Benefits of a New Actuarial Design
Two significant industry issues are solved by the FSLM model:
- The life insurance explosion problem. FSLM products are the only variable life policies on the market that cannot lapse for any reason including non-payment of premiums or investment performance without incurring the extreme cost and contract limitations of “no lapse (secondary) guarantee charges”.
- The annuity’s death tax problem. The FSLM is a hybrid product, actuarially closer in design, functionality and pricing to an annuity than to a life policy while retaining the tremendous tax free advantage of life insurance at death.
- FSLM products are designed for the tax efficient growth like an annuity by using a patented actuarial model to minimize the “At Risk” insurance amount, reducing the resulting COI charges (insurance cost) to remarkably low levels.
- utilized in a way not thought of before of IRC Section 7702 of the tax law that defines life insurance
- automatically adjusts to the least amount of “at risk” death benefit to qualify as tax free life insurance.
- actuarially impossible for a life insurance product to be more efficient and have less drag from the cost of insurance at all points in time
- priced like an asset based investment account for both the insurance company and financial advisor.
- no upfront premium charges for either the carrier or the advisor
- no surrender charges (account value is accessible anytime without policy charges)
- full disclosure
- transparent charges
- no hidden fees
- unbundles and componentizes the actuarial elements allowing custom design and policy management rather than buying pre-packaged policies. Premium, cash value, and death benefit work “independently”, not “interdependently”.
- contract language that protects the client
- eliminates many of the negatives and potential problems of conventional life insurance
- simple design that eliminates fine print policy traps or hidden “gotcha” clauses
- simple to understand
- easy to implement
- no computer illustrations