GUL with a shot at the Index

Jul 10, 2018

  1. agnt30
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    agnt30 New Member

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    Hello, looking for some help. I have a client(M, 45) who is looking for $1.5m face amount GUL but doesn't want to miss out in case the Index averages 8%. Can anyone suggest any such products? Obviously, he wants to pay as less a premium as possible and as fast as possible like 5 pay, max 10 pay. Thanks in advance.
     
    agnt30, Jul 10, 2018
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  2. DHK
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    DHK Guru

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    Your post is full of contradictions.

    is at odds with:

    What good would it do to earn 8% in a contract... if you have next to zero cash value in the contract?

    There are plenty of IUL contracts out there with guaranteed minimum premiums... but you still need to economically figure out what you're going to do. Are you going to minimally fund a contract? or Maximum fund a contract?
     
    DHK, Jul 10, 2018
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  3. agnt30
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    agnt30 New Member

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    Allow me to clarify. Let's say 7 pay of $30,000 per year carries a GUL with a DB of 1.5m to age 120, he will miss out if the Index returns 8% during this holding period and if his money was in an IUL. Are there any hybrids of GUL and IUL which guarantee DB but if the Index performs well, have plenty of cash value too?
     
    agnt30, Jul 10, 2018
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  4. DHK
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    Take a look at Midland or North American. Both have IUL products with minimum premium guarantees. I *think* Allianz has something similar.

    (I'm in California and I prefer to use carriers that have disability waiver of premium... and these companies don't offer those riders... in California. But I'd start with those 2-3.)
     
    DHK, Jul 10, 2018
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  5. Lewis_FL
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    Lewis_FL Super Genius

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    Protective Life Index Choice UL is the most competitive IUL with a no-lapse guarantee. Better CV than the only other one (North American/Midland). Premiums are not that much higher than their regular GUL at younger ages.
     
    Lewis_FL, Jul 11, 2018
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  6. agnt30
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    agnt30 New Member

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    looked at some illustrations of giul of North American life, don't like how CV quickly disappears after age 70 or so. I know DB is guaranteed but still hard to watch it turn to zero.
    Is it better to put this client in whole life? Can anyone please compare 10 pay 30K premium, min face to the same in giul? which is better?
     
    agnt30, Jul 16, 2018
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  7. ATM
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    ATM Super Genius

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    Just pay more premium.
     
    ATM, May 2, 2019
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  8. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    You are doing something wrong if CV is disappearing that quickly.

    What Premium solve or DB solve are you using?

    It sounds like the policy is extremely underfunded.... it needs a higher premium to perform properly.

    ----

    You are getting trapped into letting the client dictate things.

    Lowest Premium possible, good cash value, & a set DB.... well... those 3 things do not go together in the IUL/WL world. Its your job to know this and tell the client their expectations are not realistic.

    And you are thinking about the whole situation backwards when designing the policy. You start with the Premium they are able to pay. Then you figure out the lowest DB possible for that Premium. THAT is what makes the CV perform well. If they need more DB after that, then supplement with Term.

    "lowest premium possible" and "cash value performance" are mutually exclusive.
     
  9. ATM
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    ATM Super Genius

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    I think the client wants something that doesn't really exist. Low premium, high cash and a guaranteed death benefit. He can get two of the three but to have all three he would simply need to pay more than the guaranteed premium on a GIUL.

    Raise the premium 10-15% and it will have good cash value potential. Potential because we don't know if it will really have any cash value or millions. All depends on interest rates, caps etc in the future, but with a no lapse product the worst case is guaranteed premium and death benefit that is probably 30% less than a comparable whole life premium.
     
    ATM, May 3, 2019
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  10. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    Exactly. You see this a lot from prospects who understand what it does, but do not understand how the mechanics of the product work.

    But they often make great clients once you explain it to them. The key is you MUST explain it to them and NEVER just "give them what they want". Because that leads to a pissed off client in 5 years.

    Even with a maxed out GIUL, you are still giving up CV compared to a normal IUL. Opportunity loss.

    If the client must have the DB 100% guaranteed, then maxed out WL is the way to go. Or split the premium between IUL and WL.
     
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