when is the last time you really looked at your whole life policy?
Tom is 61 and has run a very successful business for many years. He purchased a $1,600,000 whole life policy when he was 48. Tom pays an annual premium of $38,000 a year and the policy has $600,000 in cash value.
Tom has an interest in increasing the death benefit of his policy without increasing the premium outlay. Is it possible?
Yes, he moved the $600,000 of cash value on a 1035 basis to a new carrier whose structure is more aimed at maximizing the death benefit for the required premium.
The new policy has a death benefit of $5,000,000 instead of $1,600,000 and the annual premium remained at $38,000.
Dr. Moore purchased a whole life policy when he was 32 and paid an annual premium of $24,000. Now, at 57 years of age, the policy has a cash value of $720,000. Things have changed in Dr. Moore's life since he first purchased the policy and he has considerably more assets than he did a few decades ago.
If he could get a different company policy that would give him a lifetime income on a tax free basis would he be interested?
Of course, he would...
•The new plan utilizes the moving of the $720,000 to a new carrier on a 1035 basis.
•The face amount would remain $2,000,000.
•No further premiums of $24,000 required.
•At age 66 he would receive a projected annual income for life from the policy of $90,000 TAX FREE. This would be equivalent to a taxable income of $140,000 a year. The current carrier could only provide $56,000 of tax free income for life at 66 and he would be required to pay the $24,000 annual premium.