Lesson 13 of 16 · Protect
Life Insurance
Life Insurance helps you understand what protecting your family would cost. You add each person you want to cover and Winston estimates the yearly premium for two kinds of permanent life insurance: Indexed Universal Life (IUL), whose cash value grows with a stock index such as the S&P 500 within a cap and a floor, and Universal Life (UL), which credits a steadier declared rate. These are estimates for learning and planning; a licensed partner handles real quotes and policies.
What this tab is for
- Add family members with age, sex, tobacco use, health class, coverage and policy type
- See each person's estimated annual premium and the family total
- Set the IUL index strategy: guaranteed minimum, cap, participation rate and crediting period
- See hypothetical crediting rates from S&P 500 history, by percentile
- Choose which rate to use for the family estimates
- Hand off to a licensed IUL partner
- See premiums by age or by coverage amount, for every health class
- Find the lowest, highest and average premium in the grid
- Follow a policy year by year: total paid, cash value, surrender value and death benefit
- Choose when premiums stop and when retirement income starts
- Compare crediting scenarios
Option 1 of 6
Adding your family
- 1
Open Life Insurance
In the Protect group.
- 2
Press Add a family member
Enter their name, relationship (spouse, child…), and birth year so Winston knows their age.
- 3
Health details
Sex (leave blank for a blended estimate), Tobacco or Non-tobacco, and health class. Better health means a lower premium.
- 4
Coverage and policy
The death benefit (up to $3,000,000) and the policy type: IUL or UL.
- 5
Save
Press Add family member. Repeat for everyone you want to cover.
Option 2 of 6
Setting the IUL strategy
If anyone has an IUL policy, the Strategy Details answer the questions an agent would ask.
- 1
Index strategy
Usually Single Index with S&P 500.
- 2
Guaranteed minimum
The floor: the lowest rate credited in a bad year, often 0%.
- 3
Cap
The most the policy can be credited in a good year.
- 4
Participation rate
The share of the index's gain the policy is credited, up to the cap.
- 5
Crediting period and style
For example one-year point-to-point.
Option 3 of 6
Choosing a planning rate
- 1
Set when to begin
Under Presentation Details, choose the begin month and year, and the age to fund each policy to.
- 2
Read the history
Hypothetical Percentile Rates for Rolling Periods shows what the strategy would have credited over past periods, from weak (low percentile) to strong (high percentile).
- 3
Pick a rate
Choose a rate and press Use this rate for the family premium estimates. A middle percentile is a sensible starting point.
Option 4 of 6
Reading the family estimates
- 1
Each person's premium
Family Premium Estimates shows the estimated annual premium for each person and policy type.
- 2
Year 1 cost per premium dollar
How much of the first year's premium goes to policy costs.
- 3
Talk to a professional
At the bottom, the partner card starts a handoff to Winston's licensed IUL partner. Winston qualifies the lead and hands off; he doesn't sell or bind insurance.
Estimates use 2017 CSO mortality tables and Winston's illustrative policy charges. Real premiums need underwriting and a carrier illustration.
Option 5 of 6
Using the Premium Matrix
- 1
Choose the view
By age shows the premium at each issue age; By coverage amount shows it at each death benefit.
- 2
Set the policy
Choose IUL or UL, tobacco or non-tobacco, and the death benefit.
- 3
Read the grid
Each row is an issue age and each column a health class. The tiles show the lowest and highest in the grid and the average.
Compare two ages a few years apart to see what waiting costs.
Option 6 of 6
Reading Cost & Benefits
- 1
Pick a family member
You need at least one added above.
- 2
Choose the premium
Build cash value pays more in to grow the policy. The minimum is the least that keeps the policy in force with premiums stopping at the age you set.
- 3
Set the ages
Pay premiums until age, and Take retirement income from age.
- 4
Choose a crediting scenario
Try a weaker and a stronger one to see the range.
- 5
Read the chart and table
Death benefit, cash value, premiums paid and income received by age, with totals for premiums paid and income received.
Your exercise
Before you finish, open the tab and try:
- Add yourself and one family member, then compare their IUL and UL premiums.
- Open Cost & Benefits for one person, then change the retirement income age and compare.
Worked through every option above? Finish the lesson to tick it off.
Want more detail? Read Life Insurance: family and premiums and Life Insurance: matrix and cost & benefits in the manual.