Post on 20-Jan-2016
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Participating Whole Life VS Universal Life
The differences and the similarities!
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Agenda Product Similarities Differences Case Study 1 Case Study 2 Case Study 3
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Overview Participating Whole Life insurance has been around
since 1762 Universal Life… the new kid on the block was
developed in the late 1970’s as a solution to the ”Buy Term and Invest the Difference” concept
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
The Key Similarities Low cost permanent life insurance protection Flexibility
• Premium Holidays• Riders and Benefits• Death Benefit Configurations
Tax-deferred Cash Accumulation Access to Cash
• Withdrawals• Policy Loans
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
The Key Differences Traditional Participating
Whole Life The company manages the
cash accumulation Dividend Scales can
increase/decrease, but can never be “negative”
Premium is “Bundled”• Premium• Policy Fee
Guaranteed Cash Values
Universal Life
The client/producer manages the cash accumulation
Account values can earn negative and positive interest
Premium is “Unbundled”• COI• Administration Charges• Premium Tax• Investment Portion
Higher Premium deposits available
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Case Studies
VS
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Case Study 1 Client:
• Male, age 43, nonsmoker, residing in Ontario• On the risk scale… leans to the more risk averse
Need:• $750,000 Permanent Insurance • Premiums Payable for a maximum 20 years• Cash available as a safety net for enhancing retirement
income 65 and 69• Currently maxed out RRSP • Looking to spend $15,000/year
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Product Configurations
Equimax®
• Equimax 20 Pay• Dividend Option –
Enhanced Protection with Lifetime guarantee
• Excelerator Deposit Option added to increase premium to $15,000
Equation Generation III®
• Premiums payable for 20 years
• Level Protector as Death Benefit Option
• YRT as COI type• Portfolio Interest Option
elected earning 5.5% interest
• Increase Death Benefit by 8% for exempt handling purposes
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
ComparisonEquimax Equation Generation IIII
Premium $15,000 $15,000
Death Benefit $750,000 $750,000
Guar. CV Age 65 $237,977 -
Age 85 $335,821 -
Total CSV Age 65 $526,094 $379,218
Age 70 $722,421 $510,059
Age 85 $1,675,184 $1,290,373
Total DB Age 65
$1,019,795 $750,000
Age 70 $1,248,277 $750,000
Age 85 $2,182,651 $1,290,373Notes: Earliest Offset is NOT Guaranteed.
Values illustrated assume premiums have been paid for life of the plan.
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Case Study 2 Client:
• Male, age 52, nonsmoker, residing in Ontario• A risk taker, investments include stocks
Need:• $500,000 Permanent Insurance today with an increasing
death benefit• Looking for a Tax Deferred investment to supplement
retirement income• Premium $$$ no maximum
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Product Configurations
Equimax• Equimax 20 Pay• All Basic Permanent
Protection• Dividend Option– Paid Up
Additions• Specified Offset 8 years• Maximum Excelerator
Deposit Option
Equation Generation III• Account Value Protector as
Death Benefit Option• Level as COI type• Portfolio Interest Option
elected earning 6.5% interest
• Matched Equimax Maximum
• Premiums payable for 8 Years
• Increase Death Benefit by 8% for exempt handling purposes
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
ComparisonEquimax Equation Generation III
Matched Premium 1at Yr Max Exempt
Premium $28,305 $28,305 $32,558
Total Cumulative Premium $226,440 $226,440 $258,163
Death Benefit $500,000 $500,000 $500,000
Total CSV Age 65 $226,688 $283,046 $335,409
Age 70 $341,860 $368,375 $436,206
Age 85 $804,039 $1,082,908 $1,280,937
Total DB Age 65
$625,335 $783,046 $933,098
Age 70 $565,338 $868,375 $1,033,895
Age 85 $1,206,761 $1,438,993 $1,707,950Notes: Earliest Offset is NOT Guaranteed. Values illustrated assume premiums have been paid for life of the plan.
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Case Study 3 Client:
• Female Age 31, Non Smoker, Residing in Ontario• Purchasing life insurance to protect her mortgage,• Doesn’t like paying with nothing in return… likes the idea of
cash values• Likes to take some chances in life… but doesn’t consider
herself a big gambler Need:
• $250,000 of Life insurance • Cash Values… • Looking to spend no more that $100 per month
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Product Configurations
Equimax• Equimax Life Pay• Dividend Option –
Enhanced Protection with 10 Year Guarantee
Equation Generation III• Level Protector as Death
Benefit Option• YRT as COI type• Portfolio Interest Option
elected earning 5.5% interest
• Increase Death Benefit by 8% for exempt handling purposes
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
ComparisonEquimax Equation Generation III
Premium $1,018 $1,018
Death Benefit $250,000 $250,000
Earliest “Offset” Age 59 Age 54
Guar. Cash Value Age 55 $21,330 -
Age 65 $32,327 -
Total CSV Age 55 $37,079 $ 39,057
Age 65 $74,545 $ 80,874
Age 75 $137,437 $154,305
Total DB Age 75 $250,000 $250,000
Age 85 $337,909 $300,400Notes: Earliest Offset is NOT Guaranteed.
Values illustrated assume premiums have been paid for life of the plan.
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Which One… No Quick Answer Both products are important to keep in your product
portfolio Both products meet different “risk tolerance” Both products require different levels of participation in
the management of this asset by you and your client In the end… both provide you with a product to meet
your clients protection and cash accumulation needs!
THE EQUITABLE LIFE INSURANCE COMPANY OF CANADAFor Financial Advisors use only
Thank You
1. Equitable Life® has made every effort to ensure the accuracy of this presentation. However, if the information presented here differs from that contained in any Equitable Life policy contract, the policy contract prevails in all cases. This presentation is intended for informational purposes only and is provided with the understanding that it does not render legal, accounting or other professional advice.
2. Equitable Life, Equitable Life of Canada ,Equation Generation, Equimax, Equitable Sales Illustrations and design, and the lighthouse design are all trademarks of The Equitable Life Insurance Company of Canada. Reproduction or redistribution of this presentation, in whole or in part, without permission from Equitable Life is forbidden.
3. © 2005 The Equitable Life Insurance Company of Canada. All rights reserved.