Alright
today we are going to talk about
the 7702 update
and deadlines.
When is the deadline
that I can still obtain
a policy with a 4% guarantee
if that is my preference?
So the old product
with a 4% guaranteed rate
and a higher death benefit naturally
is still available right now
and technically per the
IRS [Internal Revenue Service] guidelines
it is available through the end of 2021.
Meaning if I start a policy today
or any time during 2021
make the payment
I'm approved
I fund it
and it's during 2021
with that guaranteed rate of 4%
you are locked into that
guaranteed rate of 4% forever.
If you've purchased a policy in the past
say it was 2020
says 1990 at any point in time
with a 4% guarantee
you are locked into that 4% guarantee.
Now we're in October right now of 2021
so we're getting close to December
once 2022 rolls around
only the new products
will be available
and the new products
depending on the company
and the product that we select
if it's a traditional
whole life insurance policy
if it's a limited pay product
whatever it might be
the guaranteed rate will fall
between 2%
and 3.75%
good to have awareness on that.
Now several companies
have released the new products
where we can actually
make the choice right now
between the old one
and the new one
and kind of see it side by side.
But if we like the
higher guaranteed rate
with the strongest
guaranteed cash values
a lot of people we work with
do like that
the 4% guaranteed rate
does give you that
but the new product is still solid
across the board.
So we've got the IRS deadline
but speaking of deadlines
insurance companies
have their own deadlines as well
which it's very important
to be aware of these deadlines.
So we're going to touch on
3 companies here
being MassMutual
Guardian
and New York Life
3 of the 4 major mutual carriers
let's get on into it.
So with MassMutual
we have an application deadline
and then also
an actual starting the policy deadline
sign and fund deadline
we can call it.
So the application deadline
that MassMutual has
November 19th
so what this means
is if you want a policy
with a guaranteed rate of 4%
and you prefer MassMutual
an application with them
must be submitted
and in good order
on or before 11/19/2021.
This does not mean
that you are forced
to take out the policy
so if I sign off with an application
on an application with any company
that does not bind me
or force me to take that policy out.
And I mention that because
if you're in a position
where you say hey
I'm new to all of this
I'm trying to understand
if a whole life insurance policy
is actually a fit for me
regardless of what the guarantees look like
I need the information
before I just rush into something
because that's not my style
like if you feel like that
for full transparency
or awareness here
you have until 11/19
to submit an application
and then your options are open
to select the product
with the guaranteed rate of 4%
or the new product
or nothing
if you decide to do nothing.
So application deadline is 11/19
and then the start date
must be on or before 12/31 2021
which is technically 12/30
because most companies close
on the 31st
it's new year's eve so
by December 30th in most cases
is when I will need to make the payment.
Guardian application deadline
none
so they have no cutoff date
for the application
and what that means
is I can submit an application
call it December 15th
with 2 weeks to go
and if I'm approved
I could start a policy
still before December 31st
so I've got the same payment deadline
but there's no application deadline
which gives me a little bit more time.
Now with that said
what is very important to be aware of
is the underwriting process
sometimes is very quick
sometimes it's less than a week
with different insurance carriers
but sometimes
it takes much longer
on average it can take 3 to 6 weeks
depending on the size of the policy
how much I'm paying in
perhaps my health history
so we might not want to push
the envelope too much
in that respect
when it comes to saying hey
if I don't have an application deadline
maybe I could submit it on the 25th
maybe the 24th
and then try and get approved
to start by the 31st
that'll be tough
you're pushing it there
and you may end up getting approved
after the 31st.
So another thing to mention here
is let's assume
you apply for a policy with Mass
before the 19th
any time with Guardian
and you're approved after the 31st
what that means
is unfortunately
you will only have the new product
as an option
with a lower guaranteed rate
between 2% and 3.75%
so just for additional transparency there
you have the choice
to select either one
between now
and the end of 2022
meaning the old product
with a guaranteed rate of 4%
or the new product
with the lower guarantees
and higher
MEC [Modified Endowment Contract] limits
we've got other content on that
but once 2022 rolls around
it's only the new one.
New York Life
their cutoff deadline
for applications
November 5th
so what that means
is that an application
must be submitted
and in good order
with New York Life
by November 5th
if you still want to lock in
the 4% guaranteed rate
with a New York Life product.
If you submit an application
on November 10th with New York Life
you will only have
the new product available
in terms of
what the guaranteed rate will be
with the different MEC limits
and the same would be true
with MassMutual of the 19th
all that good stuff.
And then the
cutoff deadline for funding
same thing here at 12/31
and again what I'm doing here
is defaulting back to the IRS deadline
so this is where there's more pressure
because this is an IRS deadline
there are certain standards
that insurance companies
have to comply by
because of this
the application deadline
is something they have
a bit more flexibility over.
So I hope this video helped
if you have any questions
please feel free to reach out anytime
we are still doing our best
with everyone we work with
to show both options
if they want to see both options
meaning old product
new product
provide as much information
as quickly as possible
this way
you can get into the old product
if that's what you want
maybe get into the new product
but you get all the information upfront
and you don't feel rushed
and make a bad decision
because of that.
So again I hope you enjoyed it
please hit the like button
the subscribe button
if you did
and we'll talk to you soon.
Thanks so much.
Hey guys Steve Parisi here.
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