Onto WL now, How much DB for 10k?

[js44]

What's the best design for CV in a 10 pay Mass Mutual WL policy? How much DB should we start out with 10 years of 10K per year each?
How much CV can we expect around age 65?

Since the premiums are not flexible like IUL, if I am not able to allocate funds in any year, is it possible to save the policy from lapsing?Policy lapsing after paying 8 or 9 payments and not able to pay the 10th would be a great tragedy.

This is one of the minuses of WL. This and low returns.

 

[DHK]

Since the premiums are not flexible like IUL, if I am not able to allocate funds in any year, is it possible to save the policy from lapsing?Policy lapsing after paying 8 or 9 payments and not able to pay the 10th would be a great tragedy.

You'd have sufficient cash values for what is called an "Automatic Premium Loan". This would take a loan against your current cash values and pay the policy premiums until you pay them yourself, or is "paid up" in the case of a 10-pay policy.

Make sure this option is selected on your application.

 

[VolAgent]

As I recall, their 10 pay doesn't have much room for additional funds without becoming a MEC. You could use their rider, I can't recall if ALIR or LISR, to add some term coverage so you could add additional money to the policy. But you are right, it isn't designed for flexible premiums.

As to lapsing, if you have made 8 payments it is very unlikely to lapse if you don't make the last two, although it will depend upon dividend performance. As DHK mentioned, you could certainly use dividends and APL to make the premium payments so you could later pay back the loan. Or you could choose to go Reduced Paid Up at that time, knowing the policy will be smaller going forward.

 

[js44]

You'd have sufficient cash values for what is called an "Automatic Premium Loan". This would take a loan against your current cash values and pay the policy premiums until you pay them yourself, or is "paid up" in the case of a 10-pay policy.

Make sure this option is selected on your application.

That's a cool feature, Thanks. So, it's possible that 10pay may well become 6pay if all I am looking for is a DB.

How much DB will I get for 10k?

 

[pfg1]

Tons of ways to design policies. Your agent should be able to run all these scenarios for you and show you exactly what you are asking for.

 

[js44]

Tons of ways to design policies. Your agent should be able to run all these scenarios for you and show you exactly what you are asking for.

I don't have an agent. I am just learning about WL for now. When I have acquired the right knowledge and ready to buy, I will find one and tell him/her this is what I want. That way, I won't be steered the wrong way.

I have decided 50-50 blend of IUL/WL.

 

[Allen Trent]

That's a cool feature, Thanks. So, it's possible that 10pay may well become 6pay if all I am looking for is a DB.

How much DB will I get for 10k?

Probably not. It might be a 6 pay for a few decades until the loan became so large it causes the policy to end if not repaid. If you merely stop paying the premiums after 6 years & have the automatic premium loan cover them, eventually the loan could compound to the point it could equal the cash value. Could end up with a policy that ends with a very large tax bill as all those years of loan interest charges would cause greater & greater taxable gains in the contract at time of surrender or lapse. Wouldn't want to go into designing a contract with that planned, but APL can be a great way to help keep policies from going to the policy default non-forfeiture option, which some times is extended term.

 

[js44]

Probably not. It might be a 6 pay for a few decades until the loan became so large it causes the policy to end if not repaid. If you merely stop paying the premiums after 6 years & have the automatic premium loan cover them, eventually the loan could compound to the point it could equal the cash value. Could end up with a policy that ends with a very large tax bill as all those years of loan interest charges would cause greater & greater taxable gains in the contract at time of surrender or lapse. Wouldn't want to go into designing a contract with that planned, but APL can be a great way to help keep policies from going to the policy default non-forfeiture option, which some times is extended term.

wow! I thought that can't happen with WL as loans are a "wash".

 

[scagnt83]

Any Life Insurance policy is potentially capable of Lapsing if you have taken Withdrawals or Loans or have missed Scheduled Premiums.

WL loans vary from policy to policy. Generally speaking, most WL policies do not offer wash loans. Some offer participating loans, others non-par, others you can choose.

A WL Policy can provide more flexibility than most people think. Especially if you overfund a RPU design on a life pay.

 

[Allen Trent]

wow! I thought that can't happen with WL as loans are a "wash".

You would have to read the actual contract language to know the maximum loan interest rate that could be charged and also keep in mind that Dividends are not guaranteed. The only guarantee you have is that if you pay the 10 years of premium (on a 10 pay guaranteed paid up policy) that the policy will last until age 100 for the base face amount. Paying less than 10 years means you need to have those premiums paid from somewhere. you could re-direct the annual dividend, if any, to pay the premiums due. You could automatically loan to pay the premiums. If the loan is not paid back the loan compounds, it could cause issues. You will want to dig deeper to figure all that out. If allowed, overfund in the early years by adding the Paid Up Additions rider if possible, this will then build in flexibility that if you wish to stop premiums earlier than planned, you can surrender some of those PUAR values & current year Dividends to pay the premiums due.