Policy Review: The Palladium Group

Jeff Hess   |   June 2021   |   1-minute read
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The background

Historically, life insurance has been implemented in a "set it and forget it" type manner. All too often, life insurance goes unmanaged and isn't reviewed to make sure the coverage is performing as expected and that it still aligns with the overall financial plan.

The problem

In this case study, the client has more life insurance than he needs right now and has coverage that doesn’t last his lifetime. In addition, his health improved after the policy was placed. The client’s advisor worked with the Palladium Group to obtain coverage that better fit the client's needs.

Client profile

  • A 65-year-old male who owned a $1.1M variable universal life insurance policy
  • Table 8 non-smoker rate class
  • The client only needed $500,000 of coverage, instead of the existing $1.1M death benefit
  • The client was paying premiums of $26,832/year

How it works

First, Palladium Group requested in-force illustrations and additional policy information to review the current policy structure and better understand the projected policy performance. Based on the current annual premium outlay of $26,832 and an assumed 6% rate of return the client’s policy was projected to lapse at age 77. We also conducted a preliminary medical discovery call and estimated that the client could obtain a standard non-tobacco rate class.

An application was submitted, and after formal underwriting was complete, the client received an offer of standard non-tobacco rates. We then completed a 1035 exchange of the existing cash value of $129,000. Based on this, we were able to reduce the premium outlay to $6,780/year and guarantee the death benefit to the insured's age 100.

The result

We were able to drastically reduce the cost of insurance charges by improving the client's underwriting rate class from table 8 to standard. We also implemented a death benefit that was aligned with the client’s goals. These two actions reduced the annual outlay by approximately $20,000. In addition, the death benefit is now guaranteed to the insured's age 100.

About Palladium Group

The Palladium Group by Ash Brokerage is a boutique insurance consulting firm that serves as a concierge-level extension of an RIA's financial services. Always mirroring your fiduciary duty, our goal is to integrate within your firm and work alongside your advisors to become an extension of your team and safeguard the financial future you and your clients have built together.

Learn more about Palladium Group.

About the Author

In his role as an RIA Consultant for Palladium Group, Jeff partners with RIAs, family offices, and other fee-only advisors for consultation, expert analysis, and implementation and management of insurance-based financial solutions. With more than 15 years’ experience in the financial services industry, Jeff provides unique, independent services that raise the bar among insurance professionals. Jeff’s goal is to change the experience of obtaining insurance—to make the process personal and enjoyable for advisors and their clients.