Indexed Universal Life vs. Universal Life vs. VUL

[BNTRS]

Those are very strong numbers.... higher than ONs...

Could you post those illustrations please? Id like to see them.
What does it look like for a 50 year old for 15 years? ...just out of curiosity

Admittedly im not as knowledgeable of Guardians product line as some others, I should be though... (i do know that their 401K is top notch!)
I run most of my WL policies through ON & Mass. But I do know that Guardian has good contracts.

I admit that WL is a great product, again, im not knocking it. And the younger you are the better it is.
Im just a fan of the flexibility of UL.

Here you go, the illustrations aren't complete because I removed the cover page.

 

[scagnt83]

Those are very strong policies. Looks like I need to start selling more guardian WL.
Thanks for posting them.

 

[CFP83]

Thanks for sharing the illustrations, good information exchange.

So in this post we've seen illustrations for Lincoln's IUL and then Ohio National and Guardian whole life, thought I would share something

Going with the theme here, I attached an illustration for 35m/preferred/25k of premium to age 65. This is one of the better contracts I've seen for cash accumulation. Product has a 14% cap, 2% floor on the index account, and a 5.75% fixed account. The illustration shows first the illustrated rate (8.4%) then the rate I use 7%.

 

[dgoldenz]

Let me ask a question that hasn't really been addressed with IUL here....what happens when the company starts having financial troubles and decides to lower the interest rate cap to the guaranteed minimum and increase the COI to the guaranteed maximum? Going by the illustration above, at $25k per year, the cash value is always lower than the premiums paid except for a small amount 35 years down the line, and the coverage would terminate at age 88 instead of being guaranteed to 121. How would you explain to someone that has been dumping in $25k per year that their policy is now junk because the company abandoned the product?

 

[CFP83]

Let me ask a question that hasn't really been addressed with IUL here....what happens when the company starts having financial troubles and decides to lower the interest rate cap to the guaranteed minimum and increase the COI to the guaranteed maximum? Going by the illustration above, at $25k per year, the cash value is always lower than the premiums paid, and the coverage would terminate at age 88 instead of being guaranteed to 121. How would you explain to someone that has been dumping in $25k per year that their policy is now junk because the company abandoned the product?

Dgoldenz, I can see your concern and your heart is in the right place. The numbers you were referring to in the guranteed column would only happen if Penn goes to the 2% rate (and the market never has a positive year) starting next year and contining for the next 50 years. Penn is the second oldest insurance company in the country and a mutual one. They have a vested interest in doing whats best for the policyholder.

The likely-hood of that guranteed column coming true is so extremely small. Finally, one additional thing that has to be noted is that Penn as well as Mass, ON, and Guardian have all never used their guaranteed rate in any year in the past FIFTY YEARS. So any of these companies going to their guaranteed rate every year going forward....well lets just say there is more important issues to address with clients such as their insufficient rate of savings ect.

 

[dgoldenz]

Dgoldenz, I can see your concern and your heart is in the right place. The numbers you were referring to in the guranteed column would only happen if Penn goes to the 2% rate (and the market never has a positive year) starting next year and contining for the next 50 years. I feel confident in this company, they are the second oldest insurance company in the country and a mutual one. They have a vested interest in doing whats best for the policyholder.

AIG was rated A++ too. How many UL contracts from the 1980's and early 1990's are now paying guaranteed minimum interest and have maxed out COI charges? Lots of them....hence all of the policies that are crashing. I am sure that illustration might look a lot different if a person missed dumping in $25k in one or two of those years too. If they invest the money somewhere else, they are not subject to COI charges eating up cash value if they stop paying premiums or reduce their contributions. They could buy a $750k guaranteed UL for $3,300/year and have $22k/year to put somewhere else. At least if they died, they would have $750k plus their investment. Keep in mind that when you are illustrating 7% or 8.4% average returns, that means the average market return is going to be higher than that. That's why I say insurance is for insurance and investments are for investments, but to each his own I guess.

 

[CFP83]

That's why I say insurance is for insurance and investments are for investments, but to each his own I guess.

AIG is a publically traded company....publically traded companies never claim to have customers best interest at heart, only shareholders. I'd be curious to hear if you have ever seen a 80's UL crash from a highly-rated mutual insurer.

A policy like the one this thread is referring to, 25k per year annual premium, should only be recommended to someone with substantial other investments and income. The insurance would be used as diversification away from investments and market risk.

Several times in your posts you have talked about minimum funding insurance and then doing something else with the difference. That simply is not the clients and world I operate in, or the type of planning a few others on this board are doing as well. Many times clients and I are trying to figure out how much money we can cram into the contract without creating a MEC. It's all an action of diversifying away from market risk and maximizing the tax-deffered accumulations.

 

[dgoldenz]

AIG is a publically traded company....publically traded companies never claim to have customers best interest at heart, only shareholders. I'd be curious to hear if you have ever seen a 80's UL crash from a highly-rated mutual insurer.

A policy like the one this thread is referring to, 25k per year annual premium, should only be recommended to someone with substantial other investments and income. The insurance would be used as diversification away from investments and market risk.

Several times in your posts you have talked about minimum funding insurance and then doing something else with the difference. That simply is not the clients and world I operate in, or the type of planning a few others on this board are doing as well. Many times clients and I are trying to figure out how much money we can cram into the contract without creating a MEC. It's all an action of diversifying away from market risk and maximizing the tax-deffered accumulations.

I understand the purpose of overfunding, I just don't agree with it. I prefer to work on guarantees when it comes to insurance instead of trusting that the company will do the right thing for the client. Others may not. Like I said, to each his own.

 

[CFP83]

I prefer to work on guarantees when it comes to insurance instead of trusting that the company will do the right thing for the client. Others may not. Like I said, to each his own.

Dgoldenz, your exactly right buddy....to each his own.

 

[insuranceexec]

Dgoldenz, your exactly right buddy....to each his own.

I will save arnguy, our forum English professor, the trouble of correcting you.

you're= you are. I am sure this is what you meant...