Allstate Ad Takes Aim at Financial Services | March 2002 Short Takes

Short Takes-Web Exclusive: No Cash Value and Worth Every Penny

Back \| E-mail to a Friend \| Print

By David V. McCulloch, CLU, ChFC

This excerpt from "Advisor Today's 300 Best Sales Ideas" discusses the proper way to set up a second-to-die policy.

Sell your client a second-to-die policy that builds up as little cash value as possible! Why? Because the purpose of a second-to-die policy is to pay the death benefit at the second death-to pay the taxes. Cash value is irrelevant, since the policy is purchased and owned and the premiums are paid by an irrevocable trust.

The policy shouldn't build cash value. In fact, the less the better.

The policy shouldn't build cash value. In fact, the less the better. Some companies will design a policy that minimizes cash value, which makes the premium up to two-thirds less than a normal whole like policy. This makes your proposal far more competitive in terms of price, without giving up anything. It also means the client has to put fewer dollars into the trust initially, which saves dollars on the unified credit.

It is hard to find a company that will design the product for you this way, but they are out there and it's worth the effort.

Top | Back | E-mail to a Friend | Print

If you are not receiving your magazine or need to change your address,
please contact membersupport@naifa.org.

For comments on articles on this website contact mleyes@naifa.org.