Walk through a sample Par Accumulator illustration II

Case study

Important: Please read the Sun Life Illustrations module before completing this case study.

Use Sun Life Illustrations to illustrate a Sun Par Accumulator II with the following information:
Mark Roy is a business owner who is looking for protection that provides early cash values. This would provide him with the flexibility to access cash value when he needs it. During your meeting, you heard the following needs and circumstances that need to be considered when proposing a solution:

  • He is interested in a participating permanent life insurance policy that provides flexibility. Mark needs payment flexibility along with access to cash value if he needs it.
  • Mark stated that having upfront cash values are very important to him.
  • His current insurance need is $750,000. However, he expects the value of his business to increase.
  • He feels that the market will fluctuate in the coming years and would like to the illustration to reflect possible changes to the dividend scale.

Plan & client details

  • Plan type is Single life.
  • 45 year-old male, non-smoker with no ratings.

Coverage details

  • Coverage amount is $750,000.
  • Dividend option is Paid up additional insurance (PUA).
  • Premium options is Life Pay.
  • Premium frequency is Yearly.
  • Plus premium is Maximum from year 1 to offset.
  • Premium offset is Earliest .

Assumptions

  • Primary dividend scale is Custom
    • Current dividend scale is from 1 - 3 years.
    • Current minus 1% is from 4 - 10 years.
    • Current minus 1.5% is from 11-20 years.
    • Current minus 2% thereafter.
  • Marginal tax rate is 45% for life

Optional benefits

  • Leave the default of Total disability waiver selected with the Rating as Standard.
  • Business value protection is $500,000.

Creating an illustration in Sun Life Illustrations: 

Important: The screen shots in this document may differ from when you run the case study.

We've completed this illustration using version 3.0.0 of Sun Life Illustrations along with system defaults. Also, if you complete the steps in a different order, the information in your illustration may be different than what's displayed in the screen shots.

 

1. From your desktop, double click the Sun Life Illustrations icon.

2. Under the Start a new product illustration section, select the Sun Par Accumulator II link.

 

The Sun Life Illustrations page opens and defaults to the PLAN DESIGN tab.

3. Under the Plan & client details section, select Single life, and enter Mark's information.

4. Under the Coverage details section:

  • in the Coverage amount field, enter the $750,000.
  • for Dividend options, leave the default of Paid Up Additional Insurance (PUA) selected.
  • for Premium options, leave the default of Life Pay selected.
  • for Premium frequency, select Yearly.
  • for Plus premium, select Include and leave the default of Maximum selected, and the default for To (year) set to Offset.
  • for Premium offset, select Earliest.

As you enter information, the Illustration Summary displays the details of the plan and any important messages.

Things to remember

If a client is eligible and decides to go on premium offset and the dividend scale is reduced in the future, they may have to resume paying premiums to maintain their coverage.

If the policy owner wishes to go on premium offset at some time in the future, then the plus premium benefit is no longer available. Plus premium benefit payments stop and they cannot be restarted while the policy is on premium offset.

5. Under the Assumptions section:

  • From the Primary dividend scale drop-down list, select Custom and leave the default of Year selected.
  • from the Current minus drop-down list, leave the default of 0.0% and in the From year leave the default of 1 and in the To year enter 3.
  • click the Add a change button.
  • from the Current minus drop-down list, select 1.0% and in the From year leave the default of 4 and in the To year enter 10.
  • click the Add a change button.
  • from the Current minus drop-down list, select 1.5% and in the From year leave the default of 11 and in the To year enter 20.
  • click the Add a change button.
  • from the Current minus drop-down list, select 2.0% and in the From year leave the default of 21 and in the To year enter 55.
  • for Marginal tax rate, leave the default of Year and 45.00%, and in the To year field leave the default of 55.

Tip!

Premiums for optional benefits may continue past the payment period of the base plan where applicable.

6. From the Optional benefits including Term insurance, section under Other optional benefits:

  • select Total disability waiver with the Rating as Standard.
  • select Business value protection and in the Amount field enter $500,000.

Tip!

  • The Business value protection benefit (BVPB) makes it easier for business owners to increase their life insurance without medical evidence when their share of the business grows in value.
  • If a client becomes disabled, they may be unable to pay their premiums. The total disability waiver benefit provides low-cost disability protection, helping clients maintain their valuable life insurance coverage.

7. From the Illustration Summary section, click the Refresh button.

8. Click Save, and from the Save illustration dialog box, in the Illustration name field give the recommended name of Firstname Lastname Product Coverage amount and then click Save.

9. Click the REPORT DESIGN tab.

10. For the Designed for field enter in Mr. Mark Roy and then select Cover Page.

The Client Report Options that are greyed out are mandatory and will always print on a report.

If you select Business card information to be printed on the report, ensure your name shows above the manage business cards link.

11. Click View Client Report to open the report in Adobe Reader.

12. From the File drop-down menu, Save As.