Paid Up GUL Question

May 27, 2016

  1. BYSFG
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    BYSFG Super Genius

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    Between another carrier and what I was told from ANICO support, there seems to be conflicting information about GUL and it being paid up, or rather yet now I am a bit confused.

    Simple question, for those who write with American National, ANICO, is their GUL actually paid up when illustrated to pay til a certain age, where as guarantee/illustration runs til 121?

    The conflicting part from a second carrier I came across was along the lines of, "0 in the premium outlay does not mean the policy is paid up."

    Is this simply a carrier difference?
     
    BYSFG, May 27, 2016
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  2. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    I wouldn't use the term "paid up" and UL in the same sentence... except in this instance.

    "Paid up" implies no further required premiums due or charged by contractual guarantee.

    Just because you stop making payments (flexibility inherent within a UL contract) doesn't mean there aren't COI expenses that aren't charged.

    Only Whole Life can either have a limited pay, or a RPU (reduced paid up) option where no further premiums are due.


    Now, in regards to ANICO's Signature Guaranteed UL... "guaranteed to age 95" or similar options means that the policy premiums are GUARANTEED LEVEL until that age. The minimum guaranteed premium is enough to keep the policy in force until age 95.

    Just like term, if you want it longer, the minimum goes up, because the minimum premium amount is based on a longer age expectancy.

    But these are NOT "paid up". That is only available in a WL policy.
     
    DHK, May 27, 2016
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  3. BYSFG
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    BYSFG Super Genius

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    That's what I had originally thought before.

    I'm going to take a look at the software when I get a chance. Will take a screen shot to make sure I'm on the same page. I'll probably link it here or send it to you if you don't mind taking a quick look. Should've wrote down your contact from that one other thread.

    Right of the top of my head, it would be "solve for x year" or what you stated above with the 95 - bottom box of the illusion software.
     
    BYSFG, May 27, 2016
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  4. wln417
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    wln417 Guru

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    Midland's GUL does not require any more premiums after age 100 yet remains in force until age 121. I don't remember them using the term "paid up." Is this the type of situation you're referring to?
     
    wln417, May 27, 2016
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  5. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    [​IMG]

    Many policies will mature at age 100 and COI will stop while the policy remains in force.
     
    DHK, May 27, 2016
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  6. ///MJay
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    ///MJay Expert

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    MNL also no longer charges for coi @ 100 either so in that sense it is different.
     
    ///MJay, May 27, 2016
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  7. BYSFG
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    BYSFG Super Genius

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    Is this what you are referring to, that this is only in regards to guaranteeing premiums to be leveled to solved or selected age?

    1.png


    Not quite but yes although at an earlier age.

    If this is the case, regarding what DHK posted earlier, then I need to address a couple policies.

    :arghh::sad::cry::mad:
     
    BYSFG, May 27, 2016
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  8. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    According to that screen, the minimum premium is guaranteed to age 65. Your illustration will go to age 121. Past age 65, it is not guaranteed.

    Now, we need to look at an illustration to see what would happen past the age of 65.


    UL does NOT have "paid up". Only Guaranteed Minimum Payments to keep coverage in force.

    Only Whole Life can be contractually guaranteed to be paid up - either through limited pay policies (10-pay, 20-pay, age 65-pay, custom WL), or through a reduced paid up.

    ----------

    Dividend and Non-Forfeiture Options - CFP | Investopedia
     
    DHK, May 27, 2016
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  9. BYSFG
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    BYSFG Super Genius

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    Here is a snippet. It runs the same until 121.
    COI, I know runs regardless. Thanks for clarifying about my choice of wording.

    Now Im starting to lose faith in field support.

    2.jpg
     
    BYSFG, May 27, 2016
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  10. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    The clock is ticking now, because now you know what's going on.

    - You can reiterate that the policy is guaranteed to age 65 at that premium level, but not guaranteed past age 65, and determine if that fits their goals, needs, and objectives.

    - Ask ANICO if you can do a policy exchange into their Whole Life (not my favorite WL, but it's available) and do the illustration based on RPU at 65. This should be a non-commissionable option. (The last thing you want is to find out that the wrong policy was sold, and now you make a new commission, so you're getting rewarded for making the error.)

    Do two illustrations: one based on the current premium commitment, and another based on the face amount needed. (Yes, there will be a price/premium difference.)

    Document these conversations carefully along with all non-commissioned options you research.

    But I wouldn't sit on this too long. By being pro-active, you can avoid a potentially even bigger issue down the road.

    Why Clients are Successful in Arbitration & Litigation with their Advisers - Thought Leaders
     
    DHK, May 27, 2016
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