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By Tom Steinert, Regional Vice President |
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What’s the secret to the easiest two-minute sale you might ever make? Always ask this one simple question whenever you meet with a client who is 60 years old or up:
"Do you have $10,000 or more set aside in a bank account or CD that you plan to leave to an heir?"
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If the answer is "yes," talk to your client about Symetra Successor Single Premium Life — the wealth-transfer tool that allows loved ones to collect an inheritance’s full value without paying a single penny of federal income tax.
How It Works
This is not a traditional life insurance policy. It’s designed for older folks who are reasonably healthy, who have $10,000 or more that is not targeted for use in the near future, and who would like their beneficiaries to receive an inheritance that is income-tax free.
Let’s say you have a 60-year-old, nonsmoking female client who has $50,000 set aside for her children. Instead of letting it sit in a bank account, you suggest she purchase a Successor Single Premium Life policy. There is no additional premium to pay, and the money earns
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guaranteed minimum interest of 3 percent, less insurance and administration charges. Based on the criteria above, your client’s heirs would receive a guaranteed minimum death benefit of $86,327, completely free of federal income tax. |
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Symetra Express Quote for Successor Single Premium Life
for 60-year Old Female, Nonsmoker* |
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$50,000
one-time premium payment |
$86,327
guaranteed minimum
death benefit paid to heirs |
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*Quote based on Washington state resident as of Aug. 25, 2005. |
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Safety Plus Flexibility
Your clients will appreciate important safeguards that guarantee the cash value in their account will continue to grow tax-deferred with compounding interest. They may also appreciate the fact that their premium buys a death benefit that may be substantially more than the amount they paid in. If, for example, our hypothetical client paid the $50,000 premium today but died tomorrow, her heirs would receive $86,327. That’s compared to $50,000 minus federal income taxes had she left her money in the bank.
And while there is a surrender charge period during the first 10 years1, clients who are worried about tying up their money will be reassured to know they can:
- Take free withdrawals of up to 10 percent of the policy’s cash value each year.
- Take a loan against the policy’s value at a net cost of just 3 percent.2
- Access up to 100 percent of the discounted death benefit in advance if they are diagnosed with a terminal illness or confined to a nursing home for at least 180 days.3
Can I Really Earn 10X the Commission?
Because your client pays a large lump sum premium for their Successor Single Premium Life policy, the commission you receive is calculated more like an annuity sale than a traditional life sale. If you were considering placing your client’s assets in a fixed deferred annuity, Successor Single Premium Life provides a superior wealth-transfer tool with a commission that’s comparable to an annuity sale.
It’s impossible to compare a traditional life sale with a single premium life sale — we’re talking completely different types of clients, premiums and face values — but if you sold one $50,000 Successor Single Premium Life policy (as in the example above), your commission would be $2,875. That’s more than 10 times the $272 you might earn from selling a $500,000 term life sale, as demonstrated by the example below.
Even if our hypothetical 60-year-old client only purchased a $10,000 single premium policy, that’s still $575 — almost double the term life commission in the example below.
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| Hypothetical Commissions |
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| Type of Sale |
Premium Paid |
Commission |
| 35-year-old male, $500,000 20-year term life policy, preferred best |
$320 AFYP* |
$272
85% of total premium |
| 30-year-old female, $250,000 accelerated universal life policy, standard nonsmoker |
$1,250 AFYP* |
$1,125
90% commission of target premium
(includes Life Expense Allowance) |
| 60-year-old female, $100,000 Successor Single Premium Life policy, nonsmoker |
$50,000 single premium |
$2,875
5.75% of total premium |
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*Annual First Year Premium (AFYP).
Sample Symetra Express quotes, premiums and commissions are as of Aug. 25, 2005. |
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So, is it worth the few seconds it takes to ask your senior clients if they have money set aside for their heirs? You bet! You can go online today to get a quote, apply for and temporarily bind a Successor Single Premium Life policy in as little as 10 minutes.
For more information, contact the Sales Center at invest@symetra.com or 1-800-706-0700. |
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1 Surrender charge is 7 percent in years one through four, and drops 1 percentage point in subsequent years, with no surrender charge after the 10th year.
2 Loans and any accumulated loan interest must be repaid within six months to preserve the Return of Premium Guarantee and Guaranteed Death Benefit. Withdrawals will reduce the face amount by a proportion equal to the proportion of the total cash value that is withdrawn.
3 Not available in all states. The death benefit amount elected will be discounted as it is an early death benefit payment and reduced by loans, loan interest and withdrawals. Terminal illness is defined as being diagnosed with 12 months to live, but period of terminal illness may differ in some states. Confinement to a nursing home is defined as a minimum of 180 days with the expectation that confinement will last until death.
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