IUL Presentation Needed ?

[dbab]

That's the Magic that sets IUL apart from everything else. When you throw in the safety element of annual reset with no losses due to market downturns, it crushes everything else.

This is one of my marketing websites and my buddy Brian explains how it works: Home.

Send me your email address and I will set you up with 7 days of access to the http:/tlgts/.com site. Send it to: [email protected]

I also really enjoyed the IUL magic video, but I do have a couple of questions if you don't mind answering them:

With an IUL, the death benefit is included in the cash value? For example, an IUL with a 250,000 death benefit automatically starts out with a cash value at 250,000?

If someone withdraws a certain amount from the cash value, that amount isn't actually removed from the cash value because it's taken out as a loan. The loan's interest is then covered by the returns from the cash value? This question comes from 11 minutes into the video.

Thanks!

 

[VolAgent]

I also really enjoyed the IUL magic video, but I do have a couple of questions if you don't mind answering them:

With an IUL, the death benefit is included in the cash value? For example, an IUL with a 250,000 death benefit automatically starts out with a cash value at 250,000?

If someone withdraws a certain amount from the cash value, that amount isn't actually removed from the cash value because it's taken out as a loan. The loan's interest is then covered by the returns from the cash value? This question comes from 11 minutes into the video.

Thanks!

Umm, where did you get the idea that the death benefit is included in the cash value? If the video led you to believe that, the video needs some serious work.

There are three main death benefit options for UL policies, include IUL, VUL, CAUL, and GUL. 1) Level, the death benefit never changes. 2) Increase by cash value. The death benefit equals the original amount plus whatever cash value is in the policy. 3) Increase by premiums. The death benefit equals the original amount plus any and all premiums paid. Primarily used for business cases.

There may be hybrids, however these are the main ones.

As to the second question, yes if a loan is taken then the cash value remains the same, however there is a lien equal to the amount of the loan plus any interest. If the returns are sufficient, then yes it would cover the interest. Otherwise the interest would compound and be added to the loan amount.

 

[InsuranceIsLife]

The best thing you can do is to advise them not to do it; UL is the worse product ever invented

You must be a whole life guy. I'll take it you meant that IUL was the "worst" product invented, not UL since that seems to be the subject. And no, that's not true.. at all. What makes you think that?

I can be the worst product, but can also be the best. Depends on the client's objective, wants and needs. No one product is better than the other

 

[DHK]

You must be a whole life guy. I'll take it you meant that IUL was the "worst" product invented, not UL since that seems to be the subject. And no, that's not true.. at all. What makes you think that?

Lots of lawsuits due to increasing costs of insurance on the ULs sold in the 70's and 80's. UL came first. IUL didn't come about until the mid-late 90's or so.

What I find more interesting, is that those who are dead set against a product... don't necessarily understand how life insurance funding works. This applies to either 'whole life zealots' and the Primerica 'termites' equally.

Either you "fund the box" or you "pay the curve". These UL policies were set up to "pay the curve".



Of course, if you only want a minimum-funded permanent death benefit, I'd pick either a base whole life or a guaranteed non-lapse UL policy. I wouldn't do a minimum-funded UL without the non-lapse guarantee.

Not my favorite presentation, but here's a NAIFA LIVE on the "Tips, traps, and tricks of life insurance", but this guy does talk about how to 'rescue' policies that were deliberately under-funded in the beginning and what it would take to keep these policies in-force.



Of course, the REAL question would be "why would you pay far more for your coverage than you 'have to'?" What's in it for them?

 

[dbab]

There are three main death benefit options for UL policies, include IUL, VUL, CAUL, and GUL. 1) Level, the death benefit never changes. 2) Increase by cash value. The death benefit equals the original amount plus whatever cash value is in the policy. 3) Increase by premiums. The death benefit equals the original amount plus any and all premiums paid. Primarily used for business cases.

Thanks for the clarification. I'm sure there isn't anything wrong with the video, I just misunderstood the info. I went back and watched it again. The second time makes a lot more sense.

 

[VolAgent]

Lots of lawsuits due to increasing costs of insurance on the ULs sold in the 70's and 80's. UL came first. IUL didn't come about until the mid-late 90's or so.

What I find more interesting, is that those who are dead set against a product... don't necessarily understand how life insurance funding works. This applies to either 'whole life zealots' and the Primerica 'termites' equally.

Either you "fund the box" or you "pay the curve". These UL policies were set up to "pay the curve".

The irony is, UL was intended to be a "fund the box" product. People didn't like how dividends on par WL lagged the interest rate market. It was never designed nor intended to be used as a "poor man's WL", it was always intended to capture rising interest rates faster than par WL and may be more appropriately described as a "rich man's WL".

 

[InsuranceIsLife]

Lots of lawsuits due to increasing costs of insurance on the ULs sold in the 70's and 80's. UL came first. IUL didn't come about until the mid-late 90's or so.

What I find more interesting, is that those who are dead set against a product... don't necessarily understand how life insurance funding works. This applies to either 'whole life zealots' and the Primerica 'termites' equally.

Either you "fund the box" or you "pay the curve". These UL policies were set up to "pay the curve".

I agree with you on the UL 100%. A lot of my business has been replacing those UL's from the 80's/90's that showed assumed rates from 11%-13%, now most credited the contractual minimum, which for my book is 4%.
There's a lot of blame to go around. First off companies having agents represent with an assumed rate of 13%.. Very unfortunate for those policy holders, especially the uninsurables w/o the NLG. Glad I inherited those policies and not the one to write them!

Devil's advocate, however: The clients did have to sign the 2 column illustration showing assumed vs. guaranteed/worst case.

 

[DHK]

Just because clients sign something... doesn't mean they understood what they were signing.

 

[InsuranceIsLife]

It's the duty of the agent to fully explain what they are signing on the contract and point out the worst case that could inevitably happen. Again, I don't agree with what the carriers have done, just playing devil's advocate.

 

[DHK]

Just because you explain it, doesn't mean the client understands it or remembers your explanation a week after they signed it.