Dave Sheridan, Vice President and Managing Director of Life Distribution
In case you missed it, last month we hosted a webinar about Why Selling from the Spreadsheet is Dangerous—specifically shining the light on IUL. We discussed the importance of looking beyond the spreadsheet and uncovering what it’s not telling you, how our IUL rises above the spreadsheet battles and more. Not only is this is a topic I’m passionate about, but this is extremely relevant to our business today so I think it bears repeating. Here’s a quick recap of what we covered.
The spreadsheet battles
Our business is the business of life. Yet, deciding which life insurance policies to offer clients can sometimes become a numbers game, especially when it comes to IULs. But the spreadsheet only gives you a snapshot of how a policy could perform—it’s not an accurate representation of what might be the best policy for a client.
There are three key things that the spreadsheet doesn’t tell you:
- The expense structure of the product
- Life event triggers and how they can impact a policy
- The quality of the company
Paying for the privilege: crediting rates and policy expenses
One of the most critical things to keep in mind when determining the right IUL for your client is the expense structure. A high crediting rate can look on paper, but it’s important to look beyond the spreadsheet and take the policy expenses into account. While those higher rates illustrate attractive cash value, they tend to be offset with higher policy fees.
That means clients have to pay for that higher cap on the back end. What’s more, they’re paying for the privilege to earn that higher cap rate. They may not see that return, let alone consistently over a certain period of time. So while this cash value looks good on paper, the policy expenses and charges end up eating away at that growth.
The implications for when life happens
Not everything goes according to plan, whether that’s on the spreadsheet or in life. When life happens, everyday tasks and bills can go on hold or fall through the cracks. Things like an unexpected medical expense, a car accident or a house repair can take a toll, and clients could potentially miss a premium or two on their policy.
The risk and likelihood of experiencing one of life’s curveballs may be closer to home than clients think:
- Over the last year, 34 percent of American households experienced a major unexpected expense.1
- Yet, only 39 percent of Americans have enough savings to cover a $1,000 emergency expense.2
Life insurance could easily end up on the chopping block when life happens. When you consider the priority of financial concerns, life insurance falls to the bottom of the list—after health coverage, savings goals and living expenses.3
The carrier you work with matters
When you make product recommendations, you want to feel good about the carrier behind those products: their history, their finances and how they do business. In short, you want to feel confident that the company is able to deliver on their promises. It shouldn’t be a hard ask, but with all of the disruption and uncertainty in our industry today, this is extremely critical for your business. In the end, how the product performs can impact your client relationships and your business.
A solution that rises above the spreadsheet battles
At Protective Life, we manufacture life insurance products with the highest likelihood to perform as the distribution partner, producer, and client intended at the time of purchase. And our IUL is no exception. Protective Indexed ChoiceSM UL is a common sense solution that pairs the strong guarantees of a traditional GUL with cash-value potential, all thanks to low policy fees. Not only can this cash-value potential provide clients with more flexibility than the standard GUL, but Protective Indexed Choice UL features a responsible design—helping the product deliver on what was promised.
Watch the entire webinar recording to learn more about what the spreadsheet isn’t telling you and how Protective Indexed Choice UL performs against the competition to stand apart from the crowd.
1. Most Americans don’t have enough savings to cover a $1K emergency. Bankrate
2. Only 39% of Americans have enough savings to cover a $1,000 emergency. CNBC.com
3. 2018 Life Insurance Barometer Study, LIMRA and Life HappensThe S&P 500 Index is a product of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates (“SPDJI”), and has been licensed for use by Protective Life. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Protective Life. Protective Indexed Choice UL is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.Protective Indexed Choice UL (UL-23) is a flexible premium universal life insurance policy issued by Protective Life Insurance Company, Birmingham, AL. Policy form numbers, product features and availability may vary by state. Consult policies for benefits, riders, limitations and exclusions. Subject to underwriting. Up to a two-year contestable and suicide period. Benefits adjusted for misstatements of age of sex. In Montana, unisex rates apply. Protective Indexed Choice UL is not a security investment and is not an investment in the market. Your insurance professional can provide you with costs and complete details about the terms, conditions, limitations or exclusions that apply to this policy.The tax treatment of life insurance is subject to change. Neither Protective Life nor its representatives offer legal or tax advice. Your clients should consult with their legal or tax advisors regarding their individual situations before making any tax-related decisions.All payments and all guarantees are subject to the claims-paying ability of Protective Life Insurance Company. Although the Indexed Account is not a security or direct investment in the stock market, it can offer you the upside potential of an equity market, but also protect your account value from downside market risk.