Looking for properly designed EIUL from NA

[jboussea]

there is a ton of threads of examples of people coming here looking for a 2nd opinion without anyone here needing to sell them anything.


you're asking if the costs can be increased... I told you not only can the cost be increased .. but there are 2 more ways the insurance company can increase the "costs" of the policy.
it's like askng me for the price of a tshirt .. and I tell you the shipping and tax costs .. and you get mad cause I gave you the info up front. I guess you rather find out on the back end.

To what extent can it increased? it depends on the specifics.

As far as specifics.. You have no specifics, you came in looking for something that does not exist a "properly designed" 3-5 pay for a $3mil DB .. another agent told you that in order for it to be properly designed and non MEC it needs to be a 7 pay .. he gave you the premium and you said it was too high.. so you have yet to tell us what exactly you want. It sounds like you're not sure if you're looking for a cash focused product or a DB focused product.

When you get the illustration from your agent, there will be maximum charges (keep in mind that the maximum charges include more than just the cost of insurance)

This is exactly what I am talking about! beating around the bush trying to sound very knowledgeable. Why don't you come up with a product as an example for both cases -- yes, company can raise its expenses in any amount and will do that to get out of paying the DB, here is an example AND no, company cannot increase more than 5 or 10% since the beginning and here is an example? If you are not interested in selling me, why are you even answering me? You are diverting people from my real questions.

 

[js44]

there is a ton of threads of examples of people coming here looking for a 2nd opinion without anyone here needing to sell them anything.


you're asking if the costs can be increased... I told you not only can the cost be increased .. but there are 2 more ways the insurance company can increase the "costs" of the policy.
it's like askng me for the price of a tshirt .. and I tell you the shipping and tax costs .. and you get mad cause I gave you the info up front. I guess you rather find out on the back end.

To what extent can it increased? it depends on the specifics.

As far as specifics.. You have no specifics, you came in looking for something that does not exist a "properly designed" 3-5 pay for a $3mil DB .. another agent told you that in order for it to be properly designed and non MEC it needs to be a 7 pay .. he gave you the premium and you said it was too high.. so you have yet to tell us what exactly you want. It sounds like you're not sure if you're looking for a cash focused product or a DB focused product.

When you get the illustration from your agent, there will be maximum charges (keep in mind that the maximum charges include more than just the cost of insurance)

Thanks for your participation. Have a good day.

 

[js44]

Clarification: I am looking to decide whether to invest in S&P through index funds by setting up an entity like a Trust or llc or both or invest in S&P through Equity indexed life insurance. I don't have an agent currently and am looking to work with a good agent who doesn't fight all the way and who can answer to the point. I am a business person looking for a place indexed to S&P to dump my profits tax efficiently(maybe a buy-sell agreement which is paid by my business), liquidity is important as I may need the funds for other investments. Thanks for your time.

 

[jboussea]

SCAGNT is one of if not the most respected agent on the board when it comes to IUL .. he's the one who estimated the premium earlier.

Fyi .. you can't invest in the S&P through an IUL...

 

[jboussea]

lol... wonder how you would react if I really wanted to tick you off..

 

[jboussea]

go use your time to cram for your state license or something. Why use it to tick off potential high networth clients? unless, you have thrown in the towel already. Go flip some burgers. This is too complicated for you.

What's wrong with flipping burgers?

 

[scagnt83]

Scagnt83
You said you never sell the normal cv product anymore.
I am not contracted with Midland or North American, so
I don't know anything about there IUL products.

Did you mean you sell a product with high early cash value
opposed to one with zero and little cash value in the first few years?
Would you be more comfortable that the projections would be more
accurate with an IUL or a par whole life?

I am have trouble getting excited about IUL.
All I see are lots of zero's on the IUL guarantee side.
You have had IUL on the books for ten years so you can see
a track record that a new guy can't.

Do you have a preference IUL or Par WL?
Thanks,
Shooter

The guaranteed side of an IUL shows what the product would do IF the market returned 0% every single year.

IF that scenario played out over a 20 year period... what do you think would happen to the economy, insurance carriers, etc. ? Our nation would crumble if that scenario happened, banks would shut down, the whole economy and country would colapse.

My point, is that it is not a realistic scenario if you believe our country and economy will be in existence 10/20/30/40/60 years from now.

I had a potential client say this about the guaranteed side when I explained it to them "well that doesnt matter because if that played out, this country would no longer exist, and this policy would be the last thing on my mind."


What you need to worry about are historical returns & carrier renewal history for Caps and Rates. A carrier's renewal history on Caps/Rates is much more important than how high a Cap is or low a Spread is.


IUL is not a market investment. But it certainly has more risk compared to WL. However, IUL has the chance to provide a higher return vs. WL because of that risk.

UL, in general, has the ability to be more efficient than WL because of the ability to use GPT and change the DB to level once premiums stop. This will give a higher income, even with the same amount of CV.

It does not have to be an "either-or" type of thing. Many clients like the idea of splitting the need (or the available premiums) between WL and IUL. These days, I mostly sell WL with the LTC Rider on it. And for people who are mainly focused on CV, I use IUL. Client preference and situation obviously play a part in all that.

 

[scagnt83]

I just want to know how much are the expenses taken out every year. Can they increase those expenses by any amount or is there a cap?
Then, how can we combat these expenses? How much premium should we deposit in them so that yearly return on them(however much, maybe 10%) will not only offset these expenses but also provide for my retirement?
Next, can we reduce that 10% by how much and still accomplish my goal. It all comes down to this. Can anyone address this?

They can raise expenses, but only up to a certain point.

Illustrations have an "Expense Report" that can be included. Some carriers allow you to show the max expenses on this Report, others just show "Current" expenses.

The way to "combat" against a future increase in expenses, is to just max fund the policy from the start. The max funding is the max funding, no matter what the internal expenses are.

The key, is to go with a Carrier who has a strong history of not increasing expenses to the max, and a history of keeping Caps at competitive levels.

Caps and internal expenses are greatly affected by interest rates. It seems rates are due to rise in the future, so that would be a good thing for renewing IUL Caps. (I would not expect increases from the initial Cap, but it would help to fight potential decreases)

 

[scagnt83]

Clarification: I am looking to decide whether to invest in S&P through index funds by setting up an entity like a Trust or llc or both or invest in S&P through Equity indexed life insurance. I don't have an agent currently and am looking to work with a good agent who doesn't fight all the way and who can answer to the point. I am a business person looking for a place indexed to S&P to dump my profits tax efficiently(maybe a buy-sell agreement which is paid by my business), liquidity is important as I may need the funds for other investments. Thanks for your time.

You need to be very careful with what you do here. It is can be hard to deduct life premiums for a policy that the Owner is the Insured on.

Buy/Sell Premiums can usually be deducted, however, "Excess Premiums" can-not be deducted. Excess Premiums are the "overfunded" or "max funded" portion of the Premiums. So the majority of an overfunded IUL or WL could not be deducted as Buy/Sell Premiums.

There are ways to make it deductible. Most of those ways involve Insuring a Key Employee and providing some type of extra benefit to that Employee.

Also, any Cash you draw out of it, will count as income or a shareholder distribution.

 

[VolAgent]

The guaranteed side of an IUL shows what the product would do IF the market returned 0% every single year.

IF that scenario played out over a 20 year period... what do you think would happen to the economy, insurance carriers, etc. ? Our nation would crumble if that scenario happened, banks would shut down, the whole economy and country would colapse.

My point, is that it is not a realistic scenario if you believe our country and economy will be in existence 10/20/30/40/60 years from now.

I had a potential client say this about the guaranteed side when I explained it to them "well that doesnt matter because if that played out, this country would no longer exist, and this policy would be the last thing on my mind."


What you need to worry about are historical returns & carrier renewal history for Caps and Rates. A carrier's renewal history on Caps/Rates is much more important than how high a Cap is or low a Spread is.


IUL is not a market investment. But it certainly has more risk compared to WL. However, IUL has the chance to provide a higher return vs. WL because of that risk.

UL, in general, has the ability to be more efficient than WL because of the ability to use GPT and change the DB to level once premiums stop. This will give a higher income, even with the same amount of CV.

It does not have to be an "either-or" type of thing. Many clients like the idea of splitting the need (or the available premiums) between WL and IUL. These days, I mostly sell WL with the LTC Rider on it. And for people who are mainly focused on CV, I use IUL. Client preference and situation obviously play a part in all that.

This is hilarious. So if someone doesn't like all the 0s on the guarantee side, what is your alternative, the stock market? Because if an IUL returns 0 for ten years straight, what in the world do you think happened to the market and economy as a whole?