Altermative 15

View AlTERMative 15 Plan Design

This strategy delivers permanent universal life insurance at an outlay similar to 15-yr term.

Most term plans expire at the end of the initial term by requiring the client to pay an outrageous premium. alTERMative 15 is designed to give control to the client over how long the coverage is retained.

alTERMative 15 is a partial premium finance design, combining a loan of the first year premium, amortized over 15 years, along with a supplemental premium in years 2 thru 15.

At the end of year 15, the loan is fully repaid. The client can retain the coverage by paying or financing the premium necessary to keep the coverage beyond 15 years.

Client must post acceptable collateral roughly equal to the difference between the loan amount and the policy cash surrender value, as required by the lender.

Benefits to Design:

Client has the option of keeping the coverage at the end of the initial 15 year period, regardless of health, at a new level premium.

Client outlay during the first 15 years is similar to 15-year term.

Strategy builds cash values which may allow client to exit strategy as early as the 7th year, depending upon age and risk class.

Strategy is not highly sensitive to interest rate conditions, since loan is anticipated to be fully repaid over 15 years.

Client can use policy loans to partially repay bank loan in the future.

Note: Loan is a 5-year loan, amortized over 15 years. Loan is renewable at the discretion of the lender, based upon continued good credit of the borrower and economic conditions at the end of the fifth year.