The Ideal Asset Location Resource

Asset Location typically puts investments subject to high tax rates into a tax-advantaged portfolio. For PPVUL/Registered PPVUL, this often means investments such as fixed income, non-US dividend paying stocks, REITs, hedge funds, and liquid alts.

PPVUL/Registered PPVUL, as the primary Tax Alpha location resource, delivers important advantages over other tax-advantaged portfolios:

• There are no penalties or required minimum distributions.
• Access to advisor-applied VUL’s cash is tax free, unlike IRAs that have distributions taxed at ordinary rates.
• There are no VUL premium contribution limits, unlike Roth IRAs that have extremely low contribution amounts (even to $0 for high-income individuals). Think of PPVUL/Registered PPVUL as a mega Roth.

Moreover, PPVUL/Registered PPVUL’s tax free structure eliminates municipal bonds’ after-tax return advantage. In other words, since any investment in the portfolio gains tax-free status, the portfolio can utilize investments with higher return and income profiles.

“Buy Term & Invest the Difference” is Obsolete

For years, many advisors have operated on the basis that permanent life insurance is ineffective for wealth management, largely due to the policy’s expenses, a low guaranteed return, and a fixed death benefit.

Instead, advisors emphasized buying a term insurance policy for the years needing coverage (i.e. while children are still dependents) and investing the premium savings in a portfolio to achieve higher investment returns.

PPVUL/Registered PPVUL makes “Buy Term and Invest the Difference” obsolete for your top clients.  Here’s why:

• It’s more efficient with very low upfront and ongoing expenses
• It eliminates Inflation erosion on the death benefit because the policy’s portfolio’s value determines the death benefit
• Compounding of the portfolio’s value tax free increases wealth
• Unlike when term insurance ends because the cost of insurance becomes prohibitive, PPVUL/Registered PPVUL’s important benefits continue:

1. Use the tax free access as a supplement for a lower-cost long term care insurance policy
2. Shield the policy’s portfolio value from creditors
3. Replace other insurance policies through a tax free 1035 exchange and use the PPVUL/Registered PPVUL’s inflation-resistant death benefit for wealth replacement applications (i.e. to pay federal and/or estate taxes or to restore wealth previously transferred during your client’s lifetime

Connecting with the Generations

Many of your top clients are retired or near to it.

Although a family’s wealth is often large enough to continue growing, your planning efforts necessarily lead to distributions and transfers from your clients’ wealth. Multiple studies have detailed an advisor’s business risk in this process as it is common for children, upon inheritance, to end the parents’ advisory relationship.

If this is a concern of yours, consider how PPVUL/Registered PPVUL facilitates relationships with downstream generations.

First: children are most often designated as a policy’s beneficiaries, and the policy’s portfolio value ultimately impacts beneficiaries’ wealth. This fact opens the door for you to have ongoing interaction with each child in reporting on the portfolio’s purpose and performance.

Second: for your older clients, underwriting the policy on a child’s life makes the child the policyowner. Beyond extending the policy’s purpose for many decades, you gain direct input into the child’s wealth planning needs. Since PPVUL/Registered PPVUL has broad planning applications, the policy becomes an important resource for executing the child’s own wealth planning. You now have a powerful tool at your disposal to facilitate important conversations and, in the process, develop a lasting relationship.