Ameritas vs Penn WL - a $130K decision

[SParker]

I don't really know Ameritas, Ray would. Ameritas is $60k higher on initial db which drives up the DB by default. Also what you showed is not a 20 pay, its paying 20yrs of Base & PUA. They still have the base premium due each year after year 20, just an fyi. The NG side is what you need to be looking at, not the guaranteed side, imo.

As far as Comdex... well outside of the really big/strong carriers most will go up and down. Most of the solid companies are ok to deal with even if the comdex isn't super high. Although, we've seen some strong companies drop dramatically in a few short years, and other go up pretty well fairly quickly also. So how they rank depends on when you look at them. Everyone always says only use a strong A rated - higher comdex carrier. Well look at Genworth for example. They were for a long time, now they're in the toilet, and in a pretty rapid timeframe as well. Ohio National was mid 90's not long ago, now low 80's. Not that they are bad, but that is a big swing.

Thanks. Say if you have to choose between these two policies, would you still go with Penn even though the guaranteed DB is about $130K lower than Ameritas ? And the reason?

 

[pfg1]

Thanks. Say if you have to choose between these two policies, would you still go with Penn even though the guaranteed DB is about $130K lower than Ameritas ? And the reason?

For me, absolutely Penn. Honestly, the guaranteed column doesn't mean anything other than that is the absolute worst case scenario - no div ever paid. If you want to bank on the worst happening go for it. Much more likely to hit the non-guaranteed numbers than the guaranteed. And in that case you lose a pile by going with Ameritas.

What is the goal of doing this policy?

 

[SParker]

If the goal is retirement income, then you are using two of the worst solutions money can buy. North American with a 6.23% projection with a 10.5% cap for 20k for 20 years is projected to pay out 70K a year starting in year 21 and pay that to age 120. That's almost 9 times what either these policies are projecting. At 3.5% which is less than 1/2 of what the S&P index did over the last 25 years, it pays out 27k a year. It has an lower initial death benefit but that generally isn't the goal when you are paying 20K a year into a policy.

Thanks. Is this an UL or an annuity product?

The $70K a year lifetime income is based on a potential return of 6.23% in the stock market?

What is the absolute worst that can happen with this policy or contract?

It would be helpful to be able to also compare the worst case scenario and not just looking at the most favorable outcome.

The goal of the policy is two folds:

1) to provide a death benefit to the surviving spouse (the wife) of the policy owner or ;
2) if policy owner survives his wife, then policy owner will draw the money down as income.

 

[Tahoe Ray]

If the goal is retirement income, then you are using two of the worst solutions money can buy. North American with a 6.23% projection with a 10.5% cap for 20k for 20 years is projected to pay out 70K a year starting in year 21 and pay that to age 120. That's almost 9 times what either these policies are projecting. At 3.5% which is less than 1/2 of what the S&P index did over the last 25 years, it pays out 27k a year. It has an lower initial death benefit but that generally isn't the goal when you are paying 20K a year into a policy.

North American is not in NY. Also you're not talking about the possibility of increased charges which is typically more damaging and unpredictable than market returns. Not to mention caps change...

Max funded IUL is great but if you want certainty, then WL certainly isn't the "worst solution money can buy"...especially if it is max funded w/ PUA.

 

[SParker]

For me, absolutely Penn. Honestly, the guaranteed column doesn't mean anything other than that is the absolute worst case scenario - no div ever paid. If you want to bank on the worst happening go for it. Much more likely to hit the non-guaranteed numbers than the guaranteed. And in that case you lose a pile by going with Ameritas.

What is the goal of doing this policy?

Thanks.

The goal is two folds:

1) to provide a DB to the policy owner's wife or
2) if policy owner survives his wife, then policy owner draws down the income.



If the financial soundness of the carrier is not an issue, then I would go with Ameritas.

When I compare the 2, Ameritas is providing a guarantee that is higher than Penn's NG numbers right off the bat. I don't even have to worry about whether any dividends will be declared and for how much with the Ameritas policy.

For example, the first 5 years into the policy

Year 1 - Ameritas G-DB = $436K, Penn NG-DB = $371K
Year 2 - Ameritas G-DB = $463K, Penn NG-DB = $394K
Year 3 - Ameritas G-DB = $489K, Penn NG-DB = $417K
Year 4 - Ameritas G-DB = $514K, Penn NG-DB = $441K
Year 5 - Ameritas G-DB = $538K, Penn NG-DB = $466K

It isn't until year 13 when Penn's NG-DB exceed Ameritas' G-DB.

Ameritas numbers look too good to be true. I don't suppose this can be a scam, can it?

The question remains: whether it is worth giving up about $130K in guaranteed DB (20 years into the policy) simply because Penn is a more solid company at this point.

According to this page, New York state Guaranty Fund only provides protection up to $500K for each contract or policy, so it is a big concern if Ameritas goes under one day.
New York State Guaranty Fund for Annuities and Life Insurance

Best,

 

[SParker]

2.5% guaranteed rated

How does this 2.5% guaranteed rates work? Annual guarantee of 2.5% increase? Will any of the IUL fees/expenses eat into this 2.5% annual return?

Thanks

 

[SParker]

I have a number of videos on my membership IUL website that explains a great deal more. Go to: login

Thanks, I went to your website and it says 7 day free trial, what s going to happen after 7 days? Do I need to provide a credit card?

The 2.5% guaranteed return, is it 2.5% PER year or is it a simple 2.5% interest over the 10-year period?

BTW, I hear a lot of bad press about UL policies in recent years and that some policies became worthless and there was even a lawsuit over that, now all this is behind us and people are favoring UL policies once again? What has changed?

 

[SParker]

The Best Supplemental Retirement Plan of the 21st Century!" I have a video on my tlgts.com website about the magic of how these policies work. Check it out.

Are you a General Agency or FMO/IMO and I submit my business through your firm or do you mostly sell membership on your website? It is not clear on your website the kind of services you provide. Thanks.

 

[SParker]

@lglabash I also just sent you an inbox message asking if it is possible for you to run a $20K, 20 pay illustration so that I can compare apples to apples with the Ameritas/Penn illustrations I am currently reviewing?

Thanks

 

[jboussea]

It's WL and the structure is built to compete with guarantees (knowing that those guarantees are an unlikely scenario) instead of (non-guaranteed) dividends.

It's nothing but a scare tactic imho. It's not like Penn, Mass, and Guardian are going to suddenly suspend dividends.

I just saw the file. .he's only talking about the guaranteed column i see.