Minimizing Premium Payments Using ‘Hidden’ Policy Features
August 4, 2011
Have you ever looked at your policy’s maturity illustration and wondered why the premiums were fairly high when your policy was building no cash value? The carrier may be applying your premiums to what some refer to as the policy’s “shadow account.” Although most carriers refer to it by different names, such as “Coverage Protection” or “Lapse Protection,” the concept is all the same. Premiums are being applied to an account that has its own costs and expenses. These charges are usually less than the policy’s regular COI. It may be possible to reduce premiums or, depending on premiums already paid, eliminate them for a few years by utilizing the “shadow account.”
How do you know the COI or the value of your “shadow account”? The majority of the time it is difficult to calculate. Life Equity has worked with carriers to obtain illustrations that help utilize these policy provisions. In many cases, Life Equity has significantly reduced our clients’ premium payments, resulting in better returns. You, too, may benefit from a review of the policies in your portfolio to determine whether you can benefit from “shadow accounts.”
If you would like to learn more about Life Equity and our policy management services, please contact us.
| Tedd Mirgliotta Financial Engineer Direct: 330.655.7527 |
Ward Kerr Chief Marketing Officer Direct: 330.655.7528 |
