In this Case Study, one annuity coming out of the guarantee period created 6 new sales: A SPIA and five MetLife Promise Whole Life contracts via Met’s ERP Program. Spreading the tax over ten years, moving into a “bond alternative” were perfect for this client, and all done without an exam or medical records. Read on for the rest of the story!
AT A GLANCE:
Product: MetLife Promise Select WL 10 via ERP
- The conservative Patriarch of a wealthy family had an annuity that was about to exit the rate guarantee period.
- Unsatisfied with current annuity rates, the client began to research alternatives to rollover the approximately $1.3MM.
- The funds were earmarked for his heirs, and due to pass to the next generation at his death.
- All other estate planning had already been completed and funded with life insurance.
- His children, five in all, ranged in ages from 22 to 47.
- MetLife Promise Select Whole Life 10 via ERP
- Annuity rollover into a SPIA with 10 years certain
- The Patriarch, concerned about his children’s lack of financial acumen, wanted to maintain control of the annuity assets during his lifetime.
- At the advisor’s suggestion, they began to explore life insurance options on the lives of the second generation to take advantage of the lower cost of insurance.
- The life insurance policy performance based on cash was exactly what the client was after: a conservative, bond-like rate of return with minimal risk to principal.
- In an effort to mitigate what would be a significant tax hit, the existing annuity was used to fund a SPIA with ten years certain. The SPIA provided the funding for the life insurance contracts and stretched the taxes due over the entire ten year premium payment period.
- With approval from the Patriarch, each of the children were underwritten via MetLife’s Enhanced Rate Plus Program, and all five were approved at Preferred Elite rates with no exam or medical records required.
- The client maintained control and effective transfer by owning the policies in the family’s living trust. This also allowed the entire family to use a “family bank” strategy for funding other needs on a strategic basis during their lifetimes.
- All told, $150,866 of Whole Life Target Premium placed with MetLife.