Choosing Between GUL and IUL-please Help

Dec 9, 2015

  1. atcdav
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    atcdav New Member

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    I am looking at a GUL to age 100 at $5400/yr 10pay and an IUL guaranteed to age 90 $6300 10 pay.

    My main objective is a lifetime DB, The cash value option if it comes thru is a great perk and inflation protection. I dont really see a benefit of cash value though until the DB starts to grow.

    The costs are closing making the decision even more difficult. Worse case scenario with IUL is its lapses at 90 which may or may not be an issue......

    I would appreciate any insight especially as to why the IUL is the wrong choice. I feel like the greed of potential growth is luring me in

    I should add I have no intention of adding additional funds to the iul once paid up
     
    atcdav, Dec 9, 2015
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  2. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Let's make this quite clear then, based on your post:

    Option 1: $54,000 total cost, guaranteed to age 100

    Option 2: $63,000 total cost, guaranteed to age 90

    Looks like a no-brainer to me. The cash value part is distracting you. If the true purpose is a paid up death benefit in 10 years (please verify that it IS guaranteed paid up after 10 years)... then pick the cheaper one that is guaranteed for longer.

    IUL will give you the OPPORTUNITY to earn a higher return on your premiums... but as you can see, it will COST you more money and up to 10 years of your guaranteed death benefit.

    One factor would be your age and underwriting classification. If you're "super preferred" (for example) and you are young (generally under 50)... then the IUL could be a great choice.

    Just some thoughts. Disclaimer: This isn't advice. Definitely talk to a qualified and licensed agent in your state.
     
    DHK, Dec 9, 2015
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  3. atcdav
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    atcdav New Member

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    The purpose of the policy is pension replacement. So I do not fore see accessing cash value, but the flexibility would be nice for LTC needs etc. The GUL has a ROP, the IUL surrender value at the same policy years could far exceed the GUL ROP amounts.

    The $1000/yr saved with GUL vs IUL if invested would never meet the IUL illustrated CV at the 6% illustrated return
     
    atcdav, Dec 10, 2015
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  4. WinoBlues
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    WinoBlues Guru

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    The IUL _may_ have a larger cash value. If you access the cash value what happens to the pension replacement need? _if_ the IUL ends at age 90 could that effect the beneficiary? What would the extra $1,000 buy in face amount in GUL or how much time would it shave off the years to pay?

    Personally I would compare same face and premium.

    Just my 2 cents
     
  5. atcdav
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    atcdav New Member

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    Not sure how to do that. both $300000 DB to get to same premium would have to lower the IUL DB which most likely doesnt meet goals. Accessing CV does cancel guarantee DB and effect DB, my point was it gives me options , well as long as it performs it gives me options. I am leaning GUL . Adding the $1000 per year to GUL would buy about another 50K of DB or a nice term policy to bump the DB thru age 80. I think that just answered my question, thanks for advice
     
    atcdav, Dec 10, 2015
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  6. atcdav
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    atcdav New Member

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    Still havent pulled the trigger. Now debating GUL vs 30yr term. If I do the term I can afford to fund a roth IRA over next 6 years till I retire. There is a good chance that when the 30 years is over the investment of that roth plus another 401K will meet or exceed the DB of the term. Or I can forego the Roth and buy a GUL, get the peace of mind of a lifetime of DB, the 401K will still be available to enhance the DB or accessible for other lifestyle choices depending on how it grows.

    It has been a tough decision. Security of GUL or potential income upside of Roth IRA at end of 30 yr term policy. The Roth would be funded for 6 years and then parked for remainder of the 30 year term

    Any advise?
     
    atcdav, Dec 20, 2015
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  7. jcrawford
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    jcrawford New Member

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    I purchased a GUL as part of my overall strategy. My cousin is a financial planner and he did the same. The idea is I will have a guaranteed death benefit and can use a portion of my assets (i.e. 401 K) to purchase some immediate fixed annuities for several years at retirement to gain some guaranteed income along with non guaranteed portfolio income. The life insurance will replace what I use for annuities so my heirs don't lose out. I like the idea of having an additional $500k from the death benefit it does give me peace of mind.
     
  8. TomZack
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    TomZack Expert

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    The other question is what happens if you live to age 91 or 92?
     
    TomZack, Nov 1, 2016
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  9. dtownboy
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    dtownboy Guru

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    Only a year late on posting that I'm sure they have made their mind up by now
     
  10. TomZack
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    TomZack Expert

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    haha.....

    they are still thinking about it!
     
    TomZack, Nov 1, 2016
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