Category: Protective Life

Survivorship Universal Life: age 105 versus age 120

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June 26, 2012

12:58 PM

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Protective Life is reintroducing their life insurance survivorship product “Protective Survivor UL” which will replace “Protective Centennial Survivor GUL”.

Survivorship, or second-to-die life insurance is for couples for estate planning purposes.  It is much less expensive than taking out two policies, and can provide coverage even if one of the couple has health problems and is uninsurable.  Guaranteed Universal Life is far less expensive than traditional whole life insurance.

Notable is the trend of certain carriers away from lifetime guarantees.  Though lifetime is available, Protective Survivor UL is competitive to age 105 and lesser ages.   Given the projected rise in the number of centenarians in the coming decades, selecting coverage to age 120 is advisable, since there are still multiple carriers like Prudential and American General that offer these lifetime guarantees at competitive rates.

Long term care type benefit with Protective Life

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May 30, 2012

2:17 PM

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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

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April 26, 2012

9:50 AM

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Age 56, Claims, Protective Life

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.