2. Product Niches and Resources
Keith A. Miller, MBA, CLU®, ChFC® – VP, Advanced Sales
Michael J. Sapyta, CFP ®, CLU® – VP, Advanced Markets

3. GUL Stress Testing

4. GUL Stress Testing Which Product Solutions Provide Flexibility?
Minimal impact for skipped premium
CSVs on GUL Policy
Return of Premium (Premium Refund) options
What information can help out with competitive situations?

8. Flexibility & Face Reductions

9. Future Wealth Changes Which Product Solutions Provide Flexibility?
Decreasing Net Worth
Ability to Stop Premium Payments
Tax Law Changes
Survivorship Scenarios for Different Age Ranges

16. Age 80+ Survivorship with Limited Guarantees 10 Pay with High IRRs

20. IUL and Participating Loans

21. AG 49
Actuarial guideline that determines maximum illustration rates for IUL products and establishes the maximum spread between crediting rates and participating loan rates
When Did They Take Effect?
September 1, 2015 – Maximum Illustration Rates
March 1, 2016 – Interest credited to borrowed funds will be limited to 1% above the illustrated loan rate.

23. Participating Loans
Participating/Index Loans allow for more potential arbitrage than withdrawals and standard/fixed loan.
Inherently more risky
From John Hancock Illustration:
The choice of a Standard or an Index Loan can have a significant effect on future Policy Values….
Index Loans can have the effect of amplifying – both positively and negatively – the impact that Index Appreciation Account performance has on the policy. Therefore, the risk of policy lapse with an Index Loan is greater than it would be with a Standard Loan.

25. Overly Aggressive Premium Financing
Large Participating Loan to Exit Premium Financing Arrangement
Trading one loan for another
90% Loan to Value Ratio
7% IUL Crediting Rate for all years (potentially too high)
If Policy Lapses year 11, $1,285,211 taxable income
Assumed Positive Loan Arbitrage Between Crediting Rate and Participating Loan Interest Rate for All Years

28. Premium Financing Understand and Manage Risks Appropriately
Interest Rate Risk
Loan Renewal Risk
Crediting Rate Risk
Collateral Requirements
Exit Strategy and Related Risks

29. Older Age Term

30. Older Age Term
Most current policies are not convertible after age 75 or at most 5 years in some cases
At the end of the term period, premiums generally rise to 10x the original premium
For clients age 70+, in 10 years, you are beyond the conversion period and have no options to extend coverage
How can you recover “lost value”?

31. Mr. 73 – Standard Non-Smoker

32. Mr. 75 – Standard Non-Smoker

33. Return of Premium (Guaranteed Refund) Options

34. Carriers with Guaranteed Refund Options
AIG
Mutual of Omaha
Symetra

36. Die Too Soon Live Too Long Get Sick Along the Way

41. Questions?