Turning Single Premium Preferences into Big Regular Premium Wins (ILP)
There are times when clients—especially older ones—prefer to commit a lump sum through a single premium plan, valuing its simplicity and immediacy. It's a common preference when they’re working with a sizable amount of money set aside for planning.
However, from a consultant's perspective, at times, regular premium plans may contribute more significantly to overall production. The challenge, then, is how to position regular premium options in a way that feels strategically stronger and client-beneficial, not just sales-driven.
That’s where Edge ILP Illustrator comes in. This post explores how consultants can use Edge to visually and logically frame regular premium plans as an effective, even superior, alternative—shaping conversations that lead to win-win outcomes for both the client and the advisor.
Sample Client Scenario
50 years old
$500K to allocate
Priorities: Liquidity + Dividend Income
Below are the suggested input details for the illustration:
Premium Term: 10 years
Initial Investment: $330,000
Ongoing Premium: $1,400/month (totaling $168,000 over 10 years)
Estimated Dividend Rate: 5%
Fund Growth Rate: 3%
Policy Charges: 2.5% annually for the first 10 years
Dividend Withdrawal: Begins from Year 1
Partial Withdrawal: $20,000 annually from age 51 to 59 (We're currently working on an enhancement that will allow users to select a withdrawal period, rather than having to specify withdrawals year by year)
Consultant: “Hi [Client’s Name], I’ve structured a plan for the $500,000 you mentioned, and I believe this approach could offer you even more benefits than going with a single premium—while still giving you the ease and flexibility you’re looking for.”
“I know you’ve mentioned wanting to 'get it done and over with' through a single premium, but instead, I’ve split the amount into a 10-year regular premium of $16,800/year, and the remaining $330,000 is set aside as a top-up to the same policy. Let me explain why this structure may serve you better.”
“First, by spreading your premium over 10 years, you become eligible for additional bonuses of $xxxx that single premium plans don’t offer.”
“Second, I’ve structured it so that the dividend payout from the plan nearly covers your annual premium—so there’s no real burden to fund it year after year. It’s designed to practically pay for itself.”
“And lastly, about two-thirds of the capital—the top-up portion—is not locked in. It can be withdrawn anytime after the first policy year if you ever need the liquidity.”
Client: “Alright, go on.”
Consultant: “I’ve input everything into this Illustrator. If you look at the table here, you’ll see that by Year 1, the dividend in the third column already covers most of your premium.”
“I’ve also built in an option to withdraw $20,000 per year starting from Year 2 for living expenses. Even with that, the dividend structure holds steady, without affecting the ability to cover the premium.
“By the 10th year, you’d have paid $168,000 in premiums. In return, you’d have received nearly $170,000 in dividends, plus $180,000 in total withdrawals from the $20,000/year income stream—and your account would still hold a value of around $332,000.”
“So that’s $500,000 set aside at the start, and by Year 10, you’ve already received about $682,000 in total value—with the plan continuing to grow, policy charges ending, and loyalty bonuses kicking in from there, setting you very well in place for legacy or retirement planning.”
By presenting the benefits that occur during the premium term—and more importantly, what’s set up for the client after the premium term ends—you significantly increase the likelihood of closing the case. This approach shows tangible value both in the short and long term.
For more financially savvy clients, you can also introduce the concept of dollar-cost averaging, which further supports the logic of using regular premium contributions over a single lump sum investment.
