IUL Presentation Needed ?

[Golfnut2112]

I blame the companies for the UL mess. They knew they would never pay the 10-12% interest rate that they were projecting on their illustrations which now are paying 4%. Then you factor in a lot of them raised the cost of insurance, you then have one hell of a box to fund. I have never sold a UL policy until recently but I have seen many in force ones over the years and only 1 was funded properly, the rest I have seen didn’t make it past 75. The companies then turn around and blame the agent because they did not fund it properly when they are the ones issuing the contract with underfunded premiums. They knew exactly what they were doing.

 

[InsuranceIsLife]

DHK.. I know you are a smart respectable individual. I sincerely believe that and enjoy reading all your post/comments, but In my opinion, you shouldn't be able to sell these products to clients who are not 100% aware of what exactly they're buying as well as where they "excess premium" is being allocated to. It's our job to know and teach the mechanics and how the policy works to the client before getting their approval.

Honestly, people need to take the time to read and realize what they are signing

 

[DHK]

We're both agreeing on that, but we're also not talking about the same timing. You're talking about at the time of signing the illustration. I'm talking about far afterwards when someone 'forgets' the details behind what they bought.

Start this video at 3:37

 

[VolAgent]

I blame the companies for the UL mess. They knew they would never pay the 10-12% interest rate that they were projecting on their illustrations which now are paying 4%. Then you factor in a lot of them raised the cost of insurance, you then have one hell of a box to fund. I have never sold a UL policy until recently but I have seen many in force ones over the years and only 1 was funded properly, the rest I have seen didn’t make it past 75. The companies then turn around and blame the agent because they did not fund it properly when they are the ones issuing the contract with underfunded premiums. They knew exactly what they were doing.

I agree with blaming the companies, but I disagree with why. When these were sold, those really were normal interest rates for that period. The Fed Funds rate was double digits for quite some time. Also, the cost of insurance had only gone down. In fact, even with current trends in health, mortality is still improving.

The reason the companies are to blame is they allowed the policies to be minimally funded when they knew full well they were not designed nor intended to be used that way.

The interest rates weren't a fluke, our interest rates now are. They have intentionally been depressed for decades now. Unfortunately, these minimally funded policies could not survive this aberration.

Highest and Lowest Interest Rates and Why They Changed

 

[jerryrut]

DHK.. I know you are a smart respectable individual. I sincerely believe that and enjoy reading all your post/comments, but In my opinion, you shouldn't be able to sell these products to clients who are not 100% aware of what exactly they're buying as well as where they "excess premium" is being allocated to. It's our job to know and teach the mechanics and how the policy works to the client before getting their approval.

Honestly, people need to take the time to read and realize what they are signing

Seriously, most agents don’t understand the product, how do you expect others to?

 

[jerryrut]

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?

I know exactly how it works, it’s a scam

 

[jerryrut]

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

UL is never the best option; if you can afford 500,000 UL death benefit, it means you actually need about $3 million in coverage; you can never afford as much of that crap as you need.

 

[DHK]

Wow. A product that is regulated by all 50 states... and you believe it's a scam.

Okay.

 

[jerryrut]

Wow. A product that is regulated by all 50 states... and you believe it's a scam.

Okay.

Regulated don’t mean it’s a good deal for consumers, it’s just means it’s a financially stable plan for the insurance companies, which it is because the company makes out like a bandit at the expense of the consumer; DOI’s are owned by the insurance industry. As you may recall, UL’s have always been “regulated” by the DOI’s and you know the results.

 

[Tahoe Ray]

Regulated don’t mean it’s a good deal for consumers, it’s just means it’s a financially stable plan for the insurance companies, which it is because the company makes out like a bandit at the expense of the consumer; DOI’s are owned by the insurance industry. As you may recall, UL’s have always been “regulated” by the DOI’s and you know the results.

You keep using absolutes about UL.

There are several types of UL. Are you saying that all UL is "never the best option" or are you talking specifically about IUL, the topic of this post?