Yes a first year dump in is always a front loaded policy. However what we call a 4+3 (seen in the video) is also front loaded policy since the first 4 years are greater than the following premiums. We've found a sweetspot in paying heavily in the first 4 years and that paying heavily for less years generally requires too big of a policy that is not being funded efficiently in the later years to make up for such heavy front-loading. Make sense?
@@BankingTruths This makes perfect sense. I might be wrong, but is it because a larger proportion of the policy needs to be devoted to buying the term rider to sustain the front load design to avoid MECing the policy? Proponents of front loads claim that it's primary benefit is the availability of high early cash value, and specifically state that LaFayette Life is the one company that has up to 93% of cash value in the first year. Admittedly, the same proponents do admit that this high early cash value of LaFayette Life front load policies does come at the expense of long term cash value growth. I suppose high early CV is great for those who want to use it for IBC purposes? In an ideal world, an ideal policy (front load or otherwise) would offer high early cash value, gradual and increasing CV growth, low loan rates, high dividend rates with a 150+ year of paying dividends. Not to mention proper underwriting (not ultra strict like LaFayette Life) too. Do any of the companies you write with come close to these criteria? Thank you for taking time to address my questions.
Yes you're absolutely right on all fronts. Penn, Guardian, and Mass all start with sufficient high early cash value and produce more sustainable ongoing performance. Needless to say each should be tested and measured
Hi there, Are first year premium dump-ins the same as a front loaded policy? Thanks.
Yes a first year dump in is always a front loaded policy. However what we call a 4+3 (seen in the video) is also front loaded policy since the first 4 years are greater than the following premiums.
We've found a sweetspot in paying heavily in the first 4 years and that paying heavily for less years generally requires too big of a policy that is not being funded efficiently in the later years to make up for such heavy front-loading. Make sense?
@@BankingTruths This makes perfect sense. I might be wrong, but is it because a larger proportion of the policy needs to be devoted to buying the term rider to sustain the front load design to avoid MECing the policy?
Proponents of front loads claim that it's primary benefit is the availability of high early cash value, and specifically state that LaFayette Life is the one company that has up to 93% of cash value in the first year. Admittedly, the same proponents do admit that this high early cash value of LaFayette Life front load policies does come at the expense of long term cash value growth. I suppose high early CV is great for those who want to use it for IBC purposes?
In an ideal world, an ideal policy (front load or otherwise) would offer high early cash value, gradual and increasing CV growth, low loan rates, high dividend rates with a 150+ year of paying dividends. Not to mention proper underwriting (not ultra strict like LaFayette Life) too. Do any of the companies you write with come close to these criteria?
Thank you for taking time to address my questions.
Yes you're absolutely right on all fronts. Penn, Guardian, and Mass all start with sufficient high early cash value and produce more sustainable ongoing performance. Needless to say each should be tested and measured
@@BankingTruths Got it. Interestingly, LaFayette Life did not make your cut. May I ask why?