Policy Under Required Expectations
Policy Under Required Expectations
The PURE Comparison is a tool used to assess a life insurance policy in its purest and most guaranteed form; measuring the internal rate of return (IRR) of premiums for a guaranteed life insurance policy.
“Scientifically it has been proven that we are all going to die someday.
It is not a matter of if. It is a matter of when.”
Is there a chance that your life insurance policy will end before you do?
While we appreciate the benefits of cash values, dividends, and many other useful features of life insurance policies, our clients are looking for maximum efficiency of premiums on a guaranteed level.
The PURE Comparison is a tool to reduce the analysis to one straightforward benefit;
Guaranteed IRR at my death for my beneficiaries,
whenever that is.
Let The PURE Comparison help you put an end to your uncertainty.
Death Benefit IRR is the rate of return of a life insurance policy, displayed annually, comparing the cumulative premiums against the death benefit obtained in a hypothetical future year. Depending on the premium paying strategy, DB IRR usually declines throughout the life of the policy. This measurement tool is most useful in evaluating the ultimate performance of a life insurance policy’s death benefit in comparison to other product designs or investment strategies.
Or put another way, IRR measures the interest rate at which the net present value of the total premiums paid equals the net present value of the death benefit.
According to The Oxford Dictionary, Life Expectancy is the number of years that a person is likely to live.
Stated another way, “A life expectancy is a statistical calculation that indicates the average length of life left until death that is expected for an individual with a known mortality risk profile. The most important factors in defining an
individual’s mortality risk profile are demographics (age, sex and race), personal and medical history.”
The Social Security Administration defines the period life expectancy at a given age is the average remaining number of years expected prior to death for a
person at that exact age. Unfortunately, the Social Security life expectancy tables are woefully inaccurate, as they do not take into account longevity factors such as family history, medical conditions, smoking status, etc.
The Life Insurance Nerds life expectancy calculator uses proprietary information that more accurately represents actual carrier experience and true life expectancy.
Clients and Advisors seek to complete The PURE Comparison when they need
certainty with their life insurance policies. They insist on a death benefit that will be paid for a guaranteed period of time, whether that time is limited or for the client’s entire lifetime.
Clients and Advisors who prefer term insurance will appreciate The PURE Comparison focus on the guaranteed objectives of the client. It will also serve to alert clients of other important considerations, such as future convertibility timelines and options.
Clients and Advisors who are considering guaranteed life insurance death benefits that last as long as the client does, will appreciate The Pure Comparison. This tool focuses on the efficiency of premiums, relative to lifetime guaranteed death benefits.
Clients and Purchasers of Life Insurance Policies
• Financial Advisors
• Legal Counsel
• Businesses and Business Owners
• RIA’s (Registered Investment Advisor)
• Private Family Offices
• Tax and Accounting Counsel
• Banks and Trust Officers
(Mr. Wynn Surely, Male, 10/01/48 (age 71), Preferred NonTobacco)
(United of Omaha) BUxxxxx987
Required Guaranteed Age:
|Age 71||Age 100***NERD ALERT!|
(Life Expectancy = Age 89)
|Age 100||All Years***NERD ALERT!|
Guaranteed IRR at LE:
Guaranteed Taxable Equivalent:
*This policy may be guaranteed beyond Age 100. While the premiums are higher, the potential of you outliving your policy is lower.
**Life Insurance premiums must be paid in All Years. Many clients and trusted advisors desire to limit the premium paying period to further insure that the policy will not lapse due to missed premium payments at a later date. We always welcome additional analysis of a shorter guaranteed premium duration, such as 7-10 Years.