection you did? Have any of those reasons changed at all since then? Yes No 2. Have you moved your residence and/or adjusted your mortgage amount? Yes No 3. Have you bought a vacation property or incurred some other major financial liability? Yes No 4. Have you or your spouse changed jobs or had your income and/or benefits change significantly recently? Yes No 5. Have you or your spouse taken or do you expect to take 'early retirement' soon? Yes No 6. Has there been a change in your marital status? How about your children? Yes No 7. Have you had any additional children or grandchildren since your last review? Yes No 8. Have your children moved out on their own or returned home? Yes No 9. Have you updated your will or powers of attorney in the last 5 years? Yes No 10. Have there been any serious health issues in your immediate family? Yes No 11. Have you inherited any money? Yes No 12. Do you want to change the beneficiaries on your existing policies? Yes No Answer yes to any of these questions and you can definitely benefit from a review of your life insurance needs. Life changes planning. If your life has changed, your plan needs to also. Adapting your plans and policies gives you more of the peace of mind that means quality of life. Taking a little time now can save you a lot of time and trouble later. I m here to help you. Advisor Name: Client Name: Signature: Signature: Date: Date: