UL coverage, loan, and withdrawal solves

When using the Coverage, Loan and Withdrawal solves with universal life illustrations, there are many factors that can affect the results. The behaviour of the solve can vary dramatically by changing things like the interest rate, payment duration and adding or removing optional benefits such as Term insurance. The chart below describes the basis for each of these solves as well as some considerations for each type of solve.

Solve

Description

Availability

Considerations

Minimum coverage

The minimum UL coverage amount for a specified payment.

The main purpose of this solve is to find the least amount of coverage to avoid service account, but service account will be used if required to avoid lapse

The payment being made must be Specified and cannot be solved.

Can select this option in combination with Maximum withdrawal or Maximum loan solve as long as the two solve durations don’t overlap.

The Accidental Death Benefit (ADB) and Guaranteed Insurability Benefit (GIB) amounts may be reduced, based on the total insurance coverage for each person, to ensure they meet product rules.

Maximum coverage

The maximum UL coverage amount for a specified payment.

The main purpose for this solve is to find the highest coverage amount without lapsing. Service account will be used if required.

The payment being made must be Specified and cannot be solved.

 Cannot be combined with any other solves.

The ADB and GIB amounts may be reduced, based on the total insurance coverage for each person, to ensure they meet product rules.

Solve

Description

Availability

Considerations

Maximum withdrawal

The level maximum withdrawal amount for the years specified by the user.

The withdrawal solve will ensure that the remaining fund value is sufficient to cover all policy costs. (i.e. the withdrawal cannot cause a lapse)

Can select this option in combination with the following payment solves as long as the two solve durations don’t overlap.

  • Level maximum
  • Target death benefit
  • Target cash value

Can select this option in combination with Minimum coverage solve.

Coverage solves or payment solves are processed first. If those solves optimize the cash value to be near 0 at age 100, the resulting withdrawal solve will be $0.

If the policy lapses, the result will be $0.

Ensure that the withdrawal duration entered is not past age 100.

The minimum withdrawal amount is $250.

The maximum withdrawal amount in any one year is determined by several factors.  Refer to the advisor product guide for details.

If maximum withdrawal is selected, you can not illustrate multiple withdrawal layers.

If withdrawals are illustrated, loans cannot be illustrated.

Maximum
loan

The level maximum policy loan amount for the years specified by the user.

The loan solve will ensure that the remaining cash value is sufficient to cover all policy charges. (i.e. the loan cannot cause a lapse)

Can select this option in combination with the following payment solves as long as the two solve durations don’t overlap.

  • Level maximum
  • Target death benefit
  • Target cash value

Can select this option in combination with Minimum coverage solve.

Coverage solves or payment solves are processed first. If those solves optimize the cash value to be near 0 at age 100, the resulting loan solve will be $0.

If the policy lapses, the result will be $0.

Ensure that the loan duration entered is not past age 100.

The minimum loan amount is $250.

The maximum loan amount in any one year is determined by several factors.  Refer to the advisor product guide for details.

If maximum loan is selected, you cannot illustrate multiple loan layers.

If loans are illustrated, withdrawals cannot be illustrated.