Agents don't mention PUA rider, why?

[VolAgent]

Um... Net death benefit = cash values + net amount at risk - any outstanding loans.

The cash values of the policy IS invested in the reserve, and by definition, is used to satisfy claims. Where else would the net amount at risk come from?

And technically speaking, the cash values belong to the insurance company, but the policy holder has access to them. If accessed, death benefits are reduced by the loan or withdrawal of the cash values. Until borrowed or withdrawn, they belong to the insurance company as the reserve for the given death benefit.

If you will remember, separate accounts exist in their own little world. They cannot be accessed by creditors of the company like the general account can. And please remember, these are separate accounts, variable products.

 

[DHK]

True, but this thread was about whole life policies.

 

[VolAgent]

True, but this thread was about whole life policies.

Probably why I mentioned general account and separate accounts, separately.

 

[ls015]

Why do you feel the majority don't use PUA? What is your experience that is telling you that? I use the most PUA I can in almost every situation (with or without term blend), and many of the reps I know do the same.
However lately it seems more sell IUL than WL these days because that is what all the IMO/FMO marketers push mostly, which is ok as long as they are desinged max funded.

The financial planner I approached designed like this.$13k in simple IRA and $11K in base premium WL when I told him I have $2000 per month to invest. When I told him the same thing can be designed 1k base and 10k PUA in guardian WL, he got pissed off.

I personally feel 5k base premium with the ability to put away 50k in PUAR is the way to go.
Once I have 100k in PUAR, the dividends they generate will cover the base premium and from that point on it becomes a self-sufficient policy. Not that I want to stop contributing to it but to make it safe from lapsing.

 

[DHK]

I take it you're not an agent?

It won't work like that with ANY insurance company. You want 10% of your premium for base premium and 90% for PUAs. At most, you *might* get about 60% into PUAs.

How you *think* it "is the way to go"... and REALITY... are two very different things.

This video would explain it a bit better.

 

[ls015]

I take it you're not an agent?

No, I am not an agent. Just looking to buy me a policy.

 

[pfg1]

The financial planner I approached designed like this.$13k in simple IRA and $11K in base premium WL when I told him I have $2000 per month to invest. When I told him the same thing can be designed 1k base and 10k PUA in guardian WL, he got pissed off.

I personally feel 5k base premium with the ability to put away 50k in PUAR is the way to go.
Once I have 100k in PUAR, the dividends they generate will cover the base premium and from that point on it becomes a self-sufficient policy. Not that I want to stop contributing to it but to make it safe from lapsing.

The amount of cash you can put into the policy is set by the MEC limit. Typically on a max funded policy maybe 3-1 (PUA to Base), depending on company and design. Sometimes can be a little higher in a given designt, but I've not ever seen anything you could do 10% base to 90% PUA.
Regardless... in your scenario, the advisor will make ALOT more money if he does a base only policy than he will a max funded policy even at 40/60. Not saying that is why, but it could be. And most advisors use the term to increase the ability to dump in more PUA.

 

[ls015]

I take it you're not an agent?

It won't work like that with ANY insurance company. You want 10% of your premium for base premium and 90% for PUAs. At most, you *might* get about 60% into PUAs.

How you *think* it "is the way to go"... and REALITY... are two very different things.

This video would explain it a bit better.

It's 3% on every PUA premium for 30 years or so? On that 10k premium, if 5k is base and 5k pua premium, Agent gets 5k in commissions upfront and gets $150 every year for the next 30 years. If I were an agent, I would prefer a passive $150 to $5000 more upfront.

 

[ls015]

Sometimes can be a little higher in a given designt, but I've not ever seen anything you could do 10% base to 90% PUA.

I have seen Guardian illustration where $2400 is base with the ability to dump in a total of $24k in PUAR.

 

[DHK]

$5,000 / $150 = 33 years to break even and I'd have the money up front now so *I* can decide what to do with it.