$27K or $20K Premium for $2M Survivorship Life Insurance
Key to Success: Carrier Selection / Case Design
Applicant Summary:
- Married couple, both 58, good health
- Attorney recommends $2M joint life insurance
- Policy will be held in an ILIT
- Policy benefits will be used to pay estate taxes
- Cash values are not relevant, only the death benefit matters
An advisor with a major mutual life insurer called last week for alternatives to his primary carrier’s survivorship life option, which requires a minimum annual premium of about $27K. Neither client nor their attorney see any benefit of having a policy that builds cash values. The policy will be held in an ILIT. The purpose of the life insurance is to fund an estate tax liability at the lowest possible cost. The advisor asked us for an industry survey to identify his clients’ best solution, based on what they are trying to accomplish. The client’s top priority is low cost. Let’s look at the options:
Advisor’s Primary Insurer
- $27K annual premium for a survivorship whole life policy
- Accessible cash values provide flexibility
- Blended whole life / term mix
- Potential death benefit increase in later years
- Design based on current assumptions, not guarantees
Industry Survey Results
- Low cost, fully guaranteed premium options
- Simple to understand, term-like policy, no moving parts
- Policy has little or no accessible cash values
- Lowest cost lifetime guaranteed annual premium $20,086
- Download a spreadsheet with our industry survey here
