Linked Loans: Breaking Free From High Loan Costs

Jan 17, 2018

When clients are considering loans for indexed universal life insurance products, the modern consensus is to choose a product that has a relatively low cap on their variable or participating loans. This of course limits the number of carriers to choose from and still doesn’t address a potential problem IUL clients face. If the underlying index has a down year resulting in low or even 0% credit, an outstanding loan can become very expensive despite these caps. In fact, the average cap is between 5% - 6% meaning that a zero year could create negative arbitrage of 500 to 600 bps. Luckily, there is another strategy you can introduce to them: linked loans.

Linked Loan Options give clients downside protection while also providing upside potential. Loaned funds are transferred to a 1-year Point-to-Point strategy with the upside potential to earn as much as 12%! The amount of interest charged on borrowed funds will never exceed a NET loan cost of 2%. Costs matter to clients, so why not give them the protection and flexibility they want? Sure, this may also slightly limit the upside as compared to the competition; but, overall, our take is that the downside security is worth a slightly lower upside.

To gain access to our pre-recorded webinar that further breaks down this strategy, reach out to your agent relationship manager at 480.296.0169

paid fast.jpg



Category: Life Insurance

Category List


Tag List

Retirement Planning (24)
Donation (1)
Retirement (13)
Economy (1)
business solutions (4)
hiring (6)
Additional Earning (1)
Beneficiary (2)
Best Rates (1)
Gift (1)
rates (1)
RMD (1)
Benefits (1)
Fixed Indexed Annuities (2)
quoting (1)
Star Wars (1)
Featured MAC App (2)
Content Building (2)
gul (4)
Millennials (6)
funeral (1)
Market Exposure (1)
myAdvisorCloud (4)
advanced planning (2)
Life Insurance Broker (15)
Long Term Care (5)
industry trends (1)
Social Optimization (3)
Hybrid Products (1)
agent resources (1)
Roth (1)
Waste Management Open (1)
Death Benefit (2)
leads (6)
business (1)
Indexed Annuity (3)
Life Insurance Evaluation (8)
business owners (4)
Breast Cancer Awareness Month (5)
DOL (2)
permanent life insurance (4)
Breast Cancer Research (1)
Tax Benefits (2)
Sales (25)
end of year (1)
living benefits (8)
Webinar (4)
Quoting Tools (1)
Immediate Fixed Annuities (1)
Social Media (8)
Insurance (21)
Protection (2)
Life Insurance Update Show (9)
Income Planning Academy (1)
Cash Value (1)
IUL (15)
Retirement ACE (1)
premium deposit account (1)
buy sell agreement (1)
term life (10)
MAC App Feature (1)
Inflation (1)
illness (1)
Tips (4)
Investments (2)
estate planning (2)
E-App (1)
life concepts (1)
Annuities (36)
virtual sales (3)
selling (1)
Life Insurance Trends (21)
BlackRock (1)
Prospecting (6)
key person (1)
CSO (1)
online resources (1)
IRA (1)
Training Event (1)
Baby Boomers (1)
Legacy Planning (1)
Financial Legacy (6)
Fixed Annuities (9)
Annuity Update Show (11)
Generation Y (1)
business planning (6)
Life Quotes (4)
Required Minimum Distribution (1)
FIA (1)
Advice (1)
Alternative Investments (2)
Variable Annuities (1)
savings (1)
presentations (3)
Leaderboard (1)
PPC (2)
Asset-Based LTC (1)
LifeBrain (1)
Premium Finance (5)
Mobile App (1)
guaranteed universal life (1)
2019 (1)
sales presentations (2)
Sales Concepts (18)
Alternatives (5)
social security (2)
advanced markets (1)
consumer marketing (8)
Pitch (1)
Product Updates (1)
tools (2)
injury (1)
Health Care (2)
life insurance quotes (1)
Clients (2)
Life Insurance (96)
sales kit (2)
Healthy Living (1)
networking (1)
training (9)
review (2)
Marketing (14)
Gender Gap (1)
PIA (2)
Interest Rates (1)
final expense (1)
Quotes (1)
life happens (1)
Facebook (2)
life 101 (2)
Annuity Concepts (13)
Life Insurance Brokers (6)
trends (1)
MYGA (10)
Compliance (1)
Long-Term Care Awareness Month (1)
Retirement Investment (3)
Universal Life Insurance (4)
Brokers (2)
Annuity (3)
Financial (4)
Market (1)
products (5)
Video On-Demand (2)
Retirement Strategy (4)
Life Insurance Awareness Month (6)
Illustrations (1)
Media (2)
business owner solutions (1)
earning opportunities (1)
Production (1)
PBR (1)
case studies (3)
resources (2)
Brokers Alliance (8)
Looking Forward, Giving Back (1)
MAC (4)
march madness (1)
digital tools (1)
indexed universal life (2)
non-med (3)
Index Universal Life (1)
Charitable Giving (3)
Life Insurance Check Up (7)
Brand Values (1)
guarantee (1)
life insurance awareness (1)
Income (1)
Legacy (1)
Executive Bonus Arrangement (1)
term (6)
analysis (1)
Charity (2)
Financial Planning (20)
private pension funding (1)
underwriting (1)
Deferred Fixed Annuities (2)
Brokers Alliance Open (1)

Tag Cloud

MarketMarket ExposurebusinessDeferred Fixed AnnuitiesMYGATraining EventLooking Forward, Giving BackBeneficiaryFinancialPremium Financeguaranteed universal lifeAdvicefinal expenseBenefitsleadsdigital toolsterm lifeMobile AppFeatured MAC AppLife Insurance Trendspresentationssavingssocial securityadvanced marketsBrokersgulMarketingbuy sell agreementonline resourcesMACcase studiesAnnuity ConceptsproductsE-AppProductionsales kitCharityEconomyagent resourcesTipsunderwritingProtectionInflationSocial OptimizationPitchPIAIncomeLife Insurance Awareness MonthIRAvirtual salesSalesInvestmentsTax BenefitsillnessHybrid ProductsMillennialsguaranteeLeaderboardBaby Boomersindexed universal lifeExecutive Bonus ArrangementFIALife QuotesRetirement PlanningresourcesCash Valuekey personanalysisRetirement StrategyHealth CareProspectingsales presentationsbusiness owner solutionsestate planningAlternative InvestmentsAnnuitytoolsLife Insurance Update ShowsellingStar WarsFinancial Legacylife insurance quotesLife Insurance BrokerLife Insurance Check Upearning opportunitiesRetirement InvestmentVariable AnnuitiesLegacyRothIllustrationsBreast Cancer Awareness MonthAnnuity Update Showliving benefitspremium deposit accountBrokers Alliancelife conceptsRetirement ACEMAC App FeaturePBRbusiness planningWebinarBrokers Alliance OpenLifeBrainPPCContent BuildingAsset-Based LTCFixed Annuitieslife 101ratesMediaGeneration YInsuranceIndexed AnnuityCharitable Givingnon-medfuneralLong-Term Care Awareness MonthDonationSocial MediaRetirementBest Ratesbusiness ownersRMDAdditional Earningend of yearAlternativesAnnuitiesQuoting Toolsadvanced planninginjuryBlackRockFacebookSales Conceptsnetworkingreviewprivate pension fundingWaste Management OpenFixed Indexed AnnuitiesDOLlife insurance awarenesstermImmediate Fixed AnnuitiesVideo On-DemandClientsconsumer marketingGiftquotingLong Term CareComplianceBreast Cancer ResearchhiringRequired Minimum DistributionDeath BenefitProduct UpdatesIndex Universal LifeLife Insurance Evaluationlife happensLife Insurance BrokersLife InsuranceIncome Planning AcademyBrand ValuesHealthy LivingtrainingUniversal Life InsuranceFinancial PlanningIULmyAdvisorCloud2019permanent life insurancemarch madnessbusiness solutionsInterest RatesGender GapQuotestrendsindustry trendsLegacy PlanningCSO


Archive