A quick way to find unclaimed life insurance in North Carolina

 

For those who may be entitled to unclaimed life insurance benefits, cash or other property, the NC Department of State Treasurer has an easy to use online search tool.

It can’t hurt to perform a quick search.  Unclaimed property includes:

Unclaimed property consists of bank accounts, wages, utility deposits, insurance policy proceeds, stocks, bonds, and contents of safe deposit boxes that typically have been abandoned for one to five years. Funds become unclaimed because the company loses track of the consumer, due to an incorrect address or other missing information.

North Carolina

 

 

 

 

 

 

last revised: 04/26/19

New Survivorship product from American General Life

American General Life Insurance Company has introduced  “Secure Survivor GUL”.  Survivorship Insurance, also called Second-To-Die Insurance, is designed for couples for estate planning purposes. It is less expenses than individual coverage.

Key Features:

Guaranteed Universal Lifurvivor GUL”e (GUL)  guaranteed not to lapse, no lapse, with timely premium payments; guaranteed death benefit and premiums.

Guaranteed cash value accumulation

Ability to reduce the death benefit and premiums in future years.  Pro-rata partial withdrawals of cash value permitted while maintaining the age 121 lifetime guarantee.

  • For example male and femal age 64 both preferred non tobacco,  $4,000,000 policy,  $44,853 premium.  Accumulates $543,682 guaranteed cash value at age 84.   Access half the cash value $271,841 (less withdrawal fee) maintain half the death benefit $2,000,000 policy, $22,427  new guaranteed premium – guaranteed to age 121

Return of premium feature: one-time option at end of policy year 15 for return of up to a maximum of 100% of premiums paid, a no cost rider

Comments:  American General’s product has what they call optionality.  The choice to reduce the death benefit, premiums and accessing the guaranteed cash value while maintaining the lifetime guarantee, as well as the option to return premiums in year 15 are very valuable and flexible options.  The guaranteed cash value accumulation is another useful plus to this product, unlike most Guaranteed ULs which build little or no cash value making premium payments and lapse protection much less flexible over the course of the policy.

Long term care type benefit with Protective Life

Protective Life has a long term care services rider available on their universal life insurance product “Centennial G II”. This allows the life insurance benefit to accelerate out when the insured is certified by a licensed health care practioner as chronically ill, meaning unable to perform two out six activities of daily living or severe cognitive impairment.  This LTC type benefit is a very valuable added plus to include in a life policy.  It’s there just in case, and if not needed or if only some benefits are needed, the remaining death benefit goes to the beneficiaries.

Payouts with Protective’s plan are an indemnity payment method, full direct benefit payments, which is much preferable over the reimbursement method, repayment of bills or receipts.   Maximum is $8,500 per month, and the benefit can be 100% of the policy value.  Lump sum payment is also available.

Protective’s $8,500 per month maximum accelerated benefit is better than most carriers, but a few competing plans are based on percentage of the policy benefit which allows a higher acceleration.  For example, Penn Mutual allows 24% of the policy benefit, maximum $240,000 accelerated per year.

Life insurance payout options

Protective Life’s Income Provider Option allows the policy owner to structure installment payments as a the death benefit.  A partial initial lump-sum payment is also available. For grandparents Protective offer GrandLegacy.  Preset installments for a life insurance payout is an innovative alternative to a lump sum payment, especially if a setting up a trust is prohibitively expensive.  Since structuring a plan this way can be less expensive, it could provide a larger death benefit or make the coverage more affordable.  However, inflation would erode the value of those installments and should be factored in.

Adding structure to a life insurance death benefit by installments or a setting up a trust may be of value depending on the situation.  Installments can fill one primary purpose of life insurance: replacing lost income. Structuring payments would be prudent if beneficiary were too young or a spendthrift.

Beyond the grave control in estate planning can be counter productive. Bing Crosby with an estimated net worth at death of $600 million dollars set up a blind trust for his four sons from his first marriage that none could receive an inheritance until age 65. Only one son managed to live long enough to qualify and died at age 69.  Two of Bing’s sons committed suicide at ages 51 and 56.  One of those suicides was attributed to losing an inheritance set up by his mother.

Careful planning of the options and potential pitfalls of payouts at claims time for life insurance should be made.  Some people when receiving a big amount of money can’t resist blowing it away.

Levon Helm and the risk factors for throat cancer

Levon Helm died yesterday, April 19th, of throat cancer at age 71.  He was diagnosed in 1998, the year he turned 58, and during that time had 28 radiation treatments that helped give him over a decade more to live. Before his diagnosis he was reportedly a heavy smoker, a many as three packs a day.

It’s wonderful that modern medicine gave them those extra years.  Alarm bells should go off for oral sex as a risk factor as well as tobacco.

Who are at risk?
– Big time smokers
– Alcohol users
– People with poor diet
– People with HPV
– People who are actively pursuing oral sex
– Genes
– Those who were repeatedly exposed to asbestos
– Those with GERD and human herpesvirus

As a music fan, I did see Levon Helm perform with The Band at Watkins Glen in the summer of 1973.   So many people were there, over 600,000, seeing isn’t really the right word.  We could see the stage at a distance, so it was more a background listening experience through the crowd noise.  I played some of The Band’s songs as a disc jockey at Colby College in Maine from 1974-1976, but not much because most of their best songs were from the ’60’s, and my focus was on newer releases. I didn’t care for their 1975 Northern Lights – Southern Cross. I remember being annoyed listening to “The Night They Drove Old Dixie Down” on the radio, especially Joan Biaz’s cover in 1971 which became a hit and got a good deal of radio airplay.  Any ballad gets a tedious after repeated air plays, especially a cover.  I never bothered to buy any of their records, or back catalog as I did many of my favorites when CD’s became established, but The Band were certainly an enjoyable and essential part of that era’s music.  The opening lyrics to “The Weight” sometimes rolls through my head.

  I pulled into Nazareth, was feelin’ about half past dead;
I just need some place where I can lay my head.
“Hey, mister, can you tell me where a man might find a bed?”
He just grinned and shook my hand, and “No!”, was all he said.

(Chorus:)
Take a load off Anny, take a load for free;
Take a load off Anny, And (and) (and) you can put the load right on me.

Increasing death benefit option

The coverage amount for permanent life insurance can either be level or increasing death benefit.  Either the benefit always remains the same, a fixed $250k for example, or it goes up over the years: $251k, $253k, $257k, etc. Which is best?  Obviously a rising death benefit is preferable, but whether its value outweighs its additional cost depends mostly on your age. Generally when under age 60, an increasing death benefit is better. Over age 60 a level death benefit works better simply because it’s more cost effective. Those in higher income brackets usually should opt for an increasing death benefit.  This is also called a level or increasing face amount.  With life insurance the initial benefit is called the face amount, and thereafter it’s called the death benefit.

Level Death Benefit:  Option A

pros:  less expensive; builds higher cash value

cons: the value of death benefit amount erodes due to inflation; less flexible

Increasing Death Benefit:  Option B

pros:  death benefit amount rises over the years to help the policy value keep pace with inflation; better for partial surrender of cash value; better for loans; more flexible, most policies will allow the owner to change from an increasing death benefit to a level death benefit.

cons:  more expensive

An increasing death benefit is used often with Indexed Universal Life (IUL), at least in the cash value accumulation phase. For policy loans to generate tax free retirement income switching the death benefit from increasing to level produces higher income amounts.

A level death benefit is best for Guaranteed Universal Life, also called no lapse Universal Life

For current assumption Universal Life, a regular UL, an increasing death benefit is preferable since most of those plans are geared for those in their 30’s, 40’s and 50’s.  A structure of an increasing death benefit UL and cost will depend on the assumption of the target case value: how much and a what age.  Typical cash value targets will be $1 or to endow, to be worth the initial face amount in cash, at either age 100 or age 120.  Whole life, the high quality ones, age guaranteed to endow at age 100.  A proper analysis of a UL should compare it structured like a whole life, to endow on the non guaranteed side at 100.  I have found, especially at younger ages. that whole life premiums are very competitive, sometimes even less expense, than a UL if they are both structured to endow at age 100.  Sometimes agents will solve a UL for $1 at age 100 to cut its cost, but for the policy holder that runs the risk of the policy underperforming and running out of cash value in later years. This was part of the problem for many UL policies written in the 1980’s and 1990’s.  At the very least the target cash value assumption at age 100 should be half of the original face amount, for example a $125k target cash value at age 100 for a $250k initial face amount.

Whole life is either level or increasing death benefit.  Participating whole life, called “par” whole life for short, offers dividends that increases the death benefit over the years.      Final expense whole life for seniors is level death benefit “non par” or non-participating whole life. They do build some cash value, but the key is the benefit amount, affordability and simplified underwriting.

Choose “par” whole life for child life insurance.  Mail offers for child life insurance are level benefit “non par” whole life, non-participating, and they are a rip off considering how much more value you get for just a few dollars more with a increasing benefit whole life plan like Mass Mutual.

Equitable “Long-Term Care Services Rider” has an increased death benefit option.  This is a very distinctive feature offered for a hybrid life/LTC product.  Most other carriers only allow Option A, a level death benefit, for LTC benefits.

Please request a quote : free and strictly confidential

increasing death benefitLicensed Agent: Sean Drummey
phone: (910) 328-0447
email: spdrummey@gmail.com


revised: 4/29/2022

Equitable checked 8/1/2022

Prudential to offer an Indexed Universal Life (IUL)

Prudential starting in May will offer their first Indexed Universal Life (IUL) called PruLife® Index Advantage UL.  The indexed account will be S&P 500® Index with annual point-to-point crediting.  That’s a very basic design and similar to another late entry to the Indexed UL market John Hancock. Prudential  intends to be competitive in premiums and cash value accumulation.  They are already very competitive in premiums for guaranteed universal life and survivor universal life.

It’s important to judge which Indexed Universal Life carrier is best for the long haul.  Prudential indicates they are more going for superior overall design rather than focusing on a high cap rate. The highest cap rate doesn’t necessarily mean the best performing product.  Cost of insurance and the internal rate of return are something to review even more closely.