First and foremost, thank you to all of those who joined us for the first four parts of our weekly webinar series, “Grow Your Business with IUL.” Whether you were present or caught up later, you have come to understand the mechanics of IUL products accompanied by North American’s deep, feature-rich life insurance portfolio.

Chris Korfe, Sales Development Specialist for North American covered six of the most popular sales concepts in depth. Together, we studied some of the personas of the ideal IUL client. Through these presentations, we had an opportunity to illustrate NA IUL products and how these products can be designed to meet the goals and objectives of your clients.

Here are links to the other parts of this webinar series:

Here are a few takeaways from Chris's presentation:

Popular Sales Concepts

  • Income replacement— This provides a death benefit and protection during your working years. The cash value provides emergency funds in case of disability, critical illness, you name it. The product is flexible, so if your client loses their job, they can reduce the premiums. Conversely, they can put more money in if they get a promotion. They control how it works. The cash value is also tax-deferred.
  • Supplemental retirement— Similar to the income replacement, the cash here grows tax-deferred. Generally, this is tax-free income in the form of loans. Also, there is no date or age at which your client must use the funds. They can withdraw the original premium when investment performance return objectives are met and use the policy earnings to pay for ongoing policy benefits.
  • Death benefit for buy-sell— Using an IUL provides more flexibility to buy out a fellow owner in retirement and/or plan an exit strategy. IULs provide small business owners who want options with plenty of them. Use North American’s Insmark software to highlight all of them to your customers.
  • 1035 Exchanges— The flexibility of NA’s IUL products makes them a viable solution. Their policy guarantees additional Critical Illness and Long-term care riders which offer short-term living capital to the insured when they need it the most.
  • Estate planning— Planning for the next generation can lead to many obstacles along the way. Your client’s assets require many layers of protection; their assets are entitled to many beneficiaries, including the IRS. Life insurance will always be the best in-class vehicle to overcome these challenges. North American’s Survivorship Guaranteed Index Universal Life Policy provides your customers feature-rich products that will give them access to immediate capital to solve these planning issues.
  • Business Planning Business owners' number one concern is protecting their business. Life insurance provides protection for ownership transfer, ownership retention and acquisition of key employees. In addition, the cash value of the policy offers businesses positive cash flow on the balance sheet, tax-free retirement savings and income.

The Target IUL Client

Risk management 101 teaches us to “insure against assets you cannot afford to lose.” When looking at your customers and prospects to determine who will benefit the most from an IUL product, consider someone who has these common goals in mind. Individuals seeking the protection of assets and/or from liabilities are great candidates. They are looking for guaranteed protection for a period of time and can systematically save toward this goal. Perhaps their idle cash reserves interest returns are not outperforming inflation and they seek better returns than a low fixed interest rate.  Maybe they are looking for strategies that provide piece of mind from the worries of market timing and volatility. Someone who is looking for premium payment flexibility over the life of the contract would find IUL an attractive solution. They may also have contractual obligations that must be met and need benefit-protecting flexibility based on ownership exit strategies. These common goals and objectives can be met by Index Universal Life Insurance.

More Illustration Tips

The biggest take away you will find about illustrating performance based insurance products is the customer rule of “Know thy Customer.” Your customers will segment themselves into one of three important areas if you ask them the right questions. How do they perceive risk versus return? How long are they committed to this goal? What life changing events may come up along the way that may alter or change the intended goal? Your customers risk tolerance, time horizons, premium tolerance, need, and health status are the driving factors on how the case is designed.

As a case designer you need to be aware of the current accrediting methods used by the carrier for each of their IUL policies. When showing future projections of interest performance accounts you have to evaluate these products by the Monte Carlo evaluation methods to determine the potential performance returns of these policies. In short, the future projections illustrated can be back tested against actual prior market returns to determine the rate of return on these current polices if history repeats itself.  It is commonly phrased as “past performance is not indicative of future results.” The competitive advantage to you as the agent is that your illustration will be designed with an interest rate return you can explain to the customer; it wasn't just a number you picked out of a hat.

Four North American Products

  • Builder IUL: The flagship of NA’s IUL products, the Builder has high cash-value growth and a non-guaranteed death benefit. If your client pays the minimum for 20 years, then the death benefit becomes guaranteed.
  • Rapid Builder IUL: Also a non-guaranteed death benefit, this product features early cash value growth for early access to the cash value at no premium expense.
  • Guaranteed Builder IUL: This product features a guaranteed death benefit and high cash value growth potential. No matter what happens in the marketplace, the death benefit is guaranteed to pay until 120. Policyholders void the guarantee if they take a loan out of the policy, but this returns if the loan is repaid. This is great for someone who may be on the fence about what they want and need later.
  • Survivorship Guaranteed IUL: This product is designed to provide a low cost guaranteed death benefit to those who need financial support after both insureds are gone – typically children, an organization, or a trust. With a variety of riders to choose from, Survivorship GIUL is a customizable product that may be your solution to estate planning and cash value accumulation needs. The ability to earn interest based on the movement of a stock market index without the risk of investing directly in the market. Access to cash value through withdrawals and policy loans.

Thanks again for attending our "Grow Your Business with IUL" webinar series.