The hybrid strategy almost no one is using (and why it matters for large cases)

Let me start with a hard truth.

Whenever you release a proposal to a business owner, you should assume it’s getting sent to a competing advisor.

Not might be. Will be.

The business owner shows it to their accountant. The accountant forwards it to whoever they work with. And that advisor starts trying to beat your numbers.

This is your default operating assumption.

Someone is always trying to steal the deal from you.

But because you read this newsletter every weekend, you know the tricks other people are going to use. And you can prepare yourself.

This is also why you never want to present a single solution.

Because if all you show is one option, and a competitor comes in with something slightly different, you lose.

You need to give the client choices. And you need to make sure those choices stand out.

Which brings me to something I saw this week that I think changes how you should be thinking about large estate planning cases.

The BMO presentation I wasn’t expecting

We hosted BMO Insurance at our Ottawa office this week.

Now, BMO is an interesting company in our industry. They don’t have par. But they do have whole life. Non-par whole life.

They’re basically the only company actively promoting non-par whole life in Canada. Which is a unique position.

And while most insurance companies are trying to push their UL business hard, almost no one talks about UL in the large case market.

But BMO does.

And this week, Pierre from their advanced markets team came down and walked us through a strategy I hadn’t seen used much before.

And honestly, I think it’s brilliant.

Here’s the setup.

Most large estate planning cases look the same.

Business owner in their 60s. They’ve identified a million dollars (or more) they don’t need. They want to move it into insurance for estate planning purposes.

The traditional recommendation? 10-pay par.

$100,000 a year for 10 years. Done.

And here’s what happens next.

You send the proposal.

The business owner shows it to their accountant.

The accountant sends it to another advisor they work with.

That advisor runs a few other par illustrations from different carriers. Maybe tweaks the premium. Maybe changes the timeline.

And suddenly you’re in a horse race where every proposal looks almost identical.

All par. All 10-pay. All within a few percentage points of each other.

You might win. You might lose. But the differentiation is minimal.

Now imagine this.

What if you came in with a completely different option?

One that delivers a materially higher death benefit off the front end. One that shows better long-term performance in certain metrics. One that doesn’t look like every other proposal the client is seeing.

That’s what this BMO strategy does.

The hybrid approach

Here’s how it works.

Instead of putting the entire million into par, you split it.

50% into a 10-pay par policy (from whichever carrier you prefer).

50% into a single-pay UL from BMO.

Now here’s what makes the BMO UL interesting.

They have a 30-year GIO. A guaranteed insurance option. Basically a 30-year GIC inside the policy.

The UL is typically paid up by age 85. And because you can lock in the GIO right away, the death benefit is fully guaranteed off the front end.

No risk. No assumption of growth. It’s locked in.

The trade-off is the cash value doesn’t look as strong in the early years because you’re dumping a massive amount into a side account all at once. The cash value tends to dip before it recovers.

But the death benefit? It’s enormous right away.

And for a lot of business owners, that’s the win.

Why this works in competitive situations

Let’s go back to the scenario I described.

You’re presenting a proposal. The client is going to show it to someone else. That someone else is going to try to beat your numbers.

If you only show par, the competitor can easily match you. They’ll just run a similar illustration from a different carrier. Maybe it’s 2% better. Maybe it’s 2% worse. But it’s close enough that the client can’t tell the difference.

But if you show two options:

Option A: Full 10-pay par (the traditional approach).

Option B: 50% par, 50% single-pay UL (the hybrid approach).

And Option B shows a death benefit that’s substantially higher off the front end, with better CDA performance, and comparable long-term results…

Which one stands out?

Option B.

And the competitor? They’re going to struggle to replicate it.

Because they don’t understand the structure. They don’t know how you built it. And they’re going to waste time trying to figure out how you got those numbers.

Meanwhile, you’re already ahead.

Let me show you what this looks like.

Pierre sent me a two-page comparison after the presentation.

It’s attached to this email.

One graph shows the cash value over time. One shows the death benefit. One shows the CDA credit.

In the hybrid solution, the death benefit off the front end is dramatically higher. Like, not even close.

The cash value lags a bit in the early years, but catches up. And by the time the client is in their 80s or 90s, the numbers are competitive.

But here’s the kicker.

Because the UL creates such a large death benefit early, the CDA credit is actually bigger throughout most of the timeline.

That’s not something most advisors think about. But it’s a real advantage.

Now let me address the obvious objections.

“What if the client wants cash value access?”

Fair question. And for some clients, that’s going to be a dealbreaker.

But here’s the thing.

Most business owners doing large estate planning cases aren’t planning to access the cash. They just like knowing it’s there.

They want the optionality.

And with the hybrid approach, they still have optionality. It’s just split between two policies instead of one.

Half the money is in par with full cash value access. Half is in UL with minimal cash value but a guaranteed death benefit.

For a lot of clients, that’s a win.

“What if they live to 100?”

Also fair. If the client is convinced they’re going to live to 100, the full par solution might perform better long-term.

But how many of your clients are genuinely planning for age 100?

Most are planning for their 80s. Maybe early 90s.

And in that range, the hybrid solution performs really well.

“What if the client needs to get out early?”

This is the real concern with UL. If they surrender in the first few years, the cash value isn’t there in the same way it would be with par.

But again, for most large estate planning cases, the client isn’t planning to surrender.

They’re planning to hold it until death.

And if they are planning to surrender, you probably shouldn’t be recommending permanent insurance in the first place.

Here’s why I think this matters.

I had a case a few months ago. Very large. The business owner made me run about 150 illustrations.

He was obsessed with finding tiny differences between carriers. Trying to optimize every detail.

He cared about death benefit. But he also cared about cash value. Even though he was never going to touch it.

All the solutions I showed him were within 1% of each other. Maybe stretched out over 30 or 40 years, the numbers looked different. But realistically, they were all close.

If I had shown him this hybrid strategy, I don’t know if he would have chosen it.

But I think he would have appreciated the different angle.

And I think it would have set me apart from whoever else he was comparing me to.

The broader takeaway

I don’t think I’ve been recommending hybrid solutions enough.

It’s always been all par or all UL. Never both.

But this strategy from BMO shows that maybe we’ve been leaving something on the table.

You get the stability and cash value of par. You get the guaranteed death benefit and early performance of UL. And you get differentiation in a market where most proposals look identical.

That’s valuable.

Now, I’m not saying this is the right solution for every client. It’s not.

But I am saying it’s worth having in your toolkit.

Especially for large cases where you know you’re going to be in competition.

One more thing.

If you do present this to a client, I’d recommend not giving them all the details upfront.

Show them the numbers. Show them the graphs. Show them the performance.

But don’t hand them a breakdown of exactly how you structured it.

Because if they send it to a competing advisor, that advisor is going to struggle to replicate it.

They’re going to ask questions. They’re going to try to reverse-engineer it. They’re going to waste time.

And that gives you an advantage.

Because while they’re trying to figure out how you built it, you’re already building the relationship.

Final thought

Large estate planning cases are always competitive.

You’re never the only advisor in the room.

The business owner is going to get multiple proposals. They’re going to compare. They’re going to ask their accountant. They’re going to shop around.

That’s just the reality.

But if you can show them something they haven’t seen before, something that materially outperforms the traditional approach, something that makes them stop and think…

You win.

And this hybrid strategy? It does that.

I’ve attached the two-page comparison Pierre sent me. Take a look. Run some numbers. See if it makes sense for your next large case.

And if you try it, let me know how it goes.

Talk soon,

Andrew