Guardian Life Insurance Review Front Load Policy Long-Term Care & Company Benefits

 Hey everyone, we are back with Alden Armstrong, the head of product here at Better Wealth and today we're going to be talking about all things Guardian life insurance company. Yes, many people have been requesting this company and so Alden I know that you rolled up your sleeves and got down and dirty as relates to the good the bad the ugly as relates to Guardian life insurance carrier company And I also know that we're gonna show some numbers in case studies as well And so without further ado, man, welcome back. All right, awesome. Well, thanks so much Caleb I appreciate it. I'm really excited to be back on the show today In the past you've seen me we've reviewed pen mutual one-America Lafayette life and we're hitting it off again with Guardian So today's gonna be a little bit different We're gonna dive into some of the statistics around Guardian first with their good at what they're not and we're gonna put it up into a format on your screen So you can start to compare those between carriers as we go through additional carriers And we'll ultimately come back around to pen Lafayette life and one-America as well First of all one thing to mention Guardian life insurance company of America is one of the largest four mutual companies in the United States massive massive company found in 1860 They have been mutual for just at or just under a hundred years So 1925 they became a mutual insurance company They declared a one point almost four billion dollar dividend to their policyholders this year So they're not a small company by any means very large company They are direct recognition when it comes to loan recognition if you don't know what that means I'm gonna plug a video that we've done on that in the past Comdex score of 99 out of 100 Comdex as we know as a conglomerate rating with multiple rating agencies Basically, this is saying is They're amazing and they have a really really strong financial structure to their company And If for those of you who don't know New York is a very difficult state to do insurance in Guardian is able to write insurance in New York, which is not something that all carriers can claim It's pretty great. So and in summary they've been around for over a hundred years But they've only been mutual It's gonna coming up on their hundred year mutual birthday next year So they've been paying dividends for 99 years in a row and yeah, they're massive company They declared a dividend of 1.4 billion dollars, which is which is a lot of silver. Yeah, thank you. Thank you Thank you for that solid rating and Definitely one of the few insurance carriers that are willing to do this in New York now I'm gonna dive into some things that we like about guardians some things that are unique and as you see as we start Comparing multiple carriers across multiple videos where each carrier is different and why they may excel in some areas instead of others So something that is important to understand is the writers at the insurance company These are the things we add to the policy to get some additional benefit every whole life policy We build if we're building with cash value needs to have a term writer So the two types of term writer that are available at this carrier is an annual renewable term And then also a level term will define those as we go through the video some other unique writers that make guardian a great place for some people Is going to be they have true long-term care insurance writers that can be added on the whole life policies If you have ever had to talk to your grandparents talk to your even your parents Long-term care insurance if it's traditionally owned will increase in premium over time And that sucks if you're on a fixed income blending it with long-term care in a whole life insurance mitigates that risk. They also have a very unique industry Unique writer of a disability income writer so we can attach that to a policy If you become disabled, they'll pay you an income as well as waving your premium which is pretty great They have a waiver premium writer now every company we work with has that one thing the guardian has In addition is a paid-up additions waiver So if you're paying 20 grand a year and 20 grand or 18 of that is paid-up additions If you become disabled they're going to pay your paid-up additions moving forward as well Absolutely insane, but a very very unique writer last one here is the index participation feature writer now This is similar to what we discovered with one America Effectively you can index a portion of your dividend That's shared back to you from a mutual company and attach it to the S&P 500 Depending upon the performance of that index your dividend could double in size or it could be decreased So for some of our clients they like that idea of additional upside potential while still maintaining at minimum growth every single year With a whole life chance Exactly, whereas it's not an IUL product they don't even sell IUL this carrier All right, so a couple of things to note Underwriting at this carrier is very strong. We've got the normal approval timeframe of about eight weeks from application to offer And then if we get accelerated underwriting the average right now is about three weeks So we'll get through the process fairly quick overall some some things to understand Yes someone's someone's looking at that and going eight weeks. How is that fairly good? Welcome to the life insurance world So overall one of the things I like about this carrier is they're big enough to throw money around and they've got a mobile app So very few insurance companies we work with have a mobile app for clients So that's just a cool feature out through and here for free now They're best in the front loaded design space and that's what we're going to look at today The other areas they excel at is whole life and long-term care blends as I mentioned Then two things we won't look at today But I want to put on your radar is disability income insurance guardian is one of the major players in that field I have my personal disability and compolacy through guardian And then also they are very good at premium finance areas. They could improve So these are two big ones for me Cash flow design we can't do it at guardian with any degree of efficiency and that's just unfortunate The second is agent compensation You're not going to see a whole lot of guardian insurance Illustrations going around YouTube with an iBC community because the compensation is below industry average That said if this is the right carrier for the right client, it's the right choice So this is a great overview and we can dive into details after this Yeah, I mean we have a belief at better wealth where it's like do the right thing for the client You will be taken care of but this is because of the New York Especially New York has very strange and boss and because they're a New York based company This ultimately dictates what can get paid what can and and this is one of the reasons why Many people don't write with guardian because of the way that we design policies. We're already Max funding when you max fund with that with a carrier like guardian it it does It's pretty noticeable. Let's put it that way and the first thing we're going to look at Today is a front-loaded design policy with guardian I've built this on a 40-year-old male and we're doing a front-load of $250,000 a year a lot of numbers on your screen. So as per usual I'm going to run around and make some highlights to help you understand what's going on here The very middle of your screen. We've got net aftertax outlay This is the annual premium that we're looking at so you'll notice I've got $50,000 going in per year after the initial front-load and after 10 years that the number drops to zero So what I've done is I've illustrated an offset the policy is matured enough to now We're going to drop off the term insurance rider I'll cover that in a second and the policy is going to pay for itself Just continue to drive cash value and maintain death benefit moving forward This is a very important aspect of guardian insurance policies because in order to do a front-loaded with this carrier A highlighted here. We have to buy one-year term insurance now annual renewable term one-year term insurance Goes up and cost every year that you're alive. So over a long period of years that can become extremely inefficient So guardian specifically excels in the ability to bundle one-year term policies Into a whole-life policy for a short period of funding. So it's a fairly unique structure But as we can see here total premium outlay 250 grand have over 90% cash value in the first year Which is a very strong competitive number in the industry I think the number is about 93 to be exact The other thing I want to highlight per Caleb's request is the break-even point So if you work with me you understand I don't care about break-even points And we've had a lot of fun conversations with my clients about that But I know a lot of people want to see it. So here you go break-even. We got 400,000 after four years of funding We have over 400,000 in cash value every year after that that gap continues to get wider and wider So I'm going to pause for a moment. Caleb anything you want me to clarify or touch on here? No, I appreciate you looking into that and yeah break-break-even points Really only matter if you cancel your policy the reason I like looking at is it just gives a baseline if a policy breaks even in year 10 One breaks even it's just interesting data There's not it's not a right or a wrong. It's just interesting when it comes to data I do find the annual renewable term Decreasing very interesting. That's an interesting benefit that you get with And we left dive into that very briefly here So when we when we talk about life insurance and the way that we're building them to overfund What we're doing is we're allocating a portion of our premium dollars To paid up additions. What does paid up additions do? Well, remember It's technically buying more permanent life insurance and a byproduct of that is cash value So when I'm looking at this policy most of our premiums going toward paid up additions If you look straight up here in that first year you're putting in 250,000 If you can see the highlighted number there Over 235 grand is going toward paid up additions buying permanent insurance That's also creating a lot of cash value So coming back to down to the illustration This column is telling us how much permanent death benefit has been purchased and this policy from paid up additions So what you'll see is this number goes up every single year all the way out to 10 years and this term does the opposite It goes down because overall the death benefit stays level So what we have is we have an increasing paid up additions death benefit in a decreasing term rider This is the only reason annual renewable term makes sense in this context because even though it gets more expensive every year The amount you need to buy goes down every year Which means the cost often is also going down right per year because of the amount of coverage you're buying And in this case if you were going to continue to fund $50,000 out of pocket would you have to keep the annual renewable term on and would it just continue to increase? That's right. If we wanted to maintain funding at that or a higher level We would have to maintain the term insurance rider for a period of time A guardian is a little unique in any of my Nerd geek friends out there are going to love me for saying this everyone else is going to go When when we look at this policy We have to understand that when we have this certain type of term rider on here We can do 10 times the base premium in paid up additions So what that means is this ceiling of this policy starting year two our base premium Which we haven't covered yet is about 10 grand we could go all the way up to a hundred thousand dollars in this policy If we wanted to once we pull the term rider off We're limited to a three x multiple meaning after the term drops off we can only get in 40 grand Which still is amazing so you could fund up to 40,000 ongoing with no term rider It's gonna it's gonna depend on how you funded it in the past ten years because of the mech concerns And if we drop death benefit too quickly that may cause a mech So that's where you work with your coach and figure out what you want to do Yeah, so overall one of the things I love about this company in this particular strategy is the huge degree of cash value You getting that first year and a very unique structure to guardian that we don't find with any other insurance carrier is their loan feature So guardian is a direct recognition company what you often find with direct recognition is that their rate is fixed Either for a period of time or the spread between the growth and the loan rate is fixed That's an example like pedonutial for guardian Contractually, they'll lock you into a 5% loan rate for the first decade of the policy If you're a real estate investor It is so much easier and I'm speaking from experience so much easier to a plan on a debt table If you know what your cost is going to be and it's not going up and down every year So a lot of the real estate investors we've worked with have liked that feature with guardian And it's why we ended up going there for for those policies for decade Ten years have a 5% loan rate after that you've got an option You can pick the new fixed rate for your policy And that's going to readjust at that time or you can go variable If you go variable the loan feature becomes non direct recognition So guardian is unique. They're very similar to mass mutual where they have both in the right circumstances both direct and Non-direct recognition. Did I lose anybody there Caleb does that make sense to you? No, it's unique and I think it's it's interesting I we've had plenty of videos that Share with you over time if you're with the right mutual carrier Direct versus non-direct is not that big of a deal But the interest rates still matter and and a 5% lock-in feature. I can see where that can be attractive For sure, so this is pretty much all I wanted to cover with this policy in the numbers section now There's a couple of unique writers. I've added to this policy that I think give guardian a leg up over competition in the front load space So if if it's a good time, Caleb, I'll go ahead and dive into those. Let's do that So this first one if you stand on top of my screen here is index participation feature And you'll notice right now I've got a 0% on there the ipf writer We put on to pretty much every policy unless somebody really doesn't want it It's a free writer and it gives you that ability to take the dividend and attach it to an index to maybe get an additional upside Currently, this writer has a cap where your indexing gets capped out at 10% and on the low side you get capped out of 4% So regardless you're still making money in the index, which is kind of a cool feature other companies We work with the only one that has this other kind of writer is going to be one America their front loads as we did in the last video Are still pretty good for the right person the other writer. I want to talk about is this and again going back to the one America Video I did earlier, which I hope there's a link somewhere around my face here that long-term care annuity at one America They're masters of long-term care. They're one of the largest producers of long-term care insurance at one America Guardian is one of the other players. They have a true long-term care insurance writer that I built into this policy We have 484 thousand dollars of long-term care benefit that's costing 358 dollars a year. Okay, what does that mean in layman's terms if this person actually plans to pay for this For the next 10 years and then do an offset where the policy is paying for itself 358 dollars times 10 you put less than four grand into a long-term care of policy and now the scroll down saying to show you the numbers That four grand bought you almost 20 thousand dollars a month and long-term care benefit For a minimum of 25 months. That's powerful So if you if you think about the effect of that you fund this thing for 10 years 40 years 30 years into the future if you have a long-term care need You can draw against this long-term care pool for in-home health care provided by a family member or At a private nursing facility or anything in between So it's a phenomenal way to protect a future risk that no individual person can truly mitigate themselves Even if you're super super healthy Megan Alzheimer's so there's a lot of things to consider and I think that's why I like bringing this up all the time I live through this I used to work in health care my mom works in palliative care It's a big deal and these types of writers it makes me feel a lot better as an insurance agent to share that with you So you understand the statistical risk of this happening another unique feature that I'll just mention as a bonus Guardian is one of the best carriers that we work with for international cases or people who have Multiple citizenship live overseas trying to get insurance in the US the reason I say that is because we ran to a situation with one of our clients Where they had a guardian policy Long-term care, but they wanted to move to Ireland get this long-term care policy pay out in Ireland Yeah, which is so cool all they had to do was have a board certified physician Sign off on their long-term care need and because US is the country that it is their board certifies physicians all of the world Who are certified in the United States? I'll get off my high horse about long-term care But it's to me this is this is amazing especially because it costs And again, it's like we we have a lot of videos on how you can use your life insurance throughout your life That's great, but it's it's insurance like we're still per it's a protection vehicle and I think one of the things that's so hard to to sometimes value is like something that's going to happen in our life Like someone will die in their life Not everyone will get disabled, but it's like if you can start eliminating some of these unknowns and you can bundle it together in a product That may make sense and it's worth at least looking at so I appreciate you laying that out and Yeah, no you can continue. I just appreciate you doing a thorough job laying that out All right, so that puts the front load idea to sleep right it was a 40 year old male You could be 20 you could be 80 and a lot of times the numbers will still work So come talk to us will figure it out with you Now the second thing we're going to look at today is a bit unique now This isn't something that I had played around with because I never had a client who wanted to do it We've working with a client came to me and he had the idea the fairly wealthy individual and he said hey Alden I've got a lot of this money just sitting and I want to do something with it I want to make an impact on the next generation How can I turn this amount of dollars into a family bank for my grandkids? So I'm going to show you no no names Nothing on this policy is going to be unique to him per se what's unique about it is we're ensuring a 13 year old This client actually has multiple grandkids and we're taking about a half million dollars on each grandkids And putting into a life insurance policy some of you out there may be saying Alden that's not possible. You're going to make the contract Ah Let me show you what I mean This is this is really really cool This is one of the reasons that guardian is really fun not all insurance carriers Well, I'll put a term insurance writer on a minor. There's only a couple that do That's why we do minor insurance policy. So policies on kids with companies like pen mutual Our companies like mass mutual or or guardian because they have that term writer that gives us more room Let's shove in a lot of cash Guardian still allows us to do that annual and anable term. I don't know if you know this But term insurance when you're 13 is stupid cheap. That's a fantastic bonus So what we see here is because this person This individual and his family are worth a lot of money This is a strategy that even though we're putting in only a half a million It initially buys almost 24 million dollars in insurance. So qualifying for that amount of insurance Means that the parents have to be worth a lot of money So this doesn't fit everybody, but adjust these numbers to a $50,000 front load or a $100,000 front load And it can make sense for a mom and pops you this policy put in a $500,000 and immediately the policy is doing an offset So similar to the last illustration But instead of showing it and starting in your 11 it's in your two So what we see is nothing is required moving forward your cash value Gross because of that dividend and it's outpacing the cost of insurance because it's on a 13 year old Very quickly and you still break even in your four now if we built us on a 50 year old the break even is not going to be your four It's just a unique strategy that works for really really young kids Well, and so it's it's not a matter of Mac So the mech limit on this policy you one of the reasons because it's it's also one It's because we're still paying it we have to pay in for seven years Otherwise it's going to be a mech now that doesn't mean you have to come out of pocket Policy can pay for itself and still avoid that problem the second thing is the reason this death benefit is so high is we're buying a Load of term insurance term insurance is cheap. It gives us a lot of cash value opportunity to put an extra premium We only have to keep that term on there for seven years after that term drops off We still have a permanent death benefit that's been created from a half a million dollars all then I know I'm spraying this on you Do you happen to know the IR are on a yes? It's gonna depend heavily on the age So ironically the younger you are the same death benefit has a smaller mech limit So you can't put as much cash in so it's it's a very interesting calculation But depending upon the age your IR are on this policy is going to be somewhere between mid to low threes to mid to high threes So it's it's a fairly large range, but it's kind of all over all over the board Man, just the point that I want to make and obviously this is like a typical like you can borrow against it and all It's just normal life insurance. It's just paying for itself The rider you can still have that 10 year five five percent rider the the thing that's super interesting is like Yeah, I can see where this is super attractive because it's it's getting On average Better rates return than a high yield saves account I know at the time of this recording high yield savings accounts could be higher than that But if they stay high This this uh Cash value will also be higher the IR will be higher for rates stay that high So just hear me out there. So it's like it's very competitive if not higher Intronerator return than what it could be in like a high yield savings account But now you have a death benefit that's like not just like that having a long term forward Four plus million dollar death benefit pretty remarkable and no out of cash is needed to Continued fund this now my question is can you could you continue to fund this if if if you were 21 and you're like Hey, you you understand the power of this could you fund or is that like is it one of those things where you just have to start It's a phenomenal question when it comes to life insurance especially whole life We've got two options to stop paying premiums one Surrender the policy take your cash walk away not ideal for a lot of reasons Two is a reduced paid up and if you do reduce paid up they shrink wrap the death benefit Bring it down to a level that equate equates to what you've paid into the policy What that's purchased for you and you can't put any more dollars into it That's a one and done you're finished well. We're doing is an offset All we're doing is recycling the that cash value in the policy to moving it from one hand to the other hand So to Caleb's point this individual is 13 right now the Parent I'm sorry in this case is a grandparent owns the policy and at some point in the future when they pass We could structure it to where the new owner becomes this individual becomes as this 13 year old who may be in in the mid 20s at that point If they wanted to now they have a fully capitalized policy where they put in one dollar and it becomes four That's pretty powerful. So you're absolutely right. You can continue to pay this. You don't we don't cut off that function just by doing an offset It's amazing because there's a world where inheritance happens and There this is this potentially be a great place to put featured dollars things just to to kind of land the plane here on this particular strategy A lot of really cool things about it and just to highlight again You could do this with 50,000 doesn't have to be 500. This was just a client case that I'm working on right now If we scroll down the life expectancy That half a million dollars has turned into 10 million we talk about what the Rockefellers would do It's man. They do a lot with life insurance. They do a lot of other things and they're very big into philanthropy So do that too But at the end of the day life insurance has a purpose and it's protect the human life value mitigate risk protect families and preserve capital That's it and this this particular strategy does that with spades. So that's all I got killed most you had some other specific questions about it No, I'm good. This is great so far That is the the two illustrations I wanted to dive into day for guardian now some highlights that we have to understand Is guardian just like every other company's not best for everybody where they excel just to recap Frontloads with a short payment timeframe right because we don't want to have that annual renewable term on the policy too long It starts to eat away cash value and then other companies would be better long term So that's something to keep in mind you want long-term care insurance We can build it into a policy like this doing a front load you pay for it for 10 years or less It pays for itself. You never have to pay for it again, but you still get the benefit That's extremely powerful Then the other thing I want to mention with with guardian is that loan feature again that 5% guaranteed rate for 10 years can be very powerful for the right person So kill that's all I got if you have any specific questions about guardian or kind of how it works I'd love to dive into it. Yeah, no, and I would I love about doing this on YouTube If you're not listening to you to if you're not listening to this or if you're listening to this not on YouTube You should be watching this on YouTube because we showed a lot is would love to hear your experience What questions do you have there's many people that Put money ongoing into a life insurance policy and so obviously that it's it's not like any one company's horrible But it's like we we want to highlight where people are strong and that's not necessarily where guardian excels And then yeah, I mean the policies that I Personally have on myself. I want to continue like I'm intentionally wanted to continue to fund for a very long time Because I understand the power of like 20 years from now putting a premium in the benefit of that of of what that's going to be So that that's something that I want to do and so that's my my policies not not with guardian But it's been really cool to see like what guardians been able to do with their big Which is a huge advantage But then also can create friction Because on in some of these carriers where known we can pick up the phone and potentially like talk to an underwriter And you know talk to the CEO of the company and like you know, and so there's pros and cons of that Being with the big company We were we're not as known or or appreciated But that's that is it is is what it is if that's the that's just comes with the territory of paying out over a billion dollars in In a dividend. So I think there's I think what I appreciate about the series is people will start seeing and it be cool If we even did this each year is start seeing like all the carriers that we work with and and to do our best for clients We have to be an expert at multiple of these carriers But really comes down to what do you want? What is your outcome and then sometimes it's beneficial to look at a couple carriers because one carrier might look good But they might get you a worse underwriting So it's part of it is understanding the data and saying what company do we think will have the best Chances to give you that outcome And so we do this series so that you can have insight But overall our hope is that if this is something that's interesting to you If you're like I would really benefit to talking to all them or someone on our team We have a link down below We also have a link to our life insurance vault if you want to learn more like just like about all things life insurance We have an education vault for you to check that out and if you're not subscribed Please do so it helps other people see this content and we're hoping to continue to grow This information that I think can benefit a lot more people all then that's that's all I have I don't know if you have any other questions or thoughts. I'm good man. I think I was fine. Let's do it again Okay As always appreciate you and look forward to continuing this series with you All right everybody we are here with all the arms strong. What's your title again? You pay me dude figure it out. Sit