How will I know how my policy is performing?
Every year, around the policy’s anniversary date, Stephanie Walter will perform an annual review to include optimizing loan rates and the allocation strategy. All values are available online 24/7, with a full policy performance statement at year end that will include interest credits, policy charges, and final policy accumulation, cash, and death benefit values.
What happens if the policy does not perform as projected?
We cannot predict future market movements and there is a risk that the policy will not perform according to the anticipated returns. However, we have used historical index performance rates that have been rigorously tested and chosen specifically for the client’s financial situation. Our stress testing helps to hedge against any prolonged downturns.
Will the cap and floor of my policy change?
Every year, the life insurance carrier has the right to change or keep the policy cap rate and will lock it in for the upcoming policy year. As interest rates rise, the caps typically rise. As interest rates fall, caps typically follow suit. Life carriers are profit-neutral on the cap. The 0% floor of the policy will never change, meaning the client will never be credited less than 0%.
Can I change my allocation strategy?
Yes! Each year, around the policy anniversary date, the client and ERBE Wealth are able to review allocation options and make any changes necessary that will be applicable to the upcoming policy year.
What is strategic rollout? How does it work?
It is the process of systematically transitioning your money from your IRA or 401(k) into a tax favored policy. The objectives are: 1) get your taxes over and done with 2) reposition money in this policy so you can benefit from greater liquidity, safety, predictable rates of return, tax-free income during retirement, and income-tax-free-death benefit for your heirs.
If done correctly, it’s possible to stay with in your same bracket and even offset some or all of the tax incurred during the rollout by resurrecting certain tax deductions.
Tax reduction tends to be the #1 reason people do the strategic rollout.
How do you determine if I can use the premium financing?
First, we work with you to determine your goals for finances, tax free retirement income, estate planning, liquidity requirements and tax portfolio diversification. Second, we look to see if you have a current financials to qualify. This strategy is not a fit for everyone.
Do I need collateral for premium Financing?
It depends, if we determine you can qualify for a financed product we have 2 options: 1) the Premium Match Program and 2) the Traditional Premium Financed Policy
The Match Program is set up to not need any outside collateral to qualify.
The Traditional Premium Financed Policy depending on the amount we choose will usually need some outside collateral for the first few years.
What kind of collateral can be used?
-Cash equivalent assets
-Certificates of deposit
-Annuities
-Taxable investable assets
-Bank letter of credit for your real estate holdings
What happens if loan rates go up?
One specific feature of the Index Universal Life policy is access to policy loans which are often at a fixed rate. If bank finance loan rates continue at a higher level above policy loan rate, then early policy loans should be considered to pay off or pay down any outside bank loans.
How do I apply?
Can be done in a few simple steps and can be secured in 90 days or less.
If you apply for the premium financing option, we will need to obtain financial documents to confirm that you meet the net-worth and/or income requirements.
Depending on your health you may qualify for accelerated underwriting to waive the need for a medical exam or you may need to complete a full exam.