Do you have a client who’s looking to create an amortization schedule for their policy loan? You can actually create one for them in the Loan Analysis calculator that’s fast and simple. You can even print it out for the client to track themselves. Creating an Amortization Schedule The great thing about policy loans are the freedom to pay it back on a schedule of your choosing. However, this doesn’t mean your client should delay payments or skip out on interest. It’s still wise to have a schedule and stickRead More
Category: Loan Analysis
Policy Loans: In Advance vs In Arrears
Sometimes, life insurance companies differentiate how interest is applied to policy loans by using the terms “in Advance” or “in Arrears.” This has led to the common question: is there a difference in the rate and how the company applies it to your loan balance? The answer is a resounding NO. In Advance vs In Arrears “In advance” refers to what the insurance calls a “rate” for making your loan payments upfront. This confuses the issue because people then believe it’s a completely separate interest rate when it’s not. ThisRead More
Can Clients Actually Benefit from Inflation?
Merriam-Webster defines inflation as the continuing rise in prices, usually caused by an increasing volume of money in the economy. This means that purchasing power decreases over time. Gas and groceries are time-tested examples. In the 1950s, a gallon of gas or a loaf of bread cost under a dollar. Now, a dollar simply does not buy the same volume of goods as it used to. Inflation can, unfortunately, be considered an inevitable part of the economy. This is one reason that as financial advisors it’s crucial to look atRead More
New Button in Loan Analysis: Difference Between Payments
While the update may seem small, it has a huge impact on user friendliness. The update in question is a new “right-click” feature that does some simple math for you. That way you don’t have to fuss with the copy/paste function if you don’t want to. In a mortgage comparison, like we demonstrate here, it’s important to show the potential savings of a 15-year mortgage vs. a 30-year mortgage. Previously, to do so, you would have to calculate the difference between payments within the Future Value calculator. This meant aRead More
Can You Save More with a 30-Year Mortgage, Refinanced Every 10 Years?
What’s the major reason that people want to have their house paid off? In most cases, people fear a scenario where they can’t pay their mortgage, so they spend more money up front. Too often, this puts them in the scenario they were trying to avoid. It all comes down to control, and a 30-year mortgage simply gives you more control. We’re going to run an experiment here, and see how you can actually save more money in your own pockets. Setting Up in Loan Analysis To begin, pull upRead More
A New Way to Calculate Opportunity Cost in Loan Analysis
If you use the Loan Analysis calculator, you’re likely familiar with the “Loan View” provision. This enables you to do a side-by-side comparison of two loans, or view each loan individually. In the latest update of the Truth Concepts software, you’ll now see a third button: “Opportunity Cost.” The function of this button is to more clearly show what Todd has demonstrated in his comparison of a 15-year vs. 30-year mortgage. That is, you cannot separate the analysis from the time value of money. In previous demonstrations, Todd has usedRead More