I have quite a few people come into my office and they’re over 59 1/2 and they have CDs. And we know right now with the interest rates being so low, that they are not really getting a good rate of return.
I’d like to talk to you today about a product that we have that might help them. It’s a universal life policy and it’s called CVAT. And what that means is Cash Value Accumulation Test. And there are four key points that I cover when I talk to customers about this product.
1) It’s usually a better rate of return versus a CD. Once you take out the cost of the life insurance part of it, it generally averages around a 3% rate of return. Of course this fluctuates periodically depending on the market.
2) If you are over 59 1/2, you can take money out of that policy anytime you want without a penalty.
3) It’s tax-deferred. Whatever money you put in is completely tax free, so you don’t pay any taxes on it throughout the year like you do a CD until you take it out and then you are taxed on the gain.
4) The death benefit. A lot of time when I talk to someone, they have a CD that they are going to leave to their kids. And they’ll probably never touch that money, but they want to be able to take care of it and access it. But they want to leave as much of it as they can to their children. If you qualify through underwriting, usually the death benefit will be more than you would have had in that CD you would leave them.
So give this some thought and let me know if you would like more information on this product. In today’s economy, you want to protect your valuable assets and leave as much as you can to your children. This may be an option for you.