Surrendering FFIUL Now Or Later

Dec 20, 2017

  1. celiothrkn
    Offline

    celiothrkn New Member

    Posts:
    11
    Likes Received:
    0
    State:
    Texas
    A family friend recently informed me that he was sold a Transamerica FFIUL policy from a WFG rep about 1 year ago, and I did a bit of educating on why the FFIUL is a disaster (i.e. high COIs in later years). However for this type of policy, the surrender charge doesn't mirror the cash value until year 15, if we were to do a 1035 exchange.

    In this scenario, would it be better for the client to cut his losses, forfeit the premiums paid for the first year, and start a fresh new IUL policy with someone better like North American/Midland? Or is it better to ride out the next decade and a half to do a 1035 at a time when the surrender charges mirror the accumulated cash value? Please explain your rationale.
     
  2. eersfan
    Offline

    eersfan Super Genius

    Posts:
    200
    Likes Received:
    69
    In my opinion, provided the life insurance is being purchased for the death benefit, it's more important to have the right amount first. Then worry about the type. Term can always be converted. What isn't know is why this individual purchased a permanent plan of insurance. IF this individual chooses to purchase a new contract, it's imperative the new policy the contract be in-force prior to terminating the old one.
     
    eersfan, Dec 21, 2017
    #2
  3. AndrewSookiassian
    Offline

    AndrewSookiassian Expert

    Posts:
    27
    Likes Received:
    2
    State:
    Nevada
    Another thing to keep in mind, client's health is almost guaranteed to not be as good in 10+ years. So healthy rating is likely to be lower. I recently left WFG and am facing the same exact scenario with my own personal policy as well as a few clients' policies. All depends on the person to be honest. Have a conversation with them.
     
  4. paulallred
    Offline

    paulallred Expert

    Posts:
    65
    Likes Received:
    6
    State:
    Maryland
    Cut that crap contract loose, send me your best NA or Midland Illus and I'll show you an illus that will make you proud to present! Oh. make sure you include the expense report with your illus please.