Strategy in action
Team-owned life insurance
- Paul is a wide receiver, age 21.
- He was a first round draft pick and received a contract with $10 million guaranteed over four years.
- His new team, the Swordfish, wants to protect their investment in Paul in case of a catastrophic event.
The Swordfish found that Equitable’s BrightLife® 10-year Term product was the answer. Priced at $3,475 per year for $10 million of coverage for 10 years was an easy strategy to protect their guaranteed contract.
They especially liked Equitable’s 1 & DONE service:
- Equitable underwriters coordinated with the team and Paul to handle medical underwriting during a scheduled team physical, so Paul wouldn’t have to take additional time.
- Paul’s agent was able to use Skype conferencing as proof of signatures on the application and final policy, making delivery requirements easy.
Personally-owned life insurance
- Jerome is 20 years old and a star rookie NBA power forward.
- He wants to save money for himself and his family, so he can retire comfortably later in life, but doesn’t know where to begin.
- He contacts his agent, who refers him to a Certified Financial Planner (CFP).
Jerome’s CFP knows that Jerome is about to start earning more money than he’s ever had before and will need a place to store some of that money for safekeeping, so he’ll have income when he retires, as well as a benefit for his family. Luckily for Jerome, his CFP knows that Equitable’s BrightLife® Grow product combines the long-term protection of a universal life insurance policy with the cash accumulation of equity index-linked interest options.
The chart below shows how this product might perform for Jerome, with a Preferred underwriting class, if he were to pay $150,000 for seven years, and realize a modest 5.5% current interest. When he retires at age 35, he would have over $1.5 million in cash value with a $8 million net death benefit. This strategy would allow Jerome to put away a small portion of his contract salary for safekeeping, as well as provide a large amount of cash value for Jerome to use in retirement for anything he needs, including medical benefits for injuries incurred during his playing days, while also providing a large death benefit for his family. This financial strategy solves several of Jerome’s needs.
Throughout this illustration the net policy account values, net cash surrender values and net death benefits that are shown are based upon the greater of the Policy Account Value and the Alternate Policy Account Value (per the 2% Interest Guarantee Endorsement).
1 See definition of Guaranteed Values on the Narrative Page for more information.
2 See definition of Non-Guaranteed Values on the Narrative Pages for more information. These benefits and values are not guaranteed. Assumptions on which non-guaranteed elements are based are subject to change by the insurer. Actual results may be more or less favorable than those illustrated.
3 Index-Linked Rates of Return may be higher or lower than the current illustrated interest rates, and will generally be different for each Segment of an Indexed Account.
This is a supplemental illustration and must be read in conjunction with the basic illustration. The basic illustration contains values using the same underwriting assumptions as this supplemental at both guaranteed charges and guaranteed interest rates and contains other important information. The values represented here are for a $7,580,047 BrightLife® Grow policy on a 20-year old male preferred non-smoker. The values reflect the cost of 7 years of premiums. The values represented here are non-guaranteed and assume current charges and a current interest rate of 5.5%. If guaranteed rates and charges are used, the policy would fail in year 42.