Like 80 million Americans1, your clients probably need more life insurance. Consumers want options for protecting their families after they’re gone, yet collectively they have a staggering amount of money — $9.3 trillion2 — that’s sitting in low-yielding accounts, not contributing to their long-term financial plans. An innovative universal life product from MetLife, called MetLife Premier Accumulator Universal LifeSM, can help your clients meet their need for death benefit protection while getting their money off the sidelines and putting it to work.
Not only does MetLife Premier Accumulator Universal Life help meet consumers’ death benefit protection needs, it also allows them to access their cash value if their needs change. And because its growth is fueled by competitive interest rates6, the cash value growth is not directly affected by market fluctuations.
MetLife Premier Accumulator Universal Life also offers high early cash value accumulation with low surrender charges4 — less than one percent of typical universal life policies’ surrender charges7. Normally, universal life insurance has higher surrender charges and provides access to lower cash value in the first few years. With MetLife Premier Accumulator Universal Life, clients can access all or, in some cases, more than what they put into the policy within the first couple of years.4
Getting money off the sidelines
Nearly 9 in 10 consumers agree that most people need life insurance.3 With so many Americans believing in the importance of life insurance protection and the need to provide for their families if they’re not around, it’s hard to believe they have $9.3 trillion dollars in cash, checking, savings and CDs2 — typically low-yielding instruments — sitting on the sidelines.
MetLife Premier Accumulator Universal Life can help that money work harder for them by providing the death benefit protection they want with the potential for returns they didn’t think were available with life insurance. That’s getting money off the sidelines.
Together, sidelined money and single-premium design can go to work
MetLife Premier Accumulator Universal Life can be structured through a single-premium design (see sidebar below) to provide beneficiaries with a tax-free death benefit that is potentially greater than what they could receive otherwise.
Many clients want more financial protection or to pass money on to their families in the most efficient way possible, but they also want tax-deferred cash value accumulation with a more attractive rate of return. A one-time premium may help them maximize their estate planning needs by turning today’s dollars into tax-free death benefit dollars after they’re gone. (See how with these illustrations of single premium payments using $250K and $100K).
For some clients, the single-premium design is an effective tool for estate planning and meeting overall financial goals.
Since the passage of legislation that created modified endowment contracts (MECs) almost 30 years ago, the term MEC in the context of life insurance may have a negative connotation.
MECs are still life insurance. With a MEC, the death benefit is generally income tax-free and cash value grows tax deferred — just like regular life insurance. These clients should clearly understand the benefits, limitations and tax implications if their policy is classified as a MEC.
How is a MEC taxed?
The MEC rules were enacted to limit the favorable tax treatment of distributions during the policyholder’s lifetime on heavily funded, investment-oriented life insurance contracts.
Therefore, MECs have certain tax considerations for distributions that do not apply to typical life insurance policies. Distributions from MECs are taxed gain first. This means that to the extent there is gain in the contract, loans and withdrawals are taxed as ordinary income when they are received. And, if a MEC policyholder decides to access the cash value through a loan or withdrawal before reaching age 59½, he or she could face a 10 percent income tax penalty.
For clients who understand and accept the tax implications of a MEC and want death benefit protection, these contracts can continue to be part of an effective financial portfolio and estate planning strategy.
Simplified underwriting—easier on clients and advisors
When you think about underwriting, the word “innovative” probably doesn’t come to mind. But with MetLife’s Enhanced Rate PlusSM (ERP) program, qualifying clients and advisors can now experience a simplified underwriting process that offers a number of benefits including a boost in rating class and a faster, easier underwriting process via telephone application.
Clients rated “standard” or better are automatically elevated to “elite,” which is the best possible rating class, resulting in lower premiums.5 Qualified applicants can complete the underwriting process through a combination of database checks and a simple phone call, rather than a longer, in-person application process with the advisor — without any paramedical exams or lab work.
And perhaps best of all, advisors may receive an underwriting decision on their eligible8 clients in as little as a week, a significant improvement over a typical underwriting decision that usually takes more than a month. Thanks to the program’s streamlined underwriting decision timeline, financial professionals have the potential to close their cases sooner for qualifying clients and get paid faster.
Less waiting and more simplification means a less stressful, more positive experience for advisors and clients.
Innovative universal life
MetLife Premier Accumulator Universal Life is another example of MetLife’s commitment to creating products designed to meet the wide-ranging needs of clients and advisors.
For clients looking for more financial protection for their families, this product offers an innovative option with both death benefit protection and the potential for access to more cash value, faster than traditional life insurance products.
With competitive cash value accumulation, policy values that aren’t directly impacted by market fluctuations, low surrender charges and the opportunity for a faster, easier underwriting process, MetLife Premier Accumulator Universal Life offers clients the potential for liquidity and flexibility to further their financial goals.
To learn more, visit PutMoneytoWork.MetLife.com
1 2016 Insurance Barometer Study, LIMRA 2016
2 J.P. Morgan Asset Management Guide to Markets. 1Q 2016, February 29, 2016 https://am.jpmorgan.com/blob-gim/1383280028969/83456/jp-littlebook.pdf
4 Based on the assumptions of current interest crediting rates and current charges which are not guaranteed and are subject to change and assume the policy is optimally funded. Guaranteed assumptions will result in lower values.
5 All eligible clients who qualify for Standard Rates without an extra premium will receive the upgrade. Clients with certain factors – including, but not limited to, ratable medical impairments and other health or lifestyle risks that require an extra premium – do not qualify for Standard Rates or program upgrades and will need to go through full underwriting.
6 Cost of insurance and other charges are deducted monthly from cash value. Interest rates are subject to a guaranteed contractual minimum.
7 MetLife Internal Study of the Statutory Annual Statements of 10 Large Life Insurance Carriers.
8 Please see the Enhanced Rate Plus Program Guide for full details on eligibility requirements.
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