Life Insurance Archives - CPS Special Risk Services

Declined for Life Insurance? What to Do Next

October 13, 2026 by Tim Fuller

Couple at a kitchen table reviewing papers with an insurance advisor on a video call

Being declined for life insurance by one company does not mean you cannot get coverage. Each insurer judges health conditions differently, so the best next step is to find out why you were declined, gather your medical details and have a specialist shop your case before you apply again.

Key takeaways

A decline applies to one insurance company and one application, not to every carrier.
Find out the reason first. It decides which carriers are worth approaching.
An informal pre-screen lets carriers look at your case before you file a new formal application.
If traditional coverage is not available yet, coverage through work or a simplified or guaranteed issue policy may help in the meantime.

Why one decline is not the final answer

Every insurance company writes its own underwriting guidelines. A condition one carrier declines, another may accept, sometimes with a higher premium (a “table rating”) and sometimes at standard rates. Timing matters too: a carrier that says no during treatment may say yes once your health has been stable for a while.

For real examples, see how a client was approved at standard rates after three carrier declines and another after hepatitis C and two carrier setbacks.

Step 1: Find out why you were declined

Ask the agent who submitted your application, or the insurance company, what drove the decision. Common reasons include a recent diagnosis, abnormal lab results, certain medications, height and weight, driving history or missing medical records. The reason tells a specialist which carriers are most likely to view your history favorably.

It also helps to check your MIB record. Insurers that belong to MIB share coded information from applications for individually underwritten life and health insurance. MIB says you can request a free copy of your MIB Consumer File, if one exists, once a year, and it explains how to correct anything that is inaccurate. You will only have a file if you applied for that kind of coverage in the last seven years.

Step 2: Do not rush into another formal application

Applying to company after company on your own can add to your record without getting you closer to a yes. A better path is an informal inquiry, sometimes called a pre-screen: a specialist sends a summary of your health history to the carriers most likely to approve it and asks how each would view it. You apply formally only after you know where you stand.

This is the core of impaired risk life insurance, and it is how a specialist can often find coverage after a decline.

Step 3: Gather your medical details

Underwriters decide based on the facts in front of them. The more complete the picture, the better your chances. Have these ready:

The diagnosis, when it was made and your treatment so far
Current medications and dosages
Recent lab results and readings (for example, A1C or blood pressure, if they apply to you)
Your doctors’ names and the dates of recent visits
Anything that shows improvement: stable readings, weight loss, or time since surgery or treatment

Don’t have all the details? That’s fine. If you don’t have everything yet, we can start with a conversation and go over what you do have.

The details that help most show how well a condition is controlled today, not just that you have it.

Advisors can find more on this in what to include in a health history.

Step 4: Know the difference between declined and postponed

A postponement means “not right now.” Insurers often postpone after a recent surgery, a new diagnosis or during active treatment, because they want to see how things turn out. Ask how much time the insurer wants to see, then set a date to revisit. See how one postponed anemia case was later approved at standard rates.

Step 5: Options if traditional coverage is not available

If fully underwritten coverage is out of reach for now, these options may help bridge the gap:

Group life insurance through work. It often requires no medical questions when you enroll during an open enrollment period.
Simplified issue life insurance. Health questions but no medical exam, usually for smaller amounts.
Guaranteed issue life insurance. No health questions. Amounts are usually small, it costs more for the coverage you get, and many policies limit the full benefit in the early years.
Final expense coverage. Smaller policies meant to cover funeral and end-of-life costs. See our personal planning page.

These can be a good backstop, but they are rarely the end of the road. It is worth revisiting fully underwritten coverage as your health history improves.

How SRS can help

CPS Special Risk Services has spent 50+ years helping place hard-to-place life insurance cases and works with 60+ carriers. Tim Fuller will review your health history, explain which carriers are most likely to say yes, and shop your case before you apply. There is no cost to talk with Tim, and you don’t need all your records to get started.

Talk to Tim about your situation, or learn more about impaired risk life insurance. Financial professionals with a declined client can send us the case.

Frequently asked questions

Does being declined for life insurance mean I can never get coverage?

No. A decline applies to one insurance company and one application. Other carriers may view the same health history differently, and the same carrier may look again once more time has passed.

Will other insurers know I was declined?

Many applications ask whether you have ever been declined, so answer honestly. Insurers that belong to MIB may also see coded information from your earlier application. You can request your own MIB Consumer File to see what it contains.

How long should I wait before applying again?

It depends on the reason. If you were postponed, ask the insurer how much time it wants to see. If you were declined, have a specialist pre-screen your case first so your next application goes to a carrier that is likely to say yes.

Is guaranteed issue life insurance a good option?

It can be when other doors are closed, because there are no health questions. Coverage amounts are usually small, it costs more for the coverage you get, and many policies limit the full benefit in the early years, so compare the details before you buy.

Sources: MIB: request your MIB Consumer File

General information, not medical, legal or tax advice. Underwriting decisions are made by each insurance company, and policy features and availability vary by carrier and state.

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Reviewed by Tim Fuller on 2026-10-13

Tim Fuller

President, SRS Inc.

Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency), connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners.

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Worried About a Market Drop Before Retirement? How the IUL Floor Works

October 13, 2026 by Tim Fuller

Couple in their late 50s hiking at a mountain overlook, under the title Worried About a Market Drop? How the IUL Floor Works Before Retirement

Indexed universal life (IUL) credits interest based on a market index, with a floor, usually 0%, so the interest credited in a bad year is never negative. In return, the upside is limited by a cap or participation rate. The floor protects credited interest, not the whole account: policy charges still come out every year.

Key takeaways

A market loss in the years just before or after retirement can do outsized damage because withdrawals lock it in.
IUL credits zero, not a loss, in a negative index year; gains are credited up to a cap or participation rate.
Policy charges still apply, so cash value can go down in a zero-credit year.
Caps and participation rates are not guaranteed and can change, within contract minimums.

Why a loss near retirement hurts more

Planners call it sequence-of-returns risk. If the market falls early in retirement while you are withdrawing money, you sell more shares to get the same income, and those shares are not there when the market recovers. The same average return can leave two retirees with very different outcomes depending on when the bad years land.

How IUL crediting works

Cash value is not invested in the market. The carrier credits interest based on how an index performs over a set period, usually one year, using three levers:

Floor: the lowest rate that can be credited, usually 0%.
Cap: the highest rate that can be credited for the period.
Participation rate: the share of the index gain that counts toward the credit.

A hypothetical example, for illustration only: with a 0% floor, a 10% cap and 100% participation, an index year of minus 15% credits 0%, an index year of plus 6% credits 6%, and an index year of plus 20% credits 10%. Credited interest is locked in each period, so a later down year does not take it back.

The floor does not make IUL an investment without risk. It means a bad market year costs you growth, not credited losses.

What the floor does not protect

Policy charges. Cost of insurance and other charges are deducted regardless of the index, so a zero-credit year can reduce cash value.
Changing caps. Carriers can lower caps and participation rates, subject to guaranteed minimums in the contract.
Illustrations. Projections assume a rate that may not happen. Ask to see a conservative scenario.

Where IUL fits in a retirement plan

IUL is best used as one bucket alongside retirement accounts, not instead of them. Some retirees draw from cash value in years when the market is down, which gives their investment accounts time to recover. Others use it for tax-free income to manage their tax bracket.

It works best when it is funded for years before retirement. Someone who needs the money within 10 to 15 years, or who cannot fund a policy consistently, is usually better served by other tools.

Frequently asked questions

Can my IUL lose value?

Yes. The floor applies to credited interest, not to the account. Policy charges are deducted every year, so cash value can decline in a year with little or no credited interest.

Are caps guaranteed?

No. Current caps and participation rates can change. The contract states the guaranteed minimums.

Is my money invested in the stock market?

No. The index is only used to calculate the interest credited. Your cash value is not invested in the index.

Is IUL better than an annuity for downside protection?

They solve different problems. A fixed indexed annuity is built for retirement income and has no death benefit or cost of insurance; IUL adds life insurance and tax-free access through loans.

Financial professionals: download our free one-pager, Why Clients Buy Accumulation IUL, or request an illustration. Individuals: see who buys cash value life insurance, and who it’s not for, or ask Tim a question below.

General information, not tax, legal or investment advice. Tax treatment depends on proper policy design, keeping the policy in force and current law. Policy features, riders and availability vary by carrier and state. Illustrations are not guarantees.

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Reviewed by Tim Fuller on 2026-09-30

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Maxed Out Your 401(k)? How High Earners Use Indexed Universal Life

October 6, 2026 by Tim Fuller

Professional woman reviewing documents at a desk with a city view, under the title Maxed Out Your 401(k)? How High Earners Use Indexed Universal Life

Once a high earner has maxed out their 401(k) and earns too much to contribute directly to a Roth IRA, a well-funded indexed universal life (IUL) policy is one more place to save with tax advantages. There are no IRS income limits on who can buy one, growth is tax-deferred, and money can be reached tax-free through policy loans when the policy is designed and kept in force correctly.

Key takeaways

In 2026 the 401(k) employee limit is $24,500, and direct Roth IRA contributions phase out between $153,000 and $168,000 (single) or $242,000 and $252,000 (married filing jointly).
IUL premiums are limited by life insurance tax rules (the MEC limits), not by your income.
Money comes out through withdrawals up to what you paid in, then policy loans.
It is life insurance first: there are policy costs, and it works best over 15 years or more.

The gap high earners run into

For 2026 the IRS lets employees defer $24,500 into a 401(k), 403(b) or most 457 plans, plus catch-up contributions if they are 50 or older. Direct Roth IRA contributions phase out between $153,000 and $168,000 of modified adjusted gross income for single filers and between $242,000 and $252,000 for married couples filing jointly.

Above those levels, the remaining options are a backdoor Roth IRA, a taxable brokerage account, a deferred compensation plan if the employer offers one, or cash value life insurance. Each has a place. IUL appeals to people who also need life insurance and want tax-free income later.

How IUL fills the gap

An IUL policy builds cash value that is credited interest based on a market index, with a floor that keeps credited interest from going below zero and a cap or participation rate on the upside. The cash value grows tax-deferred.

How much you can put in is set by the tax code’s life insurance rules (sections 7702 and 7702A), which tie premiums to the death benefit. There is no income test. A policy funded too quickly becomes a modified endowment contract (MEC), which makes loans and withdrawals taxable first, so accumulation designs are built to stay just under that line.

For many high earners the question is not whether to save more. It is where the next saved dollar will be taxed least.

How the money comes out

Withdrawals up to your basis (the premiums you paid) are generally not taxable.
Policy loans after that are generally not taxable while the policy stays in force and is not a MEC.
The death benefit passes to beneficiaries generally free of income tax.

The catch is that loans accrue interest and reduce the death benefit. If a policy lapses with a large loan outstanding, the gain can become taxable all at once. Income plans need to leave enough value in the policy to keep it in force for life.

What it costs, and who it is not for

IUL has cost of insurance, policy charges and surrender charges in the early years. A taxable brokerage account has no insurance costs, so IUL only makes sense when the tax benefits and the death benefit are worth those charges to you. It is usually not a fit for money you may need within 10 to 15 years, for anyone who cannot fund it consistently, or for someone looking only for investment returns.

Designing it well

Accumulation IUL is usually designed with the smallest death benefit the tax rules allow for the planned premiums, an increasing death benefit option while you are funding it, and a switch to a level death benefit before income begins. Ask to see illustrations at more than one crediting rate, including a conservative one.

Frequently asked questions

Is IUL a replacement for a Roth IRA?

No. It is a complement. Many high earners do a backdoor Roth IRA first, then use IUL for additional savings, especially if they also need life insurance.

What is a MEC?

A modified endowment contract is a life insurance policy funded faster than the tax code allows. It loses tax-free access: loans and withdrawals are taxed as income first and may carry a 10% penalty before age 59½.

Are there income limits to buy IUL?

No. Premium limits come from the life insurance tax rules and the death benefit, not your income. Carriers do underwrite coverage amounts based on income and net worth.

How long should I plan to fund it?

Most accumulation designs assume funding for at least 7 to 10 years and holding the policy 15 years or more before taking income.

Sources: IRS: 2026 401(k) and IRA limits

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Reviewed by Tim Fuller on 2026-09-30

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Do Policy Loans Count Toward IRMAA or Social Security Taxes?

October 5, 2026 by Tim Fuller

Retired couple reviewing paperwork and a laptop at a dining table, under the title Do Policy Loans Count Toward IRMAA?

Generally, no. Loans from a life insurance policy that is not a modified endowment contract and stays in force are not taxable income. That means they do not count in the modified adjusted gross income Medicare uses for IRMAA surcharges, or in the combined income that decides how much of your Social Security is taxed.

Key takeaways

For 2026, IRMAA surcharges on Medicare Part B and Part D begin above $109,000 of MAGI for individuals and $218,000 for joint filers.
Up to 85% of Social Security benefits can be taxed once combined income passes $34,000 (single) or $44,000 (joint).
Policy loans do not show up in either calculation; 401(k) and IRA withdrawals do.
The policy must stay in force: a lapse with a loan outstanding can create taxable income.

How IRMAA works

Medicare’s income-related monthly adjustment amount (IRMAA) adds a surcharge to Part B and Part D premiums for people with higher income. For 2026 the standard Part B premium is $202.90 a month, and surcharges start when modified adjusted gross income is above $109,000 for individuals or $218,000 for married couples filing jointly. Medicare uses your tax return from two years earlier, so 2024 income sets 2026 premiums.

Because the brackets are cliffs, one extra dollar of income can raise premiums for the whole year. A large IRA withdrawal, a Roth conversion or a capital gain can push someone over.

How Social Security is taxed

The IRS looks at your combined income: adjusted gross income, plus nontaxable interest, plus half of your Social Security benefits. For single filers, up to 50% of benefits can be taxed above $25,000 and up to 85% above $34,000. For joint filers, the levels are $32,000 and $44,000. These thresholds are not indexed for inflation, so more retirees cross them every year.

Every dollar of retirement income is taxed somewhere. The planning question is which bucket it comes from, and in which year.

Where policy loans fit

A policy loan is a loan against your cash value, not income, so it is not reported on your tax return. Used alongside retirement account withdrawals, it lets a retiree take the income they need while keeping reported income under an IRMAA bracket or a Social Security threshold.

Withdrawals up to your basis (premiums paid) are also generally not taxable.
Roth IRA qualified distributions are tax-free too; cash value is another source alongside them.
Traditional IRA and 401(k) withdrawals, pensions and most annuity income are taxable and count toward both calculations.

The catches

Policy loans accrue interest, and they reduce the death benefit. If a policy lapses or is surrendered with a loan outstanding, the gain above your basis becomes taxable in that year, which could cause the very IRMAA and tax problem you were avoiding. Income from a policy needs to be planned so the policy stays in force for life.

This also only works if the policy was funded years earlier. It is a strategy to set up in your 40s and 50s, not the year you retire.

Frequently asked questions

Are life insurance withdrawals taxable?

Withdrawals up to your basis, the premiums you paid, are generally not taxable. Amounts above basis are taxable unless taken as a policy loan.

Do I pay interest on a policy loan?

Yes. Policy loans accrue interest. Some policies offer fixed-rate loans and others variable or indexed loans, each with different risks.

Does this work with a MEC?

No. Loans and withdrawals from a modified endowment contract are taxed as income first, so they can count toward IRMAA and Social Security taxation.

Which year’s income sets IRMAA?

Medicare generally uses your tax return from two years earlier. For 2026 premiums, that is your 2024 return.

Sources: CMS: 2026 Medicare Parts A & B premiums · SSA: income taxes on benefits

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Reviewed by Tim Fuller on 2026-09-30

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Life Insurance vs. a 529 Plan: Saving for a Child Who May Not Go to College

October 2, 2026 by Tim Fuller

Parent and teenage son talking at a kitchen table with a laptop, college brochures and a toolbox, under the title Life Insurance vs. a 529 Plan: Saving for a Child Who May Not Go to College

For most families, a 529 plan is the most efficient way to save for college. Cash value life insurance appeals to parents who want flexibility if their child chooses a trade, starts a business or skips college, and who also want the plan protected if a parent dies. Many families use both.

Key takeaways

529 earnings are tax-free when spent on qualified education; earnings used for other purposes are taxed and usually hit with a 10% additional tax.
Cash value life insurance can be used for anything, through withdrawals and policy loans, with no education requirement.
Cash value is generally not reported as an asset on the FAFSA.
Life insurance needs years of consistent funding before the cash value is meaningful.

Where a 529 plan shines

A 529 plan is purpose-built for education. Growth is tax-deferred, withdrawals for qualified education expenses are tax-free, and many states give a state income tax deduction for contributions. Under SECURE 2.0, a 529 that has been open at least 15 years can also roll up to $35,000, over the beneficiary’s lifetime, into a Roth IRA for that beneficiary, subject to annual Roth limits.

The trade-off is the restriction. Earnings withdrawn for non-qualified expenses are subject to income tax and, in most cases, a 10% additional tax. That additional tax is waived up to the amount of a tax-free scholarship, but the income tax still applies.

Where cash value life insurance fits

A permanent policy, such as indexed universal life or whole life, builds cash value that can be reached through withdrawals and policy loans for any purpose. If your child becomes an electrician, a business owner or a missionary instead of a college student, the money is still usable without a penalty.

There are two common designs. A policy on a parent protects the plan: if the parent dies, the death benefit can fund the goal. A policy on the child builds a very long runway and gives the child lifelong coverage, and it is often started by grandparents.

The question is not which account is better. It is how sure you are that the money will be spent on college.

Side by side

	529 plan	Cash value life insurance
Best for	Money you are confident will pay for education	Money that may be used for education or something else
Tax on growth	Tax-deferred; tax-free for qualified education	Tax-deferred; tax-free access through loans and withdrawals to basis if designed and kept in force correctly
Non-education use	Earnings taxed plus, usually, a 10% additional tax	No penalty; loans reduce the death benefit
FAFSA	Parent-owned 529 is reported as a parent asset	Generally not reported
Death benefit	None	Yes
Early-year costs	Low	Higher; surrender charges in early years

The honest trade-offs

Life insurance has costs a 529 does not: cost of insurance, policy charges and surrender charges in the early years. That means cash value grows slowly at first and needs roughly 10 to 15 years or more to work well. If college is only a few years away, a 529 or a savings account is usually the better tool.

Loans and withdrawals also reduce the death benefit, and a policy that lapses with a loan outstanding can create a tax bill. The policy needs to be designed and monitored with the goal in mind.

Using both

Many families put their base college savings in a 529, then add a cash value policy for flexibility and protection. That way the education dollars get the best tax treatment, and the family still has money that can go anywhere life leads. See how SRS approaches college funding.

Frequently asked questions

Is cash value life insurance counted on the FAFSA?

Cash value life insurance is generally not reported as an asset on the FAFSA. Schools that use the CSS Profile may ask about it.

What happens to a 529 if my child gets a scholarship?

You can withdraw up to the scholarship amount without the 10% additional tax, but the earnings portion is still subject to income tax.

Can I use a 529 and life insurance together?

Yes. Many families use a 529 for money they are confident will go to education and cash value life insurance for flexibility and protection.

How long before the cash value is useful?

It depends on the design and funding, but cash value life insurance usually needs 10 to 15 years or more to build meaningful value.

Sources: IRS Publication 970 (529 plans) · Saving for College: assets and financial aid

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Reviewed by Tim Fuller on 2026-09-30

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Why Grandparents Buy Life Insurance for Their Grandchildren

October 1, 2026 by Tim Fuller

Grandparents helping their young grandson plant a tree in the backyard, under the title Why Grandparents Buy Life Insurance for Their Grandchildren

Grandparents buy permanent life insurance on a grandchild to give a gift that keeps growing for decades: coverage the child keeps for life, plus cash value that can later help with college, a first home or a business. The grandparent owns and pays for the policy, so they stay in control until they decide to hand it over.

Key takeaways

The grandparent is usually the owner and payor; a parent or guardian normally signs the application for a minor.
Starting young means low insurance costs and many decades for cash value to grow.
The grandchild keeps coverage for life, no matter what happens to their health later.
Handing the policy to the grandchild later counts as a gift, so plan the timing with a tax advisor.

What grandparents are really buying

Most grandparents who ask about this are not worried about a death benefit on a child. They want to leave something meaningful that outlasts them, and they would rather not hand an 18-year-old a check. A permanent policy lets them do both: it builds value slowly and quietly, and it arrives with guardrails.

A head start. Cash value that can grow for 20, 30 or 50 years before anyone needs it.
Lifelong insurability. Coverage that stays in place even if the grandchild later develops diabetes, heart disease or another condition that makes insurance expensive or unavailable.
A legacy with a story. Many grandparents hand the policy over at a milestone, such as graduation, a wedding or age 30, along with a letter about why they started it.

How the policy is set up

Three roles matter. The owner controls the policy and pays the premiums; this is usually the grandparent. The insured is the grandchild. The beneficiary, who receives the death benefit, is often a parent while the child is young.

Name a successor owner too, usually a parent. If the grandparent dies before handing the policy over, the successor owner takes control and the policy keeps going instead of ending up in the grandparent’s estate paperwork.

When the grandchild is ready, ownership can be transferred to them. That transfer is a gift. In 2026 the IRS annual gift tax exclusion is $19,000 per recipient, and the value of a transferred policy is generally measured by its value at the time of transfer, not the premiums paid. A tax advisor can help time it.

The most valuable part of the gift may be insurability: coverage locked in before the grandchild has any health history at all.

Whole life or indexed universal life?

Whole life has guaranteed cash value growth and fixed premiums. It suits grandparents who want predictability and a set payment schedule.

Indexed universal life (IUL) credits interest based on a market index, with a floor that keeps credited interest from going below zero, and it allows flexible premiums. It suits grandparents who want more growth potential and are comfortable with non-guaranteed crediting. Policy charges apply to both designs, so either one needs to be funded as planned.

What the money can do later

Once the grandchild owns the policy, they can use the cash value through withdrawals and policy loans for anything: tuition, a down payment, starting a business, or leaving it alone to keep growing. Unlike a 529 plan, there is no penalty if the money is not spent on education.

Cash value life insurance is also generally not reported as an asset on the FAFSA. Some private colleges that use the CSS Profile ask about it, so check with the schools on the list.

Limits and things to watch

Coverage limits. Carriers cap how much insurance a child can have, often based on how much coverage the parents carry.
Early years. Surrender charges and policy costs are highest in the first 10 to 15 years, so this works best as a long-term gift.
Funding. Paying in too much too fast can turn the policy into a modified endowment contract (MEC), which changes how withdrawals and loans are taxed. The policy should be designed to stay under those limits.
Consent. Rules on who can insure a child vary by state and carrier.

Frequently asked questions

Do the parents need to agree?

Usually yes. Most carriers require a parent or legal guardian to sign the application for a minor, and rules vary by state.

Can I buy a policy for each grandchild?

Yes. Each grandchild gets a separate policy, and each one is subject to the carrier’s coverage limits for children.

What happens if I die before I hand the policy over?

If you name a successor owner, usually a parent, that person takes over ownership and the policy continues.

Does the cash value count against financial aid?

Cash value life insurance is generally not reported as an asset on the FAFSA. Some schools that use the CSS Profile may ask about it.

Sources: IRS: gift tax FAQs · Saving for College: assets and financial aid

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Reviewed by Tim Fuller on 2026-09-30

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Final Expense Insurance: The Supplemental Sale Clients Actually Need

September 23, 2026April 18, 2022 by Tim Fuller

Happy family of four laughing together on the couch, representing life insurance protection

Advisors are usually focused on products that meet an immediate need or a long-term planning objective — which is exactly why final expense insurance often doesn’t come up until a client’s later years, when premiums are far more expensive than they needed to be.

Key takeaways

Final expense coverage gets meaningfully more expensive the longer a client waits to address it.
Dying without earmarked funds can force a grieving family into real financial sacrifices just to cover a funeral.
This isn’t a big-ticket sale individually, but it complements existing coverage and rounds out a client’s plan.

Adding a $15,000-$20,000 child rider to a term policy covers final expenses for both parent and children — without asking a younger client to think about their own mortality before they’re ready to.

Why this coverage gets overlooked

If a client dies without funds earmarked for final expenses, their surviving family and friends can be put in a genuinely difficult position, sometimes forced into lifestyle sacrifices just to cover a proper burial. Losing a loved one is already hard to manage; making sure the funeral costs aren’t an added burden is one of the more meaningful things a policy can do, even if it’s not a large sale on its own.

Why it’s worth raising earlier, not later

These aren’t big-ticket sales individually, but collectively they create a solid supplemental line that complements existing offerings, and they get meaningfully more expensive the longer a client waits to address them. For younger clients who already have kids, final expense coverage may not feel like an immediate need — in that case, adding a child rider for $15,000 to $20,000 to a term policy is an affordable way to provide coverage on both the parent and any children, without asking the client to think about their own final expenses before they’re ready to.

Contact us today if you’d like to learn more about final expense planning and the solutions available in your state or states of operation.

Frequently asked questions

Why should final expense coverage come up earlier rather than later in a client’s life?

Premiums for final expense coverage increase significantly with age, so raising it earlier gets clients a more affordable rate and avoids leaving family members to cover funeral costs unexpectedly.

What’s an alternative for younger clients who don’t see final expense as an immediate need?

A child rider, typically

Why should final expense coverage come up earlier rather than later in a client’s life?

Premiums for final expense coverage increase significantly with age, so raising it earlier gets clients a more affordable rate and avoids leaving family members to cover funeral costs unexpectedly.

What’s an alternative for younger clients who don’t see final expense as an immediate need?

A child rider, typically $15,000 to $20,000, added to a term policy, provides affordable coverage on both the parent and any children without requiring the client to purchase a standalone final expense policy.

5,000 to $20,000, added to a term policy, provides affordable coverage on both the parent and any children without requiring the client to purchase a standalone final expense policy.

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Reviewed by Tim Fuller on 2026-09-23

Tim Fuller

President, SRS Inc.

Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency) connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners — with the impaired-risk and complex-case expertise to place business other IMOs and BGAs turn away.

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Indexed Universal Life: A New Savings Plan!

September 25, 2026April 11, 2022 by Tim Fuller

When traditional savings yields are stuck near zero and clients are wary of market risk, Indexed Universal Life offers a middle path: growth tied to an index, with a floor that keeps a bad year from becoming a bad decade.

Key takeaways

IUL’s 0% floor means a bad market year doesn’t reduce the policy’s value, unlike a directly-invested account.
Upside is capped — often as high as 13% — but that tradeoff is what funds the downside protection.
IUL fits college savings, key employee retention, and executive compensation cases where clients want growth without full market exposure.

If an index drops 20% in a given year, an Indexed Universal Life policy with a 0% floor doesn’t lose value — while a gain can be credited up to a cap as high as 13%.

How the downside protection actually works

Indexed Universal Life carries a 0% floor: if the index drops 20% in a given year, the policy’s value isn’t reduced by that loss. When the index is up, the client realizes a gain credited up to an interest rate cap, which can run as high as 13% depending on the carrier and product.

Which indices clients can choose from

Most IUL products are tied to the S&P 500, though some carriers also offer the Hang Seng and EURO STOXX 50 as additional index options within that carrier’s lineup.

Who this fits best

Prospects building a college savings account, retaining a key employee, or compensating a high-level executive are all strong fits — anyone who wants long-term accumulation without full exposure to market volatility.

Frequently asked questions

Can the policy actually lose value if the index drops?

No — the 0% floor means a negative index year doesn’t reduce the policy’s value, though cost of insurance and fees still apply regardless of index performance.

Is the participation rate the same as the interest rate cap?

No. The cap limits the maximum credited rate; the participation rate determines what percentage of the index’s gain counts toward that credit. Both vary by carrier and index.

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Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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10 Common Life Insurance Mistakes and How Advisors Can Help Clients Avoid Them

September 25, 2026March 28, 2022 by Tim Fuller

Placing the right policy, in the right amount, with the right ownership and beneficiary details is harder than it looks. Knowing the most common pitfalls helps your clients get the protection they intended — and makes you a stronger advisor.

Key takeaways

Beneficiary errors — naming the estate, naming minors outright, or skipping contingent beneficiaries — are among the most common and most avoidable mistakes.
Ownership and structure matter: having the insured own every policy can create estate and control problems.
Coverage needs change, term runs out, and life insurance isn’t a commodity — regular reviews protect clients from all three.

Checking in on a client’s policies at least every three years catches most of these mistakes before they become expensive.

Beneficiary mistakes

Naming the estate as beneficiary. This can expose proceeds to probate, delay and creditors.
Failing to name at least two contingent beneficiaries. If the primary beneficiary predeceases the insured, the proceeds may default to the estate.
Making the policy payable outright to minor children or grandchildren. Minors can’t receive proceeds directly, which can force a court-supervised guardianship. A trust or custodial arrangement is usually better.

Ownership and structure mistakes

All the insurance on the client’s life is owned by the client. For larger estates, an irrevocable life insurance trust can keep proceeds out of the taxable estate. See our overview of the $15 million federal estate tax exemption for who still needs this planning.
Not checking whether a business or practice can provide coverage more efficiently. Executive bonus, split-dollar, key person and buy-sell arrangements may fund coverage more effectively than personal dollars.

Design and amount mistakes

Matching the problem with the wrong type of insurance. A permanent need funded with term, or a temporary need funded with permanent coverage, rarely ends well.
Inadequate coverage for the family’s goals. Coverage should reflect income replacement, debts, education and long-term plans, not a round number.
Forgetting that term (including group term) runs out. Term coverage ends or becomes prohibitively expensive at older ages, and group coverage often ends with employment.

Process mistakes

Failing to review policies at least every three years. Marriages, births, business changes and policy performance all warrant a fresh look.
Buying life insurance as though it were a commodity. Underwriting niches, contract features, conversion privileges and carrier strength vary widely. The lowest premium isn’t always the best value.

Our life sales team can help you place the right policy quickly and avoid these pitfalls on your next case — contact us anytime.

Frequently asked questions

Why shouldn’t a client name their estate as beneficiary?

Proceeds paid to an estate generally go through probate, which can delay payment, add cost, and expose the money to the estate’s creditors. Naming individuals or a trust usually avoids this.

Can a minor be named as a life insurance beneficiary?

A minor can be named, but insurers typically can’t pay proceeds directly to a minor. A court may need to appoint a guardian. A trust or UTMA custodial designation is usually a better approach.

How often should life insurance be reviewed?

At least every three years, and after major life events such as marriage, divorce, a birth, a business change or a significant change in income or health.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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Older Universal Life Policies at Risk of Lapse: When to Review

September 25, 2026March 21, 2022 by Tim Fuller

Many universal life policies still in force today were designed around interest rate assumptions far higher than what those policies have actually credited. Clients often don’t realize their coverage may be heading toward lapse. A proactive review can protect the death benefit — and your relationship.

Key takeaways

Current-assumption UL policies depend on credited interest and cost-of-insurance charges, so lower-than-illustrated crediting can quietly shorten how long coverage lasts.
An in-force illustration at current and guaranteed assumptions is the best way to see whether a policy is on track.
Options range from increasing premium or reducing the face amount to exchanging into a policy with stronger guarantees, depending on health and goals.

LIMRA research has found that 21% of consumers had no idea what type of coverage they had bought — many owners of older UL policies don’t know it can lapse.

Why older UL policies can drift off course

Universal life was built on flexibility: the owner pays premiums into an account, the carrier credits interest, and monthly cost-of-insurance and expense charges come out. Premiums were often set at the minimum needed to keep the policy in force under the interest rate illustrated at the time of sale.

When actual crediting falls below that illustrated rate for many years — and when cost-of-insurance charges rise with age — the cash value can erode faster than expected. A policy that looked guaranteed to age 100 may now be projected to lapse in the client’s 80s, precisely when replacing coverage is hardest.

Warning signs that call for a review

The policy was issued many years ago on a current-assumption (non-guaranteed) basis
Premiums have been paid at the originally illustrated minimum, or skipped
Cash value has been flat or declining on annual statements
The client has taken loans or withdrawals
The carrier has announced cost-of-insurance changes
The client can’t say how long the coverage is expected to last

Research from LIMRA has found that more than 60% of life insurance shoppers are proactive, often prompted by a desire to review coverage. Many clients will welcome the call.

How to run the review

Request an in-force illustration from the carrier showing projected values at both current and guaranteed assumptions, using the premium the client is actually paying. Then answer three questions:

At current assumptions, when does the policy lapse?
What level premium would carry it to the client’s target age?
Is the original need still the right need today?

If the client’s health is good, new underwriting may open better options. Our field underwriting guide can help you gauge where a client may qualify before you apply.

Options when a policy is underfunded

Increase premium to restore the projected duration
Reduce the face amount to fit the existing funding
Exchange into a guaranteed UL or other product with stronger guarantees, potentially through a tax-free 1035 exchange
Add long-term care or chronic illness benefits where a modern policy can address additional needs

Any replacement should be evaluated carefully against surrender charges, new contestability and suicide periods, and the client’s current insurability. Our team can help you run the comparisons.

Frequently asked questions

Can a universal life policy lapse even if premiums were paid?

Yes. If the premium paid was based on an illustrated interest rate that wasn’t achieved, or if cost-of-insurance charges increased, the cash value can run out and the policy can lapse despite regular payments.

What is an in-force illustration?

It is a current projection from the carrier showing how an existing policy is expected to perform going forward, at both current and guaranteed assumptions, based on the premiums you specify.

Is a 1035 exchange a good fix for an underfunded UL policy?

It can be, if the client is insurable and a new policy provides stronger guarantees at an acceptable cost. It should be compared against increasing premium or reducing the face amount, considering surrender charges and new contestability.

50+ Years in Business60+ Top-Rated Carriers★★★★★ Rated by Advisors

Reviewed by Tim Fuller on 2026-09-25

Tim Fuller

President, SRS Inc.

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Why one decline is not the final answer

Step 1: Find out why you were declined

Step 2: Do not rush into another formal application

Step 3: Gather your medical details

Step 4: Know the difference between declined and postponed

Step 5: Options if traditional coverage is not available

How SRS can help

Frequently asked questions

Tim Fuller

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Why a loss near retirement hurts more

How IUL crediting works

What the floor does not protect

Where IUL fits in a retirement plan

Frequently asked questions

Tim Fuller

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The gap high earners run into

How IUL fills the gap

How the money comes out

What it costs, and who it is not for

Designing it well

Frequently asked questions

Tim Fuller

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How IRMAA works

How Social Security is taxed

Where policy loans fit

The catches

Frequently asked questions

Tim Fuller

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Where a 529 plan shines

Where cash value life insurance fits

Side by side

The honest trade-offs

Using both

Frequently asked questions

Tim Fuller

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What grandparents are really buying

How the policy is set up

Whole life or indexed universal life?

What the money can do later

Limits and things to watch

Frequently asked questions

Tim Fuller

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Why this coverage gets overlooked

Why it’s worth raising earlier, not later

Frequently asked questions

Why should final expense coverage come up earlier rather than later in a client’s life?

What’s an alternative for younger clients who don’t see final expense as an immediate need?

Tim Fuller

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How the downside protection actually works

Which indices clients can choose from

Who this fits best

Frequently asked questions

Tim Fuller

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Beneficiary mistakes

Ownership and structure mistakes

Design and amount mistakes

Process mistakes

Frequently asked questions

Tim Fuller

We’re Here to Help

Why older UL policies can drift off course

Warning signs that call for a review

How to run the review

Options when a policy is underfunded

Frequently asked questions

Tim Fuller

We’re Here to Help

Tim Fuller