Maximizing Life insurance value: The Power of a "Seasoned" Split Exchange

As we navigate different stages of life, our financial priorities shift. For many clients, life insurance policies initially serve as a safety net—ensuring income replacement and financial security for their loved ones. Over time, however, these policies can accumulate significant cash value, opening new opportunities for wealth optimization.

The Solution: The Seasoned Life Insurance Split Exchange

Fortunately, select insurance providers offer “all-seasons” product portfolios that allow for the seamless split of 1035 exchanges. This strategy enables clients to allocate their policy’s cash value into a diversified portfolio of insurance and annuity solutions, rather than being locked into a single option.

Consider this example: A 57-year-old client with a $1.5 million life insurance policy and a $352,176 surrender value successfully repositioned their policy using a split exchange.

The results were powerful:

? Enhanced Death Benefit Protection: The client maintained a total death benefit of $627,402 across both a Protection IUL and an Asset-Based LTC policy—without requiring any additional premium payments.

? Guaranteed Lifetime Income: By allocating a portion of the cash value to an annuity, the client secured a guaranteed income stream of $10,741 per year starting at age 66, totaling over $322,000 throughout their lifetime.

? Comprehensive Long-Term Care Protection: Should the client need long-term care, the combined coverage—including death benefits and income—could reach $1,429,632, providing peace of mind for their future.

Why This Matters

Traditional life insurance strategies often fail to address the complexities of changing financial needs. By leveraging a split exchange approach, clients can achieve a flexible, tax-efficient, and customized financial strategy that supports their long-term goals.

If you're advising clients on their life insurance portfolios, it’s worth exploring whether a split exchange could provide them with greater financial security and flexibility. Have you encountered similar cases in your practice? Let’s discuss in the comments!