Life insurance
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Life insurance
Know the difference between the two, and when they are appropriate
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Four ways to tailor life insurance for wealthy clients | Advisor.ca

Four ways to tailor life insurance for wealthy clients | Advisor.ca | Life insurance | Scoop.it
Wealth brings its own set of problems, among them large tax bills and uncertain wealth transfer upon death. Even if your wealthy clients don’t like to talk about dying, you can reframe the conversation to be about legacy.
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Ryan Sambor - Canada | LinkedIn

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Universal Life Vs Whole Life-- Two forms of permanent insurance; both have advantages over term insurance: increased estate value and cash surrender value. Both offer a separate asset class inside insurance contracts which can provide tax free investment income and liquidation funds for estate to pay for capital gains/taxes.

UL- Positives

· Flexible- higher limits of deposits. Can take premium holiday while maintaining policy in force. · You pick the investments. 60% bank loan on equities, 90% on bonds fixed income. (Depending on bank relationship). · Lower cost of Insurance-transparency in cost of insurance. · Higher death benefit off the start. Account value plus death benefit tax free death benefit

UL- Negatives

· Not guaranteed- Variable rates of returns based on individual portfolio chosen. Negative returns in some years. Hands on management. · YRT COI- No guarantee of level cost of insurance in future. · Administration charges managing expense ratio.

Whole Life- Positives

· Guaranteed death benefit and cash values. Hands off investment management inside par account. 90% access at bank loan on cash value. · Limited pay guaranteed paid up features. Contractual guarantees.

Whole Life- Negatives

· No flexibility. No pay= payment lapse. Max deposit amount is very low. · No transparency. Expensive COI at the start. · No choice of investments.

 

 

 

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