Simple IUL's for Dummies . . .

[Abrasax]

I'm successful and profitable . . .

Facebook is generating leads for the 30 - 50 peeps that don't need Final Expense.

So - might as well learn to sell what peeps want . . .

IUL leads are expensive. Maybe better to sell them? It's a complex product with a lot of nuances. And writing it the wrong way can really mess up a family. They can be designed to provide income or stability (or both if done right), but there's a lot of moving parts and it's easy to screw up.

Usually, people of higher intelligence buy them, so it's important you know much more about them than your client or you'll look like a tool. With all the time it would take to learn them well enough to custom build them, you might be better off not losing focus on the senior crowd. Think of how much SIWL you could write instead of learning a product that you'll only sell a a few times.

 

[myinsurebiz]

IUL leads are expensive. Maybe better to sell them? It's a complex product with a lot of nuances. And writing it the wrong way can really mess up a family. They can be designed to provide income or stability (or both if done right), but there's a lot of moving parts and it's easy to screw up.

Usually, people of higher intelligence buy them, so it's important you know much more about them than your client or you'll look like a tool. With all the time it would take to learn them well enough to custom build them, you might be better off not losing focus on the senior crowd. Think of how much SIWL you could write instead of learning a product that you'll only sell a a few times.

Using Term for these clients if that's what they want. IUL is an animal that isn't in my zoo.

 

[pbar]

Interesting. would have to see it to get a better feel for how it plays out & illustrates. Most CVAT cases I have run illustrations for looked better early, but worse in later years. basically, the added face needed up front for the CVAT later ate up some of the CV because of the higher COI costs for the added net amount at risk of the insurance face amount. Regardless, I totally understand your frustration as I have seen way, way too many cases where agents put too high of a IUL or WL face instead of max funding an IUL or max funding a WL by using modal PUAR funding

For CVAT, try running minimum DB possible i.e $100K with just Modal No-Lapse Premium for 10 or 15 years and then dump $500k or so and see.

My agent told me WL premiums are not flexible like IUL and talked me out of it. Didn't tell me about about base premium and PUA rider which can be used to stuff cash which is very flexible.

 

[Allen Trent]

For CVAT, try running minimum DB possible i.e $100K with just Modal No-Lapse Premium for 10 or 15 years and then dump $500k or so and see.

My agent told me WL premiums are not flexible like IUL and talked me out of it. Didn't tell me about about base premium and PUA rider which can be used to stuff cash which is very flexible.

yeah, that wont work on an IUL or UL to put that much money in that small of policy without violating the government MEC guidelines. a 100k face amount policy at CVAT for a 45 yr old paying the target premium of about $1700 per year for the 1st 10 years wont let anywhere near $500k lump sum go in the policy. The govt MEC premium guidelines will only allow about $35k.

If you are designing for cash value accumulations by dumping in that amount of money, I would highly doubt you want it to be a MEC and face taxes & early distribution penalties on the first dollars withdrawn, loaned or used as collateral. All of those events are reported on MEC policies.

 

[pbar]

yeah, that wont work on an IUL or UL to put that much money in that small of policy without violating the government MEC guidelines. a 100k face amount policy at CVAT for a 45 yr old paying the target premium of about $1700 per year for the 1st 10 years wont let anywhere near $500k lump sum go in the policy. The govt MEC premium guidelines will only allow about $35k.

If you are designing for cash value accumulations by dumping in that amount of money, I would highly doubt you want it to be a MEC and face taxes & early distribution penalties on the first dollars withdrawn, loaned or used as collateral. All of those events are reported on MEC policies.

I already said it's for people like me who want more DB but healthy CV too. MEC won't matter to me if there is more CV inside at retirement. I will just think of it as a 401k and happily pay taxes. Most important is not paying all the IUL fees that I am paying now and even more important is that the policy won't lapse even after paying all these premiums. Again, not for strictly CV with very little DB but more for bigger DB with healthy CV.

 

[Allen Trent]

I already said it's for people like me who want more DB but healthy CV too. MEC won't matter to me if there is more CV inside at retirement. I will just think of it as a 401k and happily pay taxes. Most important is not paying all the IUL fees that I am paying now and even more important is that the policy won't lapse even after paying all these premiums. Again, not for strictly CV with very little DB but more for bigger DB with healthy CV.

Yeah, you are likely mixing 2 opposite goals into the same product not designed for maximum efficiency. You likely would have been much better to buy 2 separate contracts. 1 paying the minimum no-lapse premium on a protection focused product for the max death benefit you desire. the 2nd could have been the smallest face with max funding to govt guidelines for healthy CV you wanted. Utilizing the Premium Deposit Fund bank account that tend to pay 3-4% interest would have also been a way to gradually get the money into the max accumulation product or even the no-lapse product.

Better yet, could have bought a non-dividend paying base WL for max face amount & added the modal PUAR with healthy dividend and performance with minimal to no fees on the PUAR deposits.

No worries, we all made poor decisions a few times in our life that were not maximum efficiency. At least we learn from those mistakes. Take care

 

[pbar]

Yeah, you are likely mixing 2 opposite goals into the same product not designed for maximum efficiency. You likely would have been much better to buy 2 separate contracts. 1 paying the minimum no-lapse premium on a protection focused product for the max death benefit you desire. the 2nd could have been the smallest face with max funding to govt guidelines for healthy CV you wanted. Utilizing the Premium Deposit Fund bank account that tend to pay 3-4% interest would have also been a way to gradually get the money into the max accumulation product or even the no-lapse product.

Better yet, could have bought a non-dividend paying base WL for max face amount & added the modal PUAR with healthy dividend and performance with minimal to no fees on the PUAR deposits.

No worries, we all made poor decisions a few times in our life that were not maximum efficiency. At least we learn from those mistakes. Take care

Here I have shared a way to minimize IUL fees and agents commissions and you are talking about taking out two policies? Spoken like a true insurance agent lol!

They are not opposite goals. People need both and that's what permanent insurance alleges to offer. I would say this way of CVAT design is IUL equivalent of WL -- healthy CV plus a higher DB. Unfortunately, agents won't promote it. I learnt this from an actuary.

 

[Allen Trent]

Here I have shared a way to minimize IUL fees and agents commissions and you are talking about taking out two policies? Spoken like a true insurance agent lol!

They are not opposite goals. People need both and that's what permanent insurance alleges to offer. I would say this way of CVAT design is IUL equivalent of WL -- healthy CV plus a higher DB. Unfortunately, agents won't promote it. I learnt this from an actuary.

funny part is I am not a commissioned agent. I don't really care what people do with their money as I don't get paid more if they buy 2 policies or if they get charged more. I merely want consumers to know in advance of what their options are & if they have competing goals, that may require different policies. IE: a person that wants $2M of term life might not want it to all be 10 year term or all of it to be 30 year term. They may be best suited & more cost effective to match the duration & face amount to their mortgage, income needs, kids & spouse age. So, maybe $500k is 10 year term to cover mortgage. Maybe $1M is 20 year term to cover kids who are young. lastly maybe the last $500 is either 30 year term or term to 70 to get the spouse protected to most efficient retirement age for SS, qualified funds, etc.

For you they are not opposite goals, but "people" are not you. If I personally have an IUL with Chronic Illness rider to help with LTC costs, I use a no lapse product to add the rider. I then have a separate IUL to max fund for cash accumulation so that I can be tax efficient when I retire early. I can then take funds from my IUL when I am 60-65 to stay in a low tax bracket or 0% tax bracket so that I can systematically convert my Traditional IRA to Roth at low tax rates. I can then take late SS, etc. had I bought 1 single MEC IUL as you would want all "people" to do, I would be screwed because all my CIA/LTC coverage would be gone from all my cash distributions from my policy & on top of it all my Cash Distributions from the IUL would be taxable as LIFO & not allow my goal to move Traditional IRA to Roth in an extremely tax efficient manner.

To each his own. I am just telling you that it is not my job to pre-determine for other people that they have the same exact goals as me. their goals should drive all product designs & if they need 5 policies to cover all risks & goals, so be it.

 

[pbar]

funny part is I am not a commissioned agent. I don't really care what people do with their money as I don't get paid more if they buy 2 policies or if they get charged more. I merely want consumers to know in advance of what their options are & if they have competing goals, that may require different policies. IE: a person that wants $2M of term life might not want it to all be 10 year term or all of it to be 30 year term. They may be best suited & more cost effective to match the duration & face amount to their mortgage, income needs, kids & spouse age. So, maybe $500k is 10 year term to cover mortgage. Maybe $1M is 20 year term to cover kids who are young. lastly maybe the last $500 is either 30 year term or term to 70 to get the spouse protected to most efficient retirement age for SS, qualified funds, etc.

For you they are not opposite goals, but "people" are not you. If I personally have an IUL with Chronic Illness rider to help with LTC costs, I use a no lapse product to add the rider. I then have a separate IUL to max fund for cash accumulation so that I can be tax efficient when I retire early. I can then take funds from my IUL when I am 60-65 to stay in a low tax bracket or 0% tax bracket so that I can systematically convert my Traditional IRA to Roth at low tax rates. I can then take late SS, etc. had I bought 1 single MEC IUL as you would want all "people" to do, I would be screwed because all my CIA/LTC coverage would be gone from all my cash distributions from my policy & on top of it all my Cash Distributions from the IUL would be taxable as LIFO & not allow my goal to move Traditional IRA to Roth in an extremely tax efficient manner.

To each his own. I am just telling you that it is not my job to pre-determine for other people that they have the same exact goals as me. their goals should drive all product designs & if they need 5 policies to cover all risks & goals, so be it.

I don't know why you are getting all worked up. I clearly presented my situation and said for "people" like me. You are the one who is assuming all "people" would be better off with your design. 60-65 do this and make you sure you die before 80! Jeez! Stop over programming people's lives. It does not work that way in real life.

 

[Allen Trent]