Sales Practices
#424 | The 4% Rule and Life Insurance
A Refresher on the 4% Rule Fewer things in finance have been more unjustifiably maligned than the “4% Rule.” As interest rates fell in the mid-2010s, much was written about how the 4% Rule was too aggressive for the current…
#423 | Premium Financing at the Precipice
In an article from two years ago, I wrote that “from my vantage point, the worst is almost certainly yet to come for premium financing. The longer the current conditions persist, the more problematic these transactions are going to become.…
#421 | Risk and Reward in Protection Sales
Just 20 years ago, the hottest ticket in life insurance was middle-market estate planning. The estate tax exemption was just $2 million – low enough to ensnare more than two million households with a net worth in excess of $4…
#414 | The Power of Cash Value Collateralized Lending
When it comes to collateralizing cash values, there are two primary use cases in the industry – policy loans and premium financing. In the case of a policy loan, the life insurer collateralizes the cash value to provide a cash…
#380 | Whole Life as a Fixed Income Alternative – Part 3
Modern Portfolio Theory (MPT), first formalized by Harry Markowitz in the 1950s and later earning him a Nobel Prize, is essentially the idea that the optimal portfolio is the one that provides the best relationship between risk and return. In…
#378 | Whole Life as a Fixed Income Alternative – Part 1
Full Article For the past 35 years or so, Whole Life has often been positioned against traditional fixed income in a very particular – and peculiar – way. We all know the narrative. Falling interest rates created a long-term phenomenon…
#365 | The Other Whole Life Market
Quick Take By premium, Final Expense is a relatively small part of the life insurance market. But by policy volume, it's a juggernaut, accounting for nearly 20% of all life insurance policies sold in the United States. What is Final…
#353 | Premium Financing & Rising Rates
Quick Take Premium financing is facing what feels like an existential threat in the form of high interest rates and lagging policy performance. In my experience, the vast majority of premium financing is sold to clients who expected leverage to…
#340 | The Infinite Banking Concept
Quick Take The Infinite Banking Concept (IBC) has attracted something of a cult following for its quasi-libertarian branding and purported financial benefits. The core idea behind IBC is sound - using policy loans from a Whole Life policy is a…
#331 | Cue the Premium Financing Lawsuits
Quick Take What does the recent spate of lawsuits on premium financed IUL tell us? In my view, five main things - choose your premium financing specialist wisely, absurd assurances about performance are a predictor of future problems, make sure…
