Surrender charges Dividend paying WL

[leo]

Do Dividend paying WL have Surrender charges like IUL?

 

[Allen Trent]

Do Dividend paying WL have Surrender charges like IUL?

Depends on what you consider a "surrender Charge"

WL doesnt build a cash value right away like a UL, so a person will not get all their premiums back on a WL policy, so it will look a lot like a surrender charge to a consumer or an agent, just like a UL or Annuity has a surrender charge that deducts from the total cash value. The difference is that WL doesnt build the cash value initially as the contract already takes into consideration the expenses or UW, the agent comp, expenses in those early years.

Or, are you just looking at a current consumers WL policy & wondering if they will receive the full cash value or if surrender charges are taken from it before they cash it in or 1035 exchange it? (PS- if close to policy anniversary, usually best to let the client earn their current dividend credited at end of policy year before they cash out or 1035 exchange)

 

[DHK]

With whole life, what is stated in the illustration (guarantees) + any dividends received is what it will be.

There is no difference between 'account value' and 'surrender value' with a whole life contract.

WL is 'front-loaded' with the mortality charges and reserves being posted while IUL is more of a "pay as you go" contract.