Cash Value Section

[leo]

I spoke to an agent today about an IUL today he was going to try to sell me for supplemental retirement income. It was based on I think he said option (A) minimum death benefit max cash value. He said I would get the death benefit and cash value. I told I would think about it. After doing research seems if I start out at option B and later switch to option (A) after I stop funding the policy in 25 years. Since I'm switching back to option A level would I still get both cash value and the death benefit.

Am I correct on this?

 

[DHK]

Both you and your agent are incorrect.

Net Death Benefit = Cash values + Net Amount at Risk - Any Outstanding Loans

The cash values are always a component of the total death benefit.

https://davidkinderfinancial.wixsit...rance-Company-Keeps-My-Cash-Values-When-I-Die

The only exception to the formula above, is the increasing death benefit, option B. It's a fixed amount of insurance + your cash values as you make those contributions to your policy.

When you switch back to Option A, you keep the "net amount at risk" level at that point. Usually that's done after the funding period. You'll find that amount be level for a few years, then it will continue to grow (per the illustration; index performance and caps will vary over time).

 

[Golfnut2112]

No you just get the death benefit. A very simple way to tell is look at the illustration under the death benefit column ,that is what you get. Under option B the cash value will be added to the death benefit under option A it won’t. Go to investopedia or insure.com and search cash value life insurance, it will explain why the company keeps the cash value upon death.