Advantages of PUA Vs New Small Policy (MassMutual)?

[mikichan]

I am getting a whole life policy with Mass Mutual, and there is a PUA option (called ALIR).

I was just wondering what were the pros and cons of buying PUAs vs just getting an additional, smaller policy later in the future?

 

[rpconrad]

Curious as to why there have been no responses to this question

I also would like to know agents opinions if possible

 

[Norwayguy]

I am getting a whole life policy with Mass Mutual, and there is a PUA option (called ALIR).

I was just wondering what were the pros and cons of buying PUAs vs just getting an additional, smaller policy later in the future?

First would have to be underwriting. Second I don't know how small of a single premium policy Mass Sells....What a PUA (Paid Up Addition) is is its own small paid up policy normally a dividend or scheduled premium payment less the carriers premium load and no additional premiums are required and the PUA participates in future dividends.

So I guess assuming your health remained the same and the premium amount you wanted to put in met the minimum policy size you could do a single premium whole life which would become a MEC (Modified Endowment Contract)...

 

[BNTRS]

I will tell you that I miss this stuff because I forget to scroll down the page. As for my thoughts. The PUA (ALIR, same thing) rider will help build better cash, and would be the primary reason I'd want to do it.

PUA's are mini immediately paid up policies that have a cash surrender value equal to the amount put in and a death benefit that is a multiple of the amount put in (that multiple is dependent on the insured's attained age).

It's a cash building play much more so than a death benefit building play. As far as death benefit goes, it's the most expensive way to pick up extra death benefit. In terms of cash building, it's the most efficient way to do it.

 

[mikichan]

It's a cash building play much more so than a death benefit building play. As far as death benefit goes, it's the most expensive way to pick up extra death benefit. In terms of cash building, it's the most efficient way to do it.

Yes, I gave up on this idea. When I actually had my agent run an illustration for it (1300 base + 1000 additional), it immediately became a MEC in year one. As soon as I heard that, I was not interested. (I want to avoid MEC -- stocks would be better taxwise, in that case).

I did not have the MEC problem with a blended policy quote at a different company, similar setup (1000 base + 1300 additional), so I think it must be something about the face value of the initial policy -- the WL policy with additions had a face value of around 100K, while the blended had 20K whole life and 180K term.

 

[csd11211]

Yes, I gave up on this idea. When I actually had my agent run an illustration for it (1300 base + 1000 additional), it immediately became a MEC in year one. As soon as I heard that, I was not interested. (I want to avoid MEC -- stocks would be better taxwise, in that case).

I did not have the MEC problem with a blended policy quote at a different company, similar setup (1000 base + 1300 additional), so I think it must be something about the face value of the initial policy -- the WL policy with additions had a face value of around 100K, while the blended had 20K whole life and 180K term.

.

There is no way that a 1000 dollar base + 1300 should become a mec. unless it's not runed the right way.

Regaeding the original question of when to put in PUA in an old policy, and when it makes more sense to add an additional small policy. adding another policy is a great idea if you can commit to additional premium vs. Pua by most companys is a very flexible thing.