In a VUL you can have a death benefit guarantee. You can also change the COI provision to track the performance of the subaccount meaning as the sub accounts go down, the death benefit goes down by the same amount and the cost of insurance stays the same.
Many people collateralize their cash value and borrow for 1-2% LESS than the current dividend interest rate. Meaning borrowing at an effective negative interest rate... You can borrow 90-95% loan to value for a whole life and 70 % loan to value for a VUL
Hi John, that does work in some interest rate/dividend rate environments but not all. What I’m looking for is a rock-solid guarantee regardless of what’s happening with the economy.
Thanks for the great tips Mr. Knight! Im an insurance producer expanding knowledge in different lines of insurance. How can I find a carrier with guaranteed 0% interest loan on cash value? Thanks!
@@DavidMcKnight i have an Allianz policy,after year 10, if we go with the wash loanninstead of Indexed loan, the crediting rate is 2%, loan interest rate is 1.96%, so there is a 0.04% postiive arbitrage which doesn’t amount to much but wanted to mention it here
@@DavidMcKnight do you have any video which explains the kind of policy design for maximum Internal Rate of Return in the policy? The agent who designed my policy recommended that I max fund the policy for 5 years upto the MeC limit and stop funding for highest IRR..policies with longer funding period of 10-20 years have lower IRR..would like your opinion or plz point me to any video where you cover this topic
The one that makes the advisor the biggest commission
Nice!
In a VUL you can have a death benefit guarantee. You can also change the COI provision to track the performance of the subaccount meaning as the sub accounts go down, the death benefit goes down by the same amount and the cost of insurance stays the same.
Does the Db then go back up when the cash value recovers?
@@DavidMcKnight Yes it travels with the cash value maintaining a certain death benefit above the cash value to avoid a mec
David - What about a regular UL policy.
ROR isn't really high enough, but works well for guaranteed DB.
Many people collateralize their cash value and borrow for 1-2% LESS than the current dividend interest rate. Meaning borrowing at an effective negative interest rate... You can borrow 90-95% loan to value for a whole life and 70 % loan to value for a VUL
Hi John, that does work in some interest rate/dividend rate environments but not all. What I’m looking for is a rock-solid guarantee regardless of what’s happening with the economy.
Thanks for the great tips Mr. Knight! Im an insurance producer expanding knowledge in different lines of insurance.
How can I find a carrier with guaranteed 0% interest loan on cash value?
Thanks!
Allianz or North American
Why didn't you talk about the interest rate on the loan of the IUL? What company offers a 0% loan for IUL?
Thanks for your response. I did say that several companies offer a guaranteed zero percent loan. Allianz and North American both do.
@@DavidMcKnight i have an Allianz policy,after year 10, if we go with the wash loanninstead of Indexed loan, the crediting rate is 2%, loan interest rate is 1.96%, so there is a 0.04% postiive arbitrage which doesn’t amount to much but wanted to mention it here
@@kriskris5989 because it’s interest in advance it works out to be basically a guaranteed 0% wash.
@@DavidMcKnight do you have any video which explains the kind of policy design for maximum Internal Rate of Return in the policy? The agent who designed my policy recommended that I max fund the policy for 5 years upto the MeC limit and stop funding for highest IRR..policies with longer funding period of 10-20 years have lower IRR..would like your opinion or plz point me to any video where you cover this topic
@@kriskris5989 yes you’ll get the highest IRR by stuffing as much money into the policy in those early years. Your agent told you correctly.