Smart money is money your clients want to control and be able to access during times of need. While there are several options for where to keep this smart money, one that’s often overlooked is permanent life insurance.

With the smart money concept using permanent life insurance, your clients gain three powerful benefits:

• Death benefit protection: The generally income tax-free proceeds could help a family continue, or the funds may be used to pass on a legacy.¹
• Cash value growth: Your clients have an opportunity to build cash value for financial needs down the road.
• Access to funds: Life insurance offers cash surrender value that is available for unexpected or immediate needs. Funds may be taken as loans or withdrawals for any reason.² Plus, additional design elements may include the ability to accelerate the death benefit if your client is diagnosed with a qualifying critical, chronic, or terminal illness.³

Be sure to conduct a thorough needs-based analysis and determine if death-benefit coverage is necessary before proceeding.

Sample Cases:
Philip is a 55-year-old male (Preferred Non-Tobacco) and a successful salesperson for a large farming equipment manufacturer. He’s married and has three grown children. Philip has a Certificate of Deposit (CD)⁴ worth $50,000 that he likes to keep close at hand for emergency purposes. However, he wants financial protection for his wife, Katherine, and possibly to leave funds for his children. He’s not thrilled with the current returns on his CD, but he likes knowing it is protected from market volatility. He’s interested in exploring another option.

Using North American’s Rapid Builder IUL indexed universal life insurance, Philip gains $128,000 of the death benefit protection he desires. Plus, he immediately leverages his premium payment of $50,000 into a larger benefit for his beneficiaries.

Although Philip’s primary concern is preserving access to as much cash value as possible, the Rapid Builder IUL also shows potential for cash value growth. Philip is reassured to see surrender values of over $49,000 for the first four years on a guaranteed basis. At the same time, there’s cash value growth even at the minimum 3% interest rate and a surrender value of nearly $65,000 after five years assuming a 7.5% interest rate.

Philip also retains access to his funds through loans and withdrawals if needed.² And the product’s available Waiver of Surrender Charge Option⁵ can waive surrender charges for anything except an outgoing 1035 exchange. Lastly, Rapid Builder IUL offers downside protection, so the credited interest rate will never be less than zero percent, guaranteed.

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1. Financial Markets, Inc. does not give tax advice. Please advise your customers to consult with and rely on a qualified legal or tax advisor before entering into or paying additional premiums with respect to such arrangements. IRS CIRCULAR 230 NOTICE Any U.S. tax information included in this written or electronic communication, including any attachments, is not intended as tax advice, was not intended or written to be used, and it cannot be used by you or any taxpayer, (i) for the purpose of avoiding any penalties that may be imposed on you or any other person under the Internal Revenue Code or applicable state or local tax law provisions, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
2. In some situations, loans and withdrawals may be subject to federal taxes. North American Company for Life and Health Insurance does not give tax or legal advice. Clients should be instructed to consult with and rely on their own tax advisor or attorney for advice on their specific situation. Income and growth on accumulated cash values is generally taxable only upon withdrawal. Adverse tax consequences may result if withdrawals exceed premiums paid into the policy. Withdrawals or surrenders made during a Surrender Charge period will be subject to surrender charges and may reduce the ultimate death benefit and cash value. Surrender charges vary by product, issue age, sex, underwriting class, and policy year.
3. Subject to eligibility requirements. Availability varies by state and product.
4. Removing funds from a Certificate of Deposit may result in penalty.
5. Available for an additional charge per $1,000 per month, depending on issue age and underwriting class.