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Premier Whole Life Module III. Module Objectives. What is Premier Whole Life? Where does it fit in the marketplace? Features and Benefits of the PWL. Policy Loans Non-forfeiture Options Comparison to FFUL. Summary of Course.
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Module Objectives • What is Premier Whole Life? • Where does it fit in the marketplace? • Features and Benefits of the PWL. • Policy Loans • Non-forfeiture Options • Comparison to FFUL
Summary of Course This course will not only help you to broaden your product knowledge but will help you when comparing the benefits and features of the PWL and the FFUL.
What is Premier Whole Life? A life insurance plan that provides level coverage for the life of the insured. This plan guarantees level premiums for the life of the policy and builds a cash value. The cash value is guaranteed to equal the death benefit at age 100.
Who needs it? • Young adults who need a basic plan to build on. • Professional or small business owners. • Families needing to build funds for a child’s college education, a down payment on a home, or retirement.
Special Features • One-Year Term Rider (OYT) • Single Premium Rider • Excess Credits
One-Year Term Rider This rider provides annual term coverage on the insured. This rider is only available when the policy is issued. Premiums increase every year. Current premiums are not guaranteed and can change anytime after the first year. However, premiums will never exceed the guaranteed maximum rates shown on the proposal. The rider is renewable to age 70 at which time it terminates.
One-Year Term Rider Minimum coverage amount: $10,000 Maximum coverage amount: Five (5) times the base amount.
OYT Conversion Options The OYT rider can be converted in part or in whole to any permanent plan prior to insured's age of 65. Minimum convertible amount is $10,000. The amount not converted can be left in force, reduced or cancelled.
Single Premium Rider This rider provides whole life insurance on the insured and builds its own guaranteed cash value. Minimum issue is the amount of coverage that a $200 premium will purchase. Maximum issue is the base amount. The rider cannot be added after issue.
Other available riders • Waiver of Premium • Accident Death Benefit • Children’s Rider • Family Insurance Rider Combined Children’s Rider and Family Insurance Rider coverage is limited to ten units ($10,000) for all FNWL policies in force.
What are Excess Credits? • Excess Credits are credited to the policy based on future expectations of: • Mortality • Investment • Expense Experience • Excess credits are not guaranteed!
Excess Credit Options • Paid-Up Additions • Cash • Deposit Fund • Reduce the next premium • Vanish future premiums
Paid-Up Additions This is the automatic option unless the policyholder request otherwise. With this option, the excess credits are used to buy paid-up insurance. The paid-up additions have their own cash value. Full and partial surrenders are allowed.
Cash • The insured may elect to take the excess credits in the form of cash. They are taxed like partial withdrawals from any life insurance plan.
Added to Deposit Fund Excess credits can be applied to the deposit fund to accumulate interest. They are taxed like partial withdrawals.
Reduce the next premium Excess credits can be used to pay all or part of the next premium. If the excess credits are larger than the premium due, the extra amount can either be taken in cash or added to the deposit fund. This option is not available if the policy is on BCP mode.
Vanish future premiums Excess credits might eventually be used to offset future premiums in one of three ways. • The credits may eventually be large enough to pay the entire premium due each year. • Surrender enough PUAs to pay each years premium. • The Deposit Fund may eventually be large enough to pay future premiums.
Taxability of Excess Credits Excess credits paid in cash or added to the deposit fund are taxed like partial withdrawals. When applied to purchase PUAs or reduce the premium, they do not create a taxable event.
Non-forfeiture Options • Surrender policy for cash value • Automatic Policy Loan • Extended Term Insurance • Reduced Paid-Up
Cash Value The insured may surrender the policy of its cash value minus any policy loans.
Automatic Premium Loan If the insured does not pay the premiums before the end of the grace period, APLs can be made from the policies cash value.
Extended Term Insurance The insured may continue to policy as ETI. The combined cash value of the base policy, PUA cash value and any SP Rider, minus all policy loans, will be used as a single premium to purchase ETI. This is the automatic option on a non-rated policy when APL is not in effect.
Reduced Paid-Up The combined cash value of the base policy, PUAs, and SP Rider, minus all policy loans, will be used to purchase RPU Insurance.
Policy Loans All or part of the cash value of the base policy, PUAs, and SP Rider may be taken as a Policy Loan. The interest rate charged will never exceed 8 percent compounded annually.
Comparison of Products How does the PWL stack up against the FFUL? Well, let’s take a look!
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