Friday, May 26, 2017

Outside the bun insurance

So, got a call the other day from one of our (numerous) long-term P&C clients asking for some help with a life policy. I'd met with her a few years ago to review it, and now she had some additional questions.

As requested, she brought with her the policy and as much documentation as she could.

In a nutshell:

This is a Variable Universal Life policy (basically a UL with mutual fund-like cash accumulation options). It's for a sizable amount on the life of her ex (I believe as part of the divorce settlement). There had been a pretty significant cash accumulation, but the policy is already looking to go upside-down in a half dozen or so years. Still, there's currently about $60,000 in cash surrender value.

After I explained all this, we discussed her needs and concerns; she's trying to determine whether or not to keep it until it fails or cash it in now. She asked me what I would do, and I of course demurred. But she persisted, and I told her that, based on our discussion, I thought she would do well to consider something called a Single Premium Immediate Annuity.

Briefly: these are plans, sold by insurance companies, that pay out a constant stream of income payable for the rest of her life. There are some tax issues, but in her case they'd be pretty insignificant, and she asked me to get her some numbers.

After receiving and reviewing  quotes from several carriers, I called her to discuss them. She was elated, and asked when we could get together to make this happen.

What's so fun about cases like this is the opportunity to look at different types of plans to find effective solutions based on what our clients need and want. It's a lot of fun, actually, and I'm pleased as punch that we can help her out.
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