The Good, The Bad & The Ugly
Typical Approach
Death Benefit: $1,000,000
Premium: $20,000
Better Approach - MEC Objection
Death Benefit: $500,000
Premium: $7,500
POA Rider: $12,500
Total Premium: $20,000
Good Approach - Corporate Approach
Death Benefit: $1,000,000
Premium: $1,800
Term Rider: $200
POA Rider: $18,000
Cash Value Comparison
| Year |
Ugly |
Bad |
Good |
| Year 1 |
$0 |
$11,500 |
$17,500 |
| Year 10 |
$160,000 |
$209,000 |
$240,000 |
| Year 20 |
$445,000 |
$494,000 |
$534,000 |
| Year 30 |
$795,000 |
$824,000 |
$902,000 |
Selected Approach: Good
Good Approach - Corporate Approach
This approach has a death benefit of $1,000,000 with a base premium of $1,800.
It includes a term rider of $200. The POA rider is $18,000.
By year 30, the cash value grows to $902,000.
How to Get the Best Policy
1. Policy Design
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•
Premium: Target 10% of death benefit for optimal structure
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•
Term Rider: Add a 2% term rider to enhance protection
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•
POA Rider: Use 88% paid-up additions rider, billed at leisure
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•
Total Annual Premium: Approximately $100,000 for a $1,000,000 policy
2. Choose a Major Mutual Company
Select a reputable mutual company with strong dividend history:
Key Benefits of the "Good" Approach
Higher Cash Value Growth
Better structure leads to significantly higher cash values over time
Enhanced Flexibility
POA riders allow for more control over premium payments
Tax Advantages
Properly structured policies offer tax-free growth and access
Balanced Protection
Maintains strong death benefit while maximizing cash accumulation