Tax Free Retirement WL W/riders Vs IUL?

Discussion in 'Indexed Universal Life Forum' started by LaughDontCry, Feb 12, 2015.

  1. ktmorgan
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    ktmorgan Well-Known Member

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    I don't know about you're "Upline" or your Infinite Banking dealio. But in terms of using a Blended WL policy w/a PUA rider that really builds massive Cash Value PennMutual is unbeatable in my experience. Of course your Target on that is going to be tiny. But it may be the right thing to do in this case to build trust and develop a long term relationship.



     
  2. sonseeker
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    sonseeker Member

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    Great info here, glad you folks know what your doing..
     
  3. aclaro
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    aclaro Well-Known Member

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    That's interesting because in my experience running multiple carriers with Penn included it has sometimes edge out other carriers slightly with cash value but loses on income. Since income is usually the objective I don't use much Penn. MassMutual is dominant. MassMutual gets hurt by GAs giving out shitty contracts. You can get very good comp from them.
     
  4. jboussea
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    jboussea Well-Known Member

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    What is the underlying reason why Mass has better income.. Is it the loan provisions.. Is thtat subject to change over the years
     
  5. NewAgent2017
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    NewAgent2017 New Member

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    If I understand what's said here correctly, then: I have a CVAT IUL for my 7-year old, initial face value $600k. I think I should be able to throw in a few k spare cash, asking to increase dead benefit so it won't trigger EMC. Then when kid grows older, change death benefit to level to keep COI low - which will let IUL build maximum cash accumulation when COI is low when kid is young.

    SG - you are genius. Thank you so much your insightful sharing!
     
  6. kingkhon559
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    kingkhon559 Member

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    Man, reading through this gives me headaches. I don't understand most of these acronyms. Seems like you guys are making it way more complicated than it is. However I like the strategy. So for example, for kids, we put the most death benefit that we can afford for the target premium, then later on, drop the death benefit and continue to pay the target on lower death benefit? I was told IUL is good for young people but not for anyone over 50+. It's better whole life due to the fact that the time is against them. And can you guys post a link to the IUL training and all the programs I can download? Thanks IUL gurus
     
  7. regularAgent
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    regularAgent Well-Known Member

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    What I had seen pfg1, is different, some agents keep on over funding their clients policies not knowing what they are doing and why... most of those policies never perform well, nothing to explain about, it was very well explained for scagnt83
    Nevertheless, the point is configuring this policies for Tax Free Income, as far as I can see, personally, WL will perform poorly, due to it's safe but low return, you can add some PUA, but it will required a lot of commitment from your client to keep it running, IUL it would be better, BUT, if is not propely configure it will perfom worst than WL.

    If is for retirement income, you must be thinking in low commission, the strategy is: getting as much as posible for your client, not for your pocket.
     
  8. pfg1
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    pfg1 Well-Known Member

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    Not sure what you mean. Overfunding (not mec'ing) is key in either WL or IUL to max out the cash.

    WL can perform very well if designed properly. There are a number of carriers that can achieve over 5% IRR. Sure, you might get more from IUL, but alot of folks prefer the guarantees WL offers. There is a place for both, and regardless if you want to max them out you have to overfund.
     
  9. DHK
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    DHK Well-Known Member

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    RegularAgent has some good points, but we do need to clarify some things.

    First, WL won't ILLUSTRATE as well as IUL for cash value accumulation for two reasons:
    1) The first two years of the base policy generally has little to no cash values. Regardless of Max PUA riders, the base policy costs don't contribute to cash value accumulation until year 3.

    IUL has a typical 10-15 year surrender charge schedule. During the first two years, a policy may have zero cash surrender value, but still have an account value earning indexed interest. (Assuming maximum TARGET premium, rather than maximum premium/minimum death benefit combinations.) After the 10-15 year period, the account values and surrender values are identical.

    2) IUL illustrations typically show a CONSISTENT year-over-year set return with a maximum rate allowed by law (which can be lowered by the agent for the purpose of illustrations). This is actually misleading for two reasons:
    - It will never show the max cap rate possible (currently hovering around 12%)
    - It doesn't show the effect of down or negative years that credit 0%.

    However, the limits do help to avoid over-stating the performance potential of IUL by those who choose not to study the product AT ALL. There are some companies (Midland & North American come to mind - I'm sure there are others) that do allow the illustration of their products to vary the returns year-over-year, but not everyone does this.

    So, while IUL may earn 12% and then 0% the next... WL may show 4% then another 4%. Long-term, WL may have more consistent returns while IUL can capture market upsides on a point-to-point basis (typically).

    Of course, WL illustrates CURRENT dividend performance, and that performance is NOT "locked in" for the life of the contract. With interest rates as low as they are (but rising), the contract can perform better.


    I guess what I'm trying to say is to look beyond the illustrations to see the mechanics of how each product and contract structure generally works.
     
  10. ATM
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    ATM Well-Known Member

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    explain to me how you get money out of a WL policy.

    Don't they have required premiums?
    What charge to borrow?
    Do they have direct recognition where policies with loans pay a lower dividend scale than policies that do not?
    If I surrender PUAs and get down to the base policy cash values don't I also have to worry about borrowing too much and creating a MEC 20-30 or 40yrs down the road?
     

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