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Step Rated Life Insurance

The MB Group

Westlake Village,California (PR MediaRelease) February 14, 2017

Many advisors design life insurance policies to require high level premiums to provide guaranteed coverage to age 100+. These high premiums are unnecessary as better, more cost effective step rated life insurance plan designs are available.

Because Universal Life Insurance contracts can provide flexibility without forfeiting guarantees, a new approach to plan design will allow step rated programs to save clients premium dollars typically to average life expectancy.

A recent case we designed insured a female client age 75 for $1 million of coverage. Our client was advised by another broker to pay level annual premiums of $31,690 to provide guaranteed coverage to age 100 with the flexibility to extend coverage lifetime.

The MB Group designed the same guaranteed coverage to age 100 with the flexibility to extend coverage lifetime with an initial annual premium of $16,901 which remained level for the first 5 years then increased every 5 years thereafter. The new step premiums didn’t exceed the traditional level plans for 11 years!

This step rated life insurance plan design saved the client substantial costs – see exhibit A below.

When health changes, we advise clients to often lower their premiums since life expectancy is less than age 100. At death, this can provide the client with a substantial lower cost for the coverage.

At any time, higher premiums can be paid to extend the coverage period if the client’s life expectancy increases.

Please contact our office at (818) 879-8600 to learn more about this new step rated life insurance solution.

About the Author Milt L. Belfer, CLU – Founding Partner of The MB Group

Milt Belfer is nationally recognized for his expertise in designing innovative insurance programs.Since beginning his career in 1978, Milt’s clients have enjoyed the benefits of his innovative, cost-effective life, disability and long term care insurance solutions and his exceptional service.

Corporations and high net worth clients rely on Milt for his ability to be objective and knowledgeable in solving complex problems.

About The MB Group

Since 1978, nationally known law firms, financial advisors, business managers, corporations, professional groups, entertainers and professional athletes have trusted The MB Group to advise them on life, disability and long term care insurance matters.

 

Exhibit A – Female age 75

Coverage: $1 million

Policy Year Age End of Year A – Level Ins. Co. B – Step Rate Ins. Co.
1 76 $31,690 $16,901
2 77 $31,690 $16,901
3 78 $31,690 $16,901
4 79 $31,690 $16,901
5 80 $31,690 $16,901
6 81 $31,690 $25,453
7 82 $31,690 $25,453
8 83 $31,690 $25,453
9 84 $31,690 $25,453
10 85 $31,690 $25,453
11 86 $31,690 $44,725
12 87 $31,690 $44,725
13 88 $31,690 $44,725
14 89 $31,690 $44,725
15 90 $31,690 $44,725
16 91 $31,690 $53,948
17 92 $31,690 $53,948
18 93 $31,690 $53,948
19 94 $31,690 $53,948
20 95 $31,690 $53,948
21 96 $31,690 $53,948
22 97 $31,690 $53,948
23 98 $31,690 $53,948
24 99 $31,690 $53,948
25 100 $31,690 $53,948
Total Premium Years 1-10 $316,900 $211,770
Total Premium Years 11-15 $475,350 $435,395
Total Premium Years 16-20 $633,800 $705,135
Total Premium Years 21-25 $792,250 $974,875

 

Milt Belfer
The MB Group
Founding Partner
818-879-8600
mbelfer@mbgroup.net

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