Frequently Asked Questions
What is the Carbyne Allocation®?
An asset allocation model that replaces traditional conservative assets with a fixed Cash Value Life Insurance Allocation (CVLIA).
What are considered conservative assets?
Conservative assets do not have market exposure and are made up of individual bonds, bond funds & ETFs, CDs, and Money Market Accounts.
How do you implement the Carbyne Allocation®?
We move clients' non-qualified conservative assets over a 5 to 10-year period into the CVLIA
How do we choose a carrier?
Carriers are first evaluated based on their financial strength and ownership structure. We prefer carriers that are owned by their policyholders (mutual ownership). Our second choice are companies that are foreign public companies. We do not prefer carriers that are U.S. public companies or carriers that are backed by private equity companies.
How is a policy designed?
We design policies for maximum cash value accumulation, and we build in as much flexibility in funding as possible.
Does client have access to the cash value inside their CVLIA?
Yes, a client can access the surrender charge inside the policy. They can do this by surrendering the amount they put in. This is a return of basis. Or they can borrow against the surrender value through an unstructured loan.
What is the tax treatment of the Carbyne Allocation®?
Contributions are made with after-tax dollars. Funds grow tax-deferred and can be accessed tax-free by surrendering the basis or taking a loan on the cash value.
Are there any additional benefits to the Carbyne Allocation® besides access to the cash value?
Yes, the Carbyne Allocation® offers a legacy benefit for when you pass, and you can access the death benefit before you die to help pay for the high costs of long-term care.
Can You stop allocation premiums at any time?
This depends on the product you choose to work with. There is some flexibility in this, and it is possible, but it is best to have a personalized discussion around this issue.
What are the overall advantages of utilizing the Carbyne Allocation®?
- Improved yield on their assets without increasing risk
- Deferral and potential elimination of taxes on the growth of these assets
- Lower volatility as prices do not fluctuate in the market
- Hedge against the high costs of long-term care with no additional fee
- Legacy benefit to pass assets to heirs and protect income
What are the disadvantages of utilizing the Carbyne Allocation® strategy?
Clients will give up some short-term liquidity and performance during the first several years of the CVLIA.