William Penn Life, 2017 (52. évfolyam, 1-12. szám)

2017-06-01 / 6. szám

Moneywise

provide an immediate death benefit should an untimely death occur. However, the annuity would return the $50,000 initial deposit plus any accrued interest while the SPWL certificate would provide an immediate death benefit of $94,162.

Now, let's look at what happens after 10 years. The annuity would have a guaranteed cash value (and death benefit) of $55,778, while the guaranteed cash value of the SPWL would be $61,864 or a guaranteed "internal rate of return" of 2.15%. By the way, the death benefit of the SPWL would still be $94,162. That's if both contracts performed only at the guaranteed rate that is offered on both certificates.

That scenario is highly unlikely, so let's take a look at the same comparison using our current interest rates on the annuity and current SPWL dividend payments. Assuming both the annuity and SPWL performed at current rates, the annuity would have a cash value (and death benefit) of $67,196 and the SPWL would have a cash value of $67,432. Both the annuity and SPWL have significant internal rates of return (3.0 and 3.04 respectively). However, the SPWL death benefit has now grown to $102,637. The real benefit here is that, although the cash growth is very similar, the entire death benefit of $102,637 would be payable income tax free to your beneficiaries listed with WPA, while in the annuity scenario your beneficiaries would need to pay income tax on the amount above your initial deposit of $50,000 (or $17,196).

We continued this study for another 10 years. I won't bore you with the details, but the SPWL performed admirably and returned an impressive 2.07% (guaranteed)

and 2.80% (current) internal rate of return on the cash growth. Also, the death benefit for the SPWL far exceeded the death benefit available from the annuity at any given point in time.

We ran this comparison using various ages, both male and female, and different smoking status scenarios. Suffice it to say we have yet to find a scenario in which the annuity death benefit exceeded that of the SPWL.

So, am I "slamming" annuities or trying to discourage you from purchasing one in the future? No, quite to the contrary. I'm simply saying that if your goal is to pass as much value as possible to your heirs in a strategy we call "wealth transfer" or "legacy planning" — and you're healthy enough to qualify for the SPWL life insurance — then the benefits of the SPWL might be something for you to think about.

Confused about whether an annuity or SPWL are better for you or a loved one? Call on your William Penn Association agent today. We can help determine if you qualify and which way might be best for you to go. Don't have an agent? Call our sales department at 1-800-848-7366, ext. 134, and we'll be glad to help.

Here's wishing you all a very safe and happy summer!

NOTE: As National Sales Director, I'd be remiss if I didn't encourage everyone to take a look at our 131st Anniversary Special Guaranteed Issue program and consider purchasing an additional certificate for yourself or a loved one before this campaign ends on July 9. This is an offer to purchase additional life insurance coverage with NO health questions asked. This offer doesn't come around that often, so don't delay! Look for the ad in this issue and send your response in today! □

Come grow with us

William Penn Association is looking to grow and expand its reach in current and possibly new markets. To do this, we are seeking to add highly motivated agents to our list of over 800 existing agents. WPA currently writes insurance and annuity products in 20 states. The states include: CA, CT, DC, FL, IL, IN, KY, MD, MA, Ml, MO, NC, NE, NJ, NY, OH, PA, VA, WV and Wl. To grow, we need both full-time and part-time agents. Good agents are the lifeblood of any association, and WPA is a strong and growing association that has much to offer our members and the agents who write for us. If you are interested in an opportunity to grow with us, then contact Bob Bisceglia at 1-800-848-7366, ext. 134. Thank you.

WILLIAM PENN LIFE 0 June 2017 0 7