Dividend-paying WL

[jdeasy]

JD,

The other thing is RNA is a fraternal. While I'm sure you'll cite all sorts of stuff and they do on the website. The fact that they are a fraternal and they CAN make changes down the road simply doesn't work for me. I'm one of those who doesn't trust insurance carriers and wants some controls and restrictions on them. I like the fact that after 2 years, what ever happens to my policy is my decision. I don't like even a hint that my carrier could make changes to my policy down the road without my consent.

But hey, that's just me.

You've mentioned you work the FE market and RNA is hot stuff there. I don't work the FE market so I don't know if it does or not. RNA could be the best thing since sliced bread. But many companies are.

I'm not arguing with you so I apologize if it seems that I was. RNA is a good company for FE, but so is Americo, Monumental, AmCon, Settlers, and many, many more.

RNA sets themselves apart with their fully underwritten whole life, not the SIWL. The fully underwriten is unbeatable on price. Yes, they are a fraternal and I wish they were not with the product.

I don't buy into the scare tactics about fraternals. It really comes down to what the client's goals are. if it's guaranteed death benefit and guaranteed premiums at the best price then I can't see a better alternative to RNA's fully underwritten whole life.

If it's cash or wealth accumulation then I can see the value of the participating WL to a degree. I still believe that a person could do better for wealth building than to put that money into WL. Maybe not? I do not pretend to be an expert on that stuff.

 

[LGilmore]

Jd? A good reasonable answer. Thanks.

 

[moonlightandmargaritas]

Jd? A good reasonable answer. Thanks.

Agreed, JD strikes me as a guy who's open minded to ideas, and keeps the best interest of the client foremost. Wouldn't hesitate to refer family to him (but I don't have any in KY!). Bravo, impressive.

 

[BNTRS]

Anybody know where I can find ON contracts?

You are in a career state, so you'll have to contract through a career general agency.

 

[indexedannuity_girl]

Serving as a competitive intelligence professional in the insurance industry for more than a decade has equipped me with tons of invaluable tools.

Although I am unaware of any whole life quoting enging, I would look to Blease Research for comparisons of whole life policies (cash values, death benefits, premiums, etc). Roger Blease used to publish his annual study on whole life in National Underwriter. You may be able to find a recent copy at their new website, LifeHealthPro dot com.

Good luck! sjm

 

[rousemark]

Serving as a competitive intelligence professional in the insurance industry for more than a decade has equipped me with tons of invaluable tools.

Does this mean you are a spy?

 

[RonRoberts]

Does this mean you are a spy?

I was wondering the same thing. Even though I am interested in this Roger Blease guy.

 

[Enosis]

I just wrote a 20 Pay WL $300,000 face on a 59 year old in good health. The premium is $836 per month and dividend payouts project at around $83,000 total to age 100 - total cost of policy (premium less dividends) about $118,000.

 

[usakr]

Which would be better for cash accumulation, participating wl or a iul?

 

[scagnt83]

Which would be better for cash accumulation, participating wl or a iul?

For an overfunded policy placed with a quality carrier/product, they will be very similar, and will ultimately depend on market linked performance.

WL has a very solid history of 4%-7% dividends.
While its not guaranteed, using history as a judge, you have a 99% probability of at minimum a 4% dividend.
WL will be more consistent in accumulation, and will have no "flat" years.

IUL will definitely have flat years.
If you use a product with a 1% floor (which I recommend) then you will have at least a slight gain each year.

But again, using history and current cap rates as a judge:
IUL shows around a 95% historical probability of 7% Credited Interest over the life of the policy.
It shows a 99% historical probability of 5% Credited Interest over the life of the policy.
But as the standard disclaimer goes: "Past results are not necessarily indicative of future performance". (but its the best way that we have to judge...)

-Which policy will end up with more cash is a matter of debate. The decision is ultimately a personal preference of what you feel more comfortable with.

But here is the main difference.
Do you plan on accessing that accumulated cash?
If so, you need to compare distribution.

In the distribution phase, (if GPT is chosen) the IUL has the ability to access a greater % of CV than the WL.

There are two things that affect how much cash can be distributed.
- Loan charges
- DEFRA option (test to qualify for life insurance) (GPT or CVAT) and how it affects the policy.


Loans are a pure cost against the policy.
Using a NDR company for WL helps, but they all calculate the credited dividends on loaned money in a different manner.
ONL probably has the best WL loan provisions.

IUL loans are either fixed or variable. Most IUL policies are NDR.
Fixed loans (generally speaking) are almost always a "wash" against the policy.
Variable loans differ from company to company. Generally speaking they give you the chance for positive arbitrage.
Some fixed loans give you the chance for arbitrage.


What affects the distribution % the most though is the use of GPT or CVAT.
WL always uses CVAT.
IUL/UL gives the opportunity to choose GPT which will allow for larger loans.

I like IUL for this fact. But its not the end all be all.
WL isnt a poor product by any means. Both IUL and WL have their place.
While neither product is risky. IUL involves a bit more risk than WL, and you need to have faith that the chosen Index will average out to a minimum of around what WL dividends will likely be.

So like I said, it depends on the clients personal preference.