A “Balanced” Approach to Accumulation IUL and VUL Case Design

The conventional approach to designing accumulation-focused UL strategies involves minimizing the death benefit. Often, this is combined with using the maximum AG49-compliant illustrated rate to squeeze every dollar of projected income out of the product.

On paper, this strategy makes sense, however, does it actually serve the client’s best interests in the real world?

In reality, many clients value a well-rounded solution that builds wealth efficiently and maintains financial flexibility. By reframing how we structure an IUL or VUL policy, advisors can unlock greater value for their clients without requiring additional premium contributions.

This balanced approach offers several key advantages, including:

• A larger initial face amount, providing enhanced financial protection for the client’s loved ones.
• An increase in Accelerated Benefit Riders (ABRs), offering greater financial security in the event of chronic illness or long-term care needs.
• Additional funding capacity, allowing clients to contribute more to their "tax-free bucket" as their income grows.

Most importantly, this enhanced strategy doesn’t require clients to contribute a single extra dollar in premiums. The numbers speak for themselves; let’s take a closer look at the results below:

What’s the Bottom Line?

By shifting to a balanced policy design, the client gains significantly more protection and financial flexibility without paying a dollar more in premiums.

Let’s break down the numbers:

• An additional $248,387 in coverage, representing a 61% increase over the traditional design.
• A larger Chronic Illness Accelerated Benefit Rider, now calculated on a higher face amount, provides more funds when the client needs them most.
• Traditional Design: $404,941 maximum lifetime ABR benefit.
• Balanced Approach: $653,328 maximum lifetime ABR benefit — an 81% increase in available funds.

Beyond the raw numbers, this translates into real-life financial security. If the client experiences a chronic illness or long-term care need, their ABR payout is significantly larger, helping them cover expenses without depleting their other assets. Instead of treating IUL and VUL policies solely as an accumulation tool, this approach elevates its value as a comprehensive financial solution.

How Does This Impact Illustrated Income?

This strategy improves coverage and increases funding flexibility. With over $14,000 in additional funding capacity per year, the client has more significant long-term wealth-building potential.

More importantly, this unused capacity rolls forward. By policy year 10, they have a $140,000 cumulative additional funding capacity, allowing them to take advantage of a cash surplus without starting a new policy.

What’s in it for the Advisor?

This approach isn’t just beneficial for clients; it upgrades an advisor’s business:

• Higher Target Premium: Since the face amount increases, the Target Premium also increases by 61%. This results in better compensation for the advisor while aligning with the client’s best interests.
• Stronger Client Retention: A policy that offers greater protection, flexibility, and funding options makes clients less likely to lapse or replace their coverage, increasing their long-term engagement.
• A Competitive Differentiator: Many advisors still rely on the traditional “minimum death benefit” design strategy. By offering a more balanced and flexible design, advisors position themselves as forward-thinking experts, providing accumulation potential and stronger protection.

What Products Work With This Approach?

This strategy is not product-specific — it can be applied to most accumulation-focused IUL and VUL products. That said, a manual case design process is required to optimize protection and accumulation.

Here’s a simple guideline for implementing this approach:

• Start by increasing the face amount by approximately 50% from a traditional maximum accumulation design.
• Ensure the policy maintains a favorable funding structure, allowing additional contributions if the client’s income increases.
• Adjust the design for long-term protection advantages, not just income potential.
  While specific product nuances may vary, this framework is adaptable across multiple carriers and IUL/VUL variations. Advisors should work closely with an experienced brokerage team to customize the strategy based on the client’s profile and financial goals.

Let’s Talk About Your Next Case

At LIFE Brokerage, we specialize in helping advisors determine a path for clients that maximizes both protection and wealth accumulation. Whether you’re exploring the concept for the first time or steps from finalizing an accumulation policy, our team is here to provide expert guidance.

Schedule a meeting today to discuss how we can help you bring more value to each of your clients, no matter their stage in saving.