What is the optimum age a prospect should be to take advantage of SRP?


When SRP is used specifically for retirement purposes, there should be approximately 10 years allowed for the policy to grow. Therefore, the 'oldest' age that a policy would be feasible to fund with the intention of retirement income is around age 60.  (This enables the policy to grow for 10 years and loans can begin as tax free income from the policy at age 70.)


If the policy is being used to fund Estate Planning or general death benefit needs then the maximum age is approximately between 80 - 85. This approximation must take into consideration the health of the client, the network and which carrier we will use.

What is the minimum and maximum amount for clients relative to SRP?


The minimum annual payment is only $50K.  For example, if were were to do a 5 pay scenario into a life insurance policy, the total loan would be $250,000 at $50,000 annual premium payments for 5 years.  There is no overall maximum.  Our lender allows for up to two times the client's net worth to be loaned assuming the client can afford the interest payment.  Maximums for each individual client typically comes into play when working with the life insurance carrier to justify a death benefit amount.

Is SRP limited to Business Owners?  Could other key personnel set one up personally?

SRP is driven by the owner(s) of the business, meaning the owners/board members of the corporation must sign off on the transaction as we are making a corporate loan.  Often, owners will use this program to place key man or 'golden handcuff' insurance on one of their employees.  However, key personnel cannot utilize SRP individually.

Can SRP be utilized if the owner and other possible participants are already participating in a company retirement or pension plan, 401K or other form of company sponsored retirement planning?


Certainly, SRP can be setup for supplemental retirement income above and beyond the current qualified plan they are participating in and/or an added death benefit for estate planning or wealth transference coverage.

Describe the transition from the Business Owners Qualified Plan to SRP? 


There does not have to be a transition as SRP is not a qualified plan and is not restricted to maximum contribution limits as a qualified plan is.  The client can continue to contribute to the qualified plan or split the payment between SRP and the existing plan,

or stop investing in the qualified plan. It is simply what the client is most comfortable doing.


In the Part 1 and 2 SRP Training recordings, why is $400,000 used in Line 5 under SRP comparison to Qualified Plan? 
Wouldn't it have been easier to explain $360,000 as an apples to apples comparison?

  

We are attempting to illustrate that the $18,000 spent will 'purchase' a $400,000 Stryde plan.  In other words, if you are spending $18,000 in a qualified plans, if you were to re-allocate those funds to spend on interest in the SRP, then you could obtain a $400,000 loan.

Is the life insurance for the Business Owner a whole life plan or term?


The inclusion of the insurance plan within the overall scheme of things is rather vague. The policy itself can be whole life, never term as there is no cash value, but typically we place the fund's into an Indexed Universal Life Policy.  We make a corporate loan to the company and then transfer those funds to the principal (typically the owner of the corp) and then the principal funds the policy with the borrowed monies, usually over a 5-7 year period.

 



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