Pacific Life Policy Performed 22%

[ejbarraza]

For a 10k/yr max funded policy?

Your attachment doesn't work but expenses don't equal commissions...you know that, right?

I am receiving $355 in commission I don't know what you want me to say. That is the illustration that was sent to the home office and they issued the policy.

 

[ejbarraza]

For a 10k/yr max funded policy?

Your attachment doesn't work but expenses don't equal commissions...you know that, right?

EDIT: NVM, I can see it in your post. You just took levelized commissions then? Do you get that every year for the first 10 years?

I get that for life. Don't you think it's extremely conservative now taken all together rather than jumping to conclusions?

 

[Tahoe Ray]

I get that for life. Don't you think it's extremely conservative now taken all together rather than jumping to conclusions?

No. I think I was 100% accurate that you made 3-4k on your policy because most agents take first year only, you just didn't take it all up front.

Levelized comp will often pay more over the life of the policy than up front. You could have chosen an asset-based comp if that was your intention (since it would pay you based on your account growth, which you seem to feel is going to perform very well).

To add, target doesn't mean your commission. An agent could be paid 150% of that number or 50%. It depends on your contract, your commission selection, and other factors.

 

[Allen Trent]

Many times in this thread you talk about the COI getting cheaper as your CV will replace & lower the net amount at risk & the corresponding annually increasing term costs. However, your illustration doesn't show that to be the case in the projected. It appears you chose CVAT treatment so that you could get the $10k premium in quickly, but that will come at a cost long term of carrying higher net amount at risk that became levelized net amount at risk from CVAT. This likely explains the poor net returns in year 20 from the internal costs of $4-5K on only about $140k of net amount at risk for a 46 year old. Get a quote on $140k term life at age 46, it certainly won't cost $4-5k per year. Keep in mind, that is the projected charges, they can be worse. GPT test with increasing face & later changed to level may have looked similar or even better.

To each his own, but this doest look designed for max funding & minimizing net amount at risk like you had indicated. However, I am looking at it in my phone & could be overlooking something

 

[ejbarraza]

Many times in this thread you talk about the COI getting cheaper as your CV will replace & lower the net amount at risk & the corresponding annually increasing term costs. However, your illustration doesn't show that to be the case in the projected. It appears you chose CVAT treatment so that you could get the $10k premium in quickly, but that will come at a cost long term of carrying higher net amount at risk that became levelized net amount at risk from CVAT. This likely explains the poor net returns in year 20 from the internal costs of $4-5K on only about $140k of net amount at risk for a 46 year old. Get a quote on $140k term life at age 46, it certainly won't cost $4-5k per year. Keep in mind, that is the projected charges, they can be worse. GPT test with increasing face & later changed to level may have looked similar or even better.

To each his own, but this doest look designed for max funding & minimizing net amount at risk like you had indicated. However, I am looking at it in my phone & could be overlooking something

Yes it is more expensive than GPT, however, it is structured to lower the net amount at risk. Let's just agree that Pacific Life is terrible and IULs suck. I can't get any credit no matter how logical my arguments and low my expectations of performance are. I know you don't like the analogy but it is a swiss army knife.

The second is the GPT illustration which does outperform in the long run. But I think the difference is negligible.

 

[scagnt83]

I would like to see the competition have triple-digit returns. You get what you pay for right? I would gladly pay 7.5% for 150% returns in one year. Also, if I put $70k in and pull $70k out as a loan, am I not in a risk-free position? If I put $70k into real estate and get a $70k cash-out refi, does that not imply that my risk is virtually zero? Whatever I get over and above $70k is playing with the house's money isn't it? That is the way I look at recursive leverage.

No. As you pointed out, there are multiple carriers who offer similar products. But not all of them charge as much per $1k of DB as Pac does.

Pac also pays some of the highest comp on the market... usually a terrible sign for the consumer... but it makes it a very popular product for agents to sell. You would have received around 30%-40% less in comp with a more competitive carrier.

 

[scagnt83]

Yes it is more expensive than GPT, however, it is structured to lower the net amount at risk.

No, GPT carriers a lower Net Amount at Risk. It also carriers a lower internal expense. Allows for larger loans. And creates more favorable worst case scenarios.

GPT also allows you to fund the policy up to the Guideline Premium Limit, using the lowest DB possible.

Most carriers do not allow the Overloan Protection Rider when using CVAT because of those very reasons.

 

[ejbarraza]

No, GPT carriers a lower Net Amount at Risk. It also carriers a lower internal expense. Allows for larger loans. And creates more favorable worst-case scenarios.

GPT also allows you to fund the policy up to the Guideline Premium Limit, using the lowest DB possible.

Most carriers do not allow the Overloan Protection Rider when using CVAT because of those very reasons.

Can we acknowledge the fact that with ZERO crediting it lasts for 43 years before lapsing and with the fixed interest of 2.25% it won't lapse. I also have said many times that I do not intend to ever borrow the insurance carriers' money. Rather I will pledge it as collateral for a line of credit.

 

[ejbarraza]

No. As you pointed out, there are multiple carriers who offer similar products. But not all of them charge as much per $1k of DB as Pac does.

Pac also pays some of the highest comp on the market... usually a terrible sign for the consumer... but it makes it a very popular product for agents to sell. You would have received around 30%-40% less in comp with a more competitive carrier.

The only policy that does 150-270% returns is Pacific Life. Nationwide, PennMutual and F&G fall far short. If you have a name please do tell me.

 

[Allen Trent]

Can we acknowledge the fact that with ZERO crediting it lasts for 43 years before lapsing and with the fixed interest of 2.25% it won't lapse

It will do better than that at 0% credited, because that would assume all internal charges & COI get raised to the max today & stay that way forever. However, $70k paid in to get about $160k of 43 year term insurance would be a horrendous outcome. 30 year level term for that insurance amount would have only cost you probably 5-6k total, meaning you would have $64k plus 43 years of compounding in an investment. 64k invested making around 7-8% would be worth around $1M in 43 years.

I think you will be fine with this if you are able to track it like you are today