The Life Insurance Values tool, or Life Values for short, is one of the most useful tools for the life insurance agent. It is compatible with many of the Truth Concepts calculators and makes them even more useful. If particular, the Life Values tool helps you compare life insurance to other assets, and/or see how life insurance can work with other assets.
While a brand new policy is simple to copy and paste into Life Values, an in-force policy takes a little bit more care and attention. The reason is that you want the IRR column to accurately represent the relationship between the Premium column and the Cash Flow column.
How to Input an In-Force Illustration into Life Insurance Values
Once you pull up the Life Values tool, you’re going to start by selecting the “In Force” button, as opposed to the “New” button, in the upper left-hand corner. When you click that option, a new field will pop up in the top-center of the calculator.
Once this box pops up, you want to manually write in (or copy and paste) the existing Cash Value as indicated in the most current illustration you have for the policy you’re inputting. The date after “As of” should represent the day you ran the In Force illustration, and underneath that, you’ll put the next Anniversary Date of the policy.
Once you have this information updated, you can fill in the boxes in the top left corner with the appropriate information, including how old the policy is. In the Description box, it’s important to note details of the policy such as the face amount, premium schedule, and any other details that would help you distinguish the policy.
What If You Don’t Have the Existing Cash Value?
If, for some reason, you don’t have a current or correct number for the Existing Cash Value, or you don’t know the “As of” date, the next best thing you can do is “look forward.” In other words, take whatever current illustration you have and move it up a year.
Imagine you’re illustrating a policy in Year 9, and only have projected Cash Values listed. What you can do is simply “move” the illustration forward by a year. So copy and paste the Premium, Cash Value, and Death Benefit information from Year 10 and onward into Life Values. Then use the information from Year 9 as your Existing Cash Value.
For the “As of” date, you’ll input whatever the End of Year (EOY) date is for Year 9. This is critical because the dates allow the Life Values calculator to give the most accurate possible IRR. Pushing everything forward a Year allows you to have accurate numbers with certainty, rather than guessing at numbers and dates that may make things inaccurate.
For more tips, tricks, and insights on using the calculators as efficiently as possible, we encourage you to attend a Truth Training. There’s nothing quite like learning live, in-person, and straight from the source. In addition to getting access to the mind behind Truth Concepts, Todd Langford, you’ll also be able to build community with other advisors and agents building their practice.
cash value is what is actually growing in the policy.